diff --git "a/China/2.ICBC_$267.08 B_Financials/2023/results.txt" "b/China/2.ICBC_$267.08 B_Financials/2023/results.txt"
new file mode 100644--- /dev/null
+++ "b/China/2.ICBC_$267.08 B_Financials/2023/results.txt"
@@ -0,0 +1,118594 @@
+262,965
+353,495
+1,486,733
+1,701,495
+1,874,976
+Net core tier 1 capital (1)
+356,407
+356,407
+Share capital
+1,124,997
+1,274,134
+1,530,859
+1,789,474
+1,969,751
+of the parent company
+Equity attributable to equity holders
+1,486,805
+1,269,255
+1,539,239
+2,265,860
+2,016,799
+institutions
+Due to banks and other financial
+13,642,910
+14,620,825
+15,556,601
+16,281,939
+17,825,302
+Due to customers
+351,390
+1,266,841
+349,620
+Net tier 1 capital(1)
+1,954,770
+0.68
+0.75
+0.78
+0.77
+0.77
+Basic earnings per share
+3.22
+3.63
+4.23
+4.80
+5.29
+Net asset value per share(2)
+Per share data (in RMB yuan)
+16,413,758
+9,511,205
+12,475,939
+13,216,687
+14,564,617
+Risk-weighted assets (1)
+1,299,014
+1,572,265
+1,812,137
+2,012,103
+2,127,462
+Net capital base(1)
+1,266,859
+1,521,233
+1,781,062
+11,982,187
+17,639,289
+19,072,649
+20,409,261
+275,811
+277,131
+278,249
+of the parent company
+Net profit attributable to equity holders
+238,691
+14
+276,286
+277,720
+279,106
+Net profit
+308,687
+338,537
+262,649
+361,612
+363,279
+Profit before taxation
+306,035
+336,440
+359,455
+360,905
+360,675
+Operating profit
+33,745
+38,321
+56,729
+86,993
+87,894
+363,235
+Diluted earnings per share
+238,532
+239,221
+22,156,102
+Total liabilities
+4,083,887
+4,322,244
+4,433,237
+5,009,963
+5,481,174
+Investment
+220,403
+240,959
+257,581
+280,654
+289,512
+Net cash flows from operating activities
+on loans
+17,542,217
+8,803,692
+18,917,752
+9,922,374
+20,609,953
+11,026,331
+22,209,780
+11,933,466
+13,056,846
+Total loans and advances to customers
+24,137,265
+Total assets
+As at the end of reporting period
+(in RMB millions)
+533,508
+(1,947)
+201,457
+1,131,764
+Allowance for impairment losses
+189,940
+0.77
+0.78
+2.50
+2.43
+2.34
+2.35
+2.22
+Allowance to total loans ratio (9)
+295.55
+257.19
+206.90
+156.34
+136.69
+Allowance to NPL (8)
+0.85
+0.94
+1.13
+1.50
+1.62
+Non-performing loans ("NPL") ratio (7)
+Asset quality (%)
+29.24
+28.80
+27.93
+26.69
+27.40
+20.02
+21.13
+20.87
+Capital adequacy (%)
+Core tier 1 capital adequacy ratio (10)
+12.87
+12.87
+Calculated in accordance with the Rules for the Compilation and Submission of Information Disclosure by Companies that Offer
+Securities to the Public No. 9 - Calculation and Disclosure of Return on Net Assets and Earnings per Share (Revision 2010)
+issued by CSRC.
+Notes: (1) Calculated by dividing net profit by the average balance of total assets at the beginning and at the end of the reporting period.
+(2)
+54.22
+63.34
+60.53
+59.51
+60.34
+ratio
+Risk-weighted assets to total assets
+6.43
+6.76
+7.46
+8.11
+21.44
+8.21
+13.66
+13.12
+14.53
+15.22
+14.61
+Capital adequacy ratio (10)
+10.57
+12.19
+13.48
+13.42
+Tier 1 capital adequacy ratio (10)
+10.57
+11.92
+Total equity to total assets ratio
+22.59
+Cost-to-income ratio (6)
+income to operating income
+2012
+2013
+2014
+2015
+2016
+Financial Indicators
+Financial Highlights
+5
+Annual Report 2016
+The rating results are in the form of "long-term foreign currency deposits rating".
+(3)
+(2) Calculated by dividing equity attributable to equity holders of the parent company after deduction of other equity instruments
+at the end of the reporting period by the total number of ordinary shares at the end of the reporting period.
+Notes: (1) Data for period since 2013 were calculated in accordance with the Capital Regulation and those for 2012 were calculated in
+accordance with the Regulation Governing Capital Adequacy of Commercial Banks and related regulations promulgated by CBRC.
+Profitability (%)
+A1
+A1
+A
+A1
+A
+A1
+A
+A1
+A
+Moody's(3)
+S&P(3)
+Credit rating
+0.67
+0.74
+A
+0.77
+Return on average total assets(1)
+1.30
+Ratio of net fee and commission
+2.66
+2.45
+2.26
+2.16
+2.01
+Return on risk-weighted assets (5)
+2.66
+2.57
+2.66
+2.47
+2.16
+Net interest margin (4)
+1.20
+2.49
+2.46
+2.30
+2.02
+Net interest spread (3)
+23.02
+21.92
+19.96
+17.10
+15.24
+Return on weighted average equity(2)
+1.45
+1.44
+1.40
+2.40
+(3) Calculated by the spread between yield on average balance of interest-generating assets and cost on average balance of
+interest-bearing liabilities.
+204,140
+220,835
+SSE
+SEHK
+Hong Kong
+Securities and Futures Ordinance of
+PRC GAAP
+PBC
+MOF
+IFRSS
+ICBCFS
+ICBC-AXA
+ICBC Standard Bank
+ICBC Leasing
+ICBC International
+ICBC Credit Suisse Asset Management
+ICBC (USA)
+ICBC (Turkey)
+ICBC (Thai)
+Industrial and Commercial Bank of China (Macau) Limited
+Industrial and Commercial Bank of China (Brasil) S.A.
+Industrial and Commercial Bank of China (Canada)
+Industrial and Commercial Bank of China (Europe) S.A.
+PT. Bank ICBC Indonesia
+ICBC (London) PLC
+Industrial and Commercial Bank of China (Asia) Limited
+Industrial and Commercial Bank of China (Argentina) S.A.
+Industrial and Commercial Bank of China (Almaty) Joint Stock Company
+Central Huijin Investment Ltd.
+Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong
+Limited
+Banks undertaking key functions with global features in the financial markets as
+released by the Financial Stability Board
+China Securities Regulatory Commission
+Company Law of the People's Republic of China
+Standard Bank
+State Council
+the Bank/the Group
+Industrial and Commercial Bank of China (Malaysia) Berhad
+The 2016 financial statements prepared by the Bank in accordance with PRC GAAP and IFRSS have been audited by KPMG
+Huazhen LLP and KPMG in accordance with Chinese and International Standards on Audit respectively, with standard
+unqualified auditors' reports being issued.
+The 2016 Annual Report of the Bank and its abstract have been considered and approved at the meeting of the Board of
+Directors of the Bank held on 30 March 2017. All directors of the Bank attended the meeting.
+The Board of Directors, the Board of Supervisors, Directors, Supervisors and Senior Management members of Industrial
+and Commercial Bank of China Limited undertake that the information in this report contains no false record, misleading
+statement or material omission, and assume individual and joint and several liability for the authenticity, accuracy and
+completeness of the information in this report.
+Important Notice
+ICBC
+2
+Industrial and Commercial Bank of China Limited; or Industrial and Commercial
+Bank of China Limited and its subsidiaries
+The State Council of the People's Republic of China
+Standard Bank Group Limited
+Shanghai Stock Exchange
+The Stock Exchange of Hong Kong Limited
+Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)
+Accounting Standards for Business Enterprises promulgated by the Ministry of
+Finance
+China Banking Regulatory Commission
+The People's Bank of China
+The International Financial Reporting Standards promulgated by the International
+Accounting Standards Board, which comprise the International Accounting
+Standards
+Industrial and Commercial Bank of China Financial Services LLC
+ICBC-AXA Assurance Co., Ltd.
+ICBC Standard Bank PLC
+ICBC Financial Leasing Co., Ltd.
+ICBC International Holdings Limited
+ICBC Credit Suisse Asset Management Co., Ltd.
+Industrial and Commercial Bank of China (USA) NA
+ICBC Turkey Bank Anonim Şirketi
+Industrial and Commercial Bank of China (Thai) Public Company Limited
+ICBC PERU BANK
+Industrial and Commercial Bank of China (New Zealand) Limited
+Industrial and Commercial Bank of China Mexico S.A.
+Ministry of Finance of the People's Republic of China
+Regulation Governing Capital of Commercial Banks (Provisional) promulgated by
+CBRC in June 2012
+The Articles of Association of Industrial and Commercial Bank of China Limited
+Bank ICBC (Joint stock company)
+ICBC (Peru)
+Organizational Chart
+118
+Significant Events
+115
+Report of the Board of Supervisors
+111
+Report of the Board of Directors
+93
+Corporate Governance Report
+82
+Employees and Institutions
+Directors, Supervisors, Senior Management,
+74
+121
+Shareholding of Substantial Shareholders
+71
+Social Responsibility
+70
+Regulatory Requirements
+© Other Information Disclosed Pursuant to
+68
+Outlook
+65
+– Capital Management
+49
+Risk Management
+30
+Business Overview
+Details of Changes in Share Capital and
+The Board of Directors of the Bank proposed distributing cash dividends for ordinary shares of RMB2.343 (pre-tax) for each
+ten shares for 2016. The distribution plan will be submitted for approval to the Annual General Meeting for the Year 2016.
+The Bank did not convert capital reserve to share capital.
+Auditor's Report and Financial Statements
+2016 Ranking and Awards
+ICBC (New Zealand)
+ICBC (Mexico)
+ICBC (Malaysia)
+ICBC (Macau)
+ICBC (London)
+ICBC (Indonesia)
+ICBC (Europe)
+ICBC (Canada)
+ICBC (Brasil)
+ICBC (Asia)
+ICBC (Argentina)
+ICBC (Almaty)
+Huijin
+122
+Hong Kong Listing Rules
+CSRC
+Company Law
+CBRC
+Capital Regulation
+Bank ICBC (JSC)
+Articles of Association
+In this report, unless the context otherwise requires, the following terms shall have the meanings set out below:
+Definitions
+KIX
+296
+Overseas Branches and Offices
+List of Domestic and
+292
+Global Systemically Important Banks
+218,674
+The Board of Directors of Industrial and Commercial Bank of China Limited
+Mr. Yi Huiman, Legal Representative of the Bank, Mr. Gu Shu, President in charge of finance of the Bank, and Mr. Zhang
+Wenwu, General Manager of the Finance and Accounting Department of the Bank, hereby represent and warrant that the
+financial statements contained in the Annual Report are authentic, accurate and complete.
+8/F, Prince's Building, 10 Chater Road, Central, Hong Kong
+KPMG
+International auditors:
+CPAs (Practicing): Song Chenyang and He Qi
+8/F, Tower E2, Oriental Plaza, 1 East Chang'an Avenue, Dongcheng
+District, Beijing, PRC
+KPMG Huazhen LLP
+Domestic auditors:
+Name and office address of auditors
+11 December 2015 to 31 December 2016
+618 Shangcheng Road, China (Shanghai) Pilot Free Trade Zone
+Sponsor representatives: Zhang Jianhua and Wu Guomei
+Continuous inspection and supervision period:
+Guotai Junan Investment Management Co., Ltd.
+Sponsor of domestic preference shares:
+Stock code: 360011
+Stock name: I
+Shanghai Stock Exchange
+Domestic Preference Share:
+Stock code: 84602
+Stock name: ICBC CNHPREF1-R
+Stock code: 4604
+Stock name: ICBC EURPREF1
+Stock code: 4603
+The Stock Exchange of Hong Kong Limited
+Stock name: ICBC USDPREF1
+Offshore Preference Share:
+Stock code: 1398
+The Stock Exchange of Hong Kong Limited
+Stock name: ICBC
+H Share:
+Stock code: 601398
+4
+ICBC
+Financial Highlights
+(Financial data and indicators in this annual report are prepared in accordance with IFRSS and, unless otherwise specified, are
+consolidated amounts of the Bank and its subsidiaries and denominated in Renminbi.)
+193,112
+Impairment losses
+Operating expenses
+529,720
+578,901
+634,858
+668,733
+641,681
+Operating income
+106,064
+122,326
+132,497
+143,391
+Stock name: 工商銀行
+144,973
+417,828
+443,335
+493,522
+507,867
+471,846
+Net interest income
+Annual operating results (in RMB millions)
+2012
+2013
+2014
+2015
+2016
+Financial Data
+Net fee and commission income
+Shanghai Stock Exchange
+A Share:
+Place where shares are listed, and their names and
+codes
+E-mail: ir@icbc.com.cn
+Facsimile: 86-10-66107571
+Telephone: 86-10-66108608
+Address: 55 Fuxingmennei Avenue, Xicheng District, Beijing, China
+Guan Xueqing
+Board Secretary and Company Secretary
+Gu Shu and Guan Xueqing
+Authorized representatives
+33/F, ICBC Tower, 3 Garden Road, Central, Hong Kong
+Principal place of business in Hong Kong
+Website: www.icbc.com.cn, www.icbc-ltd.com
+Business enquiry and compliant hotline: 86-95588
+Telephone: 86-10-66106114
+Selected newspapers for information disclosure
+55 Fuxingmennei Avenue, Xicheng District, Beijing, China
+Postal code: 100140
+Yi Huiman
+Legal representative
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED ("ICBC")
+Legal name in English
+中國工商銀行股份有限公司(“中國工商銀行”)
+Legal name in Chinese
+Corporate Information
+3
+Annual Report 2016
+This report is prepared in both Chinese and English. In the case of discrepancy between the two versions, the Chinese
+version shall prevail.
+The report contains forward-looking statements on the Bank's financial positions, business performance and
+development. The statements are made based on existing plans, estimates and forecasts, and bear upon future external
+events or the Group's future finance, business or performance in other aspects, and may involve future plans which do
+not constitute substantive commitment to investors. Hence, investors and persons concerned shall be fully aware of the
+risks and understand the difference between plans, estimates and commitments.
+During the reporting period, the Bank did not identify any material risks that exerted negative impact on the Bank's
+development strategy and business objectives in the future. The Bank has actively adopted measures to effectively manage
+various types of risks. Please refer to the section headed "Discussion and Analysis Risk Management" for detailed
+information.
+Notes on Material Risks
+Registered address and office address
+30 March 2017
+China Securities Journal, Shanghai Securities News, Securities Times,
+Securities Daily
+the annual report in respect of A shares
+Location where copies of this annual report are kept
+Office of the Board of Directors of the Bank
+Facsimile: 852-28650990
+Telephone: 852-28628555
+17M Floor, Hopewell Center, 183 Queen's Road East, Wanchai,
+Hong Kong
+Computershare Hong Kong Investor Services Limited
+H Share:
+Telephone: 86-4008058058
+Pudong New Area, Shanghai, PRC
+3/F China Insurance Building, No. 166 Lujiazui Dong Road,
+Shanghai Branch
+China Securities Depository and Clearing Corporation Limited,
+A Share:
+Share Registrars
+Website designated by CSRC for publication of
+10/F, Alexandra House, Chater Road, Central, Hong Kong
+9/F, Three Exchange Square, Central, Hong Kong
+Allen & Overy
+Hong Kong, China
+20/F, China Resources Building, 8 Jianguomen North Street,
+Dongcheng District, Beijing, PRC
+Jun He Law Offices
+40/F, Office Tower A, Beijing Fortune Plaza, 7 East 3rd Ring
+Middle Road, Chaoyang District, Beijing, PRC
+King & Wood Mallesons
+Mainland China:
+Legal advisors
+www.hkexnews.hk
+the annual report in respect of H shares
+The "HKExnews" website of SEHK for publication of
+www.sse.com.cn
+Linklaters
+(4) Calculated by dividing net interest income by the average balance of interest-generating assets.
+(5) Calculated by dividing net profit by the average balance of risk-weighted assets at the beginning and at the end of the
+reporting period.
+(6)
+President's Statement
+2345701
+Discussion and Analysis
+Economic, Financial and
+Regulatory Environments
+ICBC
+We made new progress in operational transformation and structural adjustment. Taking active steps to adapt to
+new changes during the economic transformation and upgrade, the Bank followed and studied new trends in the strategic
+development of international banking industry, well balanced current operation with long-term development, guided
+operational transformation, and boosted the strengthening of new drives of growth and rejuvenation of traditional ones.
+We implemented in depth strategy of mega retail, mega asset management and mega investment banking, proactively built
+the asset-liability management system that suited interest rate liberalization, and promoted international and diversified
+development. As a result, a new landscape of profit growth featuring multiple drivers and pillars has taken shape, which
+We gained new ground in serving the real economy. The real economy is the ultimate driver of growth of finance. The
+Bank followed the economic laws and trends, and improved the operating quality by seizing the opportunities presented
+by the supply-side structural reform and revitalization of the real economy. We improved the full-process and integrated
+management of incremental and existing credits as well as credit financing and non-credit financing. New loans actually
+granted by domestic branches in 2016 totaled RMB3 trillion, including RMB844.6 billion of new RMB and foreign-currency
+loans and RMB2.16 trillion loans that were recovered and relent. New non-credit financing and new investment in local
+government debts amounted to RMB989.8 billion, exceeding the loan increment and becoming an important source of
+capital for supporting the real economy. In terms of direction and structure, we dovetailed with a string of strategies such
+as "the 13th Five-Year Plan", the "four regions", "three supporting belts" and "Made in China 2025", and stepped up
+support to key projects. We steadfastly developed small and micro enterprise financial businesses and provided innovative
+services in that area that combined professional offline operation with standardized online operation, and became the first
+commercial bank in the country with a small and micro enterprise loan balance of more than RMB2 trillion. Adapting to the
+trend of expanded and upgraded personal consumption, the Bank saw steady rise in the proportion of residential mortgages
+and consumption loans in total loans. Our services for enterprises' "Going Global" drive became deeper and broader. The
+Bank took the lead in establishing Sino-CEE Financial Holding Corporation and Fund to participate in infrastructure and
+capacity cooperation under the "Belt and Road" initiative in the form of a multilateral financial company. We also gave
+stronger support to the merger and restructuring of enterprises, and pushed for market-based debt-for-equity swaps and
+asset securitization in an orderly manner, not only providing more flexible and diverse financial service options for enterprises
+to lower the cost and deleverage, but also helping ourselves to prevent and control risks and boost the real economy at the
+same time.
+Progress is the main theme of our performance results. While maintaining stability, the Bank made active efforts and
+explorations for progress.
+Stability is the priority in our performance results. Stability is the cornerstone and is important in serving the overall
+interest. Focused on stabilizing benefits, quality and risks, the Bank implemented targeted measures and maintained
+generally stable operation and development. We maintained stable profits. In face of three main factors of rising expenditure
+and reduced income, namely the increased credit cost, narrowing interest margin and fee cuts to the real economy, the
+Bank actively tapped into potential, improved efficiency, expanded sources of income and cut back on expenses. In 2016,
+we realized a net profit of RMB279.1 billion, up 0.5% from the previous year and continuing to hold the largest net profit
+base in the global banking industry. We maintained stable asset quality. In face of the downward pressure on asset quality,
+the Bank strengthened credit foundation management and credit quality management under the new normal, and adopted
+multi-pronged approaches to tackle both symptoms and root causes, focusing on the control of new loans, management
+and control of existing loans and disposal of non-performing loans. As at the end of 2016, the Bank's NPL ratio was
+controlled at 1.62%, asset quality remained stable with positive changes, the ratio of loan deterioration decreased, NPL
+balance and ratio increased at a rate lower than the same period of last year, and allowance to NPL increased over the
+previous quarter in the fourth quarter. We steadily controlled risks. In face of spreading primary, crossover and imported
+risks, the Bank intensified enterprise risk management and improved risk management measures in the aspects of strategy,
+system, instrument and mechanism, striving to cement the dam against risks and fully exert the role of a market stabilizer
+and risk reducing valve as a leading bank.
+In 2016, the recovery of world economy remained weak while economic complexity, instability and uncertainty became more
+conspicuous. Domestic economy operated steadily in general but was facing downward pressure and many difficulties. In
+face of the severe challenges such as overlapping conflicts and intertwined risks and hidden hazards at home and abroad,
+the Bank managed to make progress while maintaining stability, steered towards the right direction by keeping our eyes on
+the broader picture, implemented reform and innovation, and overcame difficulties in a responsible manner. By carrying on
+our good traditions and developing innovations, we attained performance results which exceeded the expectation of many
+and which comprised many highlights in the past year.
+Chairman's Statement
+7
+Annual Report 2016
+Chairman Yi Huiman
+Chairman's Statement
+Chairman's Statement
+Corporate Information
+Financial Highlights
+Definitions
+15
+ICBC (E
+H
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED
+(A joint stock limited company incorporated in the People's Republic of China with limited liability)
+Stock Code: 1398
+USD Preference Shares Stock Code: 4603
+EUR Preference Shares Stock Code: 4604
+RMB Preference Shares Stock Code: 84602
+Annual Report 2016
+Company Profile
+Industrial and Commercial Bank of China was
+established on 1 January 1984. On 28 October 2005,
+the Bank was wholly restructured to a joint-stock
+limited company. On 27 October 2006, the Bank was
+successfully listed on both Shanghai Stock Exchange
+and The Stock Exchange of Hong Kong Limited.
+Through its continuous endeavor and stable
+development, the Bank has developed into the leading
+bank in the world, possessing an excellent customer
+base, a diversified business structure, strong innovation
+capabilities and market competitiveness. The Bank
+regards service as the very foundation to seek further
+development and has made efforts to build a "bank
+to the satisfaction of customers" while providing a
+wide range of financial products and services to 5,784
+thousand corporate customers and 530 million personal
+customers.
+Taking the provision of service to the real economy
+as the starting point and the ultimate goal, the Bank
+remains steadfast in new finance and new service
+under the guidance of new concept, has supported
+the supply-side structural reform and the economic
+transformation and upgrading and has realized healthy
+and sustainable development. Through deepening
+of reform, innovation and operation transformation,
+retail banking, asset management and financial market
+business emerged as the important growth engines of
+profit. The pattern of internationalized and diversified
+operation was further improved, covering 42 countries
+and regions, contributing more to the Bank's profit-
+making.
+The Bank consciously unified the social responsibilities
+to its development strategy and operation and
+management activities, gaining wide social recognition
+in the aspects of supporting targeted poverty relief,
+protecting environment and resources, participating in
+social and public welfare undertakings and promoting
+inclusive finance. The Bank was ranked the 1st place
+among the Top 1000 World Banks by The Banker,
+ranked 1st place in the Global 2000 listed by Forbes,
+topped the sub-list of commercial banks of the Global
+500 in Fortune for the fourth consecutive year, and
+took the 1st place among the Top 500 Banking Brands
+of Brand Finance.
+CONTENTS
+Important Notice
+ICBC
+Financial Statement Analysis
+199,614 98,018
+2016
+activities
+Net cash flows from operating
+company
+holders of the parent
+Net profit attributable to equity
+Operating income
+(In RMB millions)
+6
+(10) Data for period since 2013 were calculated in accordance with the Capital Regulation and those for 2012 were calculated in
+accordance with the Regulation Governing Capital Adequacy of Commercial Banks and related regulations promulgated by
+CBRC.
+(9) Calculated by dividing allowance for impairment losses on loans by total balance of loans and advances to customers.
+(8) Calculated by dividing allowance for impairment losses on loans by total balance of NPLs.
+(7) Calculated by dividing the balance of NPLs by total balance of loans and advances to customers.
+(13,829) (44,582) 518,295 565,554 (331,219) 379,134
+Calculated by dividing operating expense (less taxes and surcharges) by operating income.
+2015
+Q1
+Quarterly Financial Data
+168,992
+55,457 74,324
+Q2
+74,697 72,740 55,370
+72,575
+164,900
+170,929 167,096
+165,808
+74,764 75,453
+Q4
+Q3
+Q2
+159,989
+Q1
+157,666
+Q3
+155,034
+Q4
+Guan Xueqing
+No
+45.61
+34.64
+Wang Bairong
+No
+34.64
+9.11
+10.97
+12.25
+Wang Xiquan
+No
+Directors, Supervisors and Senior Management Leaving Office
+Jiang Jianqing
+20.18
+4.30
+25.43
+6.06
+24.48
+No
+31.49
+1.84
+46.89
+7.27
+Shen Bingxi
+No
+No
+Huang Li
+2.50
+2.50
+No
+Qu Qiang
+28.00
+28.00
+No
+Fu Zhongjun
+No
+Tan Jiong
+Wang Lin
+10.66
+54.26
+No
+Hu Hao
+43.60
+10.66
+54.26
+No
+Li Yunze
+3.68
+18.21
+43.60
+zzz
+7.18
+Yes
+ICBC
+Directors, Supervisors, Senior Management, Employees and Institutions
+Notes: (1) Since January 2015, the remuneration to the Chairman of the Board of Directors, the President, the Chairman of the Board of
+Supervisors and other executives of the Bank has followed the State's policies relating to the remuneration reform on executives
+of central enterprises.
+(2) According to the requirements of relevant government authorities, the total final remuneration payable to the Chairman of the
+Board of Directors, the President, the Chairman of the Board of Supervisors, Executive Directors, Shareholder Supervisors and
+other Senior Management members is still subject to final confirmation by relevant government authorities. Additional details of
+remuneration will be disclosed when they have been determined.
+(3) During the reporting period, Ms. Wang Xiaoya, Ms. Ge Rongrong, Mr. Zheng Fuqing, Mr. Fei Zhoulin, Mr. Cheng Fengchao and
+Mr. Fu Zhongjun were paid by Huijin for their performance of responsibilities as the Bank's Non-executive Directors.
+(4) Fee of Mr. Zhang Wei is his allowance obtained as Employee Supervisor of the Bank; Fees of Mr. Hui Ping and Mr. Huang Li are
+their allowances obtained as Employee Supervisors of the Bank, excluding their remuneration with the Bank in accordance with
+the employee remuneration system.
+(5) As the Bank's Independent Non-executive Directors served as directors or senior management of other legal persons or
+organizations other than the Bank or the controlled subsidiaries of the Bank, such legal persons or organizations became
+connected persons of the Bank. During the reporting period, the Bank's Independent Non-executive Directors obtained
+remuneration from such connected persons. Except to the extent of the aforementioned circumstances, none of the Bank's
+directors, supervisors and senior management were paid by the Bank's connected persons during the reporting period.
+(6) For the change of the Bank's directors, supervisors and senior management, please refer to the section headed "Directors,
+Supervisors, Senior Management, Employees and Institutions - Appointment and Removal".
+Basic Information on Employees and Institutions
+As at the end of 2016, the Bank had a total of 461,749 employees', representing a decrease of 4,597 as compared to the
+end of the previous year, of whom 5,560 were employees in domestic subsidiaries and 14,662 were local employees in
+overseas institutions.
+SPECIALIZATIONS AND ACADEMIC ACHIEVEMENTS OF DOMESTIC EMPLOYEES
+Employee Specialization
+Academic Achievements
+Personal banking
+39.6%
+Finance, accounting, treasury
+14.7%
+operations and operational
+management
+Bachelor
+49.9%
+Corporate banking
+10.8%
+90
+No
+22
+54.10
+Malcolm Christopher
+McCarthy
+Kenneth Patrick Chung
+Yi Xiqun
+Wang Chixi
+35.83
+35.83
+Yes
+44.00
+44.00
+Yes
+11.75
+11.75
+Yes
+36.43
+5.00
+43.61
+No
+Dong Juan
+Wei Guoxiong
+43.19
+10.91
+No
+No
+5.00
+47.00
+No
+Remuneration
+additional
+Other
+paid
+Name
+(before tax)
+medical
+insurances
+monetary
+Fee
+income
+(1)
+(2)
+(3)
+(4)
+Yi Huiman
+Gu Shu
+48.44
+10.66
+44.81
+10.66
+Qian Wenhui
+48.44
+10.66
+and
+annuities,
+entities
+shareholder
+◆ Directors
+At the Second Extraordinary General Meeting of 2015 held on 21 December 2015, Mr. Yang Siu Shun was appointed as
+Independent Non-executive Director of the Bank, and his qualification was approved by CBRC in April 2016. On 31 May
+2016, the Board of Directors of the Bank appointed Mr. Yi Huiman as Chairman of the Board of Directors of the Bank,
+and his qualification was approved by CBRC in June 2016. At the Annual General Meeting for the Year 2015 of the Bank
+held on 24 June 2016, Mr. Yi Huiman was appointed as Executive Director of the Bank, and Mr. Shen Si was appointed
+as Independent Non-executive Director of the Bank. The new term of office of Mr. Yi Huiman took effect from the date
+of review and approval by the meeting. The qualification of Mr. Shen Si remains to be approved by CBRC. At the First
+Extraordinary General Meeting of 2016 held on 29 November 2016, Mr. Gu Shu and Mr. Wang Jingdong were appointed
+as Executive Directors of the Bank, and Ms. Sheila Colleen Bair was appointed as Independent Non-executive Director
+of the Bank. The qualifications of Mr. Gu Shu and Mr. Wang Jingdong were approved by CBRC in December 2016. The
+qualification of Ms. Sheila Colleen Bair was approved by CBRC in March 2017.
+In October 2015, the Board of Directors of the Bank reviewed and approved the resignation of Mr. Yi Xiqun as Independent
+Non-executive Director due to work reasons, which became effective upon approval by CBRC of the qualification of the new
+Independent Non-executive Director in April 2016. In May 2016, Mr. Jiang Jianqing resigned from the positions of Chairman
+of the Board of Directors and Executive Director citing his age. In July 2016, Mr. Wang Xiquan resigned from the positions of
+Executive Director and Senior Executive Vice President of the Bank due to change of job. In October 2016, due to expiration
+of the term of office, Sir Malcolm Christopher McCarthy ceased to act as Independent Non-executive Director of the Bank.
+In January 2017, due to expiration of the term of office, Mr. Fu Zhongjun ceased to act as Non-executive Director of the
+Bank. In March 2017, due to expiration of the term of office, Mr. Kenneth Patrick Chung ceased to act as Independent Non-
+executive Director of the Bank.
+Supervisors
+On 23 June 2016, the Bank appointed Mr. Huang Li as Employee Supervisor of the Bank at the Interim Employees' Congress,
+and his term of office took effect from the date of review and approval by the Employees' Congress. The Bank appointed
+Mr. Zhang Wei and Mr. Shen Bingxi as Shareholder Supervisor and External Supervisor of the Bank respectively at the 2015
+Annual General Meeting on 24 June 2016, and their terms of office took effect from the date of review and approval by the
+meeting.
+On 23 June 2016, Ms. Wang Chixi resigned from the position of Shareholder Supervisor of the Bank citing her age, and Mr.
+Zhang Wei ceased to act as Employee Supervisor of the Bank due to change of job. On 24 June 2016, Ms. Dong Juan ceased
+to act as External Supervisor of the Bank due to expiration of the term of office.
+◆ Senior Management
+On 31 May 2016, the Board of Directors of the Bank appointed Mr. Yi Huiman as Chairman of the Board of Directors of the
+Bank. Meanwhile, Mr. Yi Huiman resigned from the position of President of the Bank. According to relevant regulations, Mr.
+Yi Huiman shall act as President until the new President is elected with his qualification approved by CBRC. On 27 September
+2016, the Board of Directors of the Bank engaged Mr. Gu Shu as President of the Bank, and his qualification was approved
+by CBRC in October 2016.
+On 31 May 2016, the Board of Directors of the Bank appointed Mr. Guan Xueqing as Board Secretary of the Bank, and his
+qualification was approved by CBRC in July 2016. In July 2016, Mr. Hu Hao ceased to hold the position as Board Secretary of
+the Bank due to work reasons. Mr. Wang Bairong started to act as Chief Risk Officer of the Bank in July 2016. On 30 August
+2016, the Board of Directors of the Bank appointed Mr. Li Yunze as Senior Executive Vice President of the Bank, and his
+qualification was approved by CBRC in October 2016. On 28 October 2016, the Board of Directors of the Bank engaged Mr.
+Tan Jiong as Senior Executive Vice President of the Bank, and his qualification was approved by CBRC in January 2017.
+In July 2016, Mr. Wang Xiquan ceased to act as Senior Executive Vice President of the Bank due to work change and Mr.
+Wei Guoxiong ceased to act as Chief Risk Officer of the Bank for the reason of his age.
+Annual Report 2016
+89
+Zhang Hongli
+Directors, Supervisors, Senior Management, Employees and Institutions
+Remuneration from the Bank
+Contribution
+by the
+employer
+to social
+insurance,
+housing
+allowance,
+Unit: RMB10,000
+Obtain
+remuneration
+from
+Annual Remuneration
+Hui Ping
+43.60
+Wang Jingdong
+Or Ching Fai
+47.00
+47.00
+Yes
+Hong Yongmiao
+Anthony Francis Neoh
+Yang Siu Shun
+Sheila Colleen Bair
+Associate
+47.00
+Yes
+45.50
+45.50
+Yes
+29.25
+29.25
+Yes
+No
+Zhang Wei
+39.37
+13.05
+2.50
+54.92
+Yes
+Yes
+Yes
+Cheng Fengchao
+43.60
+10.66
+Wang Xiaoya
+Ge Rongrong
+Total
+remuneration
+before tax
+or other
+connected
+persons or
+not
+(5)=(1)+(2)+(3)+(4)
+59.10
+10.66
+No
+No
+59.10
+No
+54.26
+No
+54.26
+No
+Yes
+Yes
+Zheng Fuqing
+Fei Zhoulin
+55.47
+31.2%
+1
+6.7%
+Comprehensive
+Administration
+Departments
+Supporting
+Departments
+Profitability
+Units
+Directly
+Controlled
+Institutions
+Domestic
+Institutions
+Overseas
+Institutions
+Note: The above is the corporate governance framework chart as of the end of 2016.
+The Bank has made constant efforts to improve the corporate governance and checks and balances mechanism comprising
+the Shareholders' General Meeting, the Board of Directors, the Board of Supervisors and the Senior Management featuring
+clearly-defined responsibilities and accountability, coordination and effective checks and balances, and to optimize
+responsibilities of the authority organ, decision-making organ, supervisory organ and executive organ. As a result, the
+corporate governance operation mechanism with scientific decision-making process, effective supervision and steady
+operation has been in place.
+Responsibilities of the Shareholders' General Meeting
+As the authority organ of the Bank, the Shareholders' General Meeting involves all shareholders. The Shareholders'
+General Meeting is responsible for, among others, deciding on business policies and material investment plans of the Bank;
+considering and approving the proposals on the annual financial budget, final accounts, profit distribution plans and loss
+recovery plans, electing and changing directors, shareholder supervisors and external supervisors; considering and approving
+the work report of the Board of Directors and the work report of the Board of Supervisors; adopting resolutions on merger,
+division, dissolution, liquidation, change of corporate form, increase or decrease of registered capital, issuance and listing
+of corporate bonds or other negotiable securities and repurchase of stocks; and amending the Articles of Association of the
+Bank.
+Annual Report 2016
+93
+Corporate Governance Report
+Responsibilities of the Board of Directors
+As the decision-making organ of the Bank, the Board of Directors of the Bank is accountable to, and shall report to, the
+Shareholders' General Meeting. The Board of Directors is responsible for, among others, convening the Shareholders'
+General Meeting; implementing resolutions of the Shareholders' General Meeting; deciding on business plans, investment
+plans and development strategies of the Bank; formulating annual financial budgets and final accounts of the Bank;
+formulating profit distribution plans and loss recovery plans; formulating proposals on the increase or decrease of registered
+capital of the Bank; formulating fundamental management rules on risk management and internal control, and supervising
+the implementation of these rules; appointing or removing the President and the Board Secretary, and based on the
+President's nomination, appointing or removing Senior Executive Vice Presidents and other Senior Management members
+(except the Board Secretary), and deciding on their remuneration, rewards and sanctions; deciding or authorizing the
+President to set up relevant head office departments of the Bank; regularly evaluating and improving corporate governance
+of the Bank; managing information disclosure matters of the Bank; and supervising and ensuring effective performance of
+management responsibilities of the President and other Senior Management members.
+Responsibilities of the Board of Supervisors
+As the supervisory organ of the Bank, the Board of Supervisors is accountable to, and shall report to, the Shareholders'
+General Meeting. The Board of Supervisors is responsible for, among others, supervising the performance and due diligence
+of Directors and Senior Management members; supervising the performance of duties of the Board of Directors and
+the Senior Management; conducting audits on retiring or resigning Directors and Senior Management members where
+appropriate; examining and supervising the Bank's financial activities; examining financial information such as financial
+report, business report and profit distribution plan to be submitted to the Shareholders' General Meeting by the Board of
+Directors; examining and supervising business decisions, risk management and internal control of the Bank, and providing
+guidance for the internal audit departments of the Bank; formulating performance assessment measures for supervisors,
+assessing the performance and conduct of supervisors, and reporting to the Shareholders' General Meeting for approval;
+presenting proposals to the Shareholders' General Meeting; proposing to convene extraordinary general meetings,
+and convening and presiding over such meetings in case the Board of Directors fails to perform its duty of convening
+Shareholders' General Meeting; proposing to convene interim meetings of the Board of Directors.
+Responsibilities of the Senior Management
+As the executive organ of the Bank, the Senior Management is accountable to the Board of Directors. The Senior
+Management is responsible for, among others, carrying out operational management of the Bank; organizing the
+implementation of business plan and investment plan approved by the Board of Directors; formulating detailed regulations
+and rules for operational management; formulating proposals on remuneration distribution and performance assessment for
+heads of internal departments and branches of the Bank; reporting operating results to the Board of Directors and the Board
+of Supervisors; preparing the annual financial budget, final accounts, profit distribution plans and loss recovery plans, and
+proposals on the increase or decrease of registered capital, issuance or listing of bonds, and making recommendations to the
+Board of Directors.
+Overview of Corporate Governance
+During the reporting period, the Bank highlighted the improvement of corporate governance as a key move in responding to
+the challenges and opportunities under the new normal in economic development. The Bank accommodated to regulatory
+requirements on Global Systemically Important Banks, and constantly improved the structure, mechanism and culture of
+corporate governance. It enhanced the enterprise risk management of the Group, and the interaction between the parent
+bank and subsidiaries as well as the collaboration between the domestic and overseas institutions, and strove to deliver
+better services and sharpen core competitiveness, boosting the healthy and sustainable development of all businesses. There
+is neither any material divergence between actual corporate governance of the Bank and applicable regulatory documents
+regarding corporate governance issued by CSRC, nor any problem identified by regulatory authorities but remain unresolved
+in respect of corporate governance. During the reporting period, the Bank received various important domestic and overseas
+corporate governance awards, including the "Hong Kong Corporate Governance Excellence Award" by The Chamber of
+94
+ICBC
+Supervision
+Committee
+Corporate Governance Report
+Risk
+Management
+Departments
+Internal Audit
+Sub-bureau
+Audit Committee
+Senior
+Management
+Financial
+Approval
+Committee
+Information
+Information
+Technology
+Technology
+Approval
+Committee
+Management
+Committee
+Business & Product
+Innovation
+Management
+Committee
+Asset & Liability
+Management
+Committee
+Risk
+Management
+Committee
+Credit
+Approval
+Committee
+Credit Risk
+Management
+Committee
+Market Risk
+Management
+Committee
+Operational Risk
+Management
+Committee
+Internal Audit
+Bureau
+Marketing
+Management
+Departments
+Hong Kong Listed Companies, "The Asset Corporate Award Platinum Award" by The Asset, the "Best Listed Company"
+by Hong Kong Ta Kung Wen Wei Media Group, the "Best Board of Directors" by the magazine Board and Directors, the
+"2016 Outstanding Board of Directors of Strategic Chinese Listed Companies" by the 21st Century Business Herald.
+Construction of the Organizational Framework of Corporate Governance
+During the reporting period, the Bank appointed and renewed the appointments of some directors and changed the
+chairman and members of some special committees of the Board of Directors to ensure the Bank operated in compliance
+with laws and regulations. The Bank continued to improve the structure of the Board of Directors and further gave play
+to the decision-making supporting role of the special committees of the Board of Directors. Besides, the Bank stepped
+up efforts in the Group's corporate governance, and established and refined the group management and control and
+collaboration mechanism as well as the corporate governance framework, institutional system and working mechanism of its
+subsidiaries.
+Ordinary shareholders of the Bank have the right to collect dividends and other forms of benefits distributed on the basis
+of the number of shares held by them; preference shareholders of the Bank enjoy precedence over ordinary shareholders in
+dividend distribution. Shareholders have other rights conferred by laws, administrative regulations, rules and the Articles of
+Association of the Bank.
+Effective Communication with Shareholders
+The Bank has strictly complied with laws, regulations, regulatory requirements and fundamental regulations of corporate
+governance, and has taken various measures such as improving information disclosure management, strengthening investor
+relations management and optimizing the operations mechanism of the Shareholders' General Meeting, with a view to
+safeguarding the rights of all shareholders, especially minority investors, and increasing communication and exchange
+among shareholders.
+Upholding the principle of "authenticity, accuracy, completeness, timeliness and fairness", the Bank proactively reinforced
+the Group's information disclosure management. In order to meet the needs of investors and other stakeholders, the Bank
+continuously enhanced the Group's voluntary information disclosure and improved the Bank's level of transparency, thereby
+effectively guaranteeing the right of all stakeholders including shareholders and customers to information.
+The Bank improved various communication channels for investors through organizing press conferences in relation to
+periodic results and domestic and overseas road shows and attending famous investment forums at home and abroad during
+the reporting period. The Bank gave full play to the communication platforms including investor interactive platform of
+SSE, investor relations website, investor hotline and investor email of the Bank, to understand investors' needs and provide
+sufficient information feedback in a timely manner.
+During the reporting period, convening, holding, notices, announcements, proposals, voting and other procedures of the
+shareholders' general meetings of the Bank strictly complied with the relevant provisions of the Company Law and the
+Articles of Association of the Bank, ensuring that shareholders could exercise their right of participation in the Shareholders'
+General Meetings smoothly. Since it was listed, in order to treat A and H minority shareholders fairly, the Bank has held
+the Annual General Meeting in Beijing and Hong Kong concurrently by satellite and set up registration offices of A and
+H shareholders both in Beijing and Hong Kong to facilitate the voting of shareholders. The number of shareholders who
+participated in voting at the Annual General Meeting for the Year 2015 amounted to 3,223.
+Annual Report 2016
+97
+Corporate Governance Report
+Contacts
+Pursuant to relevant laws and regulations as well as the Articles of Association of the Bank, shareholders can put forward
+suggestions and inquiries through participating in activities including the Shareholders' General Meetings, press conferences
+in relation to periodic results and road shows of the Bank or by means of platforms including investor interactive platform of
+SSE, investor relations website, investor hotline and investor email and hotline, fax and email of the Shareholders' General
+Meetings of the Bank as well. For contact details, please refer to the section headed "Corporate Governance Report
+Investor Relations".
+If an ordinary shareholder wishes to enquire about share transfer, changes in name or address, reporting loss of share
+certificates and dividend notes or any other information relating to his/her shares, please contact the Share Registrars of the
+Bank. For contact details, please refer to "Corporate Information".
+Shareholders' General Meeting
+During the reporting period, the Bank convened the 2015 Annual General Meeting on 24 June 2016 and the First
+Extraordinary General Meeting of 2016 on 29 November 2016. The aforementioned Shareholders' General Meetings were
+convened and held in strict compliance with relevant laws and regulations and the Articles of Association of the Bank. The
+Bank made announcements on the resolutions and disclosed legal opinions in a timely manner in accordance with regulatory
+requirements. For details of the above meetings, please refer to the announcements of the Bank dated 24 June 2016 and 29
+November 2016 respectively on the websites of SSE and SEHK, or the website of the Bank.
+Implementation of Resolutions of the Shareholders' General Meeting by the Board
+of Directors
+The Board of Directors of the Bank earnestly and fully implemented the resolutions adopted by the Shareholders' General
+Meeting of the Bank during the reporting period.
+Board of Directors and Special Committees
+Composition of the Board of Directors
+The Bank formulated relatively complete procedures for nominating and electing directors. With diversified backgrounds, the
+Directors complemented each other on one hand with regard to their expertise, professional competence and experience
+and expressed diversified perspectives and views, which ensured scientific decision-making of the Board of Directors. As
+at the disclosure date of this annual report, the Board of Directors of the Bank consisted of 14 directors, including four
+Executive Directors: Mr. Yi Huiman, Mr. Gu Shu, Mr. Zhang Hongli and Mr. Wang Jingdong; five Non-executive Directors:
+Ms. Wang Xiaoya, Ms. Ge Rongrong, Mr. Zheng Fuqing, Mr. Fei Zhoulin and Mr. Cheng Fengchao; and five Independent
+Non-executive Directors: Mr. Or Ching Fai, Mr. Hong Yongmiao, Mr. Anthony Francis Neoh, Mr. Yang Siu Shun and Ms.
+Sheila Colleen Bair. Mr. Yi Huiman was Chairman and Mr. Gu Shu was Vice Chairman of the Board of Directors. All Executive
+Directors have worked in the areas of banking and management for a long time, possess extensive professional expertise
+and experience in those areas and are familiar with operation and management of the Bank. Most Non-executive Directors
+specialize in economic management and have rich management experience and good understanding of relevant policies
+and theories. Most of the Independent Non-executive Directors are prestigious experts in the areas of economy, finance
+and audit and law respectively, and most of them once worked at international institutions and are familiar with corporate
+finance and management. The number of Independent Non-executive Directors of the Bank accounted for more than one
+third of the total members of the Board of Directors, complying with relevant regulatory requirements.
+Meetings of the Board of Directors
+During the reporting period, the Board of Directors of the Bank held eight meetings, considered 65 proposals including the
+proposals on the 2015 Work Report of the Board of Directors, election of Chairman and Vice Chairman of the Board of
+Directors, nomination of candidates for directors, and distribution of dividends on preference shares and ordinary shares,
+and heard 22 reports including the reports on the 2016 Work Plan of the Board of Directors, the directors' performance
+98
+ICBC
+Other rights
+In the following circumstances, preference shareholders have the right to attend the Shareholders' General Meeting and
+jointly vote with ordinary shareholders as of the date following the date on which the Shareholders' General Meeting
+approves the profit distribution plan for the given year not in accordance with the previous agreement: the Bank fails to pay
+dividends on preference shares for three accounting years accumulatively or two consecutive accounting years contrary to
+previous agreement. Where the dividend of the preference shares cannot be accumulated, the voting rights of preference
+shareholders of the Bank shall be recovered until the Bank pays the dividend in full amount for the given year.
+In the following circumstances, preference shareholders of the Bank have the right to attend the Shareholders' General
+Meeting and exercise voting rights: (1) amendment of contents of the Articles of Association relating to preference
+shares; (2) decrease of the registered capital of the Bank by more than 10% once or cumulatively; (3) merger, division and
+dissolution of the Bank or change of the Bank's corporate form; (4) issuance of preference shares; or (5) other circumstances
+of changing or abolishing rights of preference shareholders as specified by the Articles of Association. If any of the above
+circumstances occurs, the Bank shall notify preference shareholders of the convening of the Shareholders' General Meeting,
+and observe the procedure specified by the Articles of Association for notifying ordinary shareholders.
+Special provisions on rights of preference shareholders
+Construction of the Corporate Governance Mechanism
+The Bank put the strategic decision-making role and corporate governance leading role of the Board of Directors into
+good use. Upholding scientific development and the acceleration of change in the mode of development, the Board of
+Directors focused on the reform of important fields and key links, stepped up the operational transformation and structural
+adjustment of the Bank and constantly followed up the implementation of strategies, plans and decisions, ensuring the
+stable operation and sound development of the Group. In addition, the Board of Directors kept improving corporate
+governance, consolidated enterprise risk management and internal control, stepped up information disclosure and managed
+investor relations in a more professional manner, and strengthened the building of a mechanism to support its duty
+performance, ensuring it discharge its duties in a legal, compliant and efficient manner.
+The Bank put the supervisory function of the Board of Supervisors into good use. The Board of Supervisors continuously
+improved its working mechanism in accordance with the priorities of the Bank, specified the details and methods of its
+supervision over performance of the Board of Directors and the Senior Management and earnestly conducted the annual
+performance assessment. Financial supervision and supervision over risk management and internal control of the Bank
+were enhanced. The role of the Board of Supervisors which is key to corporate governance was effectively exerted, and this
+promoted the legal and compliant operation and healthy and stable development of the Bank.
+The Bank improved its enterprise risk management system comprehensively and amended and refined the rules on
+consolidated management to enhance the consolidated management of the Group. Risk management of non-banking
+subsidiaries was strengthened, the risk assessment indicator system was revised, and prevention and control of credit risk
+during the economic downward cycle were highly valued. Moreover, the Bank continuously improved internal control
+and compliance management mechanism and raised its whole-process management capacity in regard to compliance risk
+and operational risk of the Group. As for audit work, the Bank thoroughly implemented risk-oriented audit activities and
+constantly promoted professional update. As for human resource management improvement, the Bank accelerated the
+human resource structure adjustment, enhanced human resource allocation efficiency and focused more on training and
+development of talents in key fields. As for social responsibility management reinforcement, the Bank explored work patterns
+to fulfill its social responsibilities given its own characteristics.
+The Bank continuously increased the level of transparency. By adhering to the principle of "authenticity, accuracy,
+completeness, timeliness and fairness", the Bank disclosed information in a legal and compliant manner. It further refined
+its information disclosure rules, continued to improve management mechanisms and procedures and constantly pushed
+ahead the team building of professional talents. This led to increasingly better management of the Group over information
+disclosure.
+Annual Report 2016
+95
+Corporate Governance Report
+Development of Corporate Governance Regulations
+During the reporting period, pursuant to the domestic and overseas regulatory requirements as well as its internal corporate
+governance, the Bank amended the Working Regulations for the Risk Management Committee of the Board of Directors
+and the Working Regulations for the Audit Committee of the Board of Directors. The Risk Management Committee of the
+Board of Directors concurrently serves the duty of risk committee for institutions in USA in accordance with the amended
+Working Regulations for the Risk Management Committee of the Board of Directors. In addition, the Bank formulated
+the Administrative Measures for Suspension and Exemption of Information Disclosure, pursuant to the relevant regulatory
+requirements, to further regulate the suspension and exemption of information disclosure.
+Compliance with the Corporate Governance Code ("the Code")
+Related Party
+Transactions Control
+Committee
+Regarding Code Provision A.2.1 of the Corporate Governance Code (the "Code") under Appendix 14 of the Hong Kong
+Listing Rules, on 31 May 2016, the Board of Directors of the Bank elected Mr. Yi Huiman as Chairman. Meanwhile, Mr. Yi
+Huiman resigned from the position as President of the Bank. Pursuant to the relevant provisions, Mr. Yi Huiman will perform
+his duties as President until the new President is elected and the approval from CBRC is obtained. On 27 September 2016,
+the Board of Directors of the Bank elected Mr. Gu Shu as President and his qualification was approved by CBRC in October
+2016. The Bank has since complied with the requirements of the above Code Provision.
+Save as disclosed above, during the reporting period, the Bank fully complied with the principles, code provisions and the
+recommended best practices stipulated in the Code.
+Shareholders' Rights
+Proposing the convening of an extraordinary general meeting
+An extraordinary general meeting should be convened within 2 months from the date when shareholders holding more than
+10% of the voting shares of the Bank, either individually or jointly, request to convene in writing. Proposing shareholders
+shall have the right to request the board of directors in writing to convene an extraordinary general meeting of shareholders.
+The Board of Directors shall make a written response as to whether or not it agrees to convene such a meeting within 10
+days upon receipt of the request in accordance with laws, administrative regulations, rules and the Articles of Association of
+the Bank. Reasonable expenses incurred from the case where shareholders convene the meeting by themselves due to the
+failure of the Board of Directors to convene the meeting shall be borne by the Bank, and deducted from the payment to
+those negligent directors.
+Submitting interim proposals for the Shareholders' General Meeting
+Shareholders who hold more than 3% of shares of the Bank, either individually or jointly, may prepare an interim proposal
+and submit it in writing to the Board of Directors 10 days before the Shareholders' General Meeting is convened. The Board
+of Directors shall issue a supplementary notice for the Shareholders' General Meeting within 2 days upon receipt of the
+proposal and submit such proposal to the Shareholders' General Meeting for approval.
+Putting forward suggestions or inquiries
+Shareholders are entitled to supervise business operation of the Bank and put forward suggestions or inquiries accordingly.
+Shareholders are entitled to review the information of the Bank such as the Articles of Association, the register of
+shareholders, share capital documents and minutes of Shareholders' General Meetings, etc.
+96
+ICBC
+Corporate Governance Report
+Regarding Code Provision A.5.1 of the Code, on 31 October 2016, the former Independent Non-executive Director Sir
+Malcolm Christopher McCarthy left office as his tenure expired. On 13 January 2017, the Board of Directors of the Bank
+approved the appointment of Independent Non-executive Director Mr. Yang Siu Shun as member of the Nomination
+Committee. The Bank has since complied with the requirements of the above Code Provision.
+Management
+Compensation
+Committee
+Risk Management
+Committee
+(%)
+Head Office
+8,368,773
+34.7
+30
+0.2
+3.4
+Yangtze River Delta
+5,194,868
+21.5
+2,583
+15.0
+62,541
+13.5
+Pearl River Delta
+3,096,641
+12.8
+2,097
+12.2
+50,759
+11.0
+Bohai Rim
+3,626,559
+Employees
+15.0
+(%)
+Number of Percentage
+(%) institutions
+Below associate
+13.3%
+Risk and compliance
+5.7%
+management
+Master
+IT
+3.2%
+5.5%
+0.1%
+Doctorate
+Other financial businesses
+2.8%
+Non-banking business
+Others
+1.3%
+15.2%
+At the end of 2016, the Bank had a total of 17,200 institutions, representing a decrease of 298 as compared with the end
+of the previous year. Among them, there were 16,788 domestic institutions and 412 overseas ones. Domestic institutions
+include the Head Office, 31 tier-one branches, five branches directly controlled by the Head Office, 27 banking offices of
+tier-one branches, 413 tier-two branches, 3,076 tier-one sub-branches, 13,098 outlets, 29 Head Office-level profitability
+units along with their directly controlled institutions and branches, and 108 major subsidiaries and their branches.
+Does not include labor dispatched for services totaling 301 persons, of whom 39 were dispatched to major subsidiaries.
+Annual Report 2016
+91
+Directors, Supervisors, Senior Management, Employees and Institutions
+GEOGRAPHIC DISTRIBUTION OF ASSETS, INSTITUTIONS AND EMPLOYEES (As at the end of December 2016)
+Assets Percentage
+Item
+(in RMB millions)
+Percentage
+2,790
+16.2
+72,712
+4.4
+Eliminated and
+undistributed assets
+(5,450,863)
+(22.5)
+Total
+24,137,265
+100.0
+17,200
+100.0
+461,749
+100.0
+Note: (1) Overseas and other assets include investments in associates and joint ventures.
+92
+ICBC
+Corporate Governance Report
+Corporate Governance Framework
+Board of
+Directors
+Shareholders'
+General Meeting
+Primary reporting line
+Secondary reporting line
+Board of
+Supervisors
+Strategy
+Committee
+20,222
+3.0
+520
+13.0
+15.7
+Central China
+2,275,456
+9.4
+3,633
+21.1
+93,805
+20.3
+Western China
+2,827,331
+11.7
+Nomination
+Committee
+3,837
+94,908
+20.6
+Northeastern China
+1,068,632
+4.4
+1,710
+10.0
+51,136
+11.1
+Overseas and others
+3,129,868
+22.3
+15,666
+14.53
+Directors, Supervisors, Senior Management, Employees and Institutions
+Appointment and Removal
+103
+Corporate Governance Report
+◆Related Party Transactions Control Committee
+The Related Party Transactions Control Committee is mainly responsible for identifying the Bank's related parties, examining
+major related party transactions, and receiving related party transaction statistics and reporting information of general
+related party transactions. As at the disclosure date of this annual report, the Related Party Transactions Control Committee
+consisted of four directors, including Executive Director Mr. Wang Jingdong, Independent Non-executive Directors Mr.
+Yang Siu Shun, Mr. Or Ching Fai and Mr. Hong Yongmiao. Independent Non-executive Director Mr. Yang Siu Shun was the
+chairman of the committee.
+Performance of the Related Party Transactions Control Committee During the reporting period, the Related Party
+Transactions Control Committee held three meetings, considered two proposals including the proposal on identification of
+related parties of the Bank, and heard two reports on the related party transactions in 2015 and the identification of related
+parties of the Bank in 2015. The Related Party Transaction Control Committee put forward comments or suggestions on
+matters including the improvement of management of related party transactions and inside transactions of the Bank.
+◆ Important Comments and Suggestions Put Forward by Special Committees of the Board of Directors
+During the reporting period, the Strategy Committee put forward comments or suggestions on matters including the
+strategic development planning, strategic capital allocation, annual final accounts and IT development planning of the
+Bank. The Audit Committee put forward comments or suggestions on matters including the preparation of regular reports,
+the arrangements of internal and external audit and improvement of internal control mechanism. The Risk Management
+Committee put forward comments or suggestions on matters including the risk management strategy, the Group's AML
+work, the risk management of institutions in USA and the risk of outsourcing business. The Nomination Committee
+put forward comments or suggestions on matters including the recommendation and nomination of candidates for
+directors, the assessment of the composition of the Board of Directors and the candidates for chairmen and members of
+special committees of the Board of Directors. The Compensation Committee put forward comments or suggestions on
+matters including the revisions to and improvement of the rules and plan on the assessment of performance of duties of
+directors by the Board of Directors and the remuneration assessment plan for Senior Management members. The Related
+Party Transaction Control Committee put forward comments or suggestions on matters including the improvement of
+management of related party transactions and inside transactions of the Bank.
+Responsibilities of Directors in Respect of Financial Statements
+The Directors of the Bank acknowledged that they are responsible for the preparation of the financial statements of the
+Bank. During the reporting period, in strict compliance with relevant provisions, the Bank published the 2015 Annual Report,
+the First Quarterly Report, the Interim Report and the Third Quarterly Report of 2016 as scheduled.
+Term of Directors
+The Bank has strictly complied with the exchanges on which the Bank is listed and the Articles of Association of the Bank
+that Directors are elected by the Shareholders' General Meeting with a term of three years, and the appointment shall take
+effect from the date of approval by CBRC. Directors may be re-appointed through re-election at the Shareholders' General
+Meeting after expiry of their term. The term for re-appointment is from the date of approval by the Shareholders' General
+Meeting.
+104
+ICBC
+Corporate Governance Report
+Annual Report 2016
+Investigation and Training of Directors
+Subject matters of the trainings attended by the Directors of the Bank during the reporting period were mainly as follows:
+Trainings held by the regulatory institutions:
+•
+SSE Training on Qualifications of Independent Directors
+•
+Beijing Office of CSRC
+New Business in the Mobile Internet and Big Data Era
+•
+Beijing Office of CSRC
+•
+Beijing Office of CSRC
+M&A and Reorganization of Enterprises in the SOE reform
+•
+Beijing-Tianjin-Hebei Integration and Development of Listed Companies in Beijing
+During the reporting period, the Bank developed the training plan for the Board of Directors, increased training resources,
+and encouraged and actively organized the Directors to attend trainings, with the aim of assisting the Directors in continuing
+to improve their comprehensive quality and ability to perform their duties. During the reporting period, the Directors of the
+Bank complied with relevant regulatory requirements, and attended relevant trainings according to work needs. Besides,
+the Directors of the Bank enhanced their professional level by attending forums and seminars as well as conducting on-site
+investigations in some domestic and overseas peers and affiliates of the Bank.
+The Hong Kong Institute of Chartered Secretaries Annual Financial Audit and Performance Report
+The Compensation Committee organized the performance assessment of directors, and put forth proposal on remuneration
+distribution for directors and submitted the same to the Shareholders' General Meeting after the approval of the Board
+of Directors. It also formulated and reviewed the assessment measures and compensation plans for Senior Management
+members of the Bank and evaluated the performance and behaviors of Senior Management members, results of which
+were submitted to the Board of Directors or the Shareholders' General Meeting, if falling into the responsibilities of the
+Shareholders' General Meeting, for approval. According to applicable regulations including the Measures on the Assessment
+of Performance of Duties of Directors in Commercial Banks (Trial) issued by CBRC, the Articles of Association and the Rules
+on the Assessment of Performance of Duties of Directors by the Board of Directors (Trial) of the Bank, the Compensation
+Committee organized the performance assessment of directors by the Board of Directors for 2015.
+The Compensation Committee is mainly responsible for formulating assessment measures on the performance of duties
+for directors, organizing the assessment on the performance of duties of Directors, putting forth proposal on remuneration
+distribution for Directors, putting forth proposal on remuneration distribution for Supervisors based on the performance
+assessment on Supervisors carried out by the Board of Supervisors, formulating and reviewing the assessment measures and
+compensation plans for Senior Management members of the Bank and evaluating the performance and behaviors of Senior
+Management members. As at the disclosure date of this annual report, the Compensation Committee consisted of five
+directors, including Executive Director Mr. Gu Shu; Independent Non-executive Directors Mr. Anthony Francis Neoh, Mr. Or
+Ching Fai and Mr. Yang Siu Shun; and Non-executive Director Ms. Wang Xiaoya. Independent Non-executive Director Mr.
+Anthony Francis Neoh was the chairman of the committee.
+◆ Audit Committee
+The Audit Committee is mainly responsible for supervising, inspecting and evaluating internal control, financial information
+and internal audit of the Bank and assessing mechanisms for the Bank's staff to report misconducts in financial statements,
+internal control, etc. and for the Bank to make independent and fair investigations and take appropriate actions. As at the
+disclosure date of this annual report, the Audit Committee consisted of six directors, including Independent Non-executive
+Directors Mr. Or Ching Fai, Mr. Hong Yongmiao, Mr. Anthony Francis Neoh and Mr. Yang Siu Shun; Non-executive Directors
+Mr. Fei Zhoulin and Mr. Cheng Fengchao. Independent Non-executive Director Mr. Or Ching Fai was the chairman of the
+committee.
+100
+ICBC
+Corporate Governance Report
+Performance of the Audit Committee During the reporting period, the Audit Committee held five meetings, considered
+eight proposals including the proposals on the 2016 internal audit plan, the 2015 annual report and revisions to the
+Basic Regulations on Internal Control and heard 11 reports including the reports on the 2015 internal audit report and
+management suggestions. The Audit Committee put forward comments or suggestions on matters including the preparation
+of regular reports, the arrangement of internal and external audit and improvement of internal control mechanism.
+• Reviewing periodical reports
+The Audit Committee reviewed financial statements of the Bank on a regular basis, and had reviewed and submitted to
+the Board of Directors to approve the annual report, interim report and quarterly reports of the Bank. It also organized and
+conducted the internal control assessment for 2015 of the Group and engaged external auditors to audit the assessment
+report and procedures of the Bank with respect to the relevant regulatory requirements. Additionally, it enhanced
+communication with external auditors, attached importance to the supervision of external auditors and heard several reports
+of external auditors concerning audit plan, audit results, and management proposals.
+During the preparation and audit of the 2016 financial statements, the Audit Committee set out related matters such as
+audit schedule and arrangement through negotiation with external auditors, followed the status of external audit and
+conducted supervision over relevant work at appropriate time by means of hearing reports and holding informal discussions,
+and reviewed the unaudited and preliminarily audited annual financial statements respectively. The Audit Committee held a
+meeting on 28 March 2017, and considered that the annual financial statements truly and completely reflected the financial
+position of the Bank. The Audit Committee reviewed the summary of audit work performed by external auditors during the
+year and made an overall and objective assessment on its performance and quality of practice. It also approved the renewal
+of the engagement of KPMG Huazhen LLP and KPMG as the external auditors of the Bank for 2017 and the engagement
+of KPMG Huazhen LLP as the internal control auditors of the Bank for 2017, and presented the proposals to the Board of
+Directors for consideration.
+Examining internal control system
+The Audit Committee is responsible for constantly monitoring and examining the internal control system of the Bank,
+and examining the effectiveness of the system at least on an annual basis. The Audit Committee performed its function
+of examining the Bank's internal control system through reviewing the administrative rules and regulations and their
+implementation, and examined and assessed the compliance and effectiveness of major operating activities of the Bank.
+The Board of Directors of the Bank is responsible for establishing, improving and effectively implementing internal control
+and truthfully disclosing internal control assessment reports according to the standard system for enterprise internal control.
+The objective of the internal control of the Bank is to reasonably assure the compliance of its operation and management
+with relevant laws, safety of its assets, as well as the authenticity and completeness of its financial reports and relevant
+information, in order to enhance operation efficiency and results, and to facilitate the realization of its development strategy.
+Due to inherent limitation of internal control, only reasonable assurance can be provided for the aforementioned objectives.
+The Board of Directors and the Audit Committee have reviewed and approved the 2016 Internal Control Assessment Report
+of the Bank. For details of the Bank's internal control, please refer to "Corporate Governance Report - Internal Control".
+Effectiveness of the internal audit function
+The Bank has established a vertical and independent internal audit management system responsible and reporting to
+the Board of Directors. The Board of Directors regularly reviews the internal audit plan and hears internal audit reports
+on internal audit activities, audit supporting measures, internal audit team building, etc., thus effectively performing the
+function of risk management. The Audit Committee examines, monitors and assesses the internal audit work of the Bank,
+supervises the internal audit rules and their implementation, and makes assessment of audit procedures and results of the
+internal audit department. It is also responsible for urging the Bank to ensure adequate resources for the internal audit
+department and coordinating the communication between the internal audit department and external auditors. The internal
+audit department is accountable to and reports to the Board of Directors, is guided by the Board of Supervisors and is under
+the examination, supervision and assessment of the Audit Committee. For details of the internal control, please refer to
+"Corporate Governance Report - Internal Control".
+Annual Report 2016
+101
+Performance of the Compensation Committee During the reporting period, the Compensation Committee held three
+meetings, considered four proposals including the proposals on the revisions to the rules on the assessment of performance
+of duties of directors by the Board of Directors, the payment of remuneration to directors, supervisors and Senior
+Management members for 2015 and the Senior Management performance evaluation plan for 2016, and heard two reports
+on the directors' performance assessment by the Board of Directors for 2015 and the plan for the directors' performance
+assessment by the Board of Directors for 2016. The Compensation Committee put forward comments or suggestions on
+matters including the revisions to and improvement of the rules and plan on the assessment of performance of duties of
+directors by the Board of Directors and the remuneration assessment plan for Senior Management members.
+Corporate Governance Report
+The Risk Management Committee is primarily responsible for reviewing and revising the strategy, policy and procedures
+of risk management and internal control process of the Bank, and supervising and evaluating the performance of Senior
+Management members and risk management department in respect of risk management. It concurrently serves as the
+US risk commitee in accordance with the relevant requirements in the Enhanced Prudential Standards on Bank Holding
+Companies and Foreign Banking Organisation established by the Federal Reserve Board. As at the disclosure date of this
+annual report, the Risk Management Committee consisted of eight directors, including Executive Director Mr. Zhang Hongli;
+Independent Non-executive Directors Mr. Anthony Francis Neoh, Mr. Hong Yongmiao and Ms. Sheila Colleen Bair; Non-
+executive Directors Ms. Ge Rongrong, Mr. Zheng Fuqing, Mr. Fei Zhoulin and Mr. Cheng Fengchao. Independent Non-
+executive Director Mr. Anthony Francis Neoh was the chairman of the committee.
+Performance of the Risk Management Committee During the reporting period, the Risk Management Committee
+held six meetings, reviewed 12 proposals including the liquidity risk management strategy for 2016, the country risk
+concentration limit for 2016-2017, revisions to the Administrative Regulations on Market Risks (2016 Edition) and
+functioning of the Risk Management Committee of the Board as the risk committee for institutions in the US. The
+Committee also heard 15 reports including the reports on the risk management and the Group's AML work for 2015 and
+the first half of 2016 and the business development and risk management of institutions in USA. The Risk Management
+Committee put forward comments or suggestions on matters including the risk management strategy, the Group's AML
+work and the risk management of institutions in USA.
+Examining the risk management system
+The Risk Management Committee is responsible for constantly monitoring and examining the risk management system of
+the Bank, and examining the effectiveness of the system at least on an annual basis. Under the enterprise risk management
+system structure of the Bank, the Risk Management Committee performed its function of examining the Bank's risk
+management system through reviewing and revising the risk strategy, risk management policy, risk appetite and the
+enterprise risk management structure, monitoring and evaluating the setup, mode of organization, work procedures and
+results of risk management departments, regularly assessing the risk appetite and the enterprise risk management status,
+supervising and assessing control activities conducted by the Senior Management members in terms of credit risk, market
+risk, operational risk and other risks. The Board of Directors and the Risk Management Committee heard the report made by
+the Management on the Group's risk management every half year and examined the Bank's risk management and internal
+control system. For details of the risk management, please refer to the section headed "Discussion and Analysis Risk
+Management".
+-
+◆ Nomination Committee
+The Nomination Committee is mainly responsible for making recommendations to the Board of Directors on candidates for
+directors and Senior Management members, nominating candidates for chairmen and members of special committees of
+the Board of Directors, and formulating the standards and procedures for selection and appointment of directors and Senior
+Management members as well as the training and development plans for Senior Management members and key reserved
+talents. The Nomination Committee is also responsible for assessing the structure, size and composition of the Board of
+Directors on a yearly basis and making recommendations to the Board of Directors based on the Bank's development
+strategy. As at the disclosure date of this annual report, the Nomination Committee consisted of seven directors, including
+Executive Director Mr. Gu Shu; Independent Non-executive Directors Mr. Hong Yongmiao, Mr. Or Ching Fai, Mr. Anthony
+Francis Neoh and Mr. Yang Siu Shun; Non-executive Directors Ms. Ge Rongrong and Mr. Fei Zhoulin. Independent Non-
+executive Director Mr. Hong Yongmiao was the chairman of the committee.
+The Articles of Association of the Bank specifies methods and procedures to nominate directors. Please refer to Article
+115 of the Articles of Association. During the reporting period, the Bank appointed and renewed the appointments of
+directors of the Bank in strict accordance with the Articles of Association of the Bank. The Nomination Committee reviews
+the qualifications of candidates for directors based on whether the candidate complies with applicable laws, administrative
+rules, regulations and the Articles of Association of the Bank. According to the requirement on diversified composition of
+the Board of Directors in the Rules for Recommendation and Nomination of Board Candidates of the Bank, the Nomination
+102
+ICBC
+Corporate Governance Report
+Committee shall pay attention to the complementarity in terms of expertise, professional competence and experience,
+cultural and educational background, gender, etc. of the candidates, to ensure the directors are well equipped, experienced
+and have diversified perspectives and views. In order to implement the requirement, the Nomination Committee assesses
+the improvement of diversified composition of the Board of Directors in addition to framework, number of directors and
+formation on a yearly basis, and discusses and designs measurable goals according to actual conditions. As at the disclosure
+date of this annual report, there were five Independent Non-executive Directors, accounting for more than one third of
+the total members of the Board of Directors; and there were three female Directors. The Bank attached importance on
+diversified sources and backgrounds of directors and continued the efforts to build a professional board, thus underpinning
+the effective operation and scientific decision-making of the Board of the Directors.
+Performance of the Nomination Committee During the reporting period, the Nomination Committee held six
+meetings, considered 13 proposals including the proposals on the nomination of Mr. Yi Huiman, Mr. Gu Shu and Mr. Wang
+Jingdong as candidates for Executive Directors, the nomination of Mr. Shen Si and Ms. Sheila Colleen Bair as candidates
+for Independent Non-executive Directors, the appointment of Mr. Li Yunze and Mr. Tan Jiong as Senior Executive Vice
+Presidents, the appointment of Mr. Wang Bairong as Chief Risk Officer and the appointment of Mr. Guan Xueqing as Board
+Secretary, and heard the report on the composition of the Board of Directors in 2015. The Nomination Committee put
+forward comments or suggestions on matters including the recommendation and nomination of candidates for directors,
+the assessment of the composition of the Board of Directors and the candidates for chairmen and members of special
+committees of the Board of Directors.
+Compensation Committee
+◆Risk Management Committee
+Special business trainings of the Bank:
+•
+Corporate Governance
+106
+ICBC
+Corporate Governance Report
+Securities Transactions of Directors and Supervisors
+The Bank has adopted a set of codes of conduct concerning the securities transactions by directors and supervisors which
+are no less stringent than the standards set out in the Model Code for Securities Transactions by Directors of Listed Issuers,
+Appendix 10 to the Hong Kong Listing Rules. After making enquiries with all Directors and Supervisors of the Bank, each
+Director and Supervisor confirmed that he/she has complied with the provisions of the aforesaid codes of conduct during the
+year ended 31 December 2016.
+Chairman and President
+Pursuant to Code Provision A.2.1 of the Corporate Governance Code (Appendix 14 to the Hong Kong Listing Rules) and the
+Articles of Association of the Bank, the roles of Chairman and President should be separated, and the Chairman shall not
+concurrently hold the position of legal representative or chief responsible officer of the controlling shareholder.
+Mr. Yi Huiman is the Chairman and legal representative of the Bank, who is responsible for leading the Board of Directors
+in considering and formulating business development strategies, risk management, internal control and other significant
+matters of the Bank.
+Mr. Gu Shu is the President of the Bank, who is responsible for the daily management of the business operations of the
+Bank. The President is appointed by and accountable to the Board of Directors, and performs his responsibilities as stipulated
+in the Articles of Association of the Bank and as authorized by the Board of Directors.
+Powers and Functions of the Senior Management
+The powers of the Board of Directors and the Senior Management are separated in strict compliance with the Articles
+of Association and other corporate governance documents of the Bank. During the reporting period, the Bank made an
+inspection on the implementation of the plan on authorization of the Board of Directors to the President, and no matter was
+found to be beyond the approval authority of the President.
+Inside Information Management
+The Bank manages inside information and insiders in strict accordance with regulatory requirements of the exchanges
+on which the Bank is listed and the Bank's rules, and ensures collection, delivery, sorting, preparation and disclosure of
+relevant information in compliance with applicable laws and regulations. During the reporting period, the Bank continued
+to strengthen inside information confidentiality management, timely organized the completion of insider lists and regularly
+conducted insider transaction self-inspections. After self-inspections, none of the insiders of the Bank were found to be
+involved in dealings in shares of the Bank who have taken advantage of inside information during the reporting period.
+Internal Control
+As the special committee of the Board of Supervisors established pursuant to the Articles of Association of the Bank, the
+Supervision Committee operates in accordance with the authorization of the Board of Supervisors and is accountable to
+the Board of Supervisors. The Supervision Committee is mainly responsible for formulating plans for the inspection and
+supervision of financial activities of the Bank; formulating plans for the audits on retiring or resigning Directors, President
+and other Senior Management members; formulating plans for the audits on business policies, risk management and internal
+control of the Bank when necessary; providing comments after review of the financial report of the Bank and reporting to
+the Board of Supervisors; reviewing the investigation report on significant events in the annual operation and financial status
+of the Bank submitted by the Supervisory Board Office, and reporting to the Board of Supervisors; giving comments on the
+performance assessment of directors and Senior Management members, and reporting to the Board of Supervisors; giving
+opinions on the assessment of the development and implementation of risk management and internal control system, and
+reporting to the Board of Supervisors; and other functions and duties as may be authorized by the Board of Supervisors.
+The Supervision Committee consists of six Supervisors, including Mr. Qian Wenhui, Mr. Zhang Wei, Mr. Hui Ping, Mr. Huang
+Li, Mr. Qu Qiang and Mr. Shen Bingxi. Mr. Qian Wenhui serves as the head member of the Supervision Committee. Daily
+operations of the Supervision Committee are conducted by the Supervisory Board Office.
+The Board of Directors is responsible for formulating the basic regulations for internal control and supervising the
+implementation of such regulations. The Audit Committee, the Risk Management Committee and the Related Party
+Transactions Control Committee of the Board of Directors perform the responsibilities of internal control management
+and review the effectiveness of internal control. The Bank has set up the Internal Audit Bureau and the Internal Audit Sub-
+bureau, which adopt a hierarchical management system and are responsible to and report to the Board of Directors. The
+Head Office and branches have internal control and compliance departments which are responsible for the bank-wide
+organization, promotion and coordination of internal control and the assessment of domestic branches.
+Annual Report 2016
+107
+Corporate Governance Report
+The enterprise risk management framework has been improved. The Bank continued to monitor, analyze and control the
+new and existing loans, and assessed overdue loans and NPLs separately. The liquidity risk measurement and treasury
+management system has been improved. The Bank pushed forward economic capital allocation and limit management,
+further increasing capital use efficiency and return on capital.
+The control activities became more effective. The Bank pressed ahead with credit operation system reform and the
+preparation of supporting rules, improved credit calculation model and set reasonable approval procedures. Adhering to the
+e-ICBC upgrading strategy, the Bank built a system for prevention and control of Internet-based financial risk based on big
+data. It refined the management rules and promoted the application of the management system at all levels of the Bank.
+Information communication has been further streamlined. Adhering to the principle of being "true, accurate, complete,
+timely and fair", the Bank actively disclosed information and strictly carried out various information disclosure management
+policies to ensure that the information disclosure complied with laws and regulations. Focussed on customer marketing,
+risk prevention and control and other priorities, the Bank strengthened its mining and analysis of big data and that relevant
+application. It promoted the platform for monitoring security and handling information securely, and strengtened the Bank's
+capacity to monitor and handle information security issues.
+The internal monitoring has remained effective. The Bank actively launched retrospective checks aiming at strengthening
+internal control and external supervision and preventing illegal operation and unlawful activities. Efforts were also made
+to conduct supervision and inspection of activities, strengthen the mechanism for ensuring accountability, deepen the
+verification of risky events in business operation and the application of findings, define the case prevention responsibility and
+assess risk on a case by case basis and irregular behavior of employees.
+Internal Control Evaluation Report and Internal Control Audit
+While disclosing the annual report, the Bank also disclosed the 2016 Internal Control Assessment Report of Industrial and
+Commercial Bank of China Limited in accordance with the requirements of MOF, CSRC and SSE. The report stated that the
+Bank had maintained effective internal control over financial reporting in all material aspects in accordance with the standard
+system for enterprise internal control and relevant rules as at 31 December 2016 (benchmark date). The Bank engaged
+KPMG Huazhen LLP to audit and issue standardized audit report on internal control of the Bank.
+For details of the internal control assessment report of the Bank, please refer to the 2016 Internal Control Assessment Report
+of Industrial and Commercial Bank of China Limited published on the websites of SSE, SEHK and the Bank.
+Internal Control Evaluation and Defects
+The Board of Directors of the Bank conducted a self-assessment on the effectiveness of the Group's internal control during
+the reporting period in accordance with the Basic Standard for Enterprise Internal Control and its supporting guidelines,
+the Guidelines for Internal Control of Listed Companies issued by SSE and relevant regulatory requirements of CBRC. No
+material or significant deficiencies were detected in the Bank's internal control system during the assessment. Risks that may
+arise from ordinary deficiencies are controllable and corrective actions have been or are being taken, which have no material
+impact on the fulfillment of internal control objectives of the Bank. The Bank had maintained effective internal control in all
+material aspects in accordance with the standard system for enterprise internal control and relevant rules.
+There was no factor that affected the assessment conclusion of internal control effectiveness from the benchmark date to
+the issuance date of the internal control assessment report.
+108
+ICBC
+The internal control environment has been optimized continuously. The Bank issued the new Basic Regulations on Internal
+Control, identifying the overall structure of the Group's internal control system in the new era. It also announced the Bank's
+compliance culture, i.e. "compliance is the fundamental of responsibility of the entire staff to keep risks under control and
+ensure efficient operation". Based on the operation transformation needs, the Bank completed the structural adjustment
+of the Head Office, branches and sub-branches as well as staffing, and refined the performance assessment and business
+evaluation system.
+Performance of the Strategy Committee During the reporting period, the Strategy Committee of the Board of Directors
+held three meetings, considered seven proposals including the proposals on the Regulations Governing Capital Management
+(2016) and the plan for IT development in the 13th Five-Year Plan Period, and heard two reports on topics including capital
+replenishment of the domestic and overseas institutions in 2016, merger and acquisition and equity investment and capital
+injection plan for institutions to be established. The Strategy Committee put forward comments or suggestions on matters
+including the strategic development planning, strategic capital allocation and annual final accounts of the Bank.
+Supervision Committee
+The Board of Supervisors discusses official matters at the meeting of the Board of Supervisors, which includes regular
+meetings and special meetings. Regular meetings shall be held at least four times a year and such meetings shall, in
+principle, be held before the disclosure of periodical reports.
+•
+Special Financing
+•
+Retail Banking
+Operation Management
+•
+Risk Management and Asset and Liability Management
+•
+IT Development
+International Banking
+Introduction trainings for newly-appointed directors of the Bank:
+•
+Introduction to Corporate Governance and Operation of the Board of Directors
+•
+As the day-to-day administrative organ of the Board of Supervisors, the Supervisory Board Office, as entrusted by the Board
+of Supervisors, is responsible for supervising and scrutinizing matters such as corporate governance, financial activities,
+risk management and internal control of the Bank, and organizing meetings of the Board of Supervisors and its special
+committee, preparing meeting documents, and taking minutes of the meetings.
+Special Training on Businesses of the Bank
+Introduction to External Regulatory Requirements and Matters to Note during Tenure of Office
+Training of Board Secretary
+During the reporting period, the Board Secretary of the Bank attended relevant specialized trainings by SSE and the
+Hong Kong Institute of Chartered Secretaries, with the training hours over 15 hours, which meets relevant regulatory
+requirements.
+Independence and Performance of Duties of Independent Non-executive Directors
+The qualifications, number and proportion of the Bank's Independent Non-executive Directors comply with regulatory
+requirements. The Bank's Independent Non-executive Directors do not have any business or financial interests in the Bank
+or its subsidiaries, and they have not assumed any managerial position in the Bank. The Bank has received the annual
+confirmation on independence from all Independent Non-executive Directors and considered that they were independent.
+During the reporting period, the Bank's Independent Non-executive Directors earnestly attended the meetings of the
+Board of Directors and special committees, gave independent opinions during consideration of issues, and provided
+recommendations on areas such as strategic management, business transformation, innovative development, corporate
+Annual Report 2016
+105
+Corporate Governance Report
+governance, risk management, internal control management and capital management of the Bank. During the adjournment,
+Independent Non-executive Directors of the Bank conducted on-site investigations in terms of operation and development
+of domestic and overseas institutions, the impacts of changes in international conditions on the operation of overseas
+institutions and the implementation of regulatory standards. Additionally, they also proactively exchanged opinions with the
+Management during special-topic discussions. During the reporting period, the Bank's Independent Non-executive Directors
+put forward comments and suggestions in respect of operation and management and the implementation of the strategies
+of the Bank, such as integrating resources for international operation, improving the service structure based on the customer
+structure and demands and conducting well management over asset & liability and risk considering the macro economic
+conditions. The Bank paid close attention to the comments and suggestions, and organized the implementation thereof
+according to the actual conditions.
+For information of performance of duties of Independent Non-executive Directors of the Bank during the reporting period,
+please refer to the Work Report of Independent Non-executive Directors for 2016 issued by the Bank on 30 March 2017.
+Board of Supervisors and Special Committee
+Composition of the Board of Supervisors
+As at the end of the reporting period, the Board of Supervisors of the Bank consisted of six members, including two
+Shareholder Supervisors, namely Mr. Qian Wenhui and Mr. Zhang Wei, two Employee Supervisors, namely Mr. Hui Ping and
+Mr. Huang Li, and two External Supervisors, namely Mr. Qu Qiang and Mr. Shen Bingxi.
+Operation of the Board of Supervisors
+•
+The Strategy Committee is mainly responsible for considering the Bank's strategic development plan, business and
+institutional development plan, major investment and financing plan and other major matters critical to the Bank's
+development, making recommendations to the Board, and examining and assessing the soundness of the corporate
+governance framework to ensure financial reporting, risk management and internal control are compliant with corporate
+governance criteria of the Bank. As at the disclosure date of this annual report, the Strategy Committee consisted of seven
+directors, including Executive Directors Mr. Yi Huiman and Mr. Gu Shu; Independent Non-executive Directors Mr. Or Ching
+Fai, Mr. Hong Yongmiao and Ms. Sheila Colleen Bair; Non-executive Directors Ms. Wang Xiaoya and Mr. Zheng Fuqing.
+Chairman of the Board of Directors Mr. Yi Huiman was the chairman of the committee.
+Corporate Governance Report
+The Board of Directors of the Bank has established six special committees, namely, the Strategy Committee, the Audit
+Committee, the Risk Management Committee, the Nomination Committee, the Compensation Committee and the
+Related Party Transactions Control Committee. Except the Strategy Committee, chairmen of all the other committees were
+assumed by Independent Non-executive Directors. More than half of the members of the Audit Committee, the Nomination
+Committee, the Compensation Committee and the Related Party Transactions Control Committee were Independent Non-
+executive Directors. During the reporting period, the performance of duties by the special committees of the Board of
+Directors of the Bank is set out below:
+3/3
+3/3
+Ge Rongrong
+2/2
+7/8
+6/6
+5/6
+Zheng Fuqing
+2/2
+8/8
+3/3
+6/6
+Fei Zhoulin
+2/2
+8/8
+8/8
+6/6
+6/6
+Cheng Fengchao
+2/2
+8/8
+5/5
+6/6
+Independent
+Non-executive
+Directors
+Or Ching Fai
+2/2
+8/8
+3/3
+5/5
+4/5
+2/2
+Non-executive Directors
+Strategy Committee
+assessment by the Board of Directors for 2015, risk management of the Bank and internal and external audits. For major
+proposals reviewed by the Board of Directors, please refer to the announcements of the Bank on the websites of SSE and
+SEHK or the website of the Bank. In addition, the Board of Directors held a Strategic Seminar. At the Seminar, Directors
+assessed the implementation of the strategic development plan for 2015-2017, analyzed the competitive advantages and
+shortcomings of the Bank, refined the Bank strategic guidelines and focused on the implementation of the 2017 strategic
+development plan by adhering to the theme of "inheritance" and "innovation".
+The attendance of each of the Directors in Shareholders' General Meetings and meetings of the Board of Directors and the
+special committees of the Board of Directors during the reporting period is set out below:
+Attendances in person/Number of meetings requiring attendance
+Special Committees of the Board of Directors:
+Related Party
+Shareholders'
+Risk
+Transactions
+General
+Board of
+Directors
+Meeting
+Directors
+Strategy
+Committee
+Wang Xiaoya
+Audit Management
+Nomination Compensation
+Committee Committee Committee Committee
+Committee
+Executive Directors
+Yi Huiman
+2/2
+8/8
+3/3
+4/6
+2/3
+Gu Shu
+Zhang Hongli
+2/2
+6/8
+4/6
+Wang Jingdong
+Control
+6/6
+During the reporting period, the Bank's Independent Non-executive Directors did not raise any objection on proposals of the
+Board of Directors and special committees of the Board of Directors.
+2/3
+Malcolm Christopher
+McCarthy
+1/1
+4/7
+2/3
+5/6
+3/6
+3/3
+Kenneth Patrick Chung
+2/2
+8/8
+5/5
+6/6
+3/3
+3/3
+3/3
+0/2
+0/2
+0/2
+0/1
+0/1
+Notes: (1) "Attendances in person" refers to attending meetings in person or on telephone or by video conference.
+(2)
+Directors who did not attend the meetings of the Board of Directors and its special committees in person appointed other
+directors to attend the meetings and exercise the voting right on their behalf.
+(3) For the change of directors, please refer to the section headed "Directors, Supervisors, Senior Management, Employees and
+Institutions Appointment and Removal".
+Annual Report 2016
+99
+Corporate Governance Report
+Special Committees of the Board of Directors
+2/3
+Yi Xiqun
+1/2
+0/1
+8/8
+2/2
+Hong Yongmiao
+3/3
+8/8
+3/3
+5/5
+6/6
+3/3
+Anthony Francis Neoh
+2/2
+8/8
+5/5
+6/6
+6/6
+3/3
+6/6
+2/2
+2/4
+Fu Zhongjun
+Yang Siu Shun
+2/2
+1/1
+Wang Xiquan
+4/4
+3/3
+Resigned Directors
+Sheila Colleen Bair
+2/2
+2/2
+3/3
+6/6
+Jiang Jianqing
+Qian Wenhui
+Shen Bingxi
+Zhang Wei
+Supervisor
+Hui Ping
+Huang Li
+Qu Qiang
+Resigned supervisor
+5/5
+Dong Juan
+Attendances in person/Number of meetings that should be attended
+Board of Supervisors
+Supervision Committee
+7/7
+7/7
+5/5
+6/7
+The table below sets out the attendance of Supervisors in meetings of the Board of Supervisors and the meetings of the
+Supervision Committee in 2016:
+5/5
+Wang Chixi
+During the reporting period, the Supervision Committee held five meetings, reviewed and approved 10 proposals including
+the 2016 Annual Work Plan of the Supervision Committee of the Board of Supervisors and the Implementation Plan on
+Supervision and Inspection of the Board of Supervisors for 2016, and heard 18 reports on supervision, special inspections
+and surveys, etc.
+Liability Insurance of Directors, Supervisors and Senior Management
+During the reporting period, the Board of Supervisors held seven meetings, reviewed and approved 19 proposals including
+the 2016 Annual Work Plan of the Board of Supervisors, the 2015 Work Report of the Board of Supervisors, the 2015
+Supervision Report of the Board of Supervisors, the 2015 Annual Report and its Abstract, and nomination of candidates
+for shareholder supervisor and external supervisor, and heard 40 reports including the reports on supervision, operating
+results, internal audit for 2015 and internal audit plan for 2016, internal control and compliance, and implementation of the
+strategic plan in 2015.
+3/3
+In 2016, the Bank carried out standardized management of the Group's connected transactions in strict accordance with
+the regulations of CBRC and CSRC as well as listing rules in Shanghai and Hong Kong, and further boosted the Group's
+refined management of connected transactions by launching special inspections on connected transactions, optimizing
+the information management system for connected transactions and strengthening the risk management and control of
+connected transactions.
+During the reporting period, the Bank's connected transactions were conducted in accordance with ordinary commercial
+terms under conditions that were not more favorable than the similar transactions between non-related parties. The
+terms and conditions of the relevant transactions were reasonable and complied with the overall interests of the Bank
+Annual Report 2016
+113
+Report of the Board of Directors
+and shareholders. Furthermore, the Bank had no connected transaction to be submitted to the Board of Directors or the
+Shareholders' General Meeting for review, and all connected transactions occurred complied with the Listing Rules of the
+Shanghai Stock Exchange and the Hong Kong Listing Rules on disclosure exemptions.
+Please refer to "Note 52. to the Financial Statements: Related Party Disclosures" for particulars of the related party
+transactions defined under the laws, regulations and accounting standards of China.
+Pursuant to the Articles of Association of the Bank, where conditions permit, the Bank may establish the professional liability
+insurance system of Directors, Supervisors and Senior Management members upon approval of the Shareholders' General
+Meeting. The Bank will use its own assets to compensate each Director, Supervisor and Senior Management member for
+any liability arising during their performance period to the maximum extent permitted by laws and administrative regulations
+or within the scope not prohibited by laws and administrative regulations, unless the Directors, Supervisors and Senior
+Management members are otherwise proved to have failed to act honestly or in good faith during their duty performance.
+During the reporting period, the Bank renewed liability insurance for Directors, Supervisors and Senior Management
+members.
+Relations among Directors, Supervisors and Senior Management Directors, Supervisors and Senior
+Management members of the Bank did not relate to one another with respect to finance, business, family, or other material
+relations required to be disclosed.
+Remuneration Policy for Directors, Supervisors and Senior Management The Bank has clearly
+documented the remuneration policy for Directors, Supervisors and Senior Management members, and has continuously
+improved performance assessment system and incentive & restriction mechanism. From the perspectives of economic benefit,
+risk cost control and social responsibilities, the Bank adopted a system composed of balanced scorecard-based indicators
+for management and duties allocation based indicators for individuals. The remuneration to the Chairman of the Board
+of Directors, the President, the Chairman of the Board of Supervisors and other executives of the Bank has followed the
+State's policies relating to the remuneration reform on executives of central enterprises, which consists of basic annual
+remuneration, performance-based remuneration and incentive income linked to term appraisal. The remuneration to other
+Senior Management members and Shareholder Supervisors consist of basic annual remuneration and performance-based
+remuneration, and part of performance-based remuneration is paid in a deferred manner. The Bank has contributed to
+statutory retirement programs organized by Chinese governmental organizations at different levels for Directors, Supervisors
+and Senior Management members concurrently as the employees of the Bank. Upon obtaining all applicable approvals, the
+Bank will implement a long-term incentive program. As at 31 December 2016, the Bank did not grant any share appreciation
+rights to any Director, Supervisor, Senior Management member, or other core business personnel designated by the Board of
+Directors.
+Members of the Board of Directors
+Executive Directors: Mr. Yi Huiman, Mr. Gu Shu, Mr. Zhang Hongli and Mr. Wang Jingdong;
+Non-executive Directors: Ms. Wang Xiaoya, Ms. Ge Rongrong, Mr. Zheng Fuqing, Mr. Fei Zhoulin and Mr. Cheng Fengchao;
+Independent Non-executive Directors: Mr. Or Ching Fai, Mr. Hong Yongmiao, Mr. Anthony Francis Neoh, Mr. Yang Siu Shun
+and Ms. Sheila Colleen Bair.
+114
+ICBC
+By Order of the Board of Directors
+Yi Huiman
+Chairman
+Report of the Board of Supervisors
+Meetings of the Board of Supervisors and its Special Committee
+Meetings of the Board of Supervisors
+◆ Meetings of the Supervision Committee
+2/2
+Implementation of Information Disclosure Management Rules During the reporting period, the Bank performed its
+duty of information disclosure in strict compliance with the regulatory requirement, implemented the information disclosure
+management rules in earnest, and disclosed information in a timely and fair manner. Information disclosed during the
+reporting period was authentic, accurate and complete.
+5/5
+Use of Proceeds from Fundraising Activities During the reporting period, the use of proceeds from the Bank's
+fundraising activities was consistent with the purpose stated in the prospectuses.
+Purchase and Sale of Assets During the reporting period, the Board of Supervisors did not find any insider trading or any
+act that contravened the shareholders' interests or caused the loss of the Bank's assets in the process of the Bank's purchase
+or sale of assets.
+Connected Transactions During the reporting period, the connected transactions of the Bank were conducted on normal
+commercial terms. The Board of Supervisors did not find any act that infringed upon the interests of the Bank. The approval,
+voting, disclosure and implementation of connected transactions complied with applicable laws and regulations and the
+Articles of Association of the Bank.
+Implementation of Resolutions Passed at the Shareholders' General Meetings During the reporting period, the
+Board of Supervisors had no objection to the reports or proposals presented by the Board of Directors to the Shareholders'
+General Meetings for consideration. The Board of Directors earnestly implemented the resolutions approved at the
+Shareholders' General Meetings.
+Internal Control Assessment Report of the Board of Directors The Board of Supervisors reviewed the 2016 Internal
+Control Assessment Report of the Board of Directors and had no objection to the report.
+Connected Transactions
+Save as disclosed above, the Board of Supervisors had no objection to other supervision matters during the reporting period.
+Annual Report 2016
+117
+Preparation of Annual Report Preparation and review procedures of this annual report were in compliance with laws,
+administrative regulations and regulatory rules. Contents of this report reflected the actual conditions of the Bank truly,
+accurately and completely.
+Significant Events
+Material Assets Acquisition, Sale and Merger During the reporting period, the Bank had no material assets
+acquisition, sale and merger.
+Credit Standing During the reporting period, there has not been any significant court judgment with which the Bank
+and its controlling shareholders have not complied, nor has there been any outstanding debt of significant amount.
+Implementation of Share Incentive Plan The Fourth Extraordinary General Meeting of 2006 of the Bank held
+on 31 July 2006 approved the share appreciation rights plan. As at the end of the reporting period, the Bank did not grant
+any share appreciation right. Please refer to "Note 47. to the Financial Statements: Share Appreciation Rights Plan" for
+details.
+Employee Stock Ownership Plan During the reporting period, the Bank did not implement any employee stock
+ownership plan.
+Performance of the Poverty Relief Social Responsibility Please refer to the section headed "Social
+Responsibility" for the details of the Bank's poverty-relief social responsibility performance during the reporting period.
+Key Audit Issues Key audit issues have been reviewed by the Audit Committee, so it is unnecessary to make a
+supplementary explanation.
+Material Related Party Transactions
+During the reporting period, the Bank did not enter into any material related party transactions.
+Please refer to "Note 52. to the Financial Statements: Related Party Disclosures" for details of the related party transactions
+defined under the laws, regulations and accounting standards of China.
+Material Legal Proceedings and Arbitration The Bank was involved in several legal proceedings in the
+ordinary course of business. Most of these legal proceedings were initiated by the Bank for recovering non-performing
+loans. In addition, some legal proceedings arose from customer disputes. As at 31 December 2016, the amount of pending
+proceedings in which the Bank and/or its subsidiaries acted as defendants totaled RMB5,515 million. The Bank does not
+expect any material adverse effect from the above-mentioned pending legal proceedings on the Bank's business, financial
+position or operating results.
+7/7
+Compliant Operation During the reporting period, the Bank continued to operate in compliance with applicable laws
+and regulations and improve its internal control system, and the decision-making procedures complied with applicable laws
+and regulations and the Articles of Association of the Bank. Members of the Board of Directors and the Senior Management
+earnestly performed their duties. The Board of Supervisors did not find any violation of laws and regulations, or any act that
+contravened the interests of the Bank in the performance of duties during the reporting period.
+researches, participated in relevant training programs, strengthened communication with other banks and made continuous
+efforts to improve the duty performance capability. The members of the Board of Supervisors played a constructive role
+in strengthening corporate governance, implementing development strategy, propelling business transformation and
+promoting reform and development of the Bank. During the reporting period, all external supervisors worked for the Bank
+for more than 15 working days.
+3/3
+2/2
+3/4
+4/4
+3/3
+3/3
+Notes: (1) During the reporting period, supervisors who could not attend the meetings of the Board of Supervisors and the Supervision
+Committee in person have appointed other supervisors to attend the meetings and exercise the voting right on their behalf.
+(2)
+For the change of supervisors, please refer to the section headed "Directors, Supervisors, Senior Management, Employees and
+Institutions Appointment and Removal".
+Independent Opinions of the Board of Supervisors on Relevant Issues
+Annual Report 2016
+Report of the Board of Supervisors
+Work of the Board of Supervisors
+During the reporting period, the Board of Supervisors, pursuant to relevant laws and regulations of the State, regulatory
+requirements and the Articles of Association of the Bank, focused on the key tasks of the Bank, carried out supervision tasks
+in depth, did a large number of work and played an important role in promoting the Bank to continuously improve the
+corporate governance, implementing the transformation and upgrading and achieving sound and sustainable development.
+Supervision on the performance of duties. The Board of Supervisors strengthened supervision on the implementation of
+the government's macro-economic policies, regulatory requirements and overall strategies, as well as providing support to
+the real economy and service to the supply-side structural reform by the Board of Directors and the Senior Management. It
+focused on the adoption of working measures by the Board of Directors and the Senior Management aimed at strengthening
+and improving the operational management and promoting the transformation, reform and innovation of operation. The
+Board of Supervisors paid ongoing attention to the exercise of functions and powers by the Board of Directors and the
+Senior Mnagement in accordance with the law, their performance of duties and faithful obligations, and issues concerning
+honesty and self-discipline. It organized and launched the duty performance assessment, conducted individual interviews
+with members of the Board of Directors and the Senior Management, and the persons in charge of the related Head Office
+departments and profitability units, reviewed the performance assessment report of the Board of Directors and the persons,
+and seriously assessed the annual performance of duty of the Board of Directors, the Senior Management and their members
+on an objective and impartial basis.
+Financial supervision. The Board of Supervisors reviewed regular reports in an earnest manner, heard reports on operation
+information and audit results, and verified the authenticity of financial information. While monitoring and studying financial
+data changes of the Bank, the Board of Supervisors also analyzed such financial issues as credit cost and replacement of
+business tax with VAT and promoted the lifting of operational management and profit level. It also strengthened financial
+examination and surveys, regularly supervised the making and implementation of important financial decisions, organized
+inspections of financial affairs of selected branches, carried out surveys on the fixed operating expenses and the collection
+and disposal of NPLs, and procured the Bank to further improve financial management and the effectiveness of financial
+resource allocation. The Board of Supervisors was highly concerned with the quality of the work done by external auditors,
+reminded them the areas of focus of the audit and oversaw the independence and effectiveness of audit work.
+Supervision on risk management. The Board of Supervisors heightened the supervision on the Group's enterprise risk
+management, capital management and consolidated management, regularly reviewed the risk management reports, and
+made a survey on the uniformity of the Group's risk management mechanism and organizational framework. Highlighting
+the Bank's credit risk management, members of the Board of Supervisors conducted surveys and supervision on business
+operation and credit asset quality in multiple branches at home and abroad, and also launched a special research into the
+optimization of credit risk governance mechanism. The Board of Supervisors improved the supervision on the management
+and control of market risk and liquidity risk and made a special survey on the Group's bond business management. In
+addition, it strengthened the supervision on risk prevention and control of innovative business, and conducted a research
+into the impact of payment business by non-bank payment institutions on the Bank so as to guarantee the healthy and well-
+regulated development of innovative business.
+Supervision on internal control. The Board of Supervisors strengthened the supervision on internal control of major risk
+points of new institutions, new businesses and new products, and surveyed the interface management of third parties. It
+paid ongoing attention to the corporate governance, compliance management and anti-money laundering management
+of overseas institutions and carried out a survey on operational management of some overseas institutions. The Board of
+Supervisors enhanced supervision on the case prevention work, including highlighting the management of behavioral risk
+and prompting the case prevention risk of key posts, major business and important institutions. It strengthened supervision
+on the implementation of rectification, studied and acted in accordance with the supervisory opinions with due care, and
+carried out a special survey on the implementation of rectification based on internal and external inspection findings. The
+Board of Supervisors fortified guidance on internal audit, internal control and compliance efforts, promoted the integration
+of supervision resources and demonstrated the advantage of collaborated supervision.
+Strengthening of self-building. The Board of Supervisors completed the re-election of supervisors in a serious manner and
+in accordance with the regulatory requirements and corporate governance procedures, and organized the annual assessment
+on the supervisors for their performance of duties. The members of the Board of Supervisors could perform their duties
+in a diligent and faithful manner, performed all supervision work by utilizing their respective strengths and safeguard the
+interests of the Bank, shareholders, employees and other stakeholders. The Supervisors actively attended meetings, earnestly
+reviewed proposals, gave opinions on an independent and objective basis, went to relevant institutions for surveys and
+116
+ICBC
+Report of the Board of Supervisors
+115
+Interests in Shares, Underlying Shares, and Debentures Held by Directors and
+Supervisors As at 31 December 2016, Mr. Zhang Hongli, Executive Director and Senior Executive Vice President of
+the Bank, held 2,000 H shares of the Bank, and the spouse of Mr. Or Ching Fai, Independent Non-executive Director of
+the Bank, held 1,316,040 H shares of the Bank. Save as above, as at 31 December 2016, none of the Directors of the Bank
+had any interests or short positions in the shares, underlying shares or debentures of the Bank or any of its associated
+corporations (as defined in Part XV of the Securities and Futures Ordinance of Hong Kong) which have to be notified to the
+Bank and SEHK under Divisions 7 and 8 of Part XV of the Securities and Futures Ordinance of Hong Kong (including interests
+or short positions therein that they shall be deemed to have pursuant to such provisions of the Securities and Futures
+Ordinance of Hong Kong), or any interests or short positions which have to be recorded in the register under Section 352 of
+the Securities and Futures Ordinance of Hong Kong, or any interests or short positions which have to be notified to the Bank
+and SEHK pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to
+the Hong Kong Listing Rules.
+91,026
+Directors' Interests in Competing Business None of the Bank's Directors held any interests in any business
+competes or competed or is or was likely to compete, either directly or indirectly, with the Bank.
+During the reporting period, KPMG and its member institutions provided the Group with non-audit services such as tax
+advisory services and the professional services for the bonds issuance, and received RMB10.00 million for such professional
+non-audit services.
+Annual Report 2016
+109
+Corporate Governance Report
+Overview of Investor Relations Activities in 2016
+In 2016, the Bank strove to improve the quality of investor relations services and generate stable return to shareholders
+following the principle of serving investors in a proactive, detailed, efficient and interactive manner.
+The Bank made constant and extensive communication with institutional investors and minority investors through press
+conference in relation to periodic results, non-transactional road shows, press conferences with large institutions, investor
+hotline, investor relations mailbox, investor relations website and the online platform of sseinfo.com, which enhanced
+investors' confidence in economic development of China and the operational transformation of the Bank and helped bring
+the market value in line with the long-term intrinsic value of the Bank. The Bank improved investor relations information
+collection and market information feedback transmission mechanism, strengthened dynamic monitoring of share price
+valuation, analyst reports and media public opinions, followed and analyzed spotlight issues of the capital market, and
+effectively enhanced the quality of communication with the investors. The Bank actively understood and solicited the
+comments and suggestions of the capital market on the Bank, facilitated the timely reaction of the Management with the
+help of many operation and communication strategies, and minimized the influence of emergencies on the share price, so as
+to continuously strengthen the level of corporate governance and core values of the Bank.
+In 2017, the Bank will further and proactively deepen the communication and exchange with investors to enhance the
+investors' understanding and acceptance of the Bank and protect legitimate interests of the investors, and at the same time
+expect to arouse more support from, and attention of, the investors.
+Investor Enquiries
+During the reporting period, the Group paid KPMG and its member institutions a total fee of RMB180 million for the audit
+of financial statements (including the audit of financial statements of subsidiaries and overseas branches), of which, RMB136
+million (including fee for internal control audit of RMB11.50 million) was paid by the Bank.
+If an investor wishes to enquire any questions related to operation performance of the Bank, please contact:
+Telephone: 86-10-66108608
+E-mail: ir@icbc.com.cn
+Address: Corporate Strategy and Investor Relations Department, Industrial and Commercial Bank of China Limited,
+55 Fuxingmennei Avenue, Xicheng District, Beijing, PRC
+Postal code: 100140
+110
+ICBC
+Report of the Board of Directors
+Principal Business
+The principal business of the Bank and its subsidiaries is the provision of banking and related financial services. Please refer
+to the section headed "Discussion and Analysis" for the business review of the Bank.
+Profits and Dividends Distribution
+Facsimile: 86-10-66107571
+The profit and financial status of the Bank during the reporting period are presented in the Independent Auditor's Report
+and Financial Statements of the Annual Report.
+KPMG Huazhen LLP and KPMG have been providers of audit services for the Bank for four consecutive years (2013, 2014,
+2015 and 2016).
+Engagement of Auditors
+Corporate Governance Report
+Internal Audit
+The Bank established a vertical and independent internal audit management system responsible and reporting to the Board
+of Directors. The chart below illustrates the internal audit management and reporting framework of the Bank:
+Board of Directors
+Audit Committee
+Senior Management
+Internal Audit Bureau
+Board of Supervisors
+Beijing
+Office
+KPMG Huazhen LLP was the domestic auditors of the Bank for the financial statements audit in 2016, and KPMG was the
+international auditors of the Bank for the financial statements audit in 2016. KPMG Huazhen LLP was also the auditors of
+internal control of the Bank in 2016.
+Shenyang
+Office
+Nanjing
+Office
+Shanghai
+Office
+Wuhan
+Office
+Xi'an
+Office
+Guangzhou Kunming
+Office
+Office
+Chengdu
+Office
+Primary reporting line
+Secondary reporting line
+During the reporting period, the Bank implemented risk-oriented audit activities according to the development strategy
+and central tasks of the Bank, and fully accomplished the annual audit plan. The audit activities covered main aspects
+of operation and management, such as credit business, financial benefit, financial asset services, Internet-based finance,
+information system security, capital management, overseas institutions, Group's consolidated management, consumer
+protection and duty performance of Senior Management members in their tenure of office. The audit activities paid
+close attention to credit risk, market risk, regional risk and financial innovation risk under the complicated operating
+circumstances as well as systematic and strategic risks in the process of diversified and internationalized development. The
+audit activities supervised and assessed the effectiveness of the compliance with regulatory requirements, implementation
+of major strategies, risk management and internal control by some institutions and in main business areas of the Group.
+The audit findings were sufficiently valued and used, and played its due role in pushing the Bank in preventing risk and
+improving management. Additionally, the Bank improved project operation process and the distribution of project resources,
+promoted IT application in audit, upgraded the audit information system platform, and strengthened the efforts in vocational
+qualification education and project training to build a more professional audit team. As a result, the service capacities and
+specialized level was constantly enhanced.
+Tianjin
+Office
+Directors' and Supervisors' Rights to Acquire Shares or Debentures None of the Bank, its
+subsidiaries, its controlling shareholders or subsidiaries of its controlling shareholders entered into any agreement or
+arrangement enabling the Directors to acquire benefits by means of the acquisition of shares in or debentures of the Bank or
+any other body corporate.
+Upon approval at the Annual General Meeting for the Year 2015 held on 24 June 2016, the Bank has distributed cash
+dividends of about RMB83,150 million, or RMB2.333 per ten shares (pre-tax), for the period from 1 January 2015 to 31
+December 2015 to the ordinary shareholders whose names appeared on the share register after the close of market on 7
+July 2016.
+-
+Distributable Reserves Details of the distributable reserves of the Bank as at 31 December 2016 are set out in
+"Note 42. to the Financial Statements: Reserves" of this annual report.
+Financial Summary The summary of results, assets and liabilities for the five years ended 31 December 2016 is set
+out in the section headed "Financial Highlights" of this annual report.
+Donations During the reporting period, the Group made external donations of RMB65,295.8 thousand equivalent.
+Subsidiaries Particulars of the Bank's major subsidiaries as at 31 December 2016 are set out in the sections headed
+"Discussion and Analysis Business Overview Internationalized and Diversified Operation" and "Note 28. to the
+Financial Statements: Investments in Subsidiaries" in this annual report.
+Share Capital and Public Float
+Changes in the share capital of the Bank for the year ended 31 December 2016 are set out in "Note 40. to the Financial
+Statements: Share Capital".
+As at the latest practicable date before the publication of this annual report, the Bank has maintained the minimum public
+float of 23.45%, based on the publicly available information and to the best knowledge of the Board of Directors of the
+Bank.
+Purchase, Sale or Redemption of Securities During the reporting period, neither the Bank nor any of its
+subsidiaries purchased, sold or redeemed any listed securities of the Bank.
+Pre-emptive Rights The Articles of Association of the Bank does not have any mandatory provision regarding pre-
+emptive rights. Pursuant to the Articles of Association, the Bank may increase its registered capital after obtaining approval
+of the Shareholders' General Meeting and of relevant authorities, by issuing shares through public or non-public offering,
+issuing bonus shares to the existing shareholders, converting capital reserve to share capital or using other methods as
+allowed by applicable laws and administrative regulations or approved by relevant authorities.
+The formulation and implementation of the Bank's cash dividend policy, which has been reviewed and approved by
+the Independent Non-executive Directors, accords with the provisions stipulated in the Articles of Association and the
+requirements provided in the resolutions of the Shareholders' General Meeting, the dividend distribution standards and
+proportion are clear and explicit, and the decision-making procedure and mechanism are complete. Minority shareholders
+can fully express their opinions and appeals, to completely safeguard their legitimate rights.
+Major Customers In 2016, the aggregate interest income and other operating income from top five customers of the
+Bank did not exceed 30% of the interest income and other operating income of the Bank during the year.
+The funds raised from the Bank's fundraising activities were used for the purposes as disclosed in the prospectuses, namely,
+strengthening the capital base to support the ongoing growth of the Bank.
+For future planning disclosed in the public disclosure documents such as previous offering prospectuses and fund raising
+prospectuses issued by the Bank which has continued during the reporting period, its implementation progress conformed to
+the planning as described after verification and analysis.
+112
+ICBC
+Report of the Board of Directors
+For details on the use of funds raised from the issue of preference shares of the Bank, please refer to "Details of Changes in
+Share Capital and Shareholding of Substantial Shareholders Preference Shares".
+Equity-linked Agreement There is neither any agreement to which the Bank is a party, any options to subscribe
+shares, nor any securities convertible to shares of the Bank that requires the Bank to issue shares. In addition, there is no
+securities offering holders the right to subscribe shares of the Bank. The employee participation plan and share option plan,
+etc. meet the disclosure requirements of the Hong Kong Listing Rules.
+Administration Contracts During the reporting period, the Bank did not enter into or have any contract regarding
+the management and administration of the whole or any important business.
+Directors' and Supervisors' Interests in Transactions, Agreements or Contracts of
+Significance During the reporting period, none of the Directors or Supervisors of the Bank had any material interests,
+whether directly or indirectly, in any transaction, arrangement or contract of significance regarding the Bank's business to
+which the Bank, its subsidiaries, its controlling shareholders or subsidiaries of its controlling shareholders was a party. None
+of the Directors or Supervisors of the Bank have entered into any service contract with the Bank, which is not determinable
+by the Bank within one year without payment of compensation (other than statutory compensation).
+Use of Proceeds from Fundraising Activities
+The Board of Directors of the Bank proposed distributing cash dividends of RMB2.343 (pre-tax) for each ten shares of
+356,406,257,089 ordinary shares for 2016, totaling about RMB83,506 million. The distribution plan will be submitted to
+the Annual General Meeting for the Year 2016 for approval. Once approved, the above-mentioned dividends will be paid
+to the holders of A shares and H shares whose names appeared on the share register of the Bank after the close of market
+on 10 July 2017. The Bank will suspend the registration procedures of H share ownership transfer on 5 July 2017 (inclusive)
+through 10 July 2017 (inclusive). The holders of H shares of the Bank that desire to receive the proposed cash dividends
+but have not registered the ownership transfer documents are requested to hand over their ownership transfer documents
+together with the H shares to the Bank's H share registrar Computershare Hong Kong Investor Services Limited that is
+located at Room 1712-1716, 17 Floor, Hopewell Center, 183 Queen's Road East, Wanchai, Hong Kong at or before 4:30
+p.m. of 4 July 2017. Pursuant to relevant regulatory requirements and operational rules, dividends on A shares and H shares
+will be paid on 11 July 2017 and 2 August 2017, respectively.
+Report of the Board of Directors
+Annual Report 2016
+The Bank had no plan for converting capital reserve to share capital in the recent three years. The table below sets out the
+dividend distribution of ordinary shares of the Bank for the recent three years:
+Item
+Dividend per ten shares (pre-tax, in RMB yuan)
+Cash dividends (pre-tax, in RMB millions)
+Percentage of cash dividends (1) (%)
+2016
+2.343
+2015
+118
+2014
+111
+2.333
+83,506
+83,150
+30.5
+30.3
+33.0
+Note: (1) Calculated by dividing cash dividends on ordinary shares (pre-tax) by net profit attributable to ordinary shareholders of the parent
+company for the period.
+For details on the distribution of dividends on preference shares of the Bank, please refer to "Details of Changes in Share
+Capital and Shareholding of Substantial Shareholders - Preference Shares".
+Formulation and Implementation of Cash Dividend Policy
+The Articles of Association of the Bank explicitly stipulates that the Bank's profit distribution policy shall maintain its
+continuity and stability and meanwhile take account of the long-term interests of the Bank, the overall interests of all
+shareholders and the sustainable development of the Bank. It emphasizes the priority to adopt cash dividend as the profit
+distribution method and provides that the Bank's adjustment to the profit distribution policy shall be discussed by the Board
+of Directors as a special proposal and the grounds for adjustment shall be argued and proved in detail to form a written
+argumentative report for Independent Non-executive Directors to issue their opinions, and then the report will be submitted
+to the Shareholders' General Meeting for approval as a special resolution.
+2.554
+Investor Relations
+ICBC
+Cash Flow Statement
+216
+52. Related Party Disclosures
+173
+16. Income Tax Expense
+216
+51. Fiduciary Activities
+173
+Loans and Advances to Customers
+216
+50. Assets Pledged as Security
+17. Profit Attributable to Equity Holders
+15. Impairment Losses on Assets Other Than
+49. Designated Funds and Loans
+172
+14. Five Highest Paid Individuals
+214
+48. Commitments and Contingent Liabilities
+168
+13. Directors' and Supervisors' Emoluments
+214
+47. Share Appreciation Rights Plan
+167
+216
+12. Operating Expenses
+53. Segment Information
+of the Parent Company
+22. Financial Assets Held for Trading
+271
+58. After the Reporting Period Event
+176
+Financial Institutions
+21. Due From Banks and Other
+270
+Financial Position
+57. Company-Level Statement of
+175
+220
+20. Cash and Balances With Central Banks
+56. Other Important Matters
+174
+19. Earnings Per Share
+174
+260
+18. Dividends
+55. Fair Value of Financial Instruments
+225
+54. Financial Instruments Risk Management
+174
+269
+213
+Transferred Financial Assets
+46.
+Net Interest Income
+6.
+203
+40. Share Capital
+International Financial Reporting Standards 161
+203
+5. Impact of Issued But Not Yet Effective
+200
+38. Debt Securities Issued
+160
+165
+Estimates
+37. Due to Customers
+Significant Accounting Judgements and
+4.
+199
+36. Certificates of Deposit
+143
+Summary of Significant Accounting Policies
+3.
+199
+35. Repurchase Agreements
+200
+41. Other Equity Instruments
+204
+7.
+167
+11. Other Operating Income, Net
+166
+10. Net Gain on Financial Investments
+213
+Statement
+166
+45. Notes to the Consolidated Cash Flow
+Profit or Loss
+Designated at Fair Value through
+211
+Entities
+43. Components of Other Comprehensive Income 210
+44. Involvement With Unconsolidated Structured
+Net Loss on Financial Assets and Liabilities
+9.
+166
+Net Trading Income
+8.
+208
+Reserves
+42.
+166
+Net Fee and Commission Income
+177
+59. Comparative Amounts
+271
+23. Financial Assets Designated at Fair Value
+through Profit or Loss
+making enquiries of management and inspecting
+documents relating to the judgement process over
+whether a structured entity is consolidated or not
+to assess whether the Group has a robust process in
+this regard;
+•
+Our audit procedures to assess the recognition of interests
+in and consolidation of structured entities included the
+following:
+How the matter was addressed in our audit
+We identified the recognition of interests in and
+consolidation of structured entities as a key audit matter
+because of the complex nature of certain of these
+structured entities and because of the judgement exercised
+by management in the qualitative assessment of the terms
+and nature of each entity.
+In determining whether the Group should retain any partial
+interests in a structured entity or should consolidate a
+structured entity, management is required to consider the
+risks and rewards retained, the power the Group is able
+to exercise over the activities of the entity and its ability
+to influence the Group's own returns from the entity.
+These factors are not purely quantitative and need to
+be considered collectively in the overall substance of the
+transactions.
+The Group may acquire or retain an ownership interest in,
+or act as a sponsor to, a structured entity, through issuing
+a wealth management product, an investment fund, an
+asset management plan, a trust plan, a structured lease
+or an asset-backed security. The Group may also retain
+partial interests in derecognised assets due to guarantees
+or securitisation structures.
+Structured entities are generally created to achieve a
+narrow and well defined objective with restrictions around
+their ongoing activities which include providing investment
+services and products to customers and managing the
+Group's assets and liabilities.
+The key audit matter
+Refer to the accounting policies in "Note 3. (1) to the Financial Statements: Subsidiaries", "Note 4. to the Financial
+Statements: Significant Accounting Judgments and Estimates" and "Note 44. to the Financial Statements: Involvement
+with Unconsolidated Structured Entities".
+selecting significant structured entities of each
+key product type and performing the following
+procedures for each structured entity selected:
+Recognition of interests in and consolidation of structured entities
+Independent Auditor's Report
+ICBC
+126
+assessing the disclosures in the consolidated financial
+statements in relation to impairment of loans
+and advances to customers with reference to the
+requirements of the prevailing accounting standards.
+re-calculating the amount of collective impairment
+allowances to assess the application of the Group's
+methodology;
+evaluating the experience, independence,
+competence and integrity of the external valuers
+engaged by the Group to value certain property
+and illiquid collateral. Where possible, we compared
+the valuations with externally derived data such as
+commodity prices and real estate valuations;
+performing credit assessments for the selected
+individually impaired corporate loans and advances
+by assessing the forecast of recoverable cash flows
+through inquiry, applying judgement and our own
+research. We evaluated the timing and means
+of realisation of collateral and considered other
+sources of repayment asserted by management. We
+also evaluated the consistency of management's
+application of key assumptions and compared them
+with our own data sources. Where available, we
+made use of post reporting date information to
+evaluate credit quality with hindsight;
+assessing the impairment allowances for individually
+impaired corporate loans and advances by selecting
+a risk-based sample for credit review. We analysed
+the loan portfolio by industry sector to select
+samples in industries vulnerable to the current
+economic slowdown. We also focused on loans with
+perceived higher risk and selected samples from non-
+performing loans, overdue but performing loans and
+borrowers with negative warning signs or adverse
+press coverage;
+•
+How the matter was addressed in our audit
+Key audit matters (continued)
+inspecting the related contracts, internal
+establishment documents and information
+disclosed to the investors to understand the
+purpose of the establishment of the structured
+entity and the involvement the Group has
+with the structured entity and to assess
+management's judgement over whether the
+Group has the ability to exercise power over
+the structured entity;
+inspecting the risk and reward structure of
+the structured entity, including any capital or
+return guarantee, provision of liquidity support,
+commission paid and distribution of the returns,
+to assess management's judgement as to the
+exposure, or rights, to variable returns from the
+Group's involvement in such an entity;
+evaluating management's analysis of the
+structured entity, including qualitative
+analysis and the calculation of the magnitude
+and variability associated with the Group's
+economic interests in the structured entity,
+to assess management's judgement over the
+Group's ability to influence its own returns
+from the structured entity;
+ICBC
+128
+assessing whether the disclosures in the consolidated
+financial statements, including fair value hierarchy
+information and sensitivity to key inputs,
+appropriately reflected the Group's exposure to
+financial instrument valuation risk with reference
+to the requirements of the prevailing accounting
+standards.
+assessing the appropriate application of Funding
+Value, Credit Value and Debit Value Adjustments
+("FVA/CVA/DVA") that form an integral part of fair
+values, inquiring of management about any changes
+in the FVA/CVA/DVA methodology and assessing the
+appropriateness of the inputs applied; and
+engaging our internal valuation specialists to conduct
+model validation, on a sample basis, for the valuation
+of complex financial instruments;
+engaging our internal valuation specialists to assist us
+in performing independent valuations, on a sample
+basis, of level 2 and level 3 financial instruments
+and comparing our valuations with the Group's
+valuations. Our procedures included developing
+parallel models, obtaining inputs independently and
+verifying the inputs;
+assessing the level 1 fair values, on a sample basis, by
+comparing the fair values applied by the Group with
+publicly available market data;
+assessing the design, implementation and operating
+effectiveness of key internal controls over the
+valuation, independent price verification, front office
+and back office reconciliations and model approval
+for financial instruments;
+Our audit procedures to assess the fair value of financial
+instruments included the following:
+How the matter was addressed in our audit
+We identified assessing the fair value of financial
+instruments as a key audit matter because of the degree of
+complexity involved in valuing certain financial instruments
+and because of the degree of judgement exercised by
+management in determining the inputs used in the
+valuation models.
+The Group has developed its own models to value certain
+level 2 and level 3 financial instruments, which also involve
+significant management judgement.
+The valuation of the Group's financial instruments, held
+at fair value, is based on a combination of market data
+and valuation models which often require a considerable
+number of inputs. Many of these inputs are obtained
+from readily available data, in particular for level 1 and
+level 2 financial instruments in the fair value hierarchy, the
+valuation techniques for which use quoted market prices
+and observable inputs, respectively. Where such observable
+data is not readily available, as in the case of level 3
+financial instruments, then estimates need to be developed
+which can involve significant management judgement.
+Financial instruments carried at fair value account for a
+significant part of the Group's assets. The effect of fair
+value adjustments may impact either the profit or loss or
+other comprehensive income.
+The key audit matter
+Refer to the accounting policies on "Note 3. (5) to the Financial Statements: Financial Instruments", "Note 4. to the
+Financial Statements: Significant Accounting Judgments and Estimates" and "Note 55. to the Financial Statements: Fair
+Value of Financial Instruments".
+Fair value of financial instruments
+Key audit matters (continued)
+Independent Auditor's Report
+127
+Annual Report 2016
+evaluating the disclosures in the consolidated
+financial statements in relation to the recognition of
+interests in and consolidation of structured entities
+with reference to the requirements of the prevailing
+accounting standards.
+assessing management's judgement over
+whether the structured entity should be
+consolidated or not;
+We identified assessing impairment of loans and advances
+to customers as a key audit matter because of the inherent
+uncertainty and management judgement involved and
+because of its significance to the financial results and
+capital of the Group.
+140
+Individual impairment allowances are assessed by
+management once objective evidence of impairment
+becomes apparent in a corporate loan. Management
+exercises judgement in determining the quantum of
+loss based on a range of factors. These include available
+remedies for recovery, the financial situation of the
+borrower, collateral valuation, the seniority of the claim
+and the existence and cooperativeness of other creditors.
+Whilst the Group appoints external valuers for the
+valuation of certain property and other illiquid collateral,
+enforceability, timing and means of realisation also affect
+the ultimate collectability and thereby the amount of
+impairment allowances as at the reporting date.
+Refer to the accounting policies in "Note 3.(6) to the Financial Statements: Impairment of the Financial Assets", "Note 4.
+to the Financial Statements: Significant Accounting Judgments and Estimates" and "Note 26. to the Financial Statements:
+Loans and Advances to Customers".
+We conducted our audit in accordance with International Standards on Auditing ("ISAs"). Our responsibilities under those
+standards are further described in the Auditor's responsibilities for the audit of the consolidated financial statements section
+of our report. We are independent of the Group in accordance with the code of Ethics for Professional Accountants issued
+by International Ethics Standards Board for Accountants ("the Code") together with any ethical requirements that are
+relevant to our audit of the consolidated financial statements in the People's Republic of China, and we have fulfilled our
+other ethical responsibilities in accordance with these requirements and the Code. We believe that the audit evidence we
+have obtained is sufficient and appropriate to provide a basis for our opinion.
+Basis for opinion
+In our opinion, the consolidated financial statements give a true and fair view of the financial position of the Bank and of
+the Group as at 31 December 2016 and of the Group's financial performance and cash flows for the year then ended in
+accordance with International Financial Reporting Standards ("IFRSS") issued by the International Accounting Standards
+Board ("IASB") and have been properly prepared in compliance with the disclosure requirements of the Hong Kong
+Companies Ordinance.
+We have audited the consolidated financial statements of Industrial and Commercial Bank of China Limited (the "Bank") and
+its subsidiaries (the "Group") set out on pages 132 to 271, which comprise the consolidated and the Bank's statements of
+financial position as at 31 December 2016, the consolidated statement of profit or loss, the consolidated statement of profit
+or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated cash flow
+statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
+Opinion
+(Incorporated in the People's Republic of China with limited liability)
+To the shareholders of Industrial and Commercial Bank of China Limited
+KPMG
+Independent Auditor's Report
+123
+Key audit matters
+Annual Report 2016
+272
+INFORMATION
+25. Reverse Repurchase Agreements
+177
+24. Derivative Financial Instruments
+UNAUDITED SUPPLEMENTARY FINANCIAL
+177
+271
+Financial Statements
+60. Approval of the Consolidated
+182
+Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
+consolidated financial statements of the current period. These matters were addressed in the context of our audit of the
+consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion
+on these matters.
+124
+ICBC
+Impairment of loans and advances to customers
+Key audit matters (continued)
+Independent Auditor's Report
+125
+Annual Report 2016
+considering, as part of the procedures above, the
+nature of and reasons for any revisions to the key
+assumptions and input parameters in the models,
+the consistency of judgement applied in the use of
+economic factors, the loss emergence period and the
+observation period for historical losses and assessing
+key internal controls over the input of underlying
+data into the models. We compared the economic
+factors used in the models to market information
+to assess whether they were aligned with market
+and economic development. We also assessed
+the emergence period by tracing the lifecycle of
+overdue accounts from the specific credit event to
+downgrading the account to a non-performing loan;
+historical loss parameters used.
+the overdue statistical data for the personal
+loan portfolios; and
+the accuracy of the loan grading migration
+data for the corporate loan portfolios;
+economic factors used in the models;
+input parameters involving management
+judgement;
+evaluating the validity of the models used and
+assumptions adopted in the Group's calculation of
+the collective impairment allowances by critically
+assessing:
+assessing the design, implementation and operating
+effectiveness of key internal controls over the
+approval, recording, monitoring and restructuring
+of loans and advances to customers, the credit
+grading process and the measurement of impairment
+allowances for individually assessed loans and
+advances to customers. In particular, we assessed the
+design, implementation and operating effectiveness
+of the key internal controls over the classification of
+loans by credit quality across all grades;
+Our audit procedures to assess impairment of loans and
+advances to customers included the following:
+How the matter was addressed in our audit
+The determination of the collective impairment allowances
+is heavily dependent on the external macro environment
+and internal credit risk management models. The Group's
+collective impairment allowances for corporate loans and
+advances are derived from estimates including the Group's
+historical losses, the historical emergence period for
+corporate loans and advances (i.e. the time lapse between
+the occurrence of the event causing eventual default to the
+actual recording of a loss) and other adjustment factors.
+The Group's collective impairment allowances for personal
+loans are derived from estimates, including the Group's
+historical overdue data, historical loss experience for
+personal loans and other adjustment factors.
+From the Group's perspective, the portfolios which gave
+rise to the greatest uncertainty in determining impairment
+allowances for loans and advances to customers were
+those where impairments were derived from models and
+individual cash flow assessments, where the loans and
+advances to customers were unsecured or where the
+loans and advances to customers were subject to potential
+collateral shortfalls.
+Impairment of loans and advances to customers is a
+subjective area due to the level of judgement applied by
+management in determining impairment allowances.
+The key audit matter
+Refer to the accounting policies in "Note 3.(6) to the Financial Statements: Impairment of the Financial Assets", "Note 4.
+to the Financial Statements: Significant Accounting Judgments and Estimates" and "Note 26. to the Financial Statements:
+Loans and Advances to Customers".
+Impairment of loans and advances to customers
+Key audit matters (continued)
+Independent Auditor's Report
+The key audit matter
+Basis of Preparation
+39. Other Liabilities
+199
+Information Technology
+Approval Committee
+Risk Management
+Committee
+Credit Approval
+Committee
+Management
+Committee
+Information
+Technology
+2.
+Management
+Committee
+Asset & Liability
+Financial Approval
+Committee
+Supervision
+Committee
+Supervisory Board Office
+Board of Supervisors
+Head Office Departments, Profitability Units and
+Directly Controlled Institutions of the Head Office
+Internal Audit Bureau
+Internal Audit
+Sub-bureau
+Senior Management
+Related Party
+Transactions Control
+Committee
+Audit Committee
+Compensation
+Committee
+Credit Risk Management
+Committee
+Strategy
+Committee
+Market Risk Management
+Committee
+Domestic Institutions
+Tier-one
+Branches
+(31)
+Profitability
+Units
+Supporting
+Departments
+Corporate Strategy and
+Investor Relations
+Department
+Asset & Liability
+Management
+Department
+Human Resources
+Department
+Department
+Finance & Accounting
+Executive Office
+Administration
+Departments
+Comprehensive
+JOB
+Department
+E-banking
+Bank Card
+Department
+(ICBC Peony Card
+Center, Consumer
+Credit Finance Center)
+Settlement & Cash
+Management
+Department
+Institutional Banking
+Department
+Personal Banking
+Department
+Marketing
+Management
+Departments
+Corporate
+Banking
+Department
+Operational Risk
+Management Committee
+Nomination
+Committee
+Risk
+Management
+Committee
+General Meeting
+commitment
+Time and term of
+commitment
+Type of
+Shareholder
+Huijin
+As at 31 December 2016, all of the continuing commitments made by the shareholders were properly fulfilled, and were
+listed as follows:
+Commitments
+Significant Events
+119
+Annual Report 2016
+Occupation of Fund by Controlling Shareholders and Other Related Parties During the reporting
+period, none of the controlling shareholders and other related parties of the Bank occupied any fund of the Bank. The
+auditors have issued the Special Explanation on the Occupation of Fund by Controlling Shareholders and Other Related
+Parties of Industrial and Commercial Bank of China Limited in 2016.
+Entrusted Cash Asset Management During the reporting period, the Bank has not entrusted any other parties to
+manage cash assets.
+Independent Non-executive Directors of Industrial and Commercial Bank of China Limited
+Or Ching Fai, Hong Yongmiao, Anthony Francis Neoh,
+Yang Siu Shun and Sheila Colleen Bair
+The Bank has attached great importance to the management of risks arising from such business, formulated strict rules
+on the credit ratings of the entities to which the guarantee was provided and on the operation process and review
+procedures of provision of guarantee services, and carried out relevant business on such basis.
+In accordance with the Circular Concerning Several Issues on Regulating Fund Transfers between Listed Companies
+and Their Related Parties and External Guarantee of Listed Companies (Zheng Jian Fa [2003] No. 56) issued by CSRC
+and relevant provisions of SSE, we, in the capacity of Independent Non-executive Directors of the Bank, reviewed
+external guarantees of the Bank on the principles of fairness, impartiality and objectivity, and hereby give our specific
+explanation and opinions as follows: upon review, external guarantees provided by the Bank mainly focus on issuance
+of letters of guarantee, which is part of the ordinary banking services within the business scope of the Bank as
+approved by PBC and CBRC. As at 31 December 2016, the balance of letters of guarantee issued by the Bank totaled
+RMB432,547 million.
+Independent Non-executive Directors' Special Explanation and Independent Opinions
+on External Guarantees of the Bank
+Material Guarantees The provision of guarantees is in the ordinary course of business of the Bank. During the reporting
+period, the Bank did not have any material guarantee that needs to be disclosed except for the financial guarantee services
+within the business scope as approved by PBC and CBRC.
+Material Trust, Sub-contract and Lease During the reporting period, the Bank had not held on trust to a material extent
+or entered into any material sub-contract or lease arrangement in respect of assets of other corporations, which were subject
+to disclosure, and no other corporation had held on trust to a material extent or entered into any material sub-contract or
+lease arrangement in respect of the Bank's assets, which were subject to disclosure.
+Material Contracts and Performance of Obligations thereunder
+Significant Events
+Commitment
+of non-
+competition
+October 2006/
+No specific
+Shareholders'
+Board of Directors
+Board of Directors' Office
+121
+Annual Report 2016
+ICBC
+120
+During the reporting period, neither the Bank nor any of its Directors, Supervisors, Senior Management members and
+controlling shareholders was subject to any investigation by competent authorities, coercive measures taken by judicial
+authorities or disciplinary inspection departments, transferred to judicial authorities or charged for criminal responsibility,
+case filing investigation or administrative penalty by CSRC, restricted access to market, identification as unqualified, major
+penalty by other administrative authorities of environmental protection, taxation, safety supervision, etc. or public reprimand
+by the stock exchanges.
+Investigations, Administrative Penalties by CSRC; Public Reprimand by Stock Exchanges;
+and Sanctions Imposed by Other Regulatory and Judicial Authorities During the Reporting
+Period
+Branches Directly Controlled
+by the Head Office
+(5)
+and did not
+do anything in
+violation of the
+commitment.
+Save as disclosed above, neither the Bank nor any of its other related parties made any commitments.
+the laws or listing rules of China or
+the listing place of the Bank, Huijin
+will not engage in or participate in any
+competitive commercial banking business
+including but not limited to granting
+loans, attracting deposits and providing
+settlement, fund custody, bank card
+and money exchange services. However,
+Huijin can engage in or participate in
+some competitive businesses by investing
+in other commercial banks. In this regard,
+Huijin has committed that it will (1) fairly
+treat the investments in commercial
+banks and will not make any decision or
+judgment that will have adverse impact
+on the Bank or be beneficial to other
+commercial banks by taking advantage
+of the status of being a shareholder of
+the Bank or information obtained by
+taking advantage of the status of being a
+shareholder of the Bank; and (2) perform
+the shareholders' rights for the maximum
+interests of the Bank.
+Provided that Huijin continues to hold
+any share of the Bank or is deemed as
+the controlling shareholder of the Bank
+or the related party of the controlling
+shareholder of the Bank according to
+Commitment
+Prospectus
+on A Share
+Rights Issue of
+Industrial and
+Commercial
+Bank of China
+Limited
+Legal document
+under which
+the commitment
+is made
+Prospectus of
+Industrial and
+Commercial
+Bank of China
+Limited on
+Initial Public
+Offering
+(A Share)
+term
+November 2010/
+No specific
+term
+Fulfillment of
+commitment
+As at 31
+December 2016,
+Huijin strictly
+fulfilled the above
+commitment
+IT Department
+Business and
+Product Innovation
+Management
+Committee
+Banking Departments of
+Tier-one Branches
+Statement of Financial Position
+193
+Property and Equipment
+30.
+133
+Other Comprehensive Income
+191
+29. Investments in Associates and
+Joint Ventures
+132
+Statement of Profit or Loss
+Statement of Profit or Loss and
+189
+28. Investments in Subsidiaries
+186
+27. Financial Investments
+183
+26. Loans and Advances to Customers
+124
+Consolidated:
+AUDITED FINANCIAL STATEMENTS
+134
+INDEPENDENT AUDITOR'S REPORT
+31.
+194
+Institutions
+140
+Corporate Information
+1.
+34. Due to Banks and Other Financial
+NOTES TO THE FINANCIAL STATEMENTS
+198
+Fair Value through Profit or Loss
+139
+Statement of Financial Position
+Financial Liabilities Designated at
+Company:
+33.
+Global Market
+Department
+197
+Other Assets
+32.
+135
+Statement of Changes in Equity
+Deferred Income Tax Assets and Liabilities
+Pages
+137
+CONTENTS
+Investment Banking
+Department
+Security Department
+Precious Metal
+Business Department
+Discipline
+Enforcement
+Department
+Department
+Urban Finance
+Research Institute
+Channel
+Management
+Department
+International
+Banking
+Private Banking
+Department
+Culture
+Department
+Corporate
+ICBC Bills Discounting
+Department
+Product Innovation
+Management
+Department
+Information
+Management
+Department
+Tier-one Sub-branches
+(3,076)
+Asset Management
+Department
+Operation
+Management
+Department
+Domestic Branches
+(27)
+Tier-two Branches
+(413)
+Pages
+Outlets
+(13,098)
+Domestic Subsidiaries
+Asset Custody
+Department
+and their Branches
+Financial Statements
+Subsidiaries with Diversified
+Operation and their Branches
+(105)
+Auditor's Report and
+Secondary reporting line
+Primary reporting line
+Organizational Chart
+Overseas Subsidiaries
+and their Institutions
+(366)
+Overseas Branches
+and their Institutions
+(45)
+Overseas Institutions
+Department
+Overseas Center
+(1)
+(Banking Department)
+Special Financing
+Department
+Committee
+Rural Banks
+Staff Union Working
+Management
+Department
+Retired Staff
+Pension Business
+(3)
+137
+Consolidated Cash Flow Statement
+Year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes
+CASH FLOWS FROM INVESTING ACTIVITIES
+2015
+Purchases of property and equipment and other assets
+Purchases of financial investments
+Annual Report 2016
+(other than repossessed assets)
+Proceeds from disposal of property and equipment and other assets
+2016
+The notes on pages 140 to 271 form part of these financial statements.
+1,664,704
+(86,783)
+(93,318)
+239,221
+Net cash flows from operating activities
+Income tax paid
+1,218,547
+332,539
+Net cash flows from operating activities before tax
+1,960,343
+896,426
+136,604
+Other liabilities
+Proceeds from sale and redemption of financial investments
+688,632
+1,477,846
+1,131,764
+Investments in associates and joint ventures
+1,356
+(42,297)
+Due to customers
+(2,007,160)
+1,378,079
+(1,373)
+(158)
+Proceeds from disposal of associates and joint ventures
+Dividends received
+Net cash flows from investing activities
+CASH FLOWS FROM FINANCING ACTIVITIES
+Proceeds from issue of other equity instruments
+Capital injection by non-controlling shareholders
+Proceeds from issuance of debt securities
+Interest paid on debt securities
+Repayment of debt securities
+Acquisition of non-controlling interests
+487
+(468,932)
+1,094
+(666,961)
+6,691
+(39,281)
+45,000
+323
+896,665
+116,214
+(13,979)
+(10,325)
+(854,012)
+(94,205)
+(374)
+Dividends paid on ordinary shares
+(83,150)
+(91,026)
+2,059,722
+3,481
+2,850
+(2,492,693)
+1,520
+Dividends paid on preference shares
+1,136
+Certificates of deposit
+(3,926)
+684
+571,704
+Profit for the year
+781,988
+278,249 278,249
+1,789,474 11,045
+1,800,519
+857
+279,106
+Other comprehensive income
+(note 43)
+(31,432)
+(28,823)
+(719)
+(923)
+(17,083)
+(17,083)
+(432)
+(17,515)
+Total comprehensive income
+(28,823) 13,382
+(719)
+(923) (17,083)
+278,249 261,166
+13,382
+246,356 29,956
+178,040
+equity
+(In RMB millions, unless otherwise stated)
+Attributable to equity holders of the parent company
+Reserves
+Foreign
+Issued
+Other
+Investment currency
+Cash flow
+Non-
+Balance as at 1 January 2016
+share equity Capital
+capital instrument reserve
+356,407 79,375 152,026
+Surplus
+reserve
+General revaluation translation
+reserve reserve
+hedging
+Other
+Retained
+controlling
+Total
+reserve
+reserve
+reserves
+Subtotal
+profits
+Total interests
+425
+261,591
+Dividends ordinary shares
+2015 final (note 18)
+(i)
+Dividends to non-controlling
+shareholders
+Others
+9
+18
+27
+(71)
+(71)
+27
+27
+Balance as at
+31 December 2016
+356,407
+86,051 152,043
+205,021 251,349
+1,133 (18,050) (4,645)
+(221) 586,630 940,663 1,969,751
+11,412
+1,981,163
+Includes the appropriation made by overseas branches and subsidiaries in the amounts of RMB84 million and RMB669 million,
+respectively.
+(ii)
+Includes the appropriation made by subsidiaries in the amount of RMB 194 million.
+The notes on pages 140 to 271 form part of these financial statements.
+Annual Report 2016
+21
+Year ended 31 December 2016
+13
+8
+Dividends preference shares
+(note 18)
+(83,150) (83,150)
+(83,150)
+(4,450) (4,450)
+(4,450)
+Appropriation to surplus
+reserve (i)
+Appropriation to general
+reserve (ii)
+Capital injection by other
+equity holders
+6,676
+Change in share holding
+in subsidiaries
+26,981
+26,981
+(26,981)
+1
+4,993
+4,993
+(4,993)
+1
+6,676
+6,676
+8
+8
+135
+Consolidated Statement of Changes in Equity
+134
+TOTAL ASSETS
+24,137,265
+22,209,780
+LIABILITIES
+Due to central banks
+545
+Financial liabilities designated at fair value through profit or loss
+33
+366,752
+Derivative financial liabilities
+24
+458,699
+89,960
+Due to banks and other financial institutions
+34
+2,016,799
+2,265,860
+Repurchase agreements
+35
+589,306
+337,191
+Certificates of deposit
+36
+218,427
+210
+303,927
+76,826
+585,733
+32
+Other assets
+94,452
+78,870
+Reverse repurchase agreements
+25
+755,627
+996,333
+Loans and advances to customers
+26
+12,767,334
+11,652,812
+Financial investments
+27
+5,006,699
+4,666,691
+Investments in associates and joint ventures
+29
+30,077
+Property and equipment
+30
+246,209
+Deferred income tax assets
+31
+28,398
+24,185
+224,426
+21,066
+183,352
+Due to customers
+37
+17,825,302
+356,407
+41
+86,051
+79,375
+79,375
+79,375
+6,676
+42
+586,630
+571,704
+940,663
+781,988
+1,969,751
+11,412
+1,789,474
+1,981,163
+24,137,265
+11,045
+1,800,519
+22,209,780
+Yi Huiman
+Chairman
+Gu Shu
+Vice Chairman and President
+The notes on pages 140 to 271 form part of these financial statements.
+Zhang Wenwu
+General Manager of Finance
+and Accounting Department
+356,407
+ICBC
+40
+TOTAL EQUITY
+16,281,939
+Income tax payable
+Deferred income tax liabilities
+31
+Debt securities issued
+38
+52,640
+604
+357,937
+63,266
+995
+306,622
+Other liabilities
+39
+637,830
+589,073
+TOTAL LIABILITIES
+22,156,102
+20,409,261
+EQUITY
+Equity attributable to equity holders of the parent company
+Share capital
+Other equity instruments
+Including: Preference shares
+Perpetual bond
+Reserves
+Retained profits
+Non-controlling interests
+TOTAL EQUITY AND LIABILITIES
+23,938
+(i)
+Year ended 31 December 2016
+2,295
+Amortisation of financial investments
+(2,155)
+(1,422)
+Impairment losses on loans and advances to customers
+26
+86,138
+86,022
+Impairment losses on assets other than loans and advances
+to customers
+15
+2,059
+1,756
+Gain on unrealised foreign exchange
+(9,282)
+(7,494)
+Interest expense on debt securities issued
+14,237
+13,349
+Accreted interest on impaired loans
+Gain on disposal of available-for-sale financial assets, net
+10
+Net trading gain on equity investments
+8
+971
+12
+Amortisation
+18,049
+(31,432) (3,926)
+684 571,704 781,988 1,789,474
+11,045 1,800,519
+Includes the appropriation made by overseas branches and subsidiaries in the amounts of RMB71 million and RMB890 million,
+respectively.
+(ii)
+Includes the appropriation made by subsidiaries in the amount of RMB1,303 million.
+The notes on pages 140 to 271 form part of these financial statements.
+136
+ICBC
+Consolidated Cash Flow Statement
+Year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes
+2016
+2015
+CASH FLOWS FROM OPERATING ACTIVITIES
+Profit before taxation
+363,279
+363,235
+Adjustments for:
+Share of profits of associates and joint ventures
+(2,604)
+(2,330)
+Depreciation
+19,761
+60%
+(5,135)
+(4,156)
+(4,202)
+(72,653)
+103,856
+Reverse repurchase agreements
+(6,395)
+130,224
+Loans and advances to customers
+(1,119,674)
+(924,231)
+Other assets
+(132,697)
+(774,096)
+(1,795,252)
+(1,210,467)
+Net increase/decrease) in operating liabilities:
+Financial liabilities designated at fair value through profit or loss
+Due to central banks
+63,898
+335
+(284,962)
+(421)
+Due to banks and other financial institutions
+(290,032)
+703,298
+Repurchase agreements
+252,115
+(43,766)
+Financial assets designated at fair value through profit or loss
+29,956
+(98,020)
+Financial assets held for trading
+(4,765)
+(345)
+(33)
+Net loss on financial assets and liabilities designated at fair value
+through profit or loss
+9
+104
+5,953
+Net gain on disposal and overage of property and equipment and
+other assets (other than repossessed assets)
+(181)
+(848)
+Dividend income
+10
+(343)
+(155)
+463,087
+468,671
+Net (increase)/decrease in operating assets:
+Due from central banks
+(273,546)
+442,973
+Due from banks and other financial institutions
+(136,134)
+(91,173)
+(54,153)
+Consolidated Statement of Changes in Equity
+152,026 178,040 246,356
+85
+(note 43)
+25,147
+(5,329)
+(73)
+Total comprehensive income
+25,147
+(5,329)
+(73)
+33
+148
+19,893
+Other comprehensive income
+19,893
+20,405
+148
+19,893
+277,131
+297,024
+1,101
+298,125
+Dividends ordinary shares
+2014 final (note 18)
+Dividends preference shares
+(note 18)
+512
+equity
+6,445 1,537,304
+589 277,720
+Total
+controlling
+reserves Subtotal profits Total interests
+661 492,312 650,236 1,530,859
+277,131 277,131
+(In RMB millions, unless otherwise stated)
+Attributable to equity holders of the parent company
+Reserves
+Equity
+Issued
+Other
+component
+of
+Foreign
+Investment currency
+Cash flow
+Non-
+Balance as at 1 January 2015
+share equity convertible
+capital instrument bonds
+353,495 34,428
+388
+Capital
+Surplus
+reserve
+reserve
+144,424
+150,752 221,622
+General revaluation translation
+reserve reserve reserve
+4,809 (26,103)
+hedging
+Other
+Retained
+reserve
+(3,853)
+Profit for the year
+Appropriation to surplus
+reserve (i)
+Appropriation to general
+reserve (ii)
+(27,288)
+24,734
+24,734
+(24,734)
+44,947
+44,947
+7,761
+10,673
+10,673
+3,438
+3,438
+(159)
+(159)
+(339)
+867
+(498)
+323
+323
+.
+(8)
+(388)
+(388)
+(125)
+(125)
+(125)
+27,288
+(40)
+(2,331)
+(2,331)
+Capital injection by other
+equity holders
+44,947
+Conversion of convertible
+bonds
+2,912
+Acquisition of subsidiaries
+Change in share holding
+in subsidiaries
+Capital injection by non-
+controlling shareholders
+Dividends to non-controlling
+shareholders
+Conversion and redemption
+of equity component
+of convertible bonds
+Others
+Balance as at
+31 December 2015
+356,407 79,375
+(388)
+7,761
+(159)
+27,288
+(91,026)
+(91,026)
+(91,026)
+(2,331)
+(4,450)
+285,144
+Dividends paid to non-controlling shareholders
+Net trading income
+143,391
+144,973
+7
+NET FEE AND COMMISSION INCOME
+(18,279)
+(19,741)
+161,670
+164,714
+507,867
+471,846
+(363,912)
+(319,634)
+871,779
+2015
+2016
+791,480
+6 7 7
+66
+Fee and commission expense
+Fee and commission income
+NET INTEREST INCOME
+Interest expense
+8
+Interest income
+6,457
+Net loss on financial assets and liabilities designated at fair value
+through profit or loss
+Share of profits of associates and joint ventures
+OPERATING PROFIT
+Others
+Loans and advances to customers
+Impairment losses on:
+(220,835)
+(193,112)
+12
+668,733
+641,681
+Operating expenses
+OPERATING INCOME
+14,281
+13,964
+11
+Other operating income, net
+4,920
+4,545
+10
+Net gain on financial investments
+(5,953)
+(104)
+9
+4,227
+PROFIT BEFORE TAXATION
+Notes
+Year ended 31 December 2016
+The Directors are assisted by the Audit Committee in discharging their responsibilities for overseeing the Group's financial
+reporting process.
+In preparing the consolidated financial statements, the Directors are responsible for assessing the Group's ability to continue
+as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
+accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative
+but to do so.
+The Directors are responsible for the preparation of the consolidated financial statements that give a true and fair view in
+accordance with IFRSS issued by IASB and the disclosure requirements of the Hong Kong Companies Ordinance, and for such
+internal control as the Directors determine is necessary to enable the preparation of consolidated financial statements that
+are free from material misstatement, whether due to fraud or error.
+Responsibilities of the directors for the consolidated financial statements
+Independent Auditor's Report
+129
+Annual Report 2016
+If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we
+are required to report that fact. We have nothing to report in this regard.
+In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and,
+in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or
+our knowledge obtained in the audit or otherwise appears to be materially misstated.
+Our opinion on the consolidated financial statements does not cover the other information and we do not express any form
+of assurance conclusion thereon.
+Information other than the consolidated financial statements and auditor's report thereon
+The Directors are responsible for the other information. The other information comprises all the information included in the
+annual report, other than the consolidated financial statements and our auditor's report thereon.
+assessing the availability and stability of key
+operating systems, taking into consideration
+the rapid development of businesses types and
+transactions volumes as well as IT projects that have
+a significant impact on business continuity.
+evaluating the design, implementation and operating
+effectiveness of the significant accounts-related
+IT process controls by assessing the operating
+effectiveness of IT Application Controls, assessing
+the operating effectiveness of certain automated
+controls and system calculations which are relevant
+to the Group's compliance activities and assessing
+the consistency of data transmission and data
+migration;
+examining the framework of governance over
+the Group's IT organisation and the controls over
+program development and changes, access to
+programs and data and IT operations, including
+compensating controls where required;
+assessing the design, implementation and
+operating effectiveness of key internal controls
+over the continued integrity of all major IT systems
+fundamental to dealing with the financial data,
+particularly financial reporting;
+We used our internal IT specialists to perform audit
+procedures to assess IT systems and controls over financial
+reporting, which included:
+How the matter was addressed in our audit
+We identified IT systems and controls over financial
+reporting as a key audit matter because the Group's
+financial accounting and reporting systems are
+fundamentally reliant on complex IT systems and control
+processes which are driven by significant transaction
+volumes caused by the size of the customer base both in
+the corporate and the retail banking businesses in China
+and globally.
+Of particular importance are system calculations,
+logic regarding significant accounts, including interest
+calculations, interfaces between business management
+systems and accounting systems and data migration from
+certain legacy systems to new systems.
+Automated accounting procedures and IT environment
+controls, which include IT governance, controls over
+program development and changes, access to programs
+and data and IT operations, are required to be designed
+and to operate effectively to ensure accurate financial
+reporting.
+The Group operates one of the largest and most complex
+IT systems used by a bank globally.
+IT systems and controls over financial reporting
+The key audit matter
+Key audit matters (continued)
+Auditor's responsibilities for the audit of the consolidated financial statements
+(In RMB millions, unless otherwise stated)
+Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free
+from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. This
+report is made solely to you, as a body, and for no other purpose. We do not assume responsibility towards or accept liability
+to any other person for the contents of this report.
+As part of an audit in accordance with ISAS, we exercise professional judgement and maintain professional scepticism
+throughout the audit. We also:
+Consolidated Statement of Profit or Loss
+131
+Annual Report 2016
+30 March 2017
+Central, Hong Kong
+10 Chater Road
+8th Floor, Prince's Building
+Certified Public Accountants
+KPMG
+The engagement partner on the audit resulting in this independent auditor's report is Simon John Edward Gleave.
+From the matters communicated with the Audit Committee, we determine those matters that were of most significance in
+the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe
+these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in
+extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse
+consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
+We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements regarding
+independence and communicate with them all relationships and other matters that may reasonably be thought to bear on
+our independence and, where applicable, related safeguards.
+We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the audit
+and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
+Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
+within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction,
+supervision and performance of the Group audit. We remain solely responsible for our audit opinion.
+Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
+disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a
+manner that achieves fair presentation.
+Conclude on the appropriateness of the Directors' use of the going concern basis of accounting and, based on the
+audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
+doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
+required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or,
+if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained
+up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue
+as a going concern.
+Auditor's responsibilities for the audit of the consolidated financial statements (continued)
+Independent Auditor's Report
+ICBC
+130
+Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
+disclosures made by the Directors.
+Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
+appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's
+internal control.
+Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud
+or error, design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient
+and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
+fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
+misrepresentations or the override of internal control.
+Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs
+will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
+material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
+taken on the basis of these consolidated financial statements.
+Independent Auditor's Report
+Income tax expense
+Attributable to:
+297,024
+261,166
+425
+Equity holders of the parent company
+Non-controlling interests
+Total comprehensive income attributable to:
+298,125
+261,591
+Total comprehensive income for the year
+20,405
+(17,515)
+Subtotal of other comprehensive income for the year
+(75)
+Others
+(5,400)
+13,608
+156
+(860)
+reclassified subsequently to profit or loss
+Foreign currency translation differences
+Share of the other comprehensive income of investees
+accounted for using equity method which may be
+(88)
+(751)
+Effective hedging portion of gains or losses arising from
+cash flow hedging instruments
+25,745
+(29,449)
+1,101
+Net (losses)/gains from change in fair value of available-for-sale
+financial assets
+261,591
+The notes on pages 140 to 271 form part of these financial statements.
+23
+Financial assets designated at fair value through profit or loss
+132,838
+189,331
+22
+Financial assets held for trading
+683,793
+797,473
+21
+3,059,633
+3,350,788
+20
+220
+Due from banks and other financial institutions
+Cash and balances with central banks
+ASSETS
+31 December 2016 31 December 2015
+Notes
+(In RMB millions, unless otherwise stated)
+31 December 2016
+Consolidated Statement of Financial Position
+133
+Annual Report 2016
+298,125
+PROFIT FOR THE YEAR
+Items that may be reclassified subsequently to profit or loss:
+15
+(3)
+857
+277,131
+278,249
+277,720
+279,106
+(85,515)
+(84,173)
+16
+363,235
+363,279
+2,330
+2,604
+360,905
+360,675
+(971)
+(86,022)
+(86,138)
+(1,756)
+15
+585
+26
+PROFIT FOR THE YEAR
+Non-controlling interests
+Equity holders of the parent company
+279,106
+(8)
+589
+277,720
+Basic (RMB yuan)
+Others
+Share of the other comprehensive income of investees
+accounted for using equity method which will not be
+reclassified to profit or loss
+Items that will not be reclassified to profit or loss:
+43
+2015
+277,720
+2016
+279,106
+Notes
+Other comprehensive income (after tax, net):
+Profit for the year
+(In RMB millions, unless otherwise stated)
+Year ended 31 December 2016
+Consolidated Statement of Profit or Loss and Other Comprehensive Income
+ICBC
+132
+The notes on pages 140 to 271 form part of these financial statements.
+Details of the dividends declared and paid or proposed are disclosed in note 18 to the financial statements.
+0.77
+0.77
+19
+0.77
+0.77
+19
+Diluted (RMB yuan)
+EARNINGS PER SHARE
+(2,331)
+Derivative financial assets
+864,899
+24
+210,434
+ICBC
+138
+The notes on pages 140 to 271 form part of these financial statements.
+(338,014)
+(317,533)
+810,718
+Interest paid
+1,441,298
+1,189,368
+CASH AND CASH EQUIVALENTS AT END OF THE YEAR
+NET CASH FLOWS FROM OPERATING ACTIVITIES INCLUDE:
+Interest received
+18,963
+45
+Effect of exchange rate changes on cash and cash equivalents
+(71)
+(8)
+Net cash flows from financing activities
+(50,786)
+28,567
+NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS
+(36,732)
+428,071
+Cash and cash equivalents at beginning of the year
+1,441,298
+994,264
+(280,497)
+79,375
+601,857
+79,375
+22
+42
+596,181
+Annual Report 2016
+729,783
+1,909,929
+22,788,080
+1,761,746
+21,046,946
+Yi Huiman
+79,375
+872,290
+79,375
+51,051
+356,407
+356,407
+40
+19,285,200
+20,878,151
+486,426
+481,236
+39
+240,175
+279,446
+38
+62,136
+Chairman
+41
+Gu Shu
+The principal activities of the Bank and its subsidiaries (collectively referred to as the "Group") comprise corporate and
+personal banking, treasury operations, investment banking, asset management, trust, financial leasing, insurance and other
+financial services. Domestic establishments refer to the Head Office of the Bank, branches and subsidiaries established inside
+Mainland China. Overseas establishments refer to branches and subsidiaries established under local jurisdictions outside
+Mainland China.
+Vice Chairman and President
+Annual Improvements to IFRSS 2012-2014 Cycle
+Amendments to IFRS 10, IFRS 12 and IAS 28
+Amendments to IAS 1
+Amendments to IAS 16 and IAS 38
+Amendments to IAS 27
+Amendments to IFRS 11
+IFRS 14
+The IASB has issued the following amendments to IFRSS (including International Accounting Standards ("IASS")) and
+amendments to standards that are effective in 2016 and relevant to the Group's operation.
+(3) Change in accounting policies
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+140
+The preparation of financial statements in conformity with IFRSS requires management to make judgements, estimates and
+assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses.
+Actual results may differ from these estimates. Judgements made by management in the application of IFRSS that have
+significant effect on the financial statements and major sources of estimation uncertainty are discussed in Note 4.
+The consolidated financial statements have been prepared under the historical cost convention, except for derivative financial
+instruments, financial assets and liabilities held for trading, financial assets and liabilities designated at fair value through
+profit or loss and available-for-sale financial assets (unless the fair value cannot be reliably measured) that have been
+measured at fair value, as further explained in the respective accounting policies below.
+(2) Basis of preparation
+ICBC
+The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards
+("IFRSS") and interpretations promulgated by the International Accounting Standards Board (the "IASB") and the disclosure
+requirements of the Hong Kong Companies Ordinance.
+2. BASIS OF PREPARATION
+TOTAL EQUITY AND LIABILITIES
+The Bank's A Shares and H Shares are listed on the Shanghai Stock Exchange and the Stock Exchange of Hong Kong
+Limited and the stock codes are 601398 and 1398, respectively. The Bank's offshore preference shares are listed on the
+Stock Exchange of Hong Kong Limited and the stock codes are 4603, 4604 and 84602, respectively. The Bank's domestic
+preference shares are listed on the Shanghai Stock Exchange and the stock code is 360011.
+The Bank obtained its finance permit No. B0001H111000001 from the China Banking Regulatory Commission (the "CBRC")
+of the PRC. The Bank obtained its business license with unified social credit code 91100000100003962T from the State
+Administration for Industry and Commerce of the PRC. The legal representative is Yi Huiman and the registered office is
+located at No. 55 Fuxingmennei Avenue, Xicheng District, Beijing, the PRC.
+Industrial and Commercial Bank of China Limited (the "Bank"), which was previously known as Industrial and Commercial
+Bank of China ("ICBC"), used to be a wholly-state-owned commercial bank established on 1 January 1984 based on
+the authorisation of the State Council and the People's Bank of China (the "PBOC") of the People's Republic of China
+(the "PRC"). On 28 October 2005, with the approval of the State Council, ICBC was restructured and incorporated as
+a joint-stock limited company. The joint-stock limited company undertook all the assets and liabilities of ICBC upon the
+restructuring.
+1. CORPORATE INFORMATION
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+139
+Annual Report 2016
+General Manager of Finance
+and Accounting Department
+Zhang Wenwu
+The notes on pages 140 to 271 form part of these financial statements.
+(1) Statement of compliance
+TOTAL EQUITY
+Due to customers
+Reserves
+21,046,946
+22,788,080
+371,556
+479,196
+32
+20,354
+27,334
+31
+129,669
+124,089
+30
+34,242
+34,242
+LIABILITIES
+29
+102,288
+28
+4,450,998
+4,748,376
+27
+Investments in associates
+Investments in subsidiaries
+Financial investments
+11,026,476
+12,033,200
+26
+Loans and advances to customers
+792,876
+101,066
+Retained profits
+Due to central banks
+33
+Including: Preference shares
+Other equity instruments
+Share capital
+EQUITY
+TOTAL LIABILITIES
+Other liabilities
+Debt securities issued
+Income tax payable
+15,781,673
+17,235,587
+37
+Regulatory deferral accounts
+150,113
+Financial liabilities designated at fair value through profit or loss
+194,503
+Certificates of deposit
+130,830
+304,987
+35
+Repurchase agreements
+297,414
+33,144
+2,103,289
+1,920,782
+34
+Due to banks and other financial institutions
+58,179
+24
+Derivative financial liabilities
+379
+352,001
+36
+In the Bank's statement of financial position, investments in associates and joint ventures are stated at cost less impairment
+losses (see note 3(21)).
+Joint Arrangements "Accounting for acquisitions of interests in joint
+operations"
+Investment entities: Applying the consolidation exception
+Presentation of financial statements "Disclosure initiative"
+Discounted bills are granted by the Group to its customers based on the bank acceptance held which has not matured.
+Discounted bills are carried at face value less unrealised interest income and the interest income of the discounted bills is
+recognised using the effective interest rate method.
+Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in
+an active market and the Group has no intention of trading the assets immediately or in the near term. After initial
+measurement, such assets are subsequently carried at amortised cost using the effective interest rate method, less any
+allowance for impairment losses. Gains and losses are recognised in profit or loss when such assets are derecognised or
+impaired, as well as through the amortisation process.
+Loans and receivables
+If, as a result of a change in intention or ability, it is no longer appropriate to classify an investment as held-to-maturity, it
+shall be reclassified as available-for-sale and remeasured at fair value.
+Held-to-maturity financial investments are non-derivative financial assets with fixed or determinable payments and a fixed
+maturity and which the Group has the positive intention and ability to hold to maturity. After initial measurement, held-to-
+maturity financial investments are subsequently measured at amortised cost using the effective interest rate method, less
+any impairment loss. Gains and losses are recognised in profit or loss when the held-to-maturity financial investments are
+derecognised or impaired, as well as through the amortisation process.
+Held-to-maturity financial investments
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+If an investment in an associate becomes an investment in a joint venture or vice versa, retained interest is not remeasured.
+Instead, the investment continues to be accounted for under the equity method.
+145
+Annual Report 2016
+Financial assets and liabilities designated at fair value through profit or loss are measured at fair value after initial
+recognition. Realised and unrealised income or expenses are recognised in profit or loss.
+In the case of an equity investment, if neither a quoted market price in an active market exists nor its fair value can be
+reliably measured, it cannot be designated as a financial asset at fair value through profit or loss.
+The financial instrument contains one or more embedded derivatives, unless the embedded derivative(s) does not
+significantly modify the cash flows or it is clear, with little or no analysis, that it would not be separately recorded.
+It applies to a group of financial assets, financial liabilities or both which is managed and its performance evaluated on
+a fair value basis, in accordance with a documented risk management or investment strategy, and where information
+about that group of financial instruments is provided internally on that basis to key management personnel; or
+It eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise from
+measuring the financial asset or financial liability or from recognising the gains and losses on them on different bases;
+Available-for-sale financial assets
+Available-for-sale financial assets are non-derivative financial assets which are designated as such or are not classified
+in any of the three preceding categories. After initial recognition, available-for-sale financial assets are subsequently
+measured at fair value. Premiums and discounts on available-for-sale financial assets are amortised using the effective
+interest rate method and are taken to the statement of profit or loss as interest income. Changes in fair value of available-
+for-sale financial assets are recognised as a separate component of other comprehensive income until the financial asset
+is derecognised or determined to be impaired at which time the cumulative gains or losses previously recorded in other
+comprehensive income are transferred to profit or loss. Dividend and interest income on available-for-sale financial assets are
+recorded in profit or loss.
+In the case of an equity investment classified as available for sale, if neither a quoted market price in an active market exists
+nor its fair value can be reliably measured, it will be measured at cost less any impairment loss.
+Other financial liabilities
+Available-for-sale financial assets
+If there is objective evidence that an impairment loss has been incurred on the financial asset, the amount of impairment
+loss, measured as the difference between the carrying amount of that financial asset and the present value of estimated
+future cash flows discounted at the current market rate of return for a similar financial asset, is recognised in profit or loss. In
+the case of an equity investment, if neither a quoted market price in an active market exists nor its fair value can be reliably
+measured, the amount of impairment loss is recognised in profit or loss. Impairment losses on these assets are not reversed.
+Financial assets carried at cost
+When an item of loans and receivables is uncollectible, it is written off against the related allowance for impairment losses.
+Such loans and receivables are written off after all the necessary procedures have been completed and the amount of the
+loss has been determined. Subsequent recoveries of the amounts previously written off decrease the amount of the provision
+for loan impairment in profit or loss.
+If, in a subsequent period, the amount of an impairment loss decreases and the decrease can be attributed objectively to an
+event occurring after the impairment was recognised, the previously recognised impairment loss is reversed. Any subsequent
+reversal of an impairment loss is recognised in profit or loss, to the extent that the carrying value of the assets does not
+exceed its amortised cost at the reversal date.
+Future cash flows of a group of financial assets that are collectively evaluated for impairment are estimated on the basis of
+historical loss experience for assets with credit risk characteristics similar to those in the group. Historical loss experience is
+adjusted on the basis of current observable data to reflect the impact of current conditions that did not affect the period on
+which the historical loss experience is based and to eliminate the impact of historical conditions that do not exist currently.
+The methodology and assumptions used for estimating future cash flows are reviewed regularly by the Group.
+The Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually
+significant, and individually or collectively for financial assets that are not individually significant. If it is determined that no
+objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, the asset is
+included in a group of financial assets with similar credit risk characteristics and that group of financial assets is collectively
+assessed for impairment. Assets that are individually assessed for impairment and for which an impairment loss is or
+continues to be recognised are not included in a collective assessment of impairment.
+(iii)
+If there is objective evidence that an impairment loss on loans and receivables or held-to-maturity investments has been
+incurred, the amount of the loss is measured as the difference between the asset's carrying amount and the present value
+of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset's
+original effective interest rate and shall include the value of any relevant collateral. The original effective interest rate is the
+rate used to determine the values of financial assets at initial recognition. With respect to floating-rate loans, receivables and
+held-to-maturity investments, the discount rate could be the current effective interest rate determined under the contract.
+The carrying amount of the asset is reduced through the use of an impairment provision account and the amount of the loss
+is recognised in profit or loss.
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+146
+An assessment on carrying amount of financial assets is made at the end of each reporting period. Impairment is recognised
+if there is objective evidence of impairment of financial assets, i.e., one or more events that occur after the initial recognition
+of those assets and have an impact on the estimated future cash flows of the financial assets or group of financial assets
+that can be reliably estimated. Evidence of impairment may include indications that the borrower or a group of borrowers
+is experiencing significant financial difficulty, default or delinquency in interest or principal payments, they would probably
+enter into bankruptcy or other financial reorganisation and where observable data indicate that there is a measurable
+decrease in the estimated future cash flows.
+(6) Impairment of the financial assets
+Other financial liabilities are carried at amortised cost using the effective interest rate method after initial recognition.
+Financial assets carried at amortised cost
+If there is objective evidence that the financial asset is impaired, the cumulative loss, measured as the difference between the
+acquisition cost (net of any principal repayment and amortisation) and the current fair value, less any impairment loss on that
+financial asset previously recognised in profit or loss, is removed from other comprehensive income and recognised in profit
+or loss.
+(ii)
+A financial instrument may be designated as a financial asset or financial liability at fair value through profit or loss upon
+initial recognition, if it meets any of the criteria set out below:
+At initial recognition, financial liabilities are classified into two categories: financial liabilities at fair value through profit or
+loss and other financial liabilities.
+At initial recognition, financial assets are classified into four categories: financial assets at fair value through profit or loss,
+held-to-maturity financial investments, loans and receivables and available-for-sale financial assets.
+Initial recognition of financial instruments
+A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
+instrument of another entity.
+(5) Financial instruments
+Cash flows arising from transactions in foreign currencies and cash flows of overseas subsidiaries are translated using the
+weighted average exchange rates for the year. The effect of exchange rate movements on cash is presented separately in the
+statement of cash flows as a reconciling item.
+As at the end of the reporting period, the assets and liabilities of foreign operations are translated into the presentation
+currency of the Bank at the exchange rates ruling at the end of the reporting period. All items within equity except for
+retained profits are translated at the exchange rates ruling at the dates of the initial transactions. Income and expenses in
+the statement of profit or loss are translated at the weighted average exchange rates for the year. The exchange differences
+arising on the above translation are taken to other comprehensive income. On disposal of a foreign operation, the
+cumulative amount recognised in other comprehensive income relating to that particular foreign operation is recognised in
+profit or loss.
+Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rates as at
+the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using
+the exchange rates as at the date when the fair value is determined. Any goodwill arising on the acquisition of a foreign
+operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition are
+treated as assets and liabilities of the foreign operation and translated at the rates ruling at the end of the reporting period.
+The exchange differences are recognised in profit or loss or in other comprehensive income, depending on the nature of
+non-monetary items.
+Foreign currency transactions are initially recorded in the functional currency using the exchange rates ruling at the dates
+of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated into the functional
+currency at the applicable exchange rates ruling at the end of the reporting period. Exchange differences arising on the
+settlement of monetary items or on translating monetary items at period end rates are recognised in profit or loss, with the
+exception that they are taken directly to other comprehensive income when the monetary items are designated as part of
+the hedge of the Bank's net investment of a foreign entity, and the aggregate exchange differences are not recognised in
+profit or loss until the disposal of such net investment. Tax charges and credits attributable to exchange differences on those
+monetary items are also recorded in other comprehensive income.
+The consolidated financial statements are presented in RMB, being the functional and presentation currency of the Bank's
+operations in Mainland China. Each entity in the Group determines its own functional currency and the financial statements
+of each entity are presented using that functional currency.
+(4) Foreign currency translation
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2016
+Notes to the Financial Statements
+143
+Financial assets and financial liabilities are measured initially at fair value. For financial assets and financial liabilities at
+fair value through profit or loss, any related directly attributable transaction costs are charged to profit or loss; for other
+categories of financial assets and financial liabilities, any related directly attributable transaction costs are included in their
+initial costs.
+144
+ICBC
+Notes to the Financial Statements
+Financial assets or financial liabilities designated at fair value through profit or loss
+Financial assets or financial liabilities held for trading are measured at fair value after initial recognition. Realised or
+unrealised income or expenses are recognised in profit or loss.
+it is a derivative that is not designated as an effective hedging instrument.
+on initial recognition it is part of a portfolio of identified financial instruments that are managed together and for
+which there is evidence of a recent actual pattern of short term profit-taking; or
+(iii)
+(ii)
+it is acquired or incurred principally for the purpose of selling or repurchasing it in the near term;
+(i)
+(i)
+Financial assets or financial liabilities held for trading
+Financial assets or financial liabilities at fair value through profit or loss include financial assets or financial liabilities held for
+trading and financial assets or financial liabilities designated at fair value through profit or loss.
+Financial assets or financial liabilities at fair value through profit or loss
+When measuring fair value, the Group shall take into account the characteristics of the asset or liability if market participants
+would take those characteristics into account when pricing the asset or liability at the measurement date (including
+the condition and location of the asset; and restrictions, if any, on the sale or use of the asset, etc.), and use valuation
+techniques that are appropriate in the circumstances and for which sufficient data and other information are available to
+measure fair value. The adopted valuation techniques mainly include market approach, income approach and cost approach.
+Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
+market participants at the measurement date.
+Measurement of fair value
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+A financial asset or financial liability is classified as held for trading if:
+Clarification of acceptable methods of depreciation and amortisation
+Separate financial statements "Equity method in separate financial
+statements"
+In the case of equity investments classified as available for sale, objective evidence would include a significant or prolonged
+decline in the fair value of the investment below its cost. The Group considers the time period and continuity of the
+magnitude of the decline to evaluate whether the decline in fair value is prolonged. More significantly the fair value declines
+relative to the cost, the less the volatility moves, and the longer the decline lasts or the more obvious the continuity of the
+magnitude of the decline is, the more likely the equity investment impairs. In general, the Group considers the situation
+when fair value is less than 40% of the cost as significant decline and that when fair value falls below the cost in a period
+over 12 months as prolonged decline.
+147
+The 2012-2014 cycle of annual improvement contains amendments to four standards with consequential amendments
+to other standards and interpretations including IFRS 5 Non-current assets held for sale and discounted operations, IFRS 7
+Financial instruments: disclosures, IAS 19 Employee benefits, IAS 34 Interim financial reporting.
+The adoption does not have any material impact on the financial position and the financial result of the Group.
+Amendments to IFRS 10, IFRS 12 and IAS 28, Investment entities: Applying the consolidation exception
+The amendments clarify the following areas of the accounting requirements of investment entities:
+•
+•
+Exemption from preparing consolidated financial statements under IFRS 10.4(a) is available to a parent entity that is a
+subsidiary of an investment entity, even if the investment entity measures all of its subsidiaries, including that parent
+entity, at fair value.
+A subsidiary that is itself an investment entity should not be consolidated even if it provides services related to the
+parent's investment activities.
+When applying the equity method, a non-investment entity investor is allowed, but not required, to retain the fair
+value measurement applied by its investment entity associate or joint venture for their subsidiaries, i.e. the investor can
+make a policy choice.
+An investment entity measuring all of its subsidiaries at fair value is still required to provide the disclosures relating to
+investment entities required by IFRS 12, even though it is not preparing consolidated financial statements.
+The adoption does not have any material impact on the financial position and the financial result of the Group.
+Amendments to IAS 1, Presentation of financial statements "Disclosure initiative"
+The amendments clarify various presentation issues relating to:
+•
+assessment of materiality versus minimum disclosure requirements of a standard;
+•
+Annual Improvements to IFRSS 2012-2014 Cycle
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+141
+The principal effects of adopting these new and amended IFRSS are as follows:
+IFRS 14, Regulatory deferral accounts
+This interim standard permits first-time adopters of IFRS to continue to use previous GAAP to account for regulatory deferral
+account balances while the IASB completes its comprehensive project in this area.
+As an existing IFRS adopter, the new standard is not applicable to the Group.
+Amendments to IFRS 11, Joint Arrangements "Accounting for acquisitions of interests in joint operations"
+The amendments provide new guidance on how to account for the acquisition of an interest in a joint operation that
+constitutes a business. Specifically, the amendments require business combination accounting to be applied in this situation.
+The adoption does not have any material impact on the financial position and the financial result of the Group.
+Amendments to IAS 16 and IAS 38, Clarification of acceptable methods of depreciation and amortisation
+The amendments introduce a rebuttable presumption to IAS 38 that the use of revenue-based amortisation methods for
+intangible assets is inappropriate. This presumption can be overcome only when revenue and the consumption of the
+economic benefits of the intangible asset are 'highly correlated', or when the intangible asset is expressed as a measure of
+revenue. The amendments also prohibit the use of revenue-based depreciation methods for property, plant and equipment
+under IAS 16.
+The adoption does not have any material impact on the financial position and the financial result of the Group.
+order of notes;
+Amendments to IAS 27, Separate financial statements "Equity method in separate financial statements"
+The amendments allow an entity to apply the equity method to account for its investments in subsidiaries, joint ventures and
+associates in its separate financial statements. As a result of the amendments, the entity can choose to account for these
+investments either:
+at cost;
+•
+in accordance with IFRS 9 (or IAS 39); or
+•
+using the equity method as described in IAS 28.
+The adoption does not have any material impact on the financial position and the financial result of the Group.
+Annual Report 2016
+•
+Annual Report 2016
+disaggregation and aggregation;
+presentation of other comprehensive income items arising from equity-accounted associates and joint ventures.
+As part of its operational activities, the Group securitises financial assets, generally through the sale of these assets to
+structured entities which issue securities to investors. Further details on prerequisites for derecognition of financial assets are
+set out above. When a securitisation of financial assets does not qualify for derecognition, the relevant financial assets are not
+derecognised, and the consideration paid by third parties are recorded as a financial liability; when the securitisation of financial
+assets partially qualifies for derecognition, the Group continue to recognise the transferred assets to the extent of its continuing
+involvement, derecognise the remaining. The book value of the transferred assets is apportioned between the derecognised
+portion and the retained portion based on their respective relative fair values, and the difference between the book value of the
+derecognised portion and the total consideration paid for the derecognised portion is recorded in profit or loss.
+Securitisation
+Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the
+original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.
+Where the Group has transferred its rights to receive cash flows from an asset or has retained its rights to receive cash flows
+from the asset but has entered into a pass-through arrangement, and has neither transferred nor retained substantially all
+the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Group's
+continuing involvement in the asset.
+The Group has transferred its rights to receive cash flows from the asset; or has retained its rights to receive cash
+flows from the asset but has assumed an obligation to pay them in full without material delay to a third party under a
+"pass-through" arrangement; and either the Group has transferred substantially all the risks and rewards of ownership
+of the financial asset; or the Group has neither transferred nor retained substantially all the risks and rewards of
+ownership of the financial asset, but has transferred control of the asset.
+The rights to receive cash flows from the asset have expired; or
+A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised
+when:
+Financial assets
+(8) Derecognition of financial assets and liabilities
+Where possible, the Group seeks to restructure loans rather than to take possession of collateral. This may involve extending
+the payment arrangements and the agreement of new loan conditions. Once the terms have been renegotiated, the loan is
+no longer considered past due. Management continuously reviews renegotiated loans to ensure that all criteria are met and
+that future payments are likely to occur. The loans continue to be subject to individual or collective impairment assessment,
+and the provision is calculated using the loan's original effective interest rate.
+(7) Renegotiated loans
+If, after an impairment loss has been recognised on an available-for-sale debt instrument, the fair value of the debt
+instrument increases in a subsequent period and the increase can be objectively related to an event occurring after the
+impairment loss was recognised the impairment loss is reversed through profit or loss. An impairment loss recognised for an
+investment in an equity instrument classified as available-for-sale is not reversed through profit or loss. The impairment loss
+on an investment in unquoted equity instrument whose fair value cannot be reliably measured is not reversed.
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2016
+Notes to the Financial Statements
+Sales of assets on condition of repurchase
+The derecognition of financial assets sold on condition of repurchase is determined by the economic substance of the
+transaction. If a financial asset is sold under an agreement to repurchase the same or substantially the same asset at a
+fixed price or at the sale price plus a reasonable return, the Group will not derecognise the asset. If a financial asset is sold
+together with an option to repurchase the financial asset at its fair value at the time of repurchase (in case of transferor sells
+such financial asset), the Group will derecognise the financial asset.
+The Group's investments in associates or joint ventures are accounted for under the equity method of accounting. Under
+the equity method, an investment in an associate or joint venture is carried in the consolidated statement of financial
+position at cost plus post-acquisition changes in the Group's share of the net assets of the associate or joint venture, less any
+impairment losses. The consolidated statement of profit or loss reflects the share of the results of operations of the associate
+or joint venture. Where there has been a change recognised directly in the equity of the associate or joint venture, the Group
+recognises its share of any changes and discloses this, when applicable, in the consolidated statement of changes in equity.
+Under the equity method, unrealised profits and losses resulting from transactions between the Group and the associates or
+joint ventures are eliminated to the extent of the Group's interests in the associates or joint ventures.
+A joint venture is an arrangement whereby the Group or Bank and other parties contractually agree to share control of the
+arrangement, and have rights to the net assets of the arrangement.
+The adoption does not have any material impact on the financial position and the financial result of the Group.
+The Group does not adopt any issued but not yet effective international financial reporting standards, interpretation and
+amendments.
+ICBC
+142
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
+• presentation of sub-totals; and
+(1) Subsidiaries
+An investment in a subsidiary is consolidated into the consolidated financial statements from the date that control
+commences until the date that control ceases. Intra-group balances, transactions and any unrealised profit or loss arising
+from intra-group transactions are eliminated in full in preparing the consolidated financial statements.
+In the Bank's statement of financial position, its investments in subsidiaries are stated at cost less impairment losses (see note
+3(21)).
+(2) Non-controlling interests
+Non-controlling interests represent the equity in a subsidiary not attributable directly or indirectly to the Group.
+Non-controlling interests are presented in the consolidated statement of financial position within equity, separately from
+equity attributable to the equity shareholders of the Bank. Non-controlling interests in the results of the Group are presented
+on the face of the consolidated statement of profit or loss and the consolidated statement of profit or loss and other
+comprehensive income as an allocation of the total profit or loss and total comprehensive income for the year between non-
+controlling interests and the equity shareholders of the Bank.
+Changes in the Group's interests in a subsidiary that do not result in a loss of control are accounted for as equity
+transactions, whereby adjustments are made to the amounts of controlling and non-controlling interests within consolidated
+equity to reflect the change in relative interests, but no adjustments are made to goodwill and no gain or loss is recognised.
+(3) Associates and Joint ventures
+An associate is an entity in which the Group or Bank has significant influence.
+Subsidiaries are entities controlled by the Group. The Group controls an entity if it is exposed, or has rights, to, variable
+returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
+The Group reassesses whether it has control if there are changes to one or more of the elements of control. This includes
+circumstances in which protective rights held (e.g. those resulting from a lending relationship) become substantive and lead
+to the Group having power over an entity.
+Notes to the Financial Statements
+148
+115,950
+Due from banks and other financial institutions
+2,991,619
+3,290,270
+20
+Cash and balances with central banks
+TOTAL ASSETS
+21
+Other assets
+31 December 2016 31 December 2015
+Notes
+ASSETS
+(In RMB millions, unless otherwise stated)
+31 December 2016
+Statement of Financial Position
+Property and equipment
+927,705
+Deferred income tax assets
+Financial assets held for trading
+772,568
+502,296
+25
+Reverse repurchase agreements
+62,892
+24
+33,290
+206,282
+272,118
+23
+Financial assets designated at fair value through profit or loss
+184,074
+22
+Derivative financial assets
+151
+Precious metals comprise gold, silver and other precious metals. Precious metals that are not related to the Group's precious
+metals trading activities are initially measured at acquisition cost and subsequently measured at the lower of cost and
+net realisable value. Precious metals acquired by the Group for trading purposes are initially measured at fair value and
+subsequent changes in fair value are recorded in the statement of profit or loss.
+Annual Report 2016
+The carrying values of property and equipment are reviewed for impairment when events or changes in circumstances
+indicate that the carrying values may not be recoverable.
+Construction in progress comprises the direct costs of construction during the period of construction and is not depreciated.
+Construction in progress is reclassified to the appropriate category of property and equipment when completed and ready
+for use.
+Property and equipment, other than construction in progress are stated at costs less accumulated depreciation and
+any impairment loss. The cost of an item of property and equipment comprises its purchase price, tax and any directly
+attributable costs of bringing the asset to its present working condition and location for its intended use. Expenditure
+incurred after items of property and equipment have been put into operation, such as repairs and maintenance, is normally
+charged to profit or loss in the period in which it is incurred. In situations where the recognition criteria are satisfied, the
+expenditure for a major inspection is capitalised in the carrying amount of the asset as a replacement.
+(16) Property and equipment
+The Group records the precious metals received as an asset. A liability to return the amount of precious metals deposited
+is also recognised. The precious metals deposited in the Group are measured at fair value both on initial recognition and in
+subsequent measurement.
+(15) Precious metals
+•
+Securities borrowing and lending transactions are usually collateralised by securities or cash. The transfer of the securities
+to counterparties is only reflected on the statement of financial position if the risks and rewards of ownership are also
+transferred. Cash advanced or received as collateral is recorded as an asset or liability.
+Conversely, assets purchased under agreements to resell at a specified future date ("reverse repos") are not recognised on
+the statement of financial position. The corresponding cash paid, including accrued interest, is recognised on the statement
+of financial position as a "reverse repurchase agreement". The difference between the purchase and resale prices is treated
+as an interest income and is accrued over the life of the agreement using the effective interest rate method.
+Assets sold under agreements to repurchase at a specified future date ("repos") are not derecognised from the statement
+of financial position. The corresponding cash received, including accrued interest, is recognised on the statement of financial
+position as a "repurchase agreement", reflecting its economic substance as a loan to the Group. The difference between the
+sale and repurchase prices is treated as an interest expense and is accrued over the life of the agreement using the effective
+interest rate method.
+(14) Repurchase and reverse repurchase transactions (including securities borrowing and
+lending)
+the Group intends either to settle on a net basis, or to realise the financial asset and settle the financial liability
+simultaneously.
+the Group currently has a legally enforceable right to set off the recognised amounts; and
+•
+Notes to the Financial Statements
+Securities borrowed are not recognised on the statement of financial position, unless they are then sold to third parties,
+in which case the obligation to return the securities is recorded as a financial liability held for trading and measured at fair
+value with any gains or losses included in profit or loss.
+Financial Statements for the year ended 31 December 2016
+Residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at least at each financial
+year end.
+Depreciation is calculated on the straight-line basis to write off the cost of each item of property and equipment, less any
+estimated residual value, over the estimated useful life. The estimated useful life, estimated residual value and the annual
+depreciation rate of each item of property and equipment (excluding aircraft and vessels) are as follows:
+(18) Repossessed assets
+Land use rights are recognised at cost, being the fair value at the time of injection from the central government of the PRC
+(the "Government") or the consideration paid. The rights are amortised using the straight-line basis over the periods of the
+leases. When the prepaid land lease payments cannot be allocated reliably between the land and buildings elements, the
+entire lease payments are included in the costs of properties and buildings as finance leases in property and equipment.
+(17) Land use rights
+An item of property and equipment or any significant part initially recognised is derecognised upon disposal or when no
+future economic benefits are expected from its use or disposal. Any gain or loss arising from derecognition of the asset
+(calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the
+statement of profit or loss in the year the asset is derecognised.
+Financial assets and financial liabilities are generally presented separately in the statement of financial position and are not
+offset. However, a financial asset and a financial liability are offset and the net amount is presented in the statement of
+financial position when both the following conditions are satisfied:
+Where parts of an item of property and equipment have different useful lives, the cost of that item is allocated on a
+reasonable basis among the parts and each part is depreciated separately.
+For an item of impaired fixed assets, the depreciation is calculated based on the carrying value less the cumulative
+impairment loss.
+Equipment under operating leases where the Group is the lessor contains aircraft, aircraft engines and vessels. The estimated
+useful lives and depreciation methods are determined according to the real conditions of individual aircraft and vessels. The
+residual values are assessed by an independent valuer based on historical data. The estimated useful lives range from 15 to
+25 years.
+Over the shorter of the economic useful lives
+and remaining lease terms
+14.29%-50%
+2-7 years
+Office equipment and motor vehicles
+(excluding aircraft and vessels)
+Leasehold improvements
+1.94%-20%
+depreciation rate
+Annual
+Estimated
+residual
+value rate
+0%-3%
+5-50 years
+Properties and buildings
+Estimated
+useful life
+(In RMB millions, unless otherwise stated)
+(13) Presentation of financial instruments
+Fair value hedges
+Notes to the Financial Statements
+Any gains or losses arising from changes in fair value on derivatives that do not qualify for hedge accounting are taken
+directly to profit or loss.
+Certain derivatives embedded in other financial instruments are treated as separate derivatives when their economic
+characteristics and risks are not closely related to those of the host contract and the hybrid instrument is not carried at fair
+value through profit or loss. These embedded derivatives are measured at fair value with the changes in fair value recognised
+in profit or loss.
+Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered
+into and are subsequently remeasured at fair value. Derivatives are carried as assets when the fair value is positive and as
+liabilities when the fair value is negative.
+(11) Derivatives and hedge accounting
+Derivatives
+Preference shares and perpetual bonds issued that should be classified as equity instruments are recognised in equity based
+on the actual amount received. Any distribution of dividends or interests during the instruments' duration is treated as profit
+appropriation. When the preference shares and perpetual bonds are redeemed according to the contractual terms, the
+redemption price is charged to equity.
+Preference shares and perpetual bonds issued containing both equity and liability components are accounted for using the
+accounting policy for convertible instruments containing an equity component. Preference shares and perpetual bonds issued
+not containing an equity component are accounted for using the accounting policy for other convertible instruments not
+containing an equity component.
+At initial recognition, the Group classifies the preference shares, perpetual bonds issued or their components as financial
+assets, financial liabilities or equity instruments based on their contractual terms and their economic substance after
+considering the definition of financial assets, financial liabilities and equity instruments.
+(10) Preference shares and perpetual bonds
+For less complex derivative products, the fair values are principally determined by valuation models which are commonly used
+by market participants. Inputs to valuation models are determined from observable market data wherever possible, including
+foreign exchange spot and forward rates and interest rate yield curves. For more complex derivative products, the fair values
+are mainly determined by quoted prices from dealers.
+If the convertible instrument is converted, the liability component, together with the equity component, is transferred to
+equity. If the convertible instrument is redeemed, the consideration paid for the redemption, are allocated to the liability
+and equity components. The method used to allocate the consideration and transaction costs is the same as that used
+for issuance. After allocating the consideration and transaction costs, the difference between the allocated and carrying
+amounts is charged to profit and loss if it relates to the liability component or directly recognised in equity if it relates to the
+equity component.
+The initial carrying amount of a compound financial instrument is allocated to its equity and liability components. The
+amount recognised in the equity is the difference between the fair value of the instrument as a whole and the separately
+determined fair value of the liability component (including the value of any embedded derivatives other than the equity
+component). Transaction costs that relate to the issue of a compound financial instrument are allocated to the liability and
+equity components in proportion to the allocation of proceeds.
+Convertible instruments issued by the Group that can be converted to equity shares, where the number of shares to be
+issued and the value of consideration to be received at that time do not vary, are accounted for as compound financial
+instruments containing both liability and equity components.
+(9) Convertible instruments
+A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires.
+Financial liabilities
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+156
+Subsequent to initial recognition, the liability component is measured at amortised cost using the effective interest method,
+unless it is designated upon recognition at fair value through profit or loss. The equity component is not re-measured.
+Annual Report 2016
+149
+Notes to the Financial Statements
+ICBC
+150
+All regular way purchases and sales of financial assets are recognised at the trade date, which is the date that the Group
+commits to purchase or sell the assets. A regular way purchase or sale is the purchase or sale of financial assets that requires
+delivery of assets within the time frame generally established by regulation or convention in the marketplace.
+(12) Trade date accounting
+Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the hedging
+instrument relating to the effective portion of the hedge is recognised directly in other comprehensive income; the gain or loss
+relating to the ineffective portion is recognised immediately in the income statement. Gains and losses accumulated in equity are
+included in the income statement when the foreign operation is disposed of as part of the gain or loss on the disposal.
+Net investment hedge is a hedge of a net investment in a foreign operation.
+Net investment hedges
+When the hedged cash flow affects profit or loss, the gain or loss on the hedging instrument recognised directly in other
+comprehensive income is recycled in the corresponding income or expense line of the statement of profit or loss. When
+a hedging instrument expires, or is sold, terminated, exercised, or when a hedge no longer meets the criteria for hedge
+accounting, any cumulative gain or loss existing in other comprehensive income at that time remains in other comprehensive
+income until the hedged forecast transaction ultimately occurs. When a forecast transaction is no longer expected to occur,
+the cumulative gain or loss that was reported in other comprehensive income is immediately transferred to profit or loss.
+Cash flow hedges are hedges of the Group's exposure to variability in cash flows that is attributable to a particular risk
+associated with a recognised asset or liability or a highly probable forecast transaction and could affect profit or loss. For
+designated and qualifying cash flow hedges, the effective portion of the gain or loss on the hedging instrument is initially
+recognised directly in other comprehensive income. The ineffective portion of the gain or loss on the hedging instrument is
+recognised immediately in profit or loss.
+Cash flow hedges
+When an unrecognised firm commitment is designated as a hedged item, the subsequent cumulative change in the fair value
+of the firm commitment attributable to the hedged risk is recognised as an asset or liability with a corresponding gain or loss
+recognised in profit or loss. The changes in the fair value of the hedging instrument are also recognised in profit or loss.
+The Group discontinues fair value hedge accounting if the hedging instrument expires or is sold, terminated or exercised,
+the hedge no longer meets the criteria for hedge accounting or the Group revokes the designation. If the hedged items are
+derecognised, the unamortised fair value is recorded in profit or loss.
+For hedged items recorded at amortised cost, the difference between the carrying value of the hedged item and the face
+value is amortised over the remaining term of the original hedge using the effective interest rate method.
+Fair value hedges are hedges of the Group's exposure to changes in the fair value of a recognised asset or liability or an
+unrecognised firm commitment, or an identified portion of such an asset, liability or unrecognised firm commitment, that is
+attributable to a particular risk and could affect the profit or loss. For fair value hedges, the carrying amount of the hedged
+item is adjusted for gains and losses attributable to the risk being hedged, the derivative is remeasured at fair value and the
+gains and losses from both are taken to profit or loss.
+Repossessed assets are initially recognised at fair value, and are subsequently measured at the lower of the carrying value
+and net recoverable amount. If the recoverable amount is lower than the carrying value of the repossessed assets, the assets
+are written down to the recoverable amount.
+Certain derivative transactions, while providing effective economic hedges under the Group's risk management positions,
+do not qualify for hedge accounting and are therefore treated as derivatives held for trading with fair value gains or losses
+recognised in profit or loss. Hedges which meet the strict criteria for hedge accounting are accounted for in accordance with
+the Group's accounting policy as set out below.
+At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which
+the Group wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge.
+The documentation includes identification of the hedging instrument, the hedged item or transaction, the nature of the risk
+being hedged and how the entity will assess the hedging instrument's effectiveness in offsetting the exposure to changes in
+the hedged item's fair value or cash flows attributable to the hedged risk. Such hedges are expected to be highly effective
+in achieving offsetting changes in fair value or cash flows and are assessed on an ongoing basis to determine that they have
+actually been highly effective throughout the financial reporting periods for which they were designated.
+Hedge accounting
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2016
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(19) Business combination and goodwill
+ICBC
+152
+In respect of taxable temporary differences associated with investments in subsidiaries, associates and joint ventures,
+where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary
+differences will not be reversed in the foreseeable future.
+Deferred income tax assets are recognised for all deductible temporary differences, carryforward of unused tax credits
+and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible
+temporary differences, and the carryforward of unused tax credits and unused tax losses can be utilised, except:
+(i)
+(ii)
+Where the deferred income tax asset relating to the deductible temporary differences arises from the initial recognition
+of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects
+neither the accounting profit nor taxable income or deductible expenses; and
+In respect of deductible temporary differences associated with investments in subsidiaries, associates and joint
+ventures, deferred income tax assets are recognised only to the extent that it is probable that the temporary
+differences will be reversed in the foreseeable future and taxable profit will be available against which the temporary
+differences can be utilised.
+Deferred income tax assets and deferred income tax liabilities are measured at the tax rates that are expected to apply to
+the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
+substantively enacted by the end of each reporting period and reflect the corresponding tax effect.
+The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and reduced to the extent
+that it is no longer probable that sufficient taxable income will be available to allow all or part of the deferred income tax
+asset to be utilised. When it is virtually probable that sufficient taxable income will be available, the reduced amount can be
+reversed accordingly. Future taxable profits are determined based on business plans for individual subsidiaries in the Group.
+Deferred income tax assets and deferred income tax liabilities are offset if a legally enforceable right exists to set off current
+tax assets against current tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation
+authority.
+(28) Leases
+Leases which transfer substantially all the risks and rewards of ownership of the assets to the lessees are classified as
+finance leases. Leases where substantially all the rewards and risks of the assets remain with the lessor are accounted for as
+operating leases.
+Finance leases
+When the Group is a lessor under finance leases, an amount representing the minimum lease payment receivables and initial
+direct costs is included in the statement of financial position as loans and advances to customers. Any unguaranteed residual
+value is also recognised at the inception of the lease. The difference between the sum of the minimum lease payment
+receivables, initial direct costs, the unguaranteed residual value and their present value is recognised as unearned finance
+income. Unearned finance income is recognised over the period of the lease using the effective interest rate method.
+(ii)
+Operating leases
+158
+ICBC
+For all financial instruments measured at amortised cost and interest-generating financial instruments classified as available-
+for-sale financial assets, interest income is recorded at the effective interest rate, which is the rate that exactly discounts
+estimated future cash payments or receipts through the expected life of the financial instrument or a shorter period, where
+appropriate, to the net carrying amount of the financial asset. The calculation takes into account all contractual terms of
+the financial instrument (for example, prepayment options) and includes any fees or incremental costs that are directly
+attributable to the instrument and are an integral part of the effective interest rate, but not future credit losses. The carrying
+amount of the financial asset is adjusted if the Group revises its estimates of payments or receipts. The adjusted carrying
+amount is calculated based on the original effective interest rate and the change in carrying amount is recorded in profit or
+loss.
+Interest income
+Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and when the
+revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:
+(26) Revenue recognition
+When measuring insurance contract liabilities, the Group classifies insurance contracts whose insurance risks are of similar
+nature as a measurement unit. Insurance contract liabilities are measured based on a reasonably estimated amount of
+payment that the Group is obliged to pay to fulfill relevant obligations under the insurance contract. At the end of each
+reporting period, liability adequacy tests are performed. If the insurance contract liabilities re-calculated with the insurance
+actuarial method exceed their carrying amounts on date of the liability adequacy test, an additional provision shall be made
+for the respective insurance contract liabilities based on the difference. Otherwise, no adjustment is made to the respective
+insurance contract liabilities.
+Insurance contract liabilities
+(iii) Related income can be reliably measured.
+The related economic benefits are likely to flow to the Group;
+(ii)
+(i) The insurance contract is issued, and related insurance risk is undertaken by the Group;
+Rental payments applicable to operating leases are charged to profit or loss on the straight-line basis over the lease terms.
+When the Group is the lessor under operating leases, the assets subject to operating leases are accounted for as the Group's
+assets. Rental income is recognised as "other operating income, net” in the statement of profit or loss on the straight-line
+basis over the lease term.
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2016
+Notes to the Financial Statements
+Notes to the Financial Statements
+Business combinations are accounted for using the acquisition method. The consideration transferred is measured at
+acquisition date fair value which is the sum of the acquisition date fair values of assets transferred by the Group, liabilities
+assumed by the Group to the former owners of the acquiree and the equity interests issued by the Group in exchange for
+control of the acquiree. Acquisition costs incurred are expensed.
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Once a financial asset or a group of similar financial assets has been written down as a result of an impairment loss, interest
+income is recognised using the rate of interest used to discount the future cash flows for the purpose of measuring the
+impairment loss.
+Fee and commission income
+The Group earns fee and commission income from a diverse range of services it provides to its customers. Fee income can be
+divided into the following two categories:
+(i)
+Fee income on transactions conducted or from services provided over a period of time
+These fees mainly include fee income on settlement and clearing business, commission income and fee income on
+asset management, custody and other management advisory services. Fee income is recognised on the basis of when
+the transaction is completed or on an accrual basis when the service is provided over a period of time.
+Fee income from providing transaction services
+Fees arising from negotiating or participating in the negotiation of a transaction for a third party, such as the
+arrangement of the acquisition of shares or other securities or the purchase or sale of businesses, are recognised on
+completion of the underlying transaction. Fees or components of fees that are linked to a certain performance are
+recognised after fulfilling the corresponding criteria.
+The fair value of the award credits granted to the bank card holders is deferred and recognised as fee and commission
+income when the award credits are redeemed or expire.
+Dividend income
+Dividend income is recognised when the Group's right to receive payment is established.
+Net trading income
+Results arising from trading activities include all gains and losses from changes in fair value for financial assets and financial
+liabilities that are held for trading. This includes gains and losses from changes in fair value relating to the ineffective portion
+of the hedging arrangements.
+(27) Income tax
+Income tax comprises current and deferred income tax. Income tax is recognised in profit or loss except that it relates to
+items recognised directly in equity, in which case it is recognised in equity.
+Current tax
+Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from
+or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or
+substantively enacted by the end of each reporting period.
+Deferred income tax
+Deferred income tax is provided using the liability method on temporary differences at the end of the reporting period
+between the tax bases of assets and liabilities and their carrying amounts.
+Deferred income tax liabilities are recognised for all taxable temporary differences, except:
+(i)
+Where the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a
+transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit
+nor taxable income or deductible expenses; and
+Annual Report 2016
+157
+Insurance premium income is recognised when:
+Insurance income recognition
+(ii)
+Where the insurance risk and other risks can be distinguished from each other and separately measured, the insurance
+risk is separated from other risks. The insurance risk is accounted for as an insurance contract and other risks are
+accounted for according to the relevant accounting standards;
+Cash and cash equivalents refer to short term highly liquid assets, which are readily convertible into known amounts of cash
+and subject to an insignificant risk of changes in value. Cash and cash equivalents comprise cash, unrestricted balances with
+central banks, amounts due from banks and other financial institutions and reverse repurchase agreements with original
+maturity of less than three months.
+(22) Cash and cash equivalents
+An assessment is made at the end of each reporting period as to whether there is any indication that previously recognised
+impairment losses may no longer exist or may have decreased. If such an indication exists, the recoverable amount is
+estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to
+determine the asset's recoverable amount since the last impairment loss was recognised. If that is the case, the carrying
+amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that
+would have been determined, net of any depreciation/amortisation, had no impairment loss been recognised for the asset
+in prior years. Any such reversal is recognised in profit or loss. After such a reversal, the depreciation/amortisation charge is
+adjusted in future periods to allocate the asset's revised carrying amount, less any residual value, on a systematic basis over
+its remaining useful life.
+The Group assesses at the end of each reporting period whether there is any indication that an asset may be impaired. If
+any such indication exists, or when impairment testing for an asset is required, the Group makes an estimate of the asset's
+recoverable amount. An asset's recoverable amount is the higher of its fair value less costs to sell and its value in use and
+is determined on an individual basis, unless the asset does not generate cash inflows that are largely independent of those
+from other assets or groups of assets, in which case the recoverable amount is determined for the CGU to which the asset
+belongs. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered to be impaired
+and is written down to its recoverable amount. In assessing value in use of an asset, the estimated future cash flows are
+discounted to their present values using a pre-tax discount rate that reflects current market assessments of the time value of
+money and the risks specific to the asset.
+Impairment losses on assets except for deferred tax assets, financial assets and goodwill are determined based on the
+following:
+(21) Asset impairment
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2016
+Notes to the Financial Statements
+153
+Annual Report 2016
+The Group shall review the carrying amount of a provision at the end of reporting period. The carrying amount shall be
+adjusted to the current best estimate.
+(23) Employee benefits
+Where the contingency involves a large population of items, the best estimate shall be determined by weighting all
+possible outcomes by their associated probabilities.
+A provision shall be initially measured at the best estimate of the expenditure required to settle the related present
+obligation. When the effect of the time value of money is material, the best estimate shall be determined by discounting the
+related future cash outflows. When determining the best estimate, the Group considers factors pertaining to a contingency
+such as risks, uncertainties and time of value of money. Where there is a continuous range of the expenditure required, and
+each possible outcome in that range is as likely as any other, the best estimate shall be the mid-point of that range. In other
+cases, the best estimate shall be determined according to the following circumstances:
+Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, and it
+is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
+estimate can be made of the amount of the obligation.
+(20) Provisions
+Where goodwill forms part of a CGU (group of CGUs) and part of the operation within that unit is disposed of, the goodwill
+associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or
+loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the
+operation disposed of and the portion of the CGU retained.
+Impairment is determined by assessing the recoverable amount of the CGU (group of CGUS) to which the goodwill relates.
+Where the recoverable amount of the CGU (group of CGUS) is less than the carrying amount, an impairment loss is
+recognised. An impairment loss recognised for goodwill is not reversed in a subsequent period.
+After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is tested for
+impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be
+impaired. The Group performs its annual impairment test of goodwill as at 31 December. For the purpose of impairment
+testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group's cash-
+generating units ("CGU"), or groups of CGUs, that are expected to benefit from the synergies of the combination,
+irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units.
+Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred, the amount
+recognised for non-controlling interests and any fair value of the Group's previously held equity interests in the acquiree over
+the net identifiable assets acquired and liabilities assumed. If the sum of this consideration and other items is lower than the
+fair value of the net assets of the subsidiary acquired, the difference is, after reassessment, recognised in profit or loss as
+gain on bargain purchase.
+Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. Subsequent
+changes to the fair value of the contingent consideration which is deemed to be an asset or liability, is recognised either in
+profit or loss or as change to other comprehensive income. If the contingent consideration is classified as equity, it shall not
+be remeasured until it is finally settled within equity.
+When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and
+designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition
+date. This includes the separation of embedded derivatives in host contracts by the acquiree.
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Where the insurance risk and other risks cannot be distinguished from each other, or can be distinguished but cannot
+be separately measured, an umbrella contract applies and significant insurance risk test shall be performed based on it.
+If the insurance risk is significant, the contract is accounted for as an insurance contract; otherwise, it is accounted for
+as a non-insurance contract.
+Notes to the Financial Statements
+Where the contingency involves a single item, the best estimate shall be the most likely outcome.
+Employee benefits refer to all forms of consideration and other related expenditure given by the Group in exchange for
+services rendered by employees. The benefits payable are recognised as liabilities during the period in which the employees
+have rendered services to the Group. If the effect of discounting the benefits payable which are payable after one year from
+the end of the reporting period is significant, the Group will present them at their present value.
+If the business combination is achieved in stages, the acquisition date fair value of the acquirer's previously held equity
+interest in the acquiree is remeasured to fair value as at the acquisition date through profit or loss.
+Employee wages or salaries, bonuses, social security contributions such as medical insurance, work injury insurance,
+maternity insurance and housing fund, measured at the amount incurred or at the applicable benchmarks and rates, are
+recognised as a liability as the employee provides services, with a corresponding charge to profit or loss or included in the
+cost of assets where appropriate.
+(ii)
+(i)
+Short-term employee benefits
+The Group's insurance subsidiary executes the contract with the policyholder. Where the Group undertakes insurance risk,
+which means a risk, rather than a financial risk, transferred from the holder of a contract to the insurance provider and over
+time, the combined cost of claims, administration and acquisition of the contract may exceed the aggregate amount of
+premiums received and investment income, the contract is classified as an insurance contract; where the Group undertakes
+the risks other than insurance risk. The contract is classified as non-insurance contract; and where the Group undertakes
+both insurance risk and other risks, forming a contract with mixed risks, the following stipulations are applied:
+Insurance contracts classification
+(25) Insurance contracts
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2016
+Notes to the Financial Statements
+155
+Annual Report 2016
+The asset custody services of the Group refer to the business that the Group as trustee approved by regulatory authorities,
+signs custody agreement with clients and takes the responsibility of trustee in accordance with relevant laws and regulations.
+The assets under custody are recorded as off-balance sheet items as the Group merely fulfils the responsibility as trustee and
+charges fees in accordance with these agreements without retaining any risks or rewards of the assets under custody.
+The Group grants entrusted loans on behalf of trustors, which are recorded off-balance sheet. The Group, as a trustee,
+grants such entrusted loans to borrowers under the direction of those trustors who fund these loans. The Group has been
+contracted by those trustors to manage the administration and collection of these loans on their behalf. Those trustors
+determine both the underwriting criteria for and the terms of all entrusted loans including their purposes, amounts, interest
+rates, and repayment schedules. The Group charges a commission related to its activities in connection with entrusted loans
+which are recognised ratably over the period in which the service is provided. The risk of loss is borne by those trustors.
+Where the Group acts in a fiduciary capacity such as custodian or agent, assets arising thereon together with related
+undertakings to return such assets to customers are excluded from the statement of financial position.
+(24) Fiduciary activities
+ICBC
+Early retirement benefits
+154
+According to the Bank's policy on early retirement benefits, certain employees are entitled to take leave of absence and
+in return receive a certain level of staff salaries and related benefits from the Bank. The salaries and benefit payments are
+made from the date of early retirement to the normal retirement date. Differences arising from changes in assumptions and
+estimates of the present value of the liabilities are recognised in profit or loss when it is incurred.
+Notes to the Financial Statements
+All eligible employees outside Mainland China participate in local defined contribution schemes. The Group contributes to
+these defined contribution schemes based on the requirements of the local regulatory bodies.
+Post-employment benefits-defined contribution plans
+Pursuant to the relevant laws and regulations of the PRC, the Group participated in a defined contribution basic pension
+insurance in the social insurance system established and managed by government organizations. The Group makes
+contributions to basic pension insurance plans based on the applicable benchmarks and rates stipulated by the government.
+Basic pension insurance contributions are recognised as part of the cost of the assets or charged to profit or loss as the
+related services are rendered by the employees.
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+In addition, employees in Mainland China also participate in a defined contribution retirement benefit plan established by the
+Group (the "Annuity Plan"). The Group and its employees are required to contribute a certain percentage of the employees'
+previous year basic salaries to the Annuity Plan. The contribution is charged to profit or loss when it is incurred. The Group
+pays a fixed contribution into the Annuity Plan and has no obligation to pay further contributions if the Annuity Plan does
+not hold sufficient assets to pay all employee benefits.
+Termination benefits
+Termination benefits are payable as a result of either the Group's decision to terminate an employee's employment before
+the normal retirement date or an employee's decision to accept an offer of benefits in exchange for the termination of
+employment. The Group recognise termination benefits in profit or loss at the earlier of:
+When the Group can no longer withdraw an offer of those benefits;
+When the Group has a specific, formal restructure plan involving payment of termination benefits, and the plan has
+started or informed each affected party about the influence of the plan, therefore each party formed reasonable
+expectations.
+ICBC
+Notes to the Financial Statements
+The above interest income and expense were related to financial instruments which are not at fair value through profit or
+loss.
+(i)
+Included in interest income on loans and advances to customers for the year is an amount of RMB5,135 million (2015:
+RMB4, 156 million) with respect to the accreted interest on impaired loans.
+(ii)
+Included in interest income on financial investments for the year is an amount of RMB15 million (2015: RMB28 million)
+with respect to interest income on impaired debt securities.
+507,867
+Annual Report 2016
+165
+Net interest income
+2015
+7.
+NET FEE AND COMMISSION INCOME
+(i)
+2016
+Bank card business
+37,670
+37,684
+Personal wealth management and private banking services (i)
+37,625
+35,910
+Settlement, clearing business and cash management
+26,108
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+471,846
+(49,801)
+(319,634)
+160,106
+174,503
+27,986
+22,800
+20,161
+Financial investments (ii)
+177,298
+170,833
+Due from central banks
+44,678
+47,867
+(363,912)
+Due from banks and other financial institutions
+36,538
+791,480
+Interest expense on:
+Due to customers
+Due to banks and other financial institutions
+Debt securities issued
+(257,850)
+(298,010)
+(44,314)
+(17,470)
+(16,101)
+31,285
+871,779
+Included in personal wealth management and private banking services, corporate wealth management services, asset
+custody business and trust and agency services above is an amount of RMB21,639 million (2015: RMB 18,659 million)
+with respect to trust and other fiduciary activities.
+25,024
+Equity investments
+Derivatives
+2016
+2015
+4,450
+4,444
+345
+33
+1,662
+(250)
+6,457
+4,227
+The above amounts include gains and losses arising from the buying and selling of, interest income and expense on, and
+changes in the fair value of financial assets and liabilities held for trading.
+9. NET LOSS ON FINANCIAL ASSETS AND LIABILITIES DESIGNATED AT FAIR VALUE
+THROUGH PROFIT OR LOSS
+Financial assets
+Financial liabilities
+2016
+2015
+9,992
+14,320
+(10,096)
+421,877
+(20,273)
+Debt securities
+NET TRADING INCOME
+8.
+Net fee and commission income
+26,791
+Corporate wealth management services (i)
+20,440
+18,305
+Asset custody business (i)
+Guarantee and commitment business
+Trust and agency services (i)
+Others
+Fee and commission income
+6,893
+5,544
+Investment banking business
+5,950
+1,907
+1,979
+3,097
+2,784
+164,714
+161,670
+Fee and commission expense
+(19,741)
+(18,279)
+144,973
+143,391
+4,687
+355,313
+Hedge accounting
+538,219
+The amendments also provide guidance on how an entity should determine future taxable profits to support the recognition
+of a deferred tax asset arising from a deductible temporary difference.
+The Group is currently assessing the impact of the amendments on its financial position and performance.
+Amendments to IAS 7, Statement of cash flows
+The amendments require entities to provide disclosures that enable users of financial statements to evaluate changes
+in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes. The
+amendments do not prescribe a specific method to fulfil the new disclosure requirements. However, the amendments
+indicate that one way is to provide a reconciliation between the opening and closing balances for liabilities arising from
+financing activities.
+The Group will modify the disclosure of cash flows according to these amendments. The amendments are expected to have
+no impact on the financial position and the financial result.
+IFRS 15 "Revenue from contracts with customers"
+The standard contains a single model that applies to contracts with customers and two approaches to recognising revenue:
+at a point in time or over time. The model features a contract-based five-step analysis of transactions to determine whether,
+how much and when revenue is recognised.
+IFRS 15 also introduces extensive qualitative and quantitative disclosure requirements which aim to enable users of the
+financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from
+contracts with customers. Some of these apply to interim financial reports prepared under IAS 34 as well as to annual
+financial statements. An entity may adopt IFRS 15 on a full retrospective basis. Alternatively, it may choose to adopt it from
+the date of initial application by adjusting opening balances at that date. Transitional disclosures are different depending on
+the approach adopted by the entity.
+The Group is currently assessing the impact of the standard on its financial position and performance.
+IFRS 9 "Financial instruments"
+IFRS 9 will replace the current standard on accounting for financial instruments, IAS 39, Financial instruments: Recognition
+and measurement. IFRS 9 introduces new requirements for classification and measurement of financial assets, calculation of
+impairment of financial assets and hedge accounting. On the other hand, IFRS 9 incorporates without substantive changes
+the requirements of IAS 39 for recognition and derecognition of financial instruments and the classification of financial
+liabilities.
+162
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Classification and measurement
+IFRS 9 contains three principal classification categories for financial assets: measured at (1) amortised cost, (2) fair value
+through profit or loss (FVTPL) and (3) fair value through other comprehensive income (FVTOCI) as follows:
+•
+The classification for debt instruments is determined based on the entity's business model for managing the financial
+assets and the contractual cash flow characteristics of the asset. If a debt instrument is classified as FVTOCI then
+effective interest, impairments and gains/losses on disposal will be recognised in profit or loss.
+For equity securities, the classification is FVTPL regardless of the entity's business model. The only exception is if the
+equity security is not held for trading and the entity irrevocably elects to designate that security as FVTOCI. If an equity
+security is designated as FVTOCI then only dividend income on that security will be recognised in profit or loss. Gains
+and losses on that security will be recognised in other comprehensive income without recycling.
+Impairment
+The new impairment model in IFRS 9 replaces the "incurred loss" model in IAS 39 with an "expected credit loss" model.
+Under the expected credit loss model, it will no longer be necessary for a loss event to occur before an impairment loss is
+recognised. Instead, an entity is required to recognise and measure expected credit losses as either 12-month expected credit
+losses or lifetime expected credit losses, depending on the asset and the facts and circumstances.
+IFRS 9 does not fundamentally change the requirements relating to measuring and recognising ineffectiveness under IAS 39.
+However, greater flexibility has been introduced to the types of transactions eligible for hedge accounting.
+The amendments clarify that the existence of a deductible temporary difference depends solely on a comparison of the
+carrying amount of an asset and its tax base at the end of the reporting period, and is not affected by possible future
+changes in the carrying amount or expected manner of recovery of the asset.
+The amendments stemmed from a request to clarify the requirements on recognition of deferred tax assets for unrealized
+losses on debt instruments measured at fair value. However, the amendments address a broader area of accounting for
+deferred tax assets in general.
+Amendments to IAS 12, Income taxes "Recognition of deferred tax assets for unrealised
+losses"
+Further information about those changes that are expected to affect the Group is as follows:
+(104)
+Annual Improvements to IFRSS 2014-2016 Cycle³
+IFRS 4 Amendments
+IFRS 16
+IFRS 10 and IAS 28 Amendments
+Insurance contracts
+Leases
+Sale or contribution of assets between an investor and its associate or joint venture
+1
+Effective for annual periods beginning on or after 1 January 2017, early adoption is permitted.
+2
+Effective for annual periods beginning on or after 1 January 2018, early adoption is permitted.
+The actual impact of adopting IFRS 9 on the Group's consolidated financial statements in 2018 is not known and cannot be
+reliably estimated because it will be dependent on the financial instruments that the Group holds and economic conditions
+at that time as well as accounting elections and judgements that it will make in the future.
+3
+Effective for annual periods beginning on or after 1 January 2018 for IFRS 1, 1 January 2018 with early adoption permission
+for IAS 28, and 1 January 2017 for IFRS 12.
+Effective for annual periods beginning on or after 1 January 2018 for deferral approach, effective for annual periods
+beginning upon initial adoption of IFRS 9 for overlay approach.
+Effective for annual periods beginning on or after 1 January 2019, early adoption is permitted.
+5
+6
+Effective for annual periods is to be determined, early adoption is permitted.
+Annual Report 2016
+161
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+4
+616,541
+The Group has established a work stream which involves finance, risk, operations, credit and IT functions. The key
+responsibilities of the work steam include analysing IFRS 9 methodology and accounting policy, developing the expected
+credit losses model, identifying data and system requirements, and establishing an appropriate operating model and
+governance framework. The work stream manages the project governance structure, assures the involvement of the
+pertinent responsible teams, and monitors the progress of the implementation work across the Group.
+The amendments clarify the accounting for the following classification and measurement issues under IFRS 2:
+Measurement of cash-settled share-based payments
+The Group is currently assessing the impact of the amendments on its financial position and performance.
+164
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+IFRS 16, "Leases"
+In January 2016, the IASB issued IFRS 16, "Leases", which replaces the current guidance in IAS 17. The new standard
+requires the companies to bring leases on-balance sheet for lessees. The new standard also makes changes in accounting
+over the life of the lease, and introduces a stark dividing line between leases and service contracts.
+Under IFRS 16 there is no longer a distinction between finance leases and operating leases so far as lessees are concerned.
+Instead, subject to practical expedients, a lessee recognises all leases on-balance sheet by recognising a right-of-use (ROU)
+asset and lease liability.
+Lessor accounting is substantially unchanged
+i.e. lessors continue to classify leases as finance and operating leases.
+However, there are a number of changes in the details of lessor accounting. For example, lessors apply the new definition of
+a lease, sale-and-leaseback guidance, sub-lease guidance and disclosure requirements.
+The Group is currently assessing the impact of the standard on its financial position and performance.
+Amendments to IFRS 10 and IAS 28, Sale or contribution of assets between an investor and
+its associate or joint venture
+The amendments introduce new requirements on loss of control over assets in a transaction with an associate or joint
+venture. These requirements require the full gain to be recognised when the assets transferred meet the definition of a
+"business" under IFRS 3, Business combination.
+The Group is currently assessing the impact of the amendments on its financial position and performance.
+6. NET INTEREST INCOME
+Interest income on:
+2016
+2015
+Loans and advances to customers (i)
+- Corporate loans and advances
+Personal loans
+Discounted bills
+All companies that issue insurance contracts may choose to recognise in other comprehensive income, rather than
+profit or loss, the volatility that could arise when IFRS 9 is applied before the new insurance contracts standard is
+issued.
+Overlay approach
+Companies whose activities are predominantly connected with insurance may choose to defer the application of IFRS 9
+until 2021.
+Deferral approach - Temporary exemption from IFRS 9
+•
+The amendments clarify that the fair value of liabilities for cash-settled share-based payments should be measured
+using the same approach as for equity-settled share-based payments - i.e. using the modified grant date method.
+Classification of share-based payments settled net of tax withholdings
+The amendments introduce an exception so that a share-based payment transaction with net settlement feature
+for withholding an amount to cover the employee's tax obligations is classified as equity-settled in its entirety when
+certain conditions are met, even though the entity is then required to transfer cash (or other assets) to the tax
+authority to settle the employee's tax obligation.
+Accounting for a modification of a share-based payment from cash-settled to equity-settled
+The amendments clarify that on such a modification the liability for the original cash-settled share-based payment is
+derecognised and the equity-settled share-based payment is measured at its fair value and recognised to the extent
+that the goods or services have been received up to that date.
+Any difference between the carrying amount of the liability derecognised and the amount recognised in equity at the
+modification date is recognised in profit or loss immediately.
+The Group is currently assessing the impact of the amendments on its financial position and performance.
+Annual Report 2016
+163
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+Amendments to IFRS 2, Share-based payment "Classification and measurement of share-
+based payment transactions"
+(In RMB millions, unless otherwise stated)
+The IASB has amended the requirements in IAS 40 Investment property to clarify that a property asset is transferred to, or
+from, investment property when and only when there is an actual change in use. A change in management intention alone
+does not support a transfer.
+A company has a choice on transition to apply:
+The prospective approach, and also reassess the classification of property assets held at the date of initial application;
+or
+The retrospective approach, but only if it does not involve the use of hindsight.
+The Group is currently assessing the impact of the amendments on its financial position and performance.
+Annual Improvements to IFRSS 2014-2016 Cycle
+The 2014-2016 cycle of annual improvements contains amendments to three standards including IFRS 1 First-time adoption
+of International Financial Reporting Standards, IFRS 12 Disclosure of interests in other entities and IAS 28 Investments in
+associates and joint ventures.
+The Group is currently assessing the impact of the annual improvements on its financial position and performance.
+Amendments to IFRS 4, Insurance contracts "Applying IFRS 9 Financial instruments with IFRS
+4 Insurance contracts"
+The amendments address concerns arising from the different effective dates of IFRS 9 and the forthcoming insurance
+contracts standard. The amendments introduce the following two approaches:
+Amendments to IAS 40, Investment property
+(5,953)
+Non-executive Director
+10. NET GAIN ON FINANCIAL INVESTMENTS
+(before tax)
+schemes
+Fees
+RMB'000
+RMB'000
+RMB'000
+(1)
+(2)
+(3)
+emoluments
+before tax
+RMB'000
+(4)=(1)+(2)+(3)
+484
+107
+591
+448
+107
+1
+555
+484
+107
+436
+107
+436
+107
+contribution
+paid
+Total
+to defined
+Chairman of the Board of Supervisors
+Executive Director, Vice President
+Executive Director, Vice President
+Non-executive Director
+GE Rongrong
+ZHENG Fuqing
+FEI Zhoulin
+CHENG Fengchao
+Or Ching Fai
+Investment Property
+Non-executive Director
+Non-executive Director
+591
+Non-executive Director
+HONG Yongmiao
+Anthony Francis Neoh
+YANG Siu Shun(iii)
+Sheila Colleen Bair(iv)
+ZHANG Wei(v)
+HUI Ping
+HUANG Li(vi)
+QU Qiang
+SHEN Bingxi(v)
+JIANG Jianqing(vii)
+WANG Xiquan(viii)
+FU Zhongjun (ix)
+M.C.McCarthy(x)
+Independent Non-executive Director
+Independent Non-executive Director
+Independent Non-executive Director
+Independent Non-executive Director
+Shareholder Representative Supervisor
+Employee Representative Supervisor
+Employee Representative Supervisor
+External Supervisor
+External Supervisor
+Former Chairman of the Board of
+Directors, Executive Director
+Year ended 31 December 2016
+Contributions
+Remuneration
+Independent Non-executive Director
+Vice Chairman of the Board of Directors,
+Executive Director, President
+543
+394
+440
+YI Xiqun(xii)
+WANG Chixi(xiii)
+DONG Juan(xiv)
+Total
+Former Independent Non-executive Director
+Former Shareholder Representative Supervisor
+Former External Supervisor
+118
+118
+364
+72
+436
+3,502
+840
+2,983
+7,325
+Note: Since January 2015, the remuneration to the Chairman of the Board of Directors, the President, the Chairman of the Board
+of Supervisors and other executives of the Bank has followed the State's policies relating to the remuneration reform on
+executives of central enterprises.
+The total compensation packages for the Chairman of the Board of Directors, President, Chairman of the Board of
+Supervisors, Executive Directors, and Shareholder Representative Supervisors of the Bank have not been finalised in
+accordance with the regulations of the PRC relevant authorities. The remuneration not yet accrued is not expected to have a
+significant impact on the Group's and the Bank's 2016 financial statements. The total compensation packages will be further
+disclosed when determined by the relevant authorities.
+Fees of Mr. Zhang Wei, Mr. Hui Ping and Mr. Huang Li are their allowances obtained as Employee Representative Supervisors
+of the Bank, excluding their remuneration with the Bank in accordance with the employee remuneration system.
+(i)
+On 31 May 2016, the Board of Directors of the Bank appointed Mr. Yi Huiman as Chairman of the Board of Directors of
+the Bank, and his qualification was approved by CBRC in June 2016. At the Annual General Meeting for the Year 2015
+of the Bank held on 24 June 2016, Mr. Yi Huiman was appointed as Executive Director of the Bank. The new term of
+office of Mr. Yi Huiman took effect from the date of review and approval by the meeting.
+168
+ICBC
+440
+Former Independent Non-executive Director
+Kenneth Patrick CHUNG(xi)
+358
+| | | |
+130
+202
+43
+254
+60
+470
+470
+455
+22522228
+470
+543
+470
+292
+549
+50
+25
+280
+245
+314
+Former Executive Director, Vice President
+Former Non-executive Director
+Former Independent Non-executive Director
+358
+455
+The above amounts represent gains and losses arising from the buying and selling of, interest income and expense on,
+and changes in the fair value of financial assets and liabilities designated at fair value through profit or loss upon initial
+recognition.
+Chairman of the Board of Directors,
+Executive Director
+ZHANG Hongli
+WANG Jingdong(ii)
+Gain from foreign exchange and foreign exchange products, net
+3,204
+1,894
+Leasing income
+5,998
+5,866
+Net gain on disposal of property and equipment, repossessed assets and others
+1,710
+1,664
+Sundry bank charge income
+270
+212
+Gain on acquisition of subsidiary
+487
+Others
+3,149
+4,124
+13,964
+14,281
+12. OPERATING EXPENSES
+2016
+2015
+Staff costs:
+(20,599)
+(28,808)
+20,633
+28,441
+2016
+2015
+Dividend income from unlisted investments
+170
+125
+Dividend income from listed investments
+173
+30
+Dividend income
+343
+155
+Salaries and bonuses
+Gain on disposal of available-for-sale financial assets, net
+4,765
+4,545
+4,920
+166
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+2016
+2015
+Net premium income
+Operating cost of insurance business
+4,202
+WANG Xiaoya
+Staff benefits
+73,348
+21,219
+17,319
+42,320
+Others
+11,578
+12,714
+193,112
+220,835
+(i)
+The defined contribution plans mainly include contributions to the state pension and the Bank's Annuity Plan.
+(ii) Principal auditor's remuneration of RMB190 million for the year (2015: RMB175 million) is included in other
+administrative expenses.
+Annual Report 2016
+167
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+13. DIRECTORS' AND SUPERVISORS' EMOLUMENTS
+Details of the directors' and supervisors' emoluments before tax, as disclosed pursuant to the Rules Governing the Listing
+of Securities on the Stock Exchange of Hong Kong Limited and Chapter 622 Section 383 of the Hong Kong Companies
+Ordinance, are as follows:
+Name
+Position
+YI Huiman(i)
+GU Shu(ii)
+QIAN Wenhui
+20,388
+Taxes and surcharges
+Other administrative expenses (ii)
+2,295
+72,721
+25,434
+27,563
+14,572
+13,889
+113,354
+114,173
+Premises and equipment expenses:
+Depreciation
+14,660
+14,560
+Post-employment benefits -defined contribution plans (i)
+Lease payments under operating leases in respect of land and buildings
+7,349
+Repairs and maintenance charges
+3,808
+3,515
+Utility expenses
+2,467
+2,690
+28,414
+28,114
+Amortisation
+2,059
+7,479
+Share-based payment
+11. OTHER OPERATING INCOME, NET
+Revenue from contracts with customers
+the entity and the Group are joint ventures of the same third party;
+(iv) one entity is a joint venture of a third entity and the other entity is an associate of the third entity;
+(v)
+(vi)
+(vii)
+the entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity
+related to the Group;
+the entity is controlled or jointly controlled by a person identified in (a);
+one entity is an associate or joint venture of the other entity (or of a parent, subsidiary or fellow subsidiary of the
+other entity);
+a person identified in (a)(i) has significant influence over the entity or is a member of the key management
+personnel of the entity (or of a parent of the entity); and
+(30) Financial guarantee contracts
+The Group issues financial guarantee contracts, including letters of credit, letters of guarantee and acceptance. These
+financial guarantee contracts provide for specified payments to be made to reimburse the holders for the losses they incur
+when a guaranteed party defaults under the original or modified terms of a debt instrument, loan or any other obligation.
+The Group initially measures all financial contracts at fair value, in other liabilities, being the premium received. This
+amount is recognised ratably over the period of the contract as fee and commission income. Subsequently, the liabilities
+are measured at the higher of the initial fair value less cumulative amortisation and the best estimate of expenditure being
+required to settle any financial obligation arising as a result of the guarantee. Any increase in the liability relating to a
+financial guarantee is taken to the statement of profit or loss.
+(31) Contingent liabilities
+A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by
+the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. It
+can also be a present obligation arising from past events that is not recognised because it is not probable that an outflow
+of economic resources will be required or the amount of obligation cannot be measured reliably. Contingent liabilities are
+disclosed in the notes to the financial statements. When a change in the probability of an outflow occurs so that outflow is
+probable and can be reliably estimated, it will then be recognised as a provision.
+(32) Dividends
+Dividends are recognised as a liability and deducted from equity when they are approved by the Bank's shareholders in
+general meetings and declared. Interim dividends are deducted from equity when they are approved and declared, and no
+longer at the discretion of the Bank. Dividend for the year that is approved after the end of the reporting period is disclosed
+as an event after the reporting period.
+Annual Report 2016
+(viii) The entity, or any member of a Group of which it is a part, provides key management personnel services to the
+Group or to the Group's parent.
+159
+(iii)
+the entity and the Group are members of the same group;
+Financial instruments
+(29) Related parties
+A party is considered to be related to the Group if:
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(a)
+the party is a person or a close member of that person's family and that person:
+(ii)
+(i)
+(ii)
+has significant influence over the Group; or
+or
+(b)
+(iii)
+is a member of the key management personnel of the Group or of a parent of the Group;
+(i)
+has control or joint control over the Group;
+Notes to the Financial Statements
+the party is an entity where any of the following conditions applies:
+(In RMB millions, unless otherwise stated)
+Securitisation vehicles
+Certain securitisation vehicles sponsored by the Group under its securitisation programme are run according to
+predetermined criteria that are part of the initial design of the vehicles. In addition, the Group is exposed to variability of
+returns from the vehicles through its holding of debt securities in the vehicles and outside the day-to-day servicing of the
+receivables (which is carried out by the Group under a servicing contract). Key decisions are usually required only when
+receivables in the vehicles go into default. Therefore, in considering whether it has control, the Group considers whether it
+manages these key decisions that most significantly affect these vehicles' returns.
+Investment funds, non-principal guaranteed wealth management products, segregated asset
+management plans, trust plans and asset-backed financings
+The Group acts as manager to a number of investment funds, non-principal guaranteed wealth management products,
+segregated asset management plans, trust plans and assets-backed financings. Determining whether the Group controls
+such a structured entity usually focuses on the assessment of the aggregate economic interests of the Group in the entity
+(comprising any carried interests and expected management fees) and the decision-making authority of the entity. For all
+these structured entities managed by the Group, the Group's aggregate economic interest is in each case not significant
+and the decision makers establish, market and manage them according to restricted parameters as set out in the investment
+agreements as required by laws and regulations. As a result, the Group has concluded that it acts as agent as opposed to
+principal for the investors in all cases, and therefore has not consolidated these structured entities.
+For further disclosure in respect of unconsolidated investment funds, non-principal guaranteed wealth management
+products, segregated asset management plans, trust plans and assets-backed financings in which the Group has an interest
+or for which it is a sponsor, see Note 44.
+5.
+IMPACT OF ISSUED BUT NOT YET EFFECTIVE INTERNATIONAL FINANCIAL
+REPORTING STANDARDS
+Management applies its judgement to determine whether the control indicators set out in Note 3(1) indicate that the Group
+controls a securitisation vehicle, an investment fund, a non-principal guaranteed wealth management product, a segregated
+asset management plan, trust plans or asset-backed financings.
+IAS 12 Amendments
+IFRS 15
+IFRS 9
+IFRS 2 Amendments
+IAS 40 Amendments
+Income taxes'
+Financial Statements for the year ended 31 December 2016
+Statement of cash flows'
+IAS 7 Amendments
+Determination of control over investees
+The Group has not applied the following new and revised IFRSS and IASS that have been issued but are not yet effective, in
+these financial statements.
+Notes to the Financial Statements
+4.
+SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+In the process of applying the Group's accounting policies, management has used its judgements and made assumptions
+of the effects of uncertain future events on the financial statements. The most significant use of judgements and key
+assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period that
+have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
+financial period are described below.
+Designation of held-to-maturity investments
+Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity
+investments when the Group has the positive intention and ability to hold the investments to maturity. Accordingly, in
+evaluating whether a financial asset shall be classified as a held-to-maturity investment, significant management judgement
+is required. If the Group fails correctly to assess its intention and ability to hold the investments to maturity and the Group
+sells or reclassifies more than an insignificant amount of held-to-maturity investments before maturity, the Group would
+reclassify the whole held-to-maturity investment portfolio as available for sale.
+Impairment losses of available-for-sale and held-to-maturity investments
+In determining whether there is any objective evidence that impairment losses have occurred on available-for-sale and held-
+to-maturity investments, the Group assesses periodically whether there has been a significant or prolonged decline in the fair
+value below its cost or carrying amount, or whether other objective evidence of impairment exists based on the investee's
+financial conditions and business prospects, including industry environment, change of technology as well as operating and
+financing cash flows. This requires a significant level of judgement, which would affect the amount of impairment losses.
+Impairment of goodwill
+Impairment losses of loans and advances and amounts due from banks and other financial institutions
+The Group determines periodically whether there is any objective evidence that impairment losses have occurred on loans
+and advances and amounts due from banks and other financial institutions. If any such evidence exists, the Group assesses
+the amount of impairment losses. The amount of impairment losses is measured as the difference between the carrying
+amount and the present value of estimated future cash flows. Assessing the amount of impairment losses requires significant
+judgement on whether the objective evidence for impairment exists and also significant estimates when determining the
+present value of the expected future cash flows.
+The Group determines whether goodwill is impaired at least on an annual basis and when circumstances indicate that the
+carrying value may be impaired. This requires an estimation of the recoverable amount of the CGU or groups of CGUS to
+which the goodwill is allocated. Estimating the recoverable amount requires the Group to make an estimate of the expected
+future cash flows from the CGU or groups of CGUS and also to choose a suitable discount rate in order to calculate the
+present value of those cash flows.
+Income tax
+Determining income tax provisions requires the Group to estimate the future tax treatment of certain transactions. The
+Group carefully evaluates tax implications of transactions in accordance with prevailing tax regulations and makes tax
+provisions accordingly. In addition, deferred income tax assets are recognised to the extent that it is probable that future
+taxable profit will be available against which the deductible temporary differences can be utilised. This requires significant
+estimation on the tax treatments of certain transactions and also significant assessment on the probability that adequate
+future taxable profits will be available for the deferred income tax assets to be recovered.
+Fair value of financial instruments
+If the market for a financial instrument is not active, the Group establishes fair value by using a valuation technique.
+Valuation techniques include using recent arm's length market transactions between knowledgeable and willing parties,
+if available, reference to the current fair value of another instrument that is substantially the same, discounted cash flow
+analysis and option pricing models. To the extent practicable, valuation technique makes maximum use of market inputs.
+However, where market inputs are not available, management needs to make estimates on such unobservable market
+inputs.
+160
+ICBC
+The non-taxable income mainly represents interest income arising from the PRC government bonds, which is exempted
+from income tax.
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2016
+Notes to the Financial Statements
+173
+The consolidated profit attributable to equity holders of the parent company for the year ended 31 December 2016 includes
+a profit of RMB261,218 million (2015: RMB262,322 million) which has been dealt with in the financial statements of the
+Bank (Note 42).
+Annual Report 2016
+17. PROFIT ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT COMPANY
+(ii)
+Others
+(i)
+85,515
+84,173
+Income tax expense
+1,513
+3,099
+(1,232)
+(3,052)
+18. DIVIDENDS
+Adjustment in respect of income tax of prior years
+The non-deductible expenses mainly represent non-deductible impairment provision and write-offs.
+2016
+2016
+Dividends on ordinary shares declared and paid:
+(582)
+277,131
+278,249
+Profit for the year attributable to equity holders of the parent company
+Less: Profit for the year attributable to other equity holders of the parent company
+Profit for the year attributable to ordinary equity holders of the parent company
+Shares:
+Earnings:
+2015
+The calculation of basic earnings per share is based on the following:
+19. EARNINGS PER SHARE
+83,150
+83,506
+Final ordinary shares dividends for 2016: RMBO.2343 per share
+(2015: RMB0.2333 per share)
+(not recognised as at 31 December):
+Dividends on ordinary shares proposed for approval
+2015
+2016
+2,331
+4,450
+Dividends on preference shares declared and paid: Dividends
+91,026
+83,150
+Final ordinary shares dividends for 2015: RMBO.2333 per share
+(2014: RMBO.2554 per share)
+2015
+(651)
+Hong Kong and Macau
+(10,256)
+3,000
+1,837
+1,952
+86,541
+80,794
+2015
+2016
+Deferred income tax expense
+Adjustments in respect of income tax of prior years
+Overseas
+(4,450)
+Mainland China
+Current income tax expense:
+(a) Income tax
+16. INCOME TAX EXPENSE
+971
+1,756
+889
+1,092
+(4)
+581
+2,238
+Profits attributable to associates and joint ventures
+85,746
+(3,052)
+(15,783)
+Non-taxable income (ii)
+5,774
+10,513
+(511)
+(773)
+Effects of different applicable rates of tax prevailing in other countries/regions
+Non-deductible expenses (i)
+90,809
+90,820
+Tax at the PRC statutory income tax rate
+2015
+363,235
+363,279
+Profit before taxation
+2016
+PRC income tax has been provided at the statutory rate of 25% in accordance with the relevant tax laws in Mainland China
+during the year. Taxes on profits assessable elsewhere have been calculated at the applicable rates of tax prevailing in the
+countries/regions in which the Group operates, based on existing legislation, interpretations and practices in respect thereof.
+A reconciliation of the income tax expense applicable to profit before taxation at the PRC statutory income tax rate to
+income tax expense at the Group's effective income tax rate is as follows:
+(b) Reconciliation between income tax and accounting profit
+85,515
+84,173
+(3,869)
+1,479
+(1,232)
+90,616
+(2,331)
+2016
+274,800
+Other restricted balances with the PBOC (ii)
+Mandatory reserves with central banks of
+2,535,503
+291,537
+238,604
+291,537
+238,604
+Fiscal deposits with the PBOC
+2,782,756
+2,539,660
+2,793,933
+77,570
+Mandatory reserves with the PBOC (ii)
+64,915
+147,058
+174,968
+180,069
+197,678
+91,346
+91,897
+105,981
+overseas countries or regions
+Unrestricted balances with central banks of
+Restricted balances with central banks:
+11,054
+77,570
+11,054
+Financial Statements for the year ended 31 December 2016
+Notes to the Financial Statements
+175
+Annual Report 2016
+The Group is required to place mandatory reserve deposits and other restricted deposits with the PBOC and certain
+central banks of overseas countries or regions where it has operations. Mandatory reserve deposits with central banks
+and other restricted deposits are not available for use in the Group's daily operations. Mandatory reserve deposits
+mainly consist of deposits placed with the PBOC. As at 31 December 2016, the mandatory deposit reserve ratios of
+the domestic branches of the Bank in respect of customer deposits denominated in RMB and foreign currencies were
+consistent with the requirement of the PBOC. The amounts of mandatory reserve deposits placed with the central
+banks of those countries or regions outside Mainland China are determined by local jurisdictions.
+Surplus reserves with the PBOC include funds for the purpose of cash settlement and other kinds of unrestricted
+deposits.
+(ii)
+(i)
+2,991,619
+3,290,270
+3,059,633
+3,350,788
+2,844,561
+3,115,302
+2,879,564
+3,153,110
+6,467
+16,372
+37,313
+43,003
+overseas countries or regions (ii)
+81,631
+512
+80,548
+3,074
+2,946
+7,125
+274,813
+273,799
+Profit used to determine diluted earnings per share
+13
+274,800
+273,799
+(2,331)
+(4,450)
+277,131
+278,249
+Profit for the year attributable to equity holders of the parent company
+Less: Profit for the year attributable to other equity holders of the parent company
+Profit for the year attributable to ordinary equity holders of the parent company
+Add: Interest expense on convertible bonds (net of tax)
+2015
+2016
+Earnings:
+The calculation of diluted earnings per ordinary share is based on the following:
+Basic earnings per share was calculated as the profit for the year attributable to ordinary equity holders of the parent
+company divided by the weighted average number of ordinary shares in issue.
+0.77
+356,027
+0.77
+356,407
+Weighted average number of ordinary shares in issue (in million shares)
+Basic earnings per share (RMB yuan)
+Shares:
+273,799
+Weighted average number of ordinary shares outstanding (in million shares)
+Diluted earnings per share (RMB yuan)
+356,027
+Surplus reserves with the PBOC (i)
+85,226
+84,572
+Cash on hand
+central banks:
+Cash and unrestricted balances with
+2015
+2016
+2015
+(25)
+Bank
+Group
+20. CASH AND BALANCES WITH CENTRAL BANKS
+Diluted earnings per share was computed from dividing the profit attributable to ordinary equity holders of the parent
+company (after adjusting for interest expense on the convertible bonds) by the weighted average number of ordinary shares
+outstanding. As of the end of the financial reporting period, the balance of outstanding convertible bonds of the Bank is nil.
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2016
+Notes to the Financial Statements
+ICBC
+174
+0.77
+0.77
+356,407
+6
+2,789
+Other
+50
+8
+13
+Employee Representative Supervisor
+50
+Employee Representative Supervisor
+8
+External Supervisor
+External Supervisor
+13
+HUI Ping(viii)
+DONG Juan
+QU Qiang(vii)
+1,294
+356
+1,650
+296
+887
+467
+Shareholder Representative Supervisor
+WANG Chixi
+ZHANG Wei
+8
+50
+13
+38
+38
+Former Employee Representative Supervisor
+LI Mingtian (xiii)
+272
+272
+428
+428
+102
+188
+138
+Former Chairman of the Board of Supervisors
+Former External Supervisor
+MENG Yan(xii)
+ZHAO Lin(xi)
+118
+118
+118
+Former Independent Non-executive Director
+WONG Kwong Shing, Frank(x)
+Former Non-executive Director
+LI Jun(ix)
+330
+463
+470
+470
+Independent Non-executive Director
+M-C-McCarthy
+Non-executive Director
+CHENG Fengchao(iv)
+Non-executive Director
+FEI Zhoulin(iv)
+Non-executive Director
+ZHENG Fuqing(iv)
+Non-executive Director
+FU Zhongjun
+Non-executive Director
+Non-executive Director
+GE Rongrong
+WANG Xiaoya
+765
+765
+178
+338
+249
+765
+765
+430
+38
+430
+Independent Non-executive Director
+440
+430
+༄༄ཤྩ ༔,་་་་ཚུུརྦྷཡཿབྷུཥྞ
+330
+330
+Independent Non-executive Director
+Anthony Francis Neoh (vi)
+463
+463
+Independent Non-executive Director
+YI Xiqun(v)
+470
+470
+Independent Non-executive Director
+HONG Yongmiao
+470
+470
+Independent Non-executive Director
+Or Ching Fai
+440
+440
+Kenneth Patrick CHUNG
+3,102
+1,888
+2,816
+1
+1
+1
+1
+RMB12,000,001 Yuan to RMB12,500,000 Yuan
+RMB12,500,001 Yuan to RMB13,000,000 Yuan
+RMB13,000,001 Yuan to RMB13,500,000 Yuan
+RMB14,000,001 Yuan to RMB14,500,000 Yuan
+RMB14,500,001 Yuan to RMB15,000,000 Yuan
+RMB15,000,001 Yuan to RMB15,500,000 Yuan
+RMB17,000,001 Yuan to RMB17,500,000 Yuan
+RMB19,500,001 Yuan to RMB20,000,000 Yuan
+RMB21,500,001 Yuan to RMB22,000,000 Yuan
+2015
+Number of employees
+2016
+The number of these individuals whose emoluments fell within the following bands is set out below.
+81,019
+74,832
+(In RMB millions, unless otherwise stated)
+441
+2,458
+394
+937
+61,608
+58,592
+13,770
+14,862
+Others
+Compensation for terminating contract
+1
+Contributions to defined contribution plans
+1
+1
+Available-for-sale financial assets
+Held-to-maturity investments
+Financial investments:
+111
+77
+21
+Due from banks and other financial institutions
+Charge/(reversal) of impairment losses on:
+2015
+2016
+Notes
+15. IMPAIRMENT LOSSES ON ASSETS OTHER THAN LOANS AND ADVANCES TO
+CUSTOMERS
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+172
+During the year, no emoluments were paid by the Group to any of these non-director and non-supervisor individuals as an
+inducement to join or upon joining the Group (2015: Nil).
+5
+1
+15
+1
+1
+27(d)
+27(c)(i),(d)
+Discretionary bonuses
+2015
+RMB'000
+At the First Extraordinary General Meeting of 2014 held on 15 April 2014, Mr. Zhang Hongli was appointed as
+Executive Director of the Bank, and his qualification has been approved by CBRC in June 2015.
+(vii)
+(vi)
+(v)
+(iv)
+(iii)
+(ii)
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+170
+The Bank appointed Mr. Qian Wenhui as Shareholder Representative Supervisor of the Bank at the 2014 Annual
+General Meeting on 19 June 2015, and his term of office took effect from the date of review and approval by the
+meeting. The Bank appointed Mr. Qian Wenhui as Chairman of the Board of Supervisors of the Bank at a meeting of
+the Board of Supervisors.
+(i)
+Fees of Employee Representative Supervisors Mr. Zhang Wei, Mr. Hui Ping, and Mr. Li Mingtian are their allowances obtained
+as Employee Representative Supervisors of the Bank, excluding their remuneration with the Bank in accordance with the
+employee remuneration system.
+Pursuant to the PRC relevant regulations, a portion of the discretionary bonus payments for the Chairman of the Board
+of Directors, the President, the Chairman of the Board of Supervisors, Executive Directors and other senior management
+members are deferred based on the future performance.
+The remuneration before tax payable to Directors and Supervisors for 2015 set out in the table above represents the total
+amount of annual remuneration for each of these individuals, which includes the amount disclosed in the 2015 Annual
+Report.
+Note: Since January 2015, the remuneration to the Chairman of the Board of Directors, the President, the Chairman of the Board
+of Supervisors and other executives of the Bank has followed the State's policies relating to the remuneration reform on
+executives of central enterprises.
+8,795
+356
+9,151
+1,345
+At the Annual General Meeting for the Year of 2014 held on 19 June 2015, Mr. Wang Xiquan was appointed as
+Executive Director of the Bank, and his qualification has been approved by CBRC in June 2015.
+Salaries and allowances
+At the First Extraordinary General Meeting of 2015 held on 23 January 2015, Mr. Zheng Fuqing was appointed as Non-
+executive Director of the Bank and his qualification was approved by CBRC in February 2015. Mr. Fei Zhoulin and Mr.
+Cheng Fengchao were appointed as Non-executive Directors of the Bank, and their qualifications were approved by
+CBRC in March 2015.
+At the First Extraordinary General Meeting of 2015 held on 23 January 2015, Mr. Anthony Francis Neoh was appointed
+as Independent Non-executive Director of the Bank, and his qualification has been approved by CBRC in April 2015.
+On 21 December 2015, the Bank appointed Mr. Qu Qiang as External Supervisor of the Bank at the Second
+Extraordinary General Meeting of 2015, and his term of office took effect from the date of review and approval by the
+meeting.
+2016
+RMB'000
+Group
+The five highest paid individuals of the Group are employees of the Bank's subsidiaries. Their emoluments were determined
+based on the prevailing market rates in the respective countries/regions where the subsidiaries are operating. None of them
+are directors, supervisors or key management personnel of the Bank whose emoluments are disclosed in notes 13 and 52(e)
+to the financial statements. Details of the emoluments in respect of the five highest paid individuals are as follows:
+14. FIVE HIGHEST PAID INDIVIDUALS
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2016
+Notes to the Financial Statements
+171
+Annual Report 2016
+During the year, no emolument was paid by the Group to any of the Directors or Supervisors as an inducement to join or
+upon joining the Group or as a compensation for loss of office (2015: Nil).
+During the year, there was no arrangement under which a Director or a Supervisor waived or agreed to waive any
+remuneration (2015: Nil).
+The Non-executive Directors of the Bank who were recommended by Huijin received emoluments from Huijin in respect of
+their services during the year.
+(xiii) On 23 July 2015, the term of office of Employee Representative Supervisor Mr. Li Mingtian expired, and he continued
+to perform the Supervisor's responsibilities up to 25 September 2015 according to the Articles of Association of the
+Bank.
+On 21 December 2015, Mr. Meng Yan ceased to act as External Supervisor of the Bank due to expiration of the term of
+office.
+On 19 June 2015, Mr. Zhao Lin resigned from the posts of Supervisor and Chairman of the Board of Supervisors due to
+his age.
+In March 2015, due to expiration of the term of office, Mr. Li Jun ceased to act as Non-executive Director of the Bank.
+In April 2015, due to expiration of the term of office, Mr. Wong Kwong Shing, Frank ceased to act as Independent
+Non-executive Director of the Bank.
+(xii)
+(xi)
+(x)
+(ix)
+(viii) On 25 September 2015, the Bank appointed Mr. Hui Ping as Employee Representative Supervisor of the Bank at the
+Interim Employees' Congress, and his term of office took effect from the date of review and approval by the Employees'
+Congress.
+In October 2015, the Board of Directors of the Bank reviewed and approved the resignation of Mr. Yi Xiqun from
+Independent Non-executive Director due to work reasons, which will become effective upon approval of new
+independent non-executive director's qualification by CBRC.
+21. DUE FROM BANKS AND OTHER FINANCIAL INSTITUTIONS
+institutions:
+Bank
+116,445
+Forward contracts
+(20,196)
+20,456
+1,338,950
+180,059
+683,648
+279,975
+195,268
+138,559
+Swap contracts
+(60,217)
+58,278
+3,323,179
+4,508
+122,302
+1,548,083
+1,648,286
+(1,617)
+85,400
+Interest rate contracts:
+161,887
+416,891
+44
+20,609
+1,779,850
+180,243
+864,377
+420,737
+314,493
+(62)
+14,669
+17
+12,216
+1,046
+1,390
+Option contracts written
+109
+9,340
+167
+6,626
+1,157
+1,390
+Option contracts purchased
+(212)
+3,061
+45,126
+37,213
+Option contracts written
+months
+but within
+three
+months
+Within
+Fair values
+Notional amounts with remaining life of
+Over three
+2016
+Group
+In accordance with accounting policy of offsetting, the Group offsets derivative assets and derivative liabilities which meet
+the criteria for offsetting, and presents net amount in the financial statements. As at 31 December 2016, derivative assets
+and derivative liabilities which meet the criteria for offsetting were RMB49,379 million and RMB51,628 million respectively,
+and the net derivative assets and net derivative liabilities were RMB30,074 million and RMB32,323 million respectively.
+At the end of the reporting period, the Group and the Bank had derivative financial instruments as follows:
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2016
+Notes to the Financial Statements
+177
+Annual Report 2016
+Fair value is the price that would be received to sell an asset or paid to transfer a liability in any orderly transaction between
+markets participates at measured date.
+The notional amount of a derivative represents the amount of an underlying asset upon which the value of the derivative is
+based. It indicates the volume of business transacted by the Group but does not reflect the risk.
+A derivative is a financial instrument, the value of which changes in response to the change in a specified interest rate,
+financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or
+other similar variables. The Group uses derivative financial instruments including forwards, swaps and options.
+24. DERIVATIVE FINANCIAL INSTRUMENTS
+206,282
+272,118
+210,434
+285,144
+Over
+one year
+(20,470)
+but within
+one year
+1,306
+107,019
+125
+3,444
+69,728
+33,722
+Option contracts purchased
+(58,600)
+56,972
+3,130,760
+4,383
+115,797
+1,433,229
+1,577,351
+Forward and swap contracts
+Exchange rate contracts:
+Liabilities
+Assets
+Total
+five years
+five years
+Over
+Commodity derivatives and others
+632,245
+273,591
+13,473
+8,059
+28
+5,386
+Option contracts purchased
+(111)
+119
+(28,079)
+26,769
+1,391,192
+585,736
+322,529
+193,918
+69,289
+Forward contracts
+161,450
+647,015
+373,438
+209,289
+Swap contracts
+Interest rate contracts:
+(38,925)
+101
+36,607
+Option contracts written
+289,350
+ICBC
+178
+(76,826)
+78,870
+(9,665)
+15,274
+1,003,663
+5,881,704
+(28,236)
+26,989
+2,003,186
+161,466
+1,460
+167,216
+(46)
+12,785
+16
+7,383
+984,986
+44,352
+1,169,459
+2,262,389
+2,282,640
+266,823
+691,028
+Commodity derivatives and others
+567,384
+5,386
+205,509
+2,874,855
+140,121
+one year
+but within
+but within
+three
+months
+one year
+months
+Within
+Over
+Over three
+Fair values
+Notional amounts with remaining life of
+2015
+(89,960)
+94,452
+(9,273)
+15,565
+959,290
+6,062,319
+3,283
+188,034
+50,171
+1,036,850
+2,242,411
+2,595,024
+five years
+4,290
+Over
+five years
+Assets
+1,428,182
+1,302,262
+(1,203)
+(37,722)
+35,533
+1,074
+106,099
+104,389
+283
+53,240
+778
+65,470
+39,851
+50,866
+Option contracts written
+Option contracts purchased
+2,664,367
+4,290
+139,060
+1,309,472
+1,211,545
+Forward and swap contracts
+Exchange rate contracts:
+Liabilities
+Total
+Group
+271,272
+615
+As at 31 December 2016, the amount of the placements from the Group with non-principal guaranteed wealth
+management products sponsored by the Group is RMB94,914 million (31 December 2015: RMB123,397 million). During the
+year of 2016, the maximum exposure of the placements from the Group with non-principal guaranteed wealth management
+products sponsored by the Group is RMB163,062 million (2015: RMB199,316 million). The transactions were conducted in
+the ordinary course of business under normal terms and conditions and at market rates.
+Movements of the allowance for impairment losses during the year are as follows:
+772,568
+927,705
+683,793
+797,473
+582,298
+687,221
+472,234
+527,415
+Group
+(33)
+(39)
+(118)
+Less: Allowance for impairment losses
+582,331
+687,336
+472,273
+527,533
+228,299
+266,373
+(115)
+At 1 January 2015
+Charge for the year
+At 31 December 2015 and 1 January 2016
+(Reversal)/charge for the year
+118
+327
+77
+79
+(2)
+368
+39
+329
+111
+13
+98
+257
+26
+231
+Total
+banks and other
+financial institutions
+Placements with
+Due from
+banks and other
+financial institutions
+ICBC
+176
+At 31 December 2016
+132,563
+119,959
+Banks and other financial institutions
+operating outside Mainland China
+307,762
+45,502
+88,702
+45,430
+Banks and other financial institutions
+operating outside Mainland China
+1,358
+944
+1,441
+1,071
+Mainland China
+Other financial institutions operating in
+102,413
+194,364
+121,745
+223,884
+Banks operating in Mainland China
+institutions:
+Due from banks and other financial
+2015
+2016
+2015
+2016
+86,828
+445
+270,385
+240,810
+318,119
+284,335
+301,776
+Mainland China
+Other financial institutions operating in
+46,270
+102,844
+55,375
+105,798
+Banks operating in Mainland China
+178
+Placements with banks and other financial
+190,270
+211,559
+270,058
+(329)
+(326)
+(329)
+(327)
+Less: Allowance for impairment losses
+190,599
+211,888
+Bank
+At 1 January 2015
+Charge for the year
+2015
+22,009
+2016
+40,601
+22,224
+40,873
+Debt securities
+2015
+2016
+Bank
+Group
+23. FINANCIAL ASSETS DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS
+115,950
+135,774
+132,465
+183,315
+115,950
+133,957
+116,930
+174,469
+387
+1,430
+14,848
+7,598
+Other debt instruments:
+687
+Banks and other financial institutions
+Others
+6,300
+3,250
+206,974
+274,993
+9,920
+210
+231
+210
+231
+Unlisted
+Listed outside Hong Kong
+Listed in Hong Kong
+Analysed into:
+206,282
+272,118
+210,434
+285,144
+177,973
+205,811
+181,910
+218,565
+6,300
+25,706
+25,706
+563
+1,248
+Listed outside Hong Kong
+82
+(3)
+362
+33
+329
+105
+7
+98
+257
+26
+231
+Total
+banks and other
+financial institutions
+banks and other
+financial institutions
+Placements with
+Due from
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+At 31 December 2016
+(Reversal)/charge for the year
+At 31 December 2015 and 1 January 2016
+79
+Unlisted
+326
+441
+Listed in Hong Kong
+Debt securities analysed into:
+115,950
+184,074
+132,838
+189,331
+48,300
+373
+6,016
+Equity investments
+2015
+115,950
+135,774
+132,465
+183,315
+Debt securities
+2016
+2015
+2016
+Bank
+Group
+22. FINANCIAL ASSETS HELD FOR TRADING
+115
+338
+240,484
+719
+In October 2015, the Board of Directors of the Bank reviewed and approved the resignation of Mr. Yi Xiqun as
+Independent Non-executive Director due to work reasons, which became effective upon approval by CBRC of the
+qualification of the new Independent Non-executive Director in April 2016.
+On 23 June 2016, Ms. Wang Chixi resigned from the position of Shareholder Representative Supervisor of the Bank
+citing her age.
+(xiv) On 24 June 2016, Ms. Dong Juan ceased to act as External Supervisor of the Bank due to expiration of the term of
+office.
+Annual Report 2016
+169
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Name
+Position
+Year ended 31 December 2015
+Contribution by
+the employer
+to social
+insurance
+and welfare
+Remuneration
+Discretionary
+plans, housing
+Total
+emoluments
+Of which:
+deferred
+In March 2017, due to expiration of the term of office, Mr. Kenneth Patrick Chung ceased to act as Independent Non-
+executive Director of the Bank.
+In October 2016, due to expiration of the term of office, Sir Malcolm Christopher McCarthy ceased to act as
+Independent Non-executive Director of the Bank.
+In January 2017, due to expiration of the term of office, Mr. Fu Zhongjun ceased to act as Non-executive Director of the
+Bank.
+(xiii)
+249
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(ii)
+(iii)
+(iv)
+(v)
+(vi)
+(vii)
+Actual
+amount of
+remuneration
+At the First Extraordinary General Meeting of 2016 held on 29 November 2016, Mr. Gu Shu and Mr. Wang Jingdong
+were appointed as Executive Directors of the Bank. The qualifications of Mr. Gu Shu and Mr. Wang Jingdong were
+approved by CBRC in December 2016.
+At the First Extraordinary General Meeting of 2016 held on 29 November 2016, Ms. Sheila Colleen Bair was appointed
+as Independent Non-executive Director of the Bank, and her qualification was approved by CBRC in March 2017.
+The Bank appointed Mr. Zhang Wei and Mr. Shen Bingxi as Shareholder Representative Supervisor and External
+Supervisor of the Bank respectively at the 2015 Annual General Meeting on 24 June 2016, and their terms of office
+took effect from the date of review and approval by the meeting. On 23 June 2016, Mr. Zhang Wei ceased to act as
+Employee Representative Supervisor of the Bank due to change of job.
+On 23 June 2016, the Bank appointed Mr. Huang Li as Employee Representative Supervisor of the Bank at the Interim
+Employees' Congress, and his term of office took effect from the date of review and approval by the Employees'
+Congress.
+In May 2016, Mr. Jiang Jianqing resigned from the positions of Chairman of the Board of Directors and Executive
+Director citing his age.
+(viii) In July 2016, Mr. Wang Xiquan resigned from the position of Executive Director of the Bank due to change of job.
+(ix)
+(x)
+(xi)
+(xii)
+At the Second Extraordinary General Meeting of 2015 held on 21 December 2015, Mr. Yang Siu Shun was appointed
+as Independent Non-executive Director of the Bank, and his qualification was approved by CBRC in April 2016.
+Fees
+RMB'000
+272
+bonuses
+Chairman of the Board of Directors,
+Executive Director
+Vice Chairman of the Board of Directors,
+Executive Director, President
+Chairman of the Board of Supervisors
+Executive Director, Vice President
+QIAN Wenhui(i)
+ZHANG Hongli(ii)
+WANG Xiquan(iii)
+YI Huiman
+Executive Director, Vice President
+376
+16
+208
+861
+231
+313
+175
+paid
+719
+277
+JIANG Jianqing
+861
+861
+before tax
+allowance, etc.
+861
+payment
+RMB'000
+RMB'000
+RMB'000
+RMB'000
+RMB'000
+RMB'000
+paid (pre-tax)
+(2)
+(3)
+(4)
+(5)=(1)+(2)+(3)+(4)
+(6)
+208
+(7)=(5)-(6)
+376
+(1)
+277
+Exchange rate contracts:
+Forward and swap contracts
+1,093,826
+78,220
+2,470
+12,961
+Option contracts purchased
+42,911
+26
+55,898
+27,457
+446
+Liabilities
+(29,659)
+2,125,748
+Assets
+months
+Over
+five years
+Option contracts written
+(58,179)
+2015
+Notional amounts with remaining life of
+Fair values
+Over three
+Total
+Over
+one year
+three
+months
+but within
+but within
+one year
+five years
+Within
+22,495
+Equity investments
+238
+3,128
+235,477
+232,349
+Debt securities
+Market value of listed securities:
+1,433
+732
+2,165
+76,512
+213,542
+7,238
+220,780
+13,929
+75,750
+6,691
+9,725
+762
+6,730
+2,451
+12,853
+29,184
+124,884
+762
+125,646
+51,917
+(623)
+986,688
+1,165,921
+78,484
+2,470
+138,665
+ICBC
+Certain available-for-sale unlisted equity investments which do not have any quoted market prices and whose fair
+values cannot be measured reliably are stated at cost less any impairment losses. There is no active market for these
+investments and it is the Group's intention to dispose of them as opportunities arise. During the year, the Group did
+not dispose of these equity investments (2015: RMB Nil).
+When impairment of an available-for-sale investment measured at fair value occurs, any impairment loss recognised is
+recorded in the carrying amount directly. As at 31 December 2016, the available-for-sale financial assets measured at
+fair value include impaired debt securities whose carrying amount was RMB70 million (31 December 2015: RMB141
+million), and impaired equity investments whose carrying amount was RMB65 million (31 December 2015: RMB264
+million), with the accrual of impairment loss recognised in profit or loss for the year of RMB419 million (2015:
+reversal of impairment loss of RMB37 million) on available-for-sale debt securities; and the accrual of impairment
+loss recognised in profit or loss for the year of RMB162 million (2015: RMB33 million) on available-for-sale equity
+investments.
+(ii)
+(i)
+140,098
+1,433
+188
+62,892
+1,479
+190,756
+67,355
+3,743
+3,015,528
+52,417
+(53,871)
+Option contracts purchased
+1,385,943
+20,693
+2,069
+84,761
+918
+Option contracts written
+23,234
+38,146
+61,999
+1,976
+1,558,487
+Exchange rate contracts:
+Within
+months
+one year
+three
+but within
+but within
+Forward and swap contracts
+Over
+one year
+five years
+five years
+Total
+Assets
+Liabilities
+months
+3,687,570
+63,356
+1,602,414
+119,323
+21,294
+338,233
+1,479
+(1,396)
+Commodity derivatives and others
+110,136
+75,301
+33
+185,692
+8,078
+(1,707)
+1,765,195
+1,706,582
+110,358
+(1,205)
+87,480
+(1,396)
+1,486,088
+71,400
+3,743
+3,163,645
+53,335
+(55,076)
+Forward contracts
+Interest rate contracts:
+87,480
+110,136
+119,323
+21,294
+338,233
+508
+Swap contracts
+677
+Listed in Hong Kong
+Listed outside Hong Kong
+Group
+Bank
+2016
+2015
+2016
+2015
+279,610
+Loans and advances for which allowance for
+Individually assessed
+160,469
+Collectively assessed
+12,896,377
+13,056,846
+135,780
+11,797,686
+11,933,466
+impairment losses are:
+154,185
+12,158,625
+12,312,810
+97,874
+At 31 December 2016
+reversal of impairment allowances
+(118,285)
+(57,298)
+(175,583)
+Accreted interest on impaired loans
+(5,111)
+181,736
+(5,111)
+(65,699)
+Recoveries of loans and advances previously written off
+1,222
+(8,035)
+706
+(73,734)
+1,928
+Write-offs
+130,375
+11,168,657
+11,299,032
+Less: Allowance for impairment losses:
+12,672,422
+84,281
+11,568,531
+12,767,334
+11,652,812
+92,727
+11,940,473
+12,033,200
+82,501
+10,943,975
+Collectively assessed
+11,026,476
+Percentage of impaired loans and advances
+211,801
+1.62%
+179,518
+1.50%
+205,133
+173,857
+1.67%
+Identified impaired loans and advances
+94,912
+Individually assessed
+allowance for impairment losses are:
+Individually assessed
+(65,557)
+(51,499)
+(61,458)
+(47,874)
+Collectively assessed
+(223,955)
+(229,155)
+(218,152)
+(224,682)
+(289,512)
+(280,654)
+(279,610)
+(272,556)
+Net loans and advances for which
+259,554
+Unlisted
+70,133
+― impairment allowances charged
+Listed outside Hong Kong
+Over
+Debt securities analysed into:
+1,299,068
+190,629
+98,883
+Unlisted
+289,512
+ICBC
+Bank
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Corporate
+loans and
+advances and
+discounted bills
+184
+Personal loans
+63,010
+27,367
+Listed in Hong Kong
+Equity investments analysed into:
+1,296,903
+1,532,327
+1,402,673
+1,720,630
+44,362
+116,895
+1,158,238
+1,189,131
+1,488,281
+97,517
+169,180
+169,339
+21,770
+1,407,443
+Total
+At 1 January 2015
+Impairment loss:
+(9,867)
+(60,028)
+Recoveries of loans and advances previously written off
+721
+359
+1,080
+(50,161)
+At 31 December 2015 and 1 January 2016
+92,368
+272,556
+Impairment loss:
+71,136
+12,835
+83,971
+180,188
+Write-offs
+(4,144)
+(4,144)
+- impairment allowances charged
+171,439
+79,723
+251,162
+62,333
+22,153
+84,486
+169,487
+54,422
+223,909
+- reversal of impairment allowances
+(107,154)
+(32,269)
+(139,423)
+Accreted interest on impaired loans
+189,421
+Over three
+Over three
+Notional amounts with remaining life of
+39,574
+10,207
+2,108
+52,164
+271
+(2,282)
+275
+2015
+Fair values
+Over three
+Over
+Within
+months
+one year
+Notional amounts with remaining life of
+three
+(5)
+161
+211
+35,304
+748
+36,263
+10
+(2,257)
+14
+Currency forward contracts
+4
+2
+Equity derivative
+64
+53
+44
+4
+Currency swap contracts
+but within
+Over
+4,155
+20
+(30)
+Equity derivative
+77
+84
+790
+104
+(60)
+2,689
+1,605
+11,300
+2,192
+17,786
+265
+but within
+(32)
+13,366
+months
+one year
+five years
+five years
+Total
+Assets
+201
+Liabilities
+265
+Currency swap contracts
+2,347
+503
+1,018
+10,406
+2,192
+Interest rate swap contracts
+(20)
+245
+15,736
+18,354
+305,880
+1,676
+(1,860)
+Commodity derivatives and others
+38,407
+95,726
+54,475
+299
+93,620
+3,711
+(1,002)
+1,079,702
+1,357,589
+439
+174,649
+137,193
+2,286
+2,233,563
+27,903
+(30,282)
+Interest rate contracts:
+Swap contracts
+Forward contracts
+54,607
+54,607
+95,726
+18,354
+303,594
+1,676
+(1,860)
+2,286
+134,907
+21,123
+2,633,063
+33,290
+but within
+but within
+Over
+months
+one year
+five years
+three
+five years
+Assets
+Liabilities
+Interest rate swap contracts
+4,213
+9,415
+2,108
+Total
+one year
+months
+Within
+(33,144)
+Annual Report 2016
+179
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Cash flow hedges
+The Group's cash flow hedges consist of interest rate swap contracts, currency swap contracts, currency forward contracts
+and equity derivatives that are used to protect against exposures to variability of future cash flows.
+Among the above derivative financial instruments, those designated as hedging instruments in cash flow hedges are set out
+below.
+Group
+2016
+Notional amounts with remaining life of
+Fair values
+Over three
+Over
+221
+(122)
+Bank
+Interest rate swap contracts
+Over
+Within
+three
+months
+but within
+one year
+but within
+Fair values
+Over
+one year
+five years
+five years
+Total
+Interest rate swap contracts
+1,302
+months
+14,801
+Notional amounts with remaining life of
+Over three
+Group
+The effectiveness of hedges based on changes in fair value of the derivatives and the hedged items attributable to the
+hedged risk recognised in profit or loss during the year is presented as follows:
+Gain/(loss) arising from fair value hedges, net:
+Hedging instruments
+Hedged items attributable to the hedged risk
+Group
+2016
+2016
+2015
+91
+(446)
+(73)
+6
+18
+Among the above derivative financial instruments, those designated as hedging instruments in fair value hedges are set out
+below:
+452
+31,715
+6,620
+54,438
+one year
+but within
+Over
+months
+one year
+five years
+five years
+but within
+Total
+279
+339
+Bank
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+2016
+Interest rate swap contracts
+three
+months
+Within
+Assets
+777
+Liabilities
+(147)
+1,302
+14,801
+31,715
+6,620
+54,438
+777
+(147)
+2015
+Notional amounts with remaining life of
+Fair values
+1.54%
+Over
+Fair value hedges are used by the Group to protect against changes in the fair value of financial assets and financial liabilities
+due to movements in market interest rates. Interest rate swaps are used as hedging instruments to hedge the interest risk of
+financial assets and financial liabilities.
+Fair values
+Fair value hedges
+Notes to the Financial Statements
+Assets
+Liabilities
+202
+232
+983
+10
+Total
+34,670
+35,418
+10
+(2,108)
+4
+2
+4
+748
+35,223
+Over
+five years
+one year
+549
+Currency swap contracts
+Currency forward
+2016
+Notional amounts with remaining life of
+Fair values
+Over three
+five years
+Over
+months
+one year
+three
+but within
+but within
+months
+Within
+950
+232
+36,405
+Liabilities
+758
+Currency swap contracts
+2,081
+2,081
+220
+220
+Assets
+513
+2,301
+3,059
+4
+20
+24
+There is no ineffectiveness recognised in profit or loss that arises from the cash flow hedge for the current year (2015: Nil).
+180
+ICBC
+245
+Total
+Over
+five years
+245
+five years
+513
+22
+(2,108)
+2015
+Notional amounts with remaining life of
+Fair values
+Over three
+Over
+Within
+months
+three
+but within
+one year
+but within
+months
+one year
+Interest rate swap contracts
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Annual Report 2016
+25,037
+Notes to the Financial Statements
+Less: Allowance for impairment losses
+11,299,032
+12,312,810
+11,933,466
+13,056,846
+511,707
+(289,512)
+708,339
+522,052
+719,993
+3,471,539
+7,315,786
+7,496,031
+4,108,440
+7,869,552
+3,541,862
+185
+4,196,169
+(280,654)
+(272,556)
+- impairment allowances charged
+-impairment allowances transferred
+Impairment loss:
+At 1 January 2015
+Total
+assessed
+assessed
+(279,610)
+Collectively
+Group
+Movements of allowance for impairment losses during the year are as follows:
+11,026,476
+12,033,200
+11,652,812
+12,767,334
+Individually
+8,140,684
+Discounted bills
+Personal loans
+700,280
+308,984
+197,031
+304,488
+189,026
+Bills
+943,351
+483,892
+638,863
+511,254
+Securities
+Reverse repurchases analysed by collateral:
+792,876
+502,296
+305,265
+502,296
+792,876
+182
+Corporate loans and advances
+2015
+2016
+2015
+2016
+Bank
+Group
+26. LOANS AND ADVANCES TO CUSTOMERS
+As at 31 December 2016, the amount of the placements through reverse repurchase agreements from the Group with
+non-principal guaranteed wealth management products sponsored by the Group is RMB126,706 million (31 December
+2015: RMB18,760 million). During the year of 2016, the maximum exposure of the placements through reverse
+repurchase agreements from the Group with non-principal guaranteed wealth management products sponsored by
+the Group is RMB126,706 million (2015: RMB33,184 million). The transactions were conducted in the ordinary course
+of business under normal terms and conditions and at market rates.
+In accordance with master repurchase agreements and related supplementary agreements, the Group offsets
+reverse repurchase agreements and repurchase agreements which meet the criteria for offsetting (note 3(13)), and
+presents net positive (or negative) amounts as reverse repurchase agreements (or repurchase agreements) in the
+financial statement. As at 31 December 2016, reverse repurchase agreements and repurchase agreements which
+meet the criteria for offsetting were RMB633,828 million and RMB659,969 million respectively (31 December
+2015: RMB572,560 million and RMB597,258 million respectively), and the net reverse repurchase agreements and
+net repurchase agreements were RMB177,649 million and RMB203,790 million, respectively (31 December 2015:
+RMB137,066 million and RMB161,764 million, respectively).
+(ii)
+(i)
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+reversal of impairment allowances
+943,351
+Accreted interest on impaired loans (note 6)
+216,336
+183
+Annual Report 2016
+1,999
+289,512
+223,955
+65,557
+At 31 December 2016
+Notes to the Financial Statements
+773
+Recoveries of loans and advances previously written off
+(74,144)
+(8,145)
+(65,999)
+Write-offs
+(5,135)
+1,226
+(5,135)
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Individually
+84,486
+22,108
+62,378
+251,162
+212,082
+39,080
+Bank
+reversal of impairment allowances
+Impairment loss:
+At 1 January 2015
+Total
+assessed
+assessed
+Collectively
+― impairment allowances charged
+-impairment allowances transferred
+Accreted interest on impaired loans (note 6)
+(176,431)
+(865)
+(148,540)
+88
+(4,156)
+(140,118)
+(902)
+(111,066)
+902
+(29,052)
+(4,156)
+326
+Write-offs
+414
+Acquisition of subsidiaries
+134,262
+91,878
+86,022
+22,294
+63,728
+257,581
+226,140
+(50,365)
+Recoveries of loans and advances previously written off
+721
+262,569
+151,577
+110,992
+865
+(27,891)
+reversal of impairment allowances
+86,138
+2,172
+83,966
+― impairment allowances charged
+-impairment allowances transferred
+Impairment loss:
+280,654
+229,155
+51,499
+At 31 December 2015 and 1 January 2016
+(60,296)
+1,089
+(9,931)
+368
+41,245
+90,032
+700,280
+168,886
+but within
+but within
+three
+one year
+months
+Within
+Over
+Over
+Fair values
+Notional amounts with remaining life of
+2015
+Interest rate swap contracts
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+Over three
+181
+months
+162
+Group
+The credit risk-weighted assets in respect of the above derivatives of the Group and the Bank as at the end of the reporting
+date are as follows:
+For the year ended 31 December 2016, a net loss from the hedging instrument of RMB75 million was recognised in "Other
+comprehensive income" on net investment hedges (2015: Nil), and there was no ineffectiveness in profit or loss that arises
+from the net investment hedges for the current year (2015:Nil).
+The Group's consolidated statement of financial position is affected by exchange differences between the functional
+currency of the Bank and functional currencies of its branches and subsidiaries. The Group hedges such exchange exposures
+only in limited circumstances. Hedging is undertaken using deposits taken in the same currencies as the functional currencies
+of related branches and subsidiaries which are accounted for as hedges of certain net investment in foreign operations.
+Net investment hedges
+Liabilities
+(99)
+one year
+73
+2,626
+Assets
+Total
+five years
+five years
+15,290
+282
+18,360
+Annual Report 2016
+Liabilities
+(127)
+Assets
+176
+(133)
+311
+22,342
+2,896
+18,828
+339
+Bank
+279
+Liabilities
+Assets
+311
+22,342
+2,896
+18,828
+1,608,839
+(133)
+2016
+Notional amounts with remaining life of
+Fair values
+Total
+33,176
+five years
+4,222
+five years
+12,956
+14,696
+1,302
+Interest rate swap contracts
+one year
+months
+Over
+one year
+but within
+months
+but within
+three
+Within
+Over
+Over three
+Bank
+230,922
+2016
+2016
+2015
+943,351
+700,280
+Reverse repurchases (i)
+2016
+Bank
+Group
+2016
+502,296
+Reverse repurchase agreements comprise reverse repurchases of securities, bills and cash advanced as collateral on securities
+borrowing.
+The credit risk-weighted assets represent the counterparty credit risk associated with derivative transactions and are
+calculated with reference to Regulation Governing Capital of Commercial Banks (Provisional) promulgated by the
+CBRC, which includes counterparty credit default risk-weighted assets and credit value adjustment.
+(i)
+42,269
+57,757
+65,704
+92,874
+25. REVERSE REPURCHASE AGREEMENTS
+16,075
+2015
+792,876
+55,347
+373,419
+361,483
+Other financial institutions
+561,954
+333,410
+569,932
+Cash advanced as collateral on securities
+borrowing
+338,797
+counterparty:
+Reverse repurchases analysed by
+792,876
+502,296
+52,982
+996,333
+755,627
+Banks
+19,188
+20,332
+31,541
+6,149
+Interest rate derivatives
+17,616
+24,625
+24,281
+32,381
+3,819
+Currency derivatives
+38,569
+45,372
+61,333
+risk-weighted assets
+Counterparty credit default
+2015
+26,194
+1,699
+769
+Credit derivatives
+Credit value adjustment
+2,268
+2,835
+9,990
+11,935
+risk-weighted assets
+Netting settled credit default
+5,541
+9,408
+7,207
+10,843
+Commodity derivatives and others
+2
+75
+25
+2015
+133,877
+951,232
+890
+2,870,448
+(95)
+(107)
+Less: Allowance for impairment losses
+2,973,149
+Debt securities
+2015
+2,876,120
+(39)
+2016
+2016
+Bank
+Group
+Held-to-maturity investments are stated at amortised cost and comprise the following:
+(b) Held-to-maturity investments
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+2015
+Notes to the Financial Statements
+2,813,118
+2,973,042
+24,732
+2015
+2016
+2015
+2016
+Bank
+(27)
+Group
+Listed outside Hong Kong
+Listed in Hong Kong
+Analysed into:
+2,813,091
+2,876,081
+2,870,353
+Unlisted
+ICBC
+186
+The special government bond represents a non-negotiable bond with a nominal value of RMB85,000 million issued by
+the MOF to the Bank in 1998. The bond will mature in 2028 and bears interest at a fixed rate of 2.25% per annum.
+Others include financial and corporate bonds, debt investment plans, asset backed securities, asset management plans
+and wealth management products with fixed or determined payments. They will mature from January 2017 to July
+2027 and bear interest rates ranging from 3.00% to 9.50% per annum. During the reporting period, the amounts
+which have been matured have been repaid without overdue history.
+2016
+Bank
+Group
+Listed outside Hong Kong
+Unlisted
+Analysed into:
+338,839
+2015
+263,456
+291,370
+145,652
+84,207
+158,956
+112,121
+(iii)
+352,143
+2016
+2015
+33,781
+The Huarong bonds are a series of long term bonds issued China Huarong Asset Management Co., Ltd ("Huarong")
+in the year of 2000 and 2001 to the Bank, with an aggregate amount of RMB312,996 million. The proceeds from the
+issuance of the bonds were used to purchase non-performing loans of the Bank. The bonds are non-negotiable, with a
+tenure of 10 years and bear interest at a fixed rate of 2.25% per annum. In 2010, the Bank received a notice from the
+Ministry of Finance of the People's Republic of China (the "MOF") that the maturity dates of the Huarong bonds were
+extended for another ten years and the interest rate remains unchanged. Additionally, the MOF will continue providing
+funding in support of the repayment of the principal and interest of the bonds. As at 31 December 2016, the Bank
+received early repayments amounting to RMB218,747 million accumulated.
+(iii)
+(ii)
+(i)
+338,839
+263,456
+352,143
+291,370
+283,939
+232,174
+297,243
+257,589
+54,900
+31,282
+54,900
+21,318
+Others
+3,830
+35,798
+967
+1,063
+973
+Debt for equity swaps
+732
+638
+1,061
+838
+At cost (ii)
+1,433
+75,874
+13,091
+11,452
+At fair value (i)
+1,401
+Equity investments:
+Others
+448
+223,909
+1,226
+(8,145)
+773
+(74,144)
+1,999
+1,444,195
+1,106
+1,742,287
+(606)
+(673)
+(678)
+Less: Allowance for impairment losses of
+equity investments, at cost
+277
+277
+(606)
+27,593
+8,804
+Other debt instruments, at fair value
+For the year ended 31 December 2016, the total carrying amount of held-to-maturity investments the Group disposed prior
+to their maturity with remaining maturity more than three months was RMB19,446 million (31 December 2015: RMB14,019
+million), which accounted for 0.65% (31 December 2015: 0.49%) of the total amount of the Group's held-to-maturity
+investments.
+14,868
+Market value of listed debt securities
+61,790
+2,813,091
+2,876,081
+Annual Report 2016
+2,870,353
+57,116
+2,798,223
+2,814,291
+2,813,237
+2,861,716
+11,038
+55,102
+2,973,042
+111,326
+187
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+1,296,903
+1,532,327
+1,402,673
+1,720,630
+Debt securities, at fair value (i)
+2015
+2016
+2015
+2016
+Bank
+Group
+Available-for-sale financial assets comprise the following:
+Recoveries of loans and advances previously written off
+(65,999)
+(c) Available-for-sale financial assets
+86,594
+85,000
+6,688
+85,000
+reversal of impairment allowances
+- impairment allowances charged
+Impairment loss:
+At 1 January 2015
+Total
+Personal loans
+177,163
+loans and
+advances and
+discounted bills
+Group
+Movements of allowance for impairment losses during the year analysed into those attributable to corporate loans and
+advances and discounted bills and personal loans are as follows:
+279,610
+218,152
+1,928
+706
+Corporate
+(5,111)
+(73,734)
+80,418
+63,752
+42
+372
+Acquisition of subsidiaries
+(4,156)
+(4,156)
+Accreted interest on impaired loans (note 6)
+257,581
+(140,118)
+(107,819)
+226,140
+54,569
+171,571
+86,022
+22,270
+(32,299)
+(8,035)
+(5,111)
+(65,699)
+At 31 December 2016
+1,080
+(4,144)
+(60,028)
+(9,867)
+359
+721
+Recoveries of loans and advances previously written off
+(50,161)
+At 31 December 2015 and 1 January 2016
+Write-offs
+Accreted interest on impaired loans
+(139,423)
+(110,879)
+(28,544)
+85,000
+(890)
+(4,144)
+47,874
+224,682
+272,556
+Recoveries of loans and advances previously written off
+Write-offs
+(175,583)
+(861)
+(147,943)
+(27,640)
+861
+83,971
+259,554
+149,603
+109,951
+Accreted interest on impaired loans
+reversal of impairment allowances
+― impairment allowances charged
+-impairment allowances transferred
+799
+83,172
+Impairment loss:
+414
+Write-offs
+1,222
+61,458
+5,006,699
+4,666,691
+1,299,068
+1,608,839
+1,444,195
+1,742,287
+(c)
+4,748,376
+Available-for-sale financial assets
+2,876,081
+2,870,353
+Held-to-maturity investments
+338,839
+263,456
+352,143
+2,813,091
+4,450,998
+(a) Receivables
+The receivables are stated at amortised cost and comprise the following:
+85,000
+Special government bond
+(50,365)
+108,187
+94,249
+108,187
+At 31 December 2016
+94,249
+Huarong bonds
+2015
+2016
+2015
+2016
+Bank
+Group
+291,370
+Receivables
+2,973,042
+73,050
+- impairment allowances charged
+86,138
+13,088
+2015
+Impairment loss:
+280,654
+93,167
+187,487
+At 31 December 2015 and 1 January 2016
+1,089
+368
+721
+Recoveries of loans and advances previously written off
+(60,296)
+(9,931)
+192,057
+262,569
+70,512
+27. FINANCIAL INVESTMENTS
+(119,007)
+2016
+(57,424)
+(176,431)
+Accreted interest on impaired loans (note 6)
+(5,135)
+(5,135)
+Write-offs
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+reversal of impairment allowances
+Group
+Bank
+2016
+2015
+30,755
+886,517
+advances to customers 12,658,686
+Total loans and
+3.47
+3.18
+4.14
+1,117,216
+Overseas business
+5.32
+171,894
+3,228,124
+538,219
+35,502
+4.25
+Total loans and
+616,541
+Interest expense on deposits amounted to RMB257,850 million, representing a decrease of RMB40,160 million or 13.5% as
+compared to that of last year, principally due to PBC lowering the RMB benchmark deposit interest rates five times in 2015,
+resulting in a decrease of 38 basis points in the average cost.
+156,658
+♦ Interest Expense on Deposits
+Interest Expense
+Interest income on due from banks and other financial institutions was RMB31,285 million, representing a decrease of
+RMB5,253 million or 14.4% as compared to that of last year, principally due to the drop of 30 basis points in the average
+yield of due from banks and other financial institutions as affected by the fall of interest rates during the reporting period.
+♦ Interest Income on Due from Banks and Other Financial Institutions
+Interest income on due from central banks was RMB44,678 million, RMB3,189 million or 6.7% lower than that of the
+previous year, mainly because PBC cut deposit reserve ratio many times in 2015 and the daily average balance of due from
+central banks reduced by RMB246,557 million.
+♦ Interest Income on Due from Central Banks
+Interest income on investment in bonds related to restructuring arrived at RMB4,192 million, down RMB242 million or 5.5%
+from the previous year, mainly because advance repayment of part of the Huarong bonds resulted in a decrease in the
+average balance during the reporting period.
+Interest income on investment was RMB177,298 million, RMB6,465 million or 3.8% higher than that of the previous year.
+Specifically, interest income on investment in bonds not related to restructuring was RMB173,106 million, representing an
+increase of RMB6,707 million or 4.0%, mainly because the Bank increased bond investment during the reporting period,
+resulting in a rise of RMB528,627 million in the average balance of investment in bonds not related to restructuring. In 2016
+the market interest rate declined, and the average yield of investment in bonds not related to restructuring dropped by 31
+basis points.
+♦ Interest Income on Investment
+Discussion and Analysis
+17
+Annual Report 2016
+5.31
+11,607,327
+3,786,442
+advances to customers
+4.53
+Interest
+income
+balance
+Item
+Average
+2015
+2016
+Average yield
+In RMB millions, except for percentages
+5.31
+616,541
+4.25 11,607,327
+538,219
+12,658,686
+ANALYSIS OF AVERAGE DEPOSIT COST BY PRODUCTS
+ANALYSIS OF THE AVERAGE YIELD OF LOANS AND ADVANCES TO CUSTOMERS BY BUSINESS LINE
+Average
+(%)
+balance
+19,593
+432,191
+3.26
+22,107
+678,019
+Discounted bills
+5.58
+(%)
+Average yield
+Interest
+income
+394,299
+7,060,495
+4.58
+323,952
+7,077,009
+Corporate loans
+Personal loans
+In RMB millions, except for percentages
+18
+2015
+7,205,641
+1.62
+125,110
+7,703,869
+Subtotal
+0.33
+143,403
+10,439
+0.31
+10,597
+3,440,581
+Demand deposits
+3.26
+132,964
+3,131,445
+1.99
+Overseas business
+693,038
+5.75
+ICBC
+Note: (1) Includes outward remittance and remittance payables.
+1.91
+298,010
+15,579,271
+1.53
+257,850
+16,878,531
+Total deposits
+1.50
+9,071
+604,019
+1.40
+9,732
+4,074,196
+2.69
+114,513
+4,263,288
+2.48
+91,153
+3,674,017
+Time deposits
+Corporate deposits
+(%)
+Average cost
+Interest
+expense
+balance
+(%)
+Average
+Average cost
+Interest
+expense
+Average
+balance
+Item
+3,655,043
+2016
+115,366
+Demand deposits (¹)
+Time deposits
+Personal deposits
+1.87
+145,536
+7,769,611
+1.45
+123,008
+8,481,624
+Subtotal
+0.73
+30,170
+4,114,568
+0.66
+31,855
+4,807,607
+3.16
+440,293
+(80,299)
+4.57
+279,106
+277,720
+1,386
+0.5
+Attributable to: Equity holders of the parent
+company
+278,249
+277,131
+1,118
+0.4
+Non-controlling interests
+857
+589
+268
+45.5
+Annual Report 2016
+15
+Profit for the year
+Discussion and Analysis
+(1.6)
+85,515
+360,675
+360,905
+(230)
+(0.1)
+Shares of profits of associates and
+joint ventures
+2,604
+2,330
+274
+11.8
+Profit before taxation
+363,279
+363,235
+44
+0.0
+Less: Income tax expense
+84,173
+(1,342)
+Operating profit
+Net Interest Income
+AVERAGE YIELD OF INTEREST-GENERATING ASSETS AND AVERAGE COST OF INTEREST-BEARING LIABILITIES
+177,298
+3.65
+4,333,202
+170,833
+3.94
+Investment in bonds not related to
+restructuring
+4,664,712
+173,106
+3.71
+4,136,085
+166,399
+4.02
+Investment in bonds related to
+restructuring (2)
+190,871
+4,192
+4,855,583
+In 2016, net interest income was RMB471,846 million, RMB36,021 million or 7.1% lower than that of last year, accounting
+for 73.5% of the Bank's operating income. Interest income dropped by RMB80,299 million or 9.2% to RMB791,480 million
+and interest expenses decreased by RMB44,278 million or 12.2% to RMB319,634 million. Net interest spread and interest
+margin came at 2.02% and 2.16%, 28 basis points and 31 basis points lower than those of the previous year, respectively.
+During the reporting period, net interest income dropped, due to multiple factors such as the emerging influence of the five
+interest rate cuts and the removal of deposit interest caps by PBC in 2015, the fall of interest rates and the complete launch
+of the pilot programme in the financial sector with regard to the policy of "replacement of business tax with VAT" by MOF
+on 1 May 2016.
+5.31
+11,607,327
+In RMB millions, except for percentages
+2016
+2015
+Interest
+Interest
+Item
+Assets
+Average
+balance
+income/ Average yield/
+Average
+income/ Average yield/
+expense
+cost (%)
+balance
+expense
+cost (%)
+538,219
+4.25
+616,541
+2.20
+1.0
+86,993
+11
+President's Statement
+trillion and income from asset custody was RMB6.89 billion, representing an increase of 24.3%. Both products were leading
+in their respective market segments. Investment banking business income was RMB25.0 billion, with the M&A financial
+advisory service having a leading position in the Asia Pacific region. Meanwhile, we maintained our leading position in
+strategic and fundamental businesses. As always, we have treated deposits as our fundamental resources for development
+transformation and domestic new RMB deposits was RMB1,280.2 billion, representing a year-on-year increase of RMB610.2
+billion, hence achieving the highest of the last three years.
+We broadened innovative service with greater farsightedness in the trends of financial technology development.
+We continued to deepen the big data and informatization strategy, consolidated technological innovation resources and
+launched nearly one thousand application innovation projects to accelerate integrated innovation in technology and
+business. In particular, e-ICBC Internet-based finance was advanced in such dimensions as products, scenarios and channels.
+As at the end of 2016, the open online banking platform ICBC Mobile had 253 million customers, including 66.05 million
+active mobile terminal users, representing an increase of 64.2%. The e-commerce platform ICBC Mall reached an annual
+transaction volume of RMB1.27 trillion. The instant messaging platform ICBC Link had 66.49 million customers, 12.4 times
+that at the beginning of the year. Internet financing increased by RMB105.7 billion to RMB629.3 billion, making us the
+largest internet financing bank. In addition, we combined our strengths in technological innovation with our strengths in
+offline outlet services, improved our efforts to optimize the network of smarter and smaller outlets and established a system
+of integrated online and office services in an effort to enhance service capabilities and create greater value for customers at
+lower costs.
+We pressed further ahead with comprehensive risk management to ensure all risks are under control. Risk
+management is the largest variable affecting our profit growth, and places the biggest pressure on business development.
+Challenged by the ongoing pressure on asset quality and interwoven risks, we put substantive emphasis on the core of risk
+management, governed loans with an iron hand, strengthened credit risk prevention and control, and strictly controlled
+the floodgate for new loans. We strengthened efforts to monitor outstanding loans and resolve non-performing loans
+(NPLs) and created a mechanism for NPL recovery and disposal to ensure stability of asset quality. As at the end of 2016,
+the Group's NPL ratio was 1.62%, representing an increase of 0.12 percentage points from the end of last year and a
+year-on-year decrease of 0.25 percentage points. The divergence between overdue loans and NPLs fell by RMB18.9 billion,
+representing a year-on-year decrease of RMB86.0 billion. Credit risk management showed signs of positive changes. We
+strengthened global market research, developed early risk prevention strategy and mitigation plan and focused on enhancing
+the management of off-balance-sheet risk, liquidity risk and foreign exchange risk. Risk preventions were better targeted
+and more effective. We strengthened internal control and compliance management, improved risk management in key
+areas and, in particular, intensified the compliance and anti-money laundering management of overseas institutions. We
+also established an information technology-assisted, automatic and smart risk management platform with the big data
+technology that identified and blocked 63,400 telecom frauds and protected customer funds worth of RMB930 million
+from risk. Thanks to these efforts, we have not only safeguarded customer funds and our own reputation, but we have also
+fulfilled the responsibility for fostering a sound financial ecosystem as a large bank.
+With growing grasses, one can tell spring is not far away. Faced with the increasingly complex economic situation and
+business environment at home and abroad, the Management will stay true to the development strategy set by the Board
+of Directors and keep to the ultimate mission of serving the real economy with diligence. By expanding our market share
+via transformation and innovation, and deriving value from risk management, we will spare no efforts to pursue healthy,
+sustainable development of ICBC while delivering better services to our customers and creating greater return to our
+shareholders and the society.
+12
+ICBC
+ist
+// ind
+谷
+President: Gu Shu
+30 March 2017
+Chairman of the Board of Supervisors Qian Wenhui
+Annual Report 2016
+13
+Discussion and Analysis
+ECONOMIC, FINANCIAL AND REGULATORY ENVIRONMENTS
+Annual Report 2016
+The world economy maintained a grueling recovery in 2016, despite the impacts of a series of events, including Britain's
+severance from the EU, the US presidential election and Italy's constitutional referendum. The US realized a steady economic
+growth, the European economy recovered moderately and emerging market economies stabilized and improved, with Japan
+still mired in economic recession. International financial markets convulsed violently, with the dollar remaining strong, global
+stock markets collectively rising, commodity prices picking up generally, and bond markets falling in choppy trading.
+We were more responsive to changes in market and customer needs through faster business transformation. In
+a new and changing situation, sustainable banking cannot go without keeping pace with the market and customers and
+making demand-oriented moves. Riding on the trend of cross-market integrated development in the context of financial
+disintermediation and the trend of growing diversity of customer needs, we made full use of the Group's licenses and
+synergies to continuously improve the full-value-chain service and create greater market room for transformation of the
+conventional driving forces and growth of the new ones. In the mega retail field, financial assets of individual customers
+broke the mark of RMB12 trillion, maintaining a leading position in the market; 120 million credit cards were also issued. In
+the fields of mega asset management and mega investment banking, balance of wealth management products was RMB2.7
+Last year, we encountered grave challenges as evidenced by the number of problems and interwoven risks that were
+involved in operating the business, coupled with interest rate liberalization, financial disintermediation and cross-sector
+competition. Pursuant to the strategic objectives and tasks set by the Board of Directors and adhering to the general
+principle of making progress while stablising performance, the Management transformed the development model on the
+one hand and guarded against risk on the other hand in a bid to enhance the steadiness, coordinateness and sustainability
+of development.
+Chairman's Statement
+enhanced our competitiveness, developing capability, and sustainable profit growth. We earnestly carried out the "two
+focus" strategy to guide and support branches in key cities to become better and stronger and focus on winning key
+markets of competition. We perfected the operating and management system at profitability units, consolidated their
+capability of professional operation, value creation and profit contribution, and fully invigorated transformation and
+development at all levels and in all fields.
+We achieved new breakthroughs in reform and innovation. The Bank deliberated and implemented reform and
+innovation measures in such areas as governance structure, management system, operating mechanism and information
+technology. We fully realized that FinTech innovation is reshaping the operating and developing model of banks and
+their competition landscape. Spearheading industrial revolution with technological innovation has been the traditional
+advantage of the Bank and the key to our successful transformation. We set up "seven innovation labs" covering internet-
+based finance, big data and artificial intelligence, cloud computing, block chain and biological identification, established
+the corporate-level data application system across the board, and optimized the IT architecture from a high starting point,
+striving to build more open, flexible and powerful technological systems. We accelerated the combination of technology
+and business, strongly promoted the e-ICBC internet-based finance strategy, and ramped up efforts on building the three
+platforms of ICBC Mobile, ICBC Mall and ICBC Link, the online financing center and the payment product line. We renovated
+our outlets to be more intelligent and lighter at a faster speed, formed an online-offline integrated service system, and raised
+our service capability through technological and service model innovations. We launched a series of reform measures in a
+coordinated way, including the institutional and mechanism reform of credit operation and management, bills and interbank
+business reform, optimization of personnel structure, and the "last mile" of performance assessment. With these efforts,
+we established a new structure and new mechanism which are conducive to enhancing our competitiveness and developing
+capability, strengthening enterprise risk management, raising resource allocation efficiency, and motivating innovation and
+creativity.
+2016 was a tough year after our joint-stock reform and listing. Despite the complex situations, the Bank maintained a
+stable performance with good momentum for high-quality growth, which responded to concerns expressed by others and
+stabilized market expectations. The Bank was ranked the 1st place among the Top 1000 World Banks by The Banker and
+the Global 2000 listed by Forbes, and topped the sub-list of commercial banks of the Global 500 in Fortune for the fourth
+consecutive year, indicating a big advancement on our international competitiveness and market image.
+2016 was also a year that oversaw substantial changes in the composition of the Bank's Board of Directors and the Senior
+Management. Several board members and senior management members joined the Bank in 2016 and the transitional
+progress was smooth, maintaining a scientific and efficient level of operation within the corporate governance structure of
+the Bank.
+Only those who try will know how hard things can be; only those who travel will know how dangerous the path is. Standing
+at a new historical starting point, we are fully aware that the way ahead will not be easy. Compared with our joint-stock
+reform and listing in the past, the reform and development today is equally pioneering, arduous and complicated albeit
+significant changes in the environment, conditions and tasks. Only the persistent innovators and practical achievers will
+embrace a bright future. We will observe the laws governing the operation of commercial banks, adhere to our strategy,
+fulfill our responsibilities and progress with a view to overcoming different challenges ahead. With new visions, new
+measures and new agendas, we will take our transformation and development efforts into a new realm and write a proud
+and glorious chapter in the new year.
+Chairman: Yi Huiman
+30 March 2017
+Annual Report 2016
+9
+President's Statement
+President Gu Shu
+10
+ICBC
+President's Statement
+In 2016, ICBC focused on its principal businesses, defended the bottom line and maintained a solid and steady development
+in spite of complicated changes in both internal and external environments. Our net profit for the year reached RMB279.1
+billion, showing an increase of 0.5% as compared with the previous year. Return on weighted average equity, basic earnings
+per share and cost-to-income ratio met the targets set by the Board of Directors in its operation plan. Those results did not
+come easily. In particular, there are three encouraging developments.
+First, the decline in net interest margin (NIM) was well contained. The Group's NIM was 2.16%, showing a decrease of 21
+bps from last year if the replacement of business tax with VAT is not factored into the same. The decrease is basically the
+same as that of last year. That result is attributable mainly to our proactive efforts to improve the asset and liability structure,
+to enhance pricing management and to increase the efficiency of fund operation, which suppressed the decreasing trend in
+net interest income to a certain degree and ensured profit stability. Second, income structure was improved continuously.
+Net fee and commission income was RMB145.0 billion, showing an increase of 4.7% if the replacement of business tax with
+VAT is not factored into the same, accounting for 22.6% of operating income, an increase of 1.15 percentage points. Third,
+new driving forces became stronger. Domestic mega retail sector contributed RMB196.1 billion to the operating income,
+occupying 39.66% of the domestic institutions' revenue, which is an increase of 0.67 percentage points. Mega asset
+management and mega investment banking saw their driving forces becoming stronger, with income growth rate of asset
+custody, asset management and pension business exceeding or coming close to 10%. Overseas institutions and domestic
+comprehensive subsidiaries generated RMB21.13 billion of net profit, accounting for 7.6% of the Group's net profit, an
+increase of 0.7 percentage points. This gives a steady and strong impetus to profit growth of the Group.
+We were better positioned to proactively cater for the new normal in economic development and made
+continuous improvement on the quality of financing development. The Bank upholds the fundamental logic of
+adaptation, seizing the opportunity, and steering the new normal in economic development throughout our business
+development and the Bank focused our efforts on supporting economic transformation and upgrading the supply-side
+structural reform. We endeavored to transform the credit expansion mode by relying more on re-allocation of existing
+credit assets and increasing the turnover of assets to seize structural opportunities and prevent and control structural risks.
+Domestic branches granted RMB3 trillion of loans in 2016, of which new loans amounted to RMB844.6 billion and relending
+of recovered loans reached RMB2.16 trillion. In terms of lending structure, RMB946.6 billion of project loans were granted
+accumulatively, representing an increase of RMB129.8 billion year-on-year. This was mainly applied to key fields such as
+transportation, public facilities, functional upgrading of key cities, high-quality government-purchased services and advanced
+manufacturing. Retail loans, which are less capital intensive, grew faster. Domestic residential mortgages have increased by
+RMB717.0 billion, representing an increase of 28.8%. Loans to small and micro enterprises have also increased by RMB150.8
+billion, growing faster than all other types of loans in the same period. In terms of geographical mix, large and medium-
+sized cities had a faster growth in loans, with first-tier cities and provincial capital cities contributing 69% of total new
+loans. USD23.5 billion of loans were granted to countries or regions along the "Belt and Road", showing an increase of
+35.8%. Non-credit financing continued to expand. As at the end of the year, the balance of enterprise bond investment,
+equity financing, wealth management investment and entrusted loans amounted to RMB2.5 trillion. The increase in non-
+credit financing and new local government bond investment together were 1.17 times total new loans. Signed framework
+agreements on cooperation in debt-for-equity swap amounted to RMB55.0 billion. The integrated credit and non-credit
+financing services have improved our structure and quality of financing and met the diverse needs for funding caused by
+development of the real economy.
+901
+In 2016, the Chinese economy registered a slower but stable performance with good momentum for growth. China's gross
+domestic product (GDP), consumer price index (CPI), retail sales of consumer goods, fixed asset investment and industrial
+added value of above-scale enterprises rose by 6.7%, 2.0%, 10.4%, 8.1% and 6.0% respectively, while total imports and
+exports fell by 0.9%.
+Money supply maintained stable growth in 2016. At the end of December, the M2 balance was RMB155.01 trillion,
+representing an increase of 11.3%. The outstanding RMB loans reached RMB106.6 trillion, representing an increase of
+13.5%. The balance of RMB deposits registered RMB150.59 trillion, up 11.0%. The social financing scale was RMB17.8
+trillion in 2016, RMB2.4 trillion more than the previous year. Stock indexes swung up and down at the beginning of the
+year, then steadied in general and declined at the end of the year, with a decline of 12.3% and 19.6% in the Shanghai
+Composite Index and the Shenzhen Component Index respectively. The capitalization of the free float stocks on the
+Shanghai and Shenzhen stock markets decreased by 5.9%. The accumulative issuance amount of bonds in the bond market
+reached RMB35.6 trillion, up 55.5%. The central parity of RMB against the US dollar was RMB6.9370, representing a
+depreciation of 6.39% from the end of the previous year.
+(36,021)
+(7.1)
+169,835
+160,866
+8,969
+5.6
+641,681
+668,733
+(27,052)
+(4.0)
+Less: Operating expenses
+193,112
+220,835
+(27,723)
+(12.6)
+Less: Impairment losses
+87,894
+507,867
+PBC continued to follow a prudent monetary policy while keeping the policy moderate and flexible, creating an appropriate
+monetary and financial climate for the task of stabilizing growth and supply-side structural reform. First, it further enhanced
+the purposefulness and effectiveness of prudent monetary policy through applying open market operations to keep liquidity
+moderate. Second, it effectively facilitated the innovation, opening up and standardization of financial markets by improving
+the bond market maker management regulations and issuing administrative measures for bill transactions. Third, it pressed
+ahead with the risk prevention of cross-border capital flows and trade and investment facilitation.
+471,846
+Growth rate
+Asset scale of the banking industry grew steadily, with the quality of credit assets remaining stable overall. At the end
+of 2016, the total assets of banking financial institutions (corporate) in China were RMB232.25 trillion, representing an
+increase of 15.8%. The balance of NPLs of commercial banks reached RMB1,512.3 billion; NPL ratio was 1.74%; allowance
+to NPL was 176.40%; core tier 1 capital adequacy ratio (CAR), tier 1 CAR and CAR were 10.75%, 11.25% and 13.28%
+respectively.
+Looking ahead to 2017, the world economy will grow at a slow pace at large, with greater uncertainty. The improving
+US economy is likely to keep leading developed markets, while the European and Japanese economies will subject to
+higher downward pressure. Emerging markets should guard against the impacts of capital flight and trade protectionism.
+International financial markets will remain turbulent as a result of brewing political risks in developed countries and a
+persistently weak recovery of the world economy. 2017 is a critical year for the implementation of China's "13th Five-Year
+Plan", as well as for deepening of the supply-side structural reform. The Chinese central bank will maintain a prudent and
+neutral monetary policy, ensure fundamentally steady liquidity by employing various types of monetary policy instruments,
+implement the monetary policy in optimizing credit structure, and guide financial institutions to provide further support to
+key sectors and weak areas. In the meantime, it will continue to conduct the supply-side structural reform of the financial
+services sector, offer greater support to the government's major strategies including the initiative to cut overcapacity,
+promoting "mass entrepreneurship and innovation" and strategic emerging industries, and adhere to differentiated housing
+credit policies. It will practically prevent and eliminate financial risks and stay clear of systemic risks.
+14
+ICBC
+Discussion and Analysis
+FINANCIAL STATEMENT ANALYSIS
+Income Statement Analysis
+In 2016, in response to a severe external business environment, with a focus on serving the real economy and meeting
+the financial requirements of consumers, the Bank committed to seeking progress while ensuring stability, adhered to
+inheritance while striving for innovation, worked to increase income while cutting expenditure, implemented strict risk
+prevention and control and achieved a stable performance in making profit. In 2016, the Bank realized a net profit of
+RMB279,106 million, representing an increase of RMB1,386 million or 0.5% as compared to the previous year. Return on
+average total assets stood at 1.20%, and return on weighted average equity was 15.24%. Operating income amounted
+to RMB641,681 million, representing a decrease of 4.0%. This was mainly due to the decrease of net interest income by
+7.1% to RMB471,846 million as affected by the fall of interest margin. Non-interest income reached RMB169,835 million,
+representing an increase of 5.6%. Operating expenses amounted to RMB193,112 million, representing a decrease of 12.6%,
+and the cost-to-income ratio was 27.40%. Allowance for impairment losses was RMB87,894 million, representing an
+increase of 1.0%. Income tax expense reduced by 1.6% to RMB84,173 million.
+CHANGES OF KEY INCOME STATEMENT ITEMS
+In RMB millions, except for percentages
+Item
+Net interest income
+Non-interest income
+Operating income
+2016
+2015
+Increase/
+(decrease)
+(%)
+197,117
+4,434
+2.25
+Due from central banks
+(3,821)
+632
+(3,189)
+Due from banks and other financial institutions
+(908)
+(4,345)
+(5,253)
+Changes in interest income
+59,373
+(139,672)
+Liabilities
+Deposits
+19,041
+(59,201)
+(40,160)
+Due to banks and other financial institutions
+(242)
+(2,743)
+(99)
+Investment in bonds related to restructuring
+In RMB millions
+Comparison between 2016 and 2015
+Increase/(decrease) due to
+Volume
+Interest rate
+Net increase/
+(decrease)
+Loans and advances to customers
+44,716
+(123,038)
+(78,322)
+Investment
+19,386
+(12,921)
+6,465
+Investment in bonds not related to restructuring
+19,529
+(12,822)
+6,707
+(143)
+Discussion and Analysis
+(2,744)
+Debt securities issued
+Short-term loans
+4,043,710
+Interest
+income
+144,349
+Average yield
+Average
+(%)
+balance
+3.57
+3,944,455
+Interest
+income
+176,248
+Average yield
+(%)
+4.47
+Medium to long-term
+loans
+8,614,976
+393,870
+balance
+(5,487)
+Item
+2015
+2,893
+(1,524)
+1,369
+Changes in interest expenses
+19,191
+(63,469)
+(44,278)
+Impact on net interest income
+40,182
+(76,203)
+(36,021)
+Note: Changes in volume are measured by the changes in average balances, while the changes in interest rate are measured by the changes
+in average interest rates. Changes resulted from the combination of volume and interest rate have been allocated to the changes
+resulted from business volume.
+Interest Income
+♦ Interest Income on Loans and Advances to Customers
+Interest income on loans and advances to customers was RMB538,219 million, RMB78,322 million or 12.7% lower than
+those of the previous year. The interest rates of new loans and repriced existing loans during the reporting period were
+largely lower than those of last year, as affected by the fact that PBC cut benchmark interest rates on RMB loans five times
+in 2015. The policy of "replacement of business tax with VAT" launched on 1 May 2016 also resulted in the decrease of
+interest income on loans and advances to customers as the VAT of interest income is detached from the selling price.
+ANALYSIS OF THE AVERAGE YIELD OF LOANS AND ADVANCES TO CUSTOMERS BY MATURITY STRUCTURE
+In RMB millions, except for percentages
+2016
+Average
+Assets
+Item
+ANALYSIS OF CHANGES IN INTEREST INCOME AND EXPENSE
+4.24
+Non-interest-generating assets
+1,708,483
+1,515,899
+Allowance for impairment losses
+(290,892)
+(273,612)
+Total assets
+23,259,118
+21,792,776
+Liabilities
+Deposits
+16,878,531
+257,850
+1.53
+15,579,271
+298,010
+871,779
+1.91
+20,550,489
+791,480
+Due from central banks(3)
+2,915,005
+44,678
+1.53
+3,161,562
+47,867
+1.51
+Due from banks and other financial
+institutions (4)
+1,412,253
+31,285
+2.22
+1,448,398
+36,538
+2.52
+Total interest-generating assets
+21,841,527
+3.62
+Due to banks and other financial
+institutions (4)
+2,595,974
+1,383,096
+20,142,166
+Net interest income
+471,846
+507,867
+Net interest spread
+2.02
+2.30
+Net interest margin
+2.16
+2.47
+Notes: (1) The average balances of interest-generating assets and interest-bearing liabilities represent their daily average balances. The
+average balances of non-interest-generating assets, non-interest-bearing liabilities and the allowance for impairment losses
+represent the average of the balances at the beginning of the year and that at the end of the year.
+(2) Investment in bonds related to restructuring includes Huarong bonds and special government bond. Please see "Note 27. (a) to
+the Financial Statements: Receivables" for details.
+(3) Due from central banks mainly includes mandatory reserves and surplus reserves with central banks.
+(4)
+Due from banks and other financial institutions includes the amount of reverse repurchase agreements, and due to banks and
+other financial institutions includes the amount of repurchase agreements.
+16
+ICBC
+1,363,841
+21,360,043
+Total Liabilities
+Non-interest-bearing liabilities
+1.94
+44,314
+1.71
+2,744,339
+49,801
+1.81
+Debt securities issued
+521,697
+17,470
+7,662,872
+3.35
+16,101
+3.70
+Total interest-bearing liabilities
+19,996,202
+319,634
+1.60
+18,759,070
+363,912
+435,460
+Loans and advances to customers
+Investment
+12,658,686
+34,242
+(deductible)
+Taxable/
+2016
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+Group
+ICBC
+temporary
+194
+84,206
+28,398
+113,473
+(4,091)
+(16,886)
+(3,886)
+(15,847)
+21,066
+Others
+differences
+Deferred
+Change in fair value of available-for-sale
+(296)
+(1,143)
+(365)
+(1,460)
+Allowance for impairment losses
+Deferred income tax liabilities:
+2015
+liabilities/
+(assets)
+differences
+(assets)
+temporary
+liabilities/
+(deductible)
+income tax
+Taxable/
+Deferred
+income tax
+7,174
+28,696
+7,026
+Deductible/
+(taxable)
+temporary
+differences
+Deferred
+income
+tax assets/
+(liabilities)
+differences
+temporary
+Deductible/
+(taxable)
+2015
+2016
+Deferred
+income
+Deferred income tax assets:
+31. DEFERRED INCOME TAX ASSETS AND LIABILITIES
+(a) Analysed by nature
+As at 31 December 2016, the net carrying value of aircraft and vessels owned by the Group that have been pledged as
+security for due to banks and other financial institutions was RMB34,174 million (31 December 2015: RMB22,850 million).
+As at 31 December 2016, the net carrying value of aircraft and vessels leased out by the Group under operating leases was
+RMB111,231 million (31 December 2015: RMB85,763 million).
+As at 31 December 2016, the process of obtaining the title for the Group's properties and buildings with an aggregate net
+carrying value of RMB13,342 million (31 December 2015: RMB11,852 million) was still in progress. Management is of the
+view that the aforesaid matter would neither affect the rights of the Group to these assets nor have any significant impact
+on the business operation of the Group.
+86,838
+87,188
+88,566
+Group
+tax assets/
+(liabilities)
+Allowance for impairment losses
+114,765
+28,104
+Accrued staff costs
+(790)
+(3,166)
+(2,385)
+(9,544)
+at fair value through profit or loss
+Change in fair value of financial instruments
+(9,670)
+(38,283)
+(973)
+(4,005)
+financial assets
+Change in fair value of available-for-sale
+28,443
+113,845
+28,616
+financial assets
+563
+120
+2,848
+Group
+(b) Movements of deferred income tax
+20,354
+81,534
+27,334
+109,021
+(4,733)
+2016
+(18,900)
+(18,813)
+Others
+7,174
+28,696
+7,026
+28,104
+Accrued staff costs
+(4,690)
+Deferred income tax assets:
+Total
+At
+financial assets
+Change in fair value of available-for-sale
+28,616
+173
+28,443
+Allowance for impairment losses
+2016
+in equity
+profit or loss
+2016
+31 December
+At
+gains
+recorded
+recorded in
+1 January
+Total
+gains/
+(losses)
+(798)
+2,924
+(3,191)
+(9,552)
+temporary
+(taxable)
+Deductible/
+2015
+2016
+Bank
+995
+Deferred
+income
+tax assets/
+4,009
+2,471
+696
+2,304
+849
+3,368
+Others
+595
+604
+Deductible/
+(taxable)
+Deferred
+income
+differences
+at fair value through profit or loss
+Change in fair value of financial instruments
+(9,343)
+(37,275)
+(680)
+(2,816)
+financial assets
+Change in fair value of available-for-sale
+28,054
+112,204
+28,066
+112,098
+Allowance for impairment losses
+Deferred income tax assets:
+tax assets/
+(liabilities)
+temporary
+differences
+(liabilities)
+(2,388)
+(9,670)
+3,079
+3,096
+89,024
+(89)
+(276)
+Disposals
+14,219
+7,783
+994
+5,442
+(2,108)
+Depreciation charge for the year
+43,468
+5,272
+41
+39,810
+At 1 January 2015
+Accumulated depreciation and impairment:
+235,729
+88,591
+72,435
+(2,473)
+44,976
+50,095
+At 31 December 2016
+(2,991)
+(2,448)
+(68)
+(475)
+Disposals
+At 31 December 2015 and 1 January 2016
+14,294
+987
+5,594
+Depreciation charge for the year
+100,337
+49,143
+6,177
+41
+7,713
+9,295
+16,716
+137,283
+At 31 December 2015 and 1 January 2016
+(3,765)
+(2,128)
+(90)
+(309)
+(1,238)
+Disposals
+131,814
+215,459
+18,312
+(6,105)
+5,918
+CIP transfer in/(out)
+880
+8,353
+1,655
+Additions
+7,424
+187
+19,731
+8,743
+69,718
+At 31 December 2016
+(3,547)
+(2,487)
+(82)
+(193)
+(785)
+Disposals
+404
+(5,722)
+5,318
+9,270
+4,800
+634
+2,900
+936
+Additions
+230,006
+41
+7,096
+54,408
+111,640
+640
+Held overseas
+66
+152
+305
+316
+Held in Hong Kong
+602
+70,331
+70,459
+70,468
+Held in the PRC (other than Hong Kong)
+Medium term leases (10 to 50 years):
+13,509
+13,586
+14,259
+70,334
+37
+8
+71,424
+68
+9
+85
+26
+Held overseas
+34
+36
+34
+36
+2,822
+3,034
+2,822
+3,034
+Short term leases (less than 10 years):
+Held in the PRC (other than Hong Kong)
+Held in Hong Kong
+70,405
+70,523
+71,366
+14,504
+2,941
+172
+600
+Notes to the Financial Statements
+193
+Annual Report 2016
+124,089
+18,027
+2,199
+16,675
+Financial Statements for the year ended 31 December 2016
+87,188
+20,575
+2,566
+19,690
+86,838
+At 31 December 2016
+At 31 December 2015
+Net carrying amount:
+129,669
+(In RMB millions, unless otherwise stated)
+The carrying value of the Group's and the Bank's properties and buildings is analysed based on the remaining terms of the
+land leases as follows:
+Long term leases (over 50 years):
+741
+Held overseas
+293
+295
+615
+644
+13,044
+13,115
+13,044
+13,119
+Held in the PRC (other than Hong Kong)
+Held in Hong Kong
+2015
+2016
+2015
+2016
+Bank
+Group
+176
+8,697
+(973)
+Change in fair value of financial instruments
+112,298
+Interest receivable
+2015
+2016
+Bank
+Group
+32. OTHER ASSETS
+108,907
+The Group and the Bank did not have significant unrecognised deferred income tax assets or liabilities at the end of the
+reporting period.
+(7,484)
+3,939
+23,899
+(4,733)
+749
+378
+(5,860)
+20,354
+Others
+2016
+104,463
+103,613
+182,118
+Settlement accounts
+391
+11,310
+10,680
+Advance payments
+19,682
+2015
+19,198
+19,264
+Land use rights
+92,967
+189,722
+114,619
+220,091
+Precious metals
+19,756
+7,174
+726
+6,448
+gains/(losses)
+recorded in
+profit or loss
+2015
+1 January
+At
+Total
+Total
+Deferred income tax assets:
+(losses)/gains
+2015
+8,661
+(1,681)
+20,354
+(4,690)
+45
+(4,733)
+Others
+27,334
+At
+recorded in
+31 December
+Accrued staff costs
+(798)
+(197)
+(601)
+at fair value through profit or loss
+Change in fair value of financial instruments
+(9,343)
+(8,233)
+(1,110)
+financial assets
+Change in fair value of available-for-sale
+28,054
+3,032
+25,022
+Allowance for impairment losses
+2015
+equity
+173,241
+148,610
+428
+141,516
+Goodwill (i)
+Other
+8,496
+13,311
+8,496
+13,377
+(2)(c)
+Debt securities
+5,555
+55,866
+55,871
+59,192
+(2)(b)
+precious metals
+Financial liabilities related to
+27,521
+8,674
+59,185
+6,508
+Total
+366,752
+2016
+ICBC
+198
+There were no significant changes in the credit spread of the Group and therefore the amounts of changes in fair value
+of the financial liabilities that were attributable to changes in credit risk were considered not significant during the year of
+2016 and 2015 cumulatively. The changes in fair value of the financial liabilities were mainly attributable to changes in other
+market factors.
+The debt securities including notes issued by Singapore Branch in 2012 and 2014 at fixed rates, notes issued by London
+Branch in 2015 at fixed rate and in 2016 at floating rate, 3 notes at floating rates and 8 notes at fixed rates issued
+by Sydney Branch in 2016 and equity-linked note issued by ICBC Asia in 2016 were classified as financial liabilities
+designated at fair value through profit or loss. The fair value of the debt securities is lower than the amount that the
+Group would be contractually required to pay to the holders of these debt securities upon maturity as at 31 December
+2016 by RMB555 million (31 December 2015: RMB383 million lower).
+As at 31 December 2016, the fair value of the financial liabilities related to precious metals was approximately the same
+as the amount that the Group would be contractually required to pay to the holders (31 December 2015: approximately
+the same).
+As at 31 December 2016, the fair value of structured deposits was approximately the same as the amount that the
+Group would be contractually required to pay to the holders of these structured deposits upon maturity (31 December
+2015: RMB159 million higher).
+(c)
+(b)
+(a)
+Structured deposits, certain financial liabilities related to precious metals and debt securities have been matched with
+derivatives or precious metals as part of a documented risk management strategy of the group to mitigate market risk,
+such as interest rate risk. An accounting mismatch would arise if these financial liabilities were accounted for at amortised
+cost, whereas the related derivatives or precious metals were measured at fair value with movements in the fair value taken
+through profit or loss. By designating these financial liabilities at fair value through profit or loss, the movement in their fair
+values is recorded in the statement of profit or loss.
+The principal guaranteed wealth management products issued by the Group and the financial assets invested in by the
+aforementioned products form part of a group of financial instruments that are together managed on a fair value basis,
+and are classified as financial liabilities and financial assets designated at fair value through profit or loss, respectively. The
+fair value of the wealth management products was RMB510 million higher than the amount that the Group would be
+contractually required to pay to the holders of the wealth management products upon maturity as at 31 December 2016 (31
+December 2015: RMB1,496 million higher).
+(2)
+(1)
+297,414
+352,001
+303,927
+27,521
+7,026
+17,797
+Structured deposits
+371,556
+479,196
+458,699
+585,733
+6,726
+8,713
+15,102
+Annual Report 2016
+23,529
+6,624
+8,099
+6,808
+8,273
+Repossessed assets
+8,956
+9,480
+Others
+197
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+205,531
+2015
+2016
+270,831
+205,531
+270,831
+(1)
+Wealth management products
+2015
+2016
+Bank
+Group
+33. FINANCIAL LIABILITIES DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS
+As indicated by the impairment tests, goodwill arising from business combinations is not impaired and thus, no
+impairment loss was recognised.
+The recoverable amount of the CGU is determined based on the discounted future cash flows of the CGU. The cash
+flow projections are based on financial forecasts approved by management of the subsidiaries. The average growth
+rates are projected based on the similar rates which do not exceed the long term average growth rate for the business
+in which the CGU operates. The discount rate is the pre-tax rate and reflects the specific risk associated with the CGU.
+Goodwill arising from business combinations has been allocated to the Group's CGU, which is not larger than the reportable
+segment of the Group, for impairment testing.
+(i)
+(In RMB millions, unless otherwise stated)
+(2)(a)
+(148)
+7,174
+(2,388)
+726
+6,448
+Accrued staff costs
+(790)
+(188)
+(602)
+at fair value through profit or loss
+7,174
+Change in fair value of financial instruments
+(8,329)
+(1,341)
+financial assets
+Change in fair value of available-for-sale
+28,443
+2,636
+25,807
+(9,670)
+Others
+(5,554)
+695
+31 December
+recorded in
+At
+(gains)
+gains/(losses)
+recorded in
+1 January
+At
+Total
+Total
+21,066
+35
+(7,596)
+3,869
+24,758
+(4,091)
+35
+733
+Allowance for impairment losses
+2016
+2015
+in equity
+8,727
+(1,395)
+21,066
+(3,886)
+30
+175
+(4,091)
+28,398
+Others
+(148)
+7,174
+Accrued staff costs
+(2,385)
+(1,595)
+(790)
+at fair value through profit or loss
+7,026
+Annual Report 2016
+195
+Notes to the Financial Statements
+profit or loss
+2015
+Deferred income tax assets:
+2015
+31 December
+of
+At
+Acquisition
+gains
+recorded
+recorded in
+1 January
+(losses)
+At
+(losses)/
+Total
+Total
+gains/
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+subsidiaries
+64,235
+Deferred income tax liabilities:
+profit or loss
+Total
+Total
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+Deferred income tax assets:
+2016
+Bank
+At
+ICBC
+995
+525
+19
+451
+696
+247
+449
+196
+1 January
+2016
+gains/(losses)
+recorded in
+profit or loss
+(1,590)
+(798)
+at fair value through profit or loss
+Accrued staff costs
+Change in fair value of financial instruments
+(680)
+8,663
+(9,343)
+financial assets
+Change in fair value of available-for-sale
+28,066
+12
+28,054
+Allowance for impairment losses
+2016
+31 December
+At
+gains/(losses)
+recorded in
+equity
+Others
+2016
+595
+70
+995
+849
+153
+696
+Others
+120
+(475)
+84
+595
+Change in fair value of available-for-sale
+(365)
+(69)
+(296)
+Allowance for impairment losses
+2016
+equity
+financial assets
+(475)
+604
+Total
+financial assets
+Change in fair value of available-for-sale
+(296)
+(228)
+(68)
+Allowance for impairment losses
+2015
+equity
+31 December
+At
+Total
+losses
+recorded in
+(gains)/losses
+recorded in
+profit or loss
+2015
+Deferred income tax liabilities:
+2015
+1 January
+At
+525
+7,953
+CIP transfer in/out)
+125,479
+98.61
+98.61
+IDR2,692.2 billion
+USD286 million
+Bank ICBC (Joint stock company)
+100
+00
+98.61
+100
+100
+RUB2,310 million
+RUB2,310 million
+Jakarta,
+Indonesia
+Moscow, Russia
+Commercial
+banking
+Commercial
+10
+banking
+PT. Bank ICBC Indonesia (" ICBC Indonesia")
+Commercial
+RMB200 million
+RMB433 million
+London,
+United Kingdom
+Beijing, the PRC
+Commercial
+banking
+Commercial
+banking
+Fund
+Co., Ltd. *
+banking
+management
+100
+100
+10
+100
+EUR437 million
+EUR437 million
+Luxembourg
+Industrial and Commercial Bank of China
+(Europe) S.A.
+ICBC Financial Leasing Co., Ltd. *
+100
+100
+60
+60
+60
+60
+RMB200 million
+RMB120 million
+100
+60
+80
+00
+100
+RMB100 million
+RMB100 million
+Zhejiang, the PRC
+Chongqing, the PRC
+banking
+Commercial
+banking
+100
+*
+Commercial
+Macau, the PRC
+10
+100
+RMB11,000 million
+RMB11,000 million
+Tianjin, the PRC
+Leasing
+(Macau) Limited ("ICBC Macau")
+("ICBC Leasing")
+Industrial and Commercial Bank of China
+Zhejiang Pinghu ICBC Rural Bank Co., Ltd.
+Chongqing Bishan ICBC Rural Bank
+Co., Ltd. *
+Industrial and Commercial Bank of China
+(Canada)
+89.33
+89.33
+89.33
+MOP589 million
+MOP12,064 million
+80
+80
+80
+80
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Particulars of the Group's principal subsidiaries as at the end of the reporting period are as follows:
+Place of
+incorporation/
+Nominal value of
+Percentage of equity interest % Voting rights %
+17,792
+Notes to the Financial Statements
+Amount
+2016
+2015
+2016
+2016
+Industrial and Commercial Bank of China
+100
+100
+Name
+189
+Annual Report 2016
+101,066
+(2)
+At 31 December 2016
+11
+1
+1
+107
+678
+785
+39
+606
+645
+28. INVESTMENTS IN SUBSIDIARIES
+Unlisted investments, at cost
+Bank
+2016
+2015
+102,288
+100
+Commercial
+HKD36,379 million
+registration
+100
+00
+100
+KZT8,933 million
+KZT8,933 million
+Almaty, Kazakhstan
+(Almaty) Joint Stock Company
+00
+ICBC (London) PLC ("ICBC London")
+00
+100
+00
+100
+USD200 million
+USD200 million
+ICBC Credit Suisse Asset Management
+100
+100
+Industrial and Commercial Bank of China
+banking
+Principal
+and operations
+activities
+Hong Kong, the PRC
+Commercial
+(Asia) Limited ("ICBC Asia")
+banking
+ICBC International Holdings Limited
+100
+100
+00
+100
+HKD4,882 million
+HKD4,882 million
+Hong Kong, the PRC
+Investment
+("ICBC International")
+invested
+by the Bank
+HKD46,930 million
+banking
+Industrial and Commercial Bank of China
+(Malaysia) Berhad
+100
+banking
+ICBC Standard Bank PLC ("ICBC Standard")
+60
+60
+60
+USD1,083 million
+USD680 million
+("ICBC Turkey")
+London,
+United Kingdom
+These subsidiaries incorporated in Mainland China are all limited liability companies.
+The above table lists the principal subsidiaries of the Bank. To give details of other subsidiaries would, in the opinion of the
+management, result in particulars of excessive length.
+There is no subsidiary of the Group which has material non-controlling interests during the reporting period.
+190
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Banking
+banking
+Commercial
+Istanbul, Turkey
+USD309 million
+Auckland,
+New Zealand
+banking
+Commercial
+banking
+("ICBC New Zealand")
+Industrial and Commercial Bank of China
+100
+100
+100
+MXN664 million
+MXN664 million
+Mexico City, Mexico
+Commercial
+Mexico S.A.
+ICBC Turkey Bank Anonim Şirketi
+92.8169
+92.8169
+92.8169
+TRY420 million
+29. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
+(New Zealand) Limited
+Investment in associates and joint ventures comprise the following:
+Interest in joint ventures
+24,533
+Less: Allowance for impairment losses
+(348)
+(348)
+30,077
+24,185
+Shares listed outside Hong Kong, at cost
+30,425
+(a) Interest in associates
+Particulars of the Group's only material associate is as follows:
+Name
+Standard Bank Group Limited
+("Standard Bank") (i)
+Percentage of
+equity interest %
+31 December 31 December
+2016
+20.08
+Bank
+(i)
+8,824
+10,762
+15,709
+Group
+2016
+2015
+(a)
+27,443
+22,095
+(b)
+2,634
+2,090
+30,077
+24,185
+Group
+2016
+2015
+Share of net assets
+Goodwill
+19,663
+Interest in associates
+(2)
+NZD145 million
+100
+Kuala Lumpur,
+Malaysia
+Bangkok, Thailand
+Commercial
+banking
+Commercial
+(Thai) Public Company Limited
+banking
+("ICBC Thai")
+Industrial and Commercial Bank of China
+Financial Services LLC
+100
+THB23,711 million
+100
+USD50 million
+USD50.25 million
+0
+ICBC-AXA Assurance Co., Ltd. *
+60
+Industrial and Commercial Bank of China
+80
+100
+97.86 THB20,132 million
+97.86
+97.86
+80
+10
+80
+50
+80
+80
+CAD158 million
+CAD178.66 million
+Toronto, Canada
+Commercial
+banking
+100
+00
+100
+MYR833 million
+MYR833 million
+Industrial and Commercial Bank of China
+68
+NZD145 million
+60
+80
+Argentina
+Lima, Peru
+banking
+Commercial
+Industrial and Commercial Bank of China
+(Brasil) S.A.
+100
+80
+100
+100
+USD50 million
+100
+Real202 million
+Sao Paulo, Brazil
+banking
+Commercial
+and investment
+Industrial and Commercial Bank of China
+100
+100
+10
+Real202 million
+USD50 million
+100
+10
+80
+RMB8,705 million
+USD309 million
+RMB5,700 million
+USD258 million
+Delaware and
+New York
+United States
+Shanghai, the PRC
+Broker dealer
+(USA) NA
+Industrial and Commercial Bank of China
+80
+80
+80
+ARS1,345 million
+ARS3,505 million
+New York,
+United States
+Buenos Aires,
+Insurance
+Commercial
+banking
+Commercial
+(Argentina) S.A.("ICBC Argentina")
+ICBC PERU BANK
+100
+100
+60
+13
+issued share/
+paid-in capital
+13
+762
+6,849
+1,076
+Additions
+333,844
+92,785
+71,175
+6,911
+9,509
+134,233
+At 31 December 2015 and 1 January 2016
+(14,479)
+(10,371)
+(2,276)
+(154)
+(350)
+26,142
+(1,328)
+38,252
+CIP transfer in/out)
+75,993
+10,073
+23,009
+139,838
+At 31 December 2016
+(16,274)
+(12,508)
+53,850
+(2,497)
+(241)
+(830)
+Disposals
+3,978
+404
+(9,741)
+5,359
+(198)
+Disposals
+479
+160
+Cost:
+Total
+Aircraft and
+vessels
+vehicles
+improvements
+in progress
+Office
+equipment
+and motor
+At 1 January 2015
+Leasehold
+Properties and
+buildings
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+Group
+30. PROPERTY AND EQUIPMENT
+ICBC
+192
+Construction
+Additions
+127,413
+24,845
+319
+Acquisition of subsidiaries
+4,550
+188
+(10,658)
+5,920
+CIP transfer in/(out)
+54,527
+31,782
+13
+1,001
+12,305
+1,909
+293,317
+66,824
+65,573
+8,662
+122,507
+371,420
+Accumulated depreciation and impairment:
+At 1 January 2015
+26,101
+88,566
+At 31 December 2015
+Net carrying amount:
+125,211
+11,276
+55,597
+2,924
+7,483
+50,814
+At 31 December 2016
+(4,460)
+(1,339)
+(2,453)
+(169)
+(499)
+41
+21,072
+85,763
+224,426
+At 1 January 2015
+Cost:
+Total
+vehicles
+and motor
+Leasehold
+improvements
+Construction
+in progress
+Properties and
+buildings
+Office
+equipment
+Bank
+246,209
+111,231
+20,396
+2,590
+22,968
+89,024
+At 31 December 2016
+Disposals
+All of the above joint ventures are accounted for using the equity method in the consolidated financial statements.
+492
+Impairment charge for the year
+Acquisition of subsidiaries
+324
+324
+Impairment charge for the year
+18,049
+3,489
+7,925
+189
+1,073
+Depreciation charge for the year
+94,037
+3,867
+44,312
+5,620
+41
+40,197
+5,562
+97
+286
+Disposals
+19,761
+5,101
+7,947
+1,067
+5,646
+Depreciation charge for the year
+109,418
+7,022
+50,103
+6,585
+45,667
+At 31 December 2015 and 1 January 2016
+(3,278)
+(658)
+(2,231)
+(108)
+(281)
+492
+59
+7,530
+Total comprehensive income
+registration
+2016
+2015
+incorporation/
+31 December
+Place of
+Voting
+rights %
+Principal
+activities
+426
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(d) Movements of allowance for impairment losses of held-to-maturity investments and
+available-for-sale equity investments measured at cost during the year are as follows:
+At 1 January 2015
+Group
+Available-
+Held-to-
+for-sale
+maturity
+Notes to the Financial Statements
+20.08
+20.08
+Johannesburg, Commercial banking
+Net assets
+Liabilities
+Assets
+2015
+2016
+Gross amounts of the associate
+The summarised financial information of Standard Bank, being consistent with the Group's accounting policies, and
+reconciled to the carrying amounts using equity method in the Group's consolidated financial statements.
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2016
+Notes to the Financial Statements
+191
+Annual Report 2016
+The market value of the Group's investment in Standard Bank amounts to RMB25,067 million as at 31 December 2016 (31
+December 2015: RMB15,362 million).
+Standard Bank, a listed commercial bank in Republic of South Africa and a strategic partner for the Group, enables the
+Group to widen its customer base in Africa.
+(i)
+South Africa
+Republic of
+investments
+Revenue
+equity
+investments
+Held-to-
+maturity
+investments
+3
+At 31 December 2015
+and 1 January 2016
+95
+Charge for the year
+13
+Reversals
+| | 3
+Disposals
+125
+S36
+673
+768
+27
+606
+633
+Others
+11
+3
+8
+Bank
+Available-
+for-sale
+equity
+investments
+Total
+142
+670
+812
+24
+606
+630
+Charge for the year
+Reversals
+(25)
+(25)
+Disposals
+(30)
+(30)
+Others
+Total
+Profit from continuing operations
+2015
+34,242
+993,396
+701
+1,240
+Carrying amount of individually immaterial associates
+21,742
+26,551
+Standard Bank
+Carrying amount of material associates
+Less: Allowance for impairment losses
+2015
+Reconciliation of carrying amounts to the Group's total interests in the associates:
+22
+335
+306
+22
+29
+Total comprehensive income
+2016
+(348)
+(348)
+Interest in associates in the consolidated financial statements
+21
+59
+405
+2,090
+2,634
+Other comprehensive income
+Profit from continuing operations
+Aggregate amounts of the Group's share of those joint ventures:
+in the consolidated financial statements
+Other comprehensive income
+2015
+2016
+The Group has interests in a number of individually immaterially joint ventures. The following tables illustrate the
+summarised financial information of the joint ventures that are not individually material to the Group:
+(b) Interest in joint ventures
+All of the above associates are accounted for using the equity method in the consolidated financial statements.
+22,095
+27,443
+Other comprehensive income
+Profit from continuing operations
+Aggregate carrying amount of individually immaterial joint ventures
+2015
+4,950
+5,579
+Dividends received from the associate
+12,023
+5,296
+Total comprehensive income
+826
+(5,512)
+11,197
+10,808
+42,950
+74,516
+91,171
+753,045
+902,225
+827,561
+Aggregate amounts of the Group's share of those associates:
+Reconciled to the Group's interests in the associate
+Gross amounts of net assets of the associate attribute to the parent company
+48,603
+64,508
+2016
+78,814
+The following tables illustrate the summarised financial information of the associates that are not individually material
+to the Group:
+(!!)
+26,551
+in the consolidated financial statements
+Carrying amount of the Group's interest in Standard Bank
+8,788
+21,742
+Goodwill
+Group's effective interest
+12,954
+15,825
+Group's share of net assets of the associate
+20.08%
+10,726
+20.08%
+381,540
+2015
+2016
+Bank
+Group
+2,103,289
+35. REPURCHASE AGREEMENTS
+1,920,782
+2,265,860
+Repurchases (note 25(i))
+2,016,799
+Repurchase agreements comprise repurchases of securities, bills and cash received as collateral on securities lending.
+561,031
+589,306
+2016
+304,987
+2015
+130,830
+Cash received as collateral on
+securities lending
+28,275
+23,885
+337,191
+304,987
+130,830
+Repurchases analysed by counterparty:
+Banks
+449,243
+180,681
+313,306
+477,593
+1,437,462
+306,590
+304,587
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+34. DUE TO BANKS AND OTHER FINANCIAL INSTITUTIONS
+Group
+Bank
+2016
+2015
+2016
+2015
+Deposits:
+Banks and other financial institutions
+operating in Mainland China
+Banks and other financial institutions
+operating outside Mainland China
+1,673,179
+500,107
+1,431,325
+79,230
+1,516,692
+115,088
+1,788,267
+40,214
+1,471,539
+68,198
+1,721,749
+Money market takings:
+Banks and other financial institutions
+operating in Mainland China
+Banks and other financial institutions
+operating outside Mainland China
+134,736
+30,145
+74,950
+365,371
+291,804
+419,098
+1,653,551
+121,420
+185,789
+194,647
+Book value
+79,375
+(b) Main Clauses
+(1) Overseas preference shares
+a.
+Dividend
+Fixed rate for a certain period (5 years for USD and RMB tranche and 7 years for EUR tranche) after issuance.
+174
+Dividend reset every 5 years thereafter to the sum of the benchmark rate and the Fixed Spread.
+Dividends will be paid annually.
+b.
+Conditions to distribution of dividends
+The Group could pay dividends while the Group still has distributable after-tax profit after making up previous years' losses,
+contributing to the statutory reserve and making general provisions, and the Group's capital adequacy ratio meets regulatory
+requirements. Preference shareholders of the Group are senior to the ordinary shareholders on the right to dividends. The
+Group may elect to cancel any dividend, but such cancellation will require a shareholder's resolution to be passed.
+C.
+Dividend stopper
+If the Group cancels all or part of the dividends to the Preference Shareholders, the Group shall not make any dividend
+distribution to ordinary shareholders before the Group pays the dividends for the current dividend period to the Preference
+Shareholders in full.
+The Fixed Spread will be equal to the spread between the dividend rate at the time of issuance and the benchmark rate. The
+Fixed Spread will remain unchanged throughout the term of the Preference Shares.
+d.
+Less: Issue fees
+757
+None
+Mandatory
+2 2 2
+No
+Domestic Preference
+Shares in:
+RMB
+79,549
+2015-11-18
+4.50% 100RMB/Share
+450
+45,000
+45,000
+None
+Mandatory No
+Total
+Equity
+12,000
+Order of distribution and liquidation method
+204
+The Fixed Spread will be equal to the spread between the dividend rate at the time of issuance and the benchmark rate. The
+Fixed Spread will remain unchanged throughout the term of the Preference Shares.
+Dividends will be paid annually.
+Annual Report 2016
+205
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Dividend reset every 5 years thereafter to the sum of the benchmark rate and the Fixed Spread.
+b.
+The Group could pay dividends while the Group still has distributable after-tax profit after making up previous years'
+losses, contributing to the statutory reserve and making general provisions, and the Group's capital adequacy ratio meets
+regulatory requirements. The paying order of domestic preference shares is equal to overseas preference shares. Preference
+shareholders of the Group are senior to the ordinary shareholders on the right to dividends. The Group may elect to cancel
+any dividend, but such cancellation will require a shareholder's resolution to be passed.
+C.
+Dividend stopper
+If the Group cancels all or part of the dividends to the Preference Shareholders, the Group shall not make any dividend
+distribution to ordinary shareholders before the Group pays the dividends for the current dividend period to the Preference
+Shareholders in full.
+d.
+Order of distribution and liquidation method
+The Domestic Preference Shareholders as well as Overseas Preference Shareholders will rank equally for payment. The
+Preference Shareholders will be subordinated to the depositors, ordinary creditors, holders of subordinated debt, holders of
+convertible bonds, holders of Tier 2 capital bonds and holders of other Tier 2 capital instruments of the Group, but will be
+senior to the ordinary shareholders.
+Conditions to distribution of dividends
+The USD, EUR and RMB Preference Shareholders as well as the Domestic Preference Shareholders will rank equally for
+payment. The Preference Shareholders will be subordinated to the depositors, ordinary creditors, holders of subordinated
+debt, holders of convertible bonds, holders of Tier 2 capital bonds and holders of other Tier 2 capital instruments of the
+Group, but will be senior to the ordinary shareholders.
+Fixed rate for a certain period (5 years) after issuance.
+a.
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+e.
+Mandatory conversion trigger events
+Upon the occurrence of an Additional Tier 1 Capital Trigger Event (Core Tier 1 Capital Adequacy Ratio of the Group falling
+to 5.125% or below), the Group shall have the right to convert all or part of the Preference Shares into H shares, in order
+to restore the Core Tier 1 Capital Adequacy Ratio of the Group to above 5.125%; If Preference Shares were converted to H
+shares, they may not be converted to Preference Shares again.
+Upon the occurrence of a Non-Viability Trigger Event (Earlier of the two situations: (1) CBRC has determined that the Group
+would become non-viable if there is no conversion or write-down of capital; or (2) the relevant authorities have determined
+that a public sector injection of capital or equivalent support is necessary, without which the Group would become non-
+viable), the Group shall have the right to convert all Preference Shares into H shares. If Preference Shares were converted to
+H shares, they may not be converted to Preference Shares again.
+Dividend
+f.
+Under the premise of obtaining the approval of the CBRC and condition of redemption, the Group has right to redeem
+all or some of overseas preference shares in first call date and subsequent any dividend payment date. The first call date
+after issuance and subsequent any dividend payment date (redemption price is equal to issue price plus accrued dividend in
+current period).
+USD Preference Shares: the First Redemption Date is five years after issuance
+EUR Preference Shares: the First Redemption Date is seven years after issuance
+RMB Preference Shares: the First Redemption Date is five years after issuance
+g.
+Dividend setting mechanism
+Non cumulative dividend is a dividend on preference shares which does not cumulate upon omission of payment so as to
+require payment of a passed or omitted dividend of one year out of earnings of a following year. After receiving dividend
+at agreed dividend rate, preference shareholders of the Group will not participate the distribution of residual profits with
+ordinary shareholders.
+The Group could pay dividends while the Group still has distributable after-tax profit after making up previous years' losses,
+contributing to the statutory reserve and making general provisions, and the Group's capital adequacy ratio meets regulatory
+requirements. Preference shareholders of the Group are senior to the ordinary shareholders on the right to dividends.
+The Group shall distribute dividends for the Preference Shares in cash, based on the total amount of the issued and
+outstanding Preference Shares on the corresponding times (i.e. the product of the issue price of preference shares and the
+number of the issued and outstanding preference shares). Interest method of the Preference Shares of the Group is once a
+year.
+(2) Domestic preference shares
+Redemption
+12,000
+120
+6.00% 100RMB/Share
+Nominal
+value
+86,795
+86,795
+86,795
+86,795
+269,612
+269,612
+(millions)
+269,612
+356,407
+356,407
+356,407
+356,407
+Except for the dividends for H shares which are payable in Hong Kong dollars, all of the ordinary A shares and H shares rank
+pari passu with each other in respect of dividends.
+Annual Report 2016
+203
+269,612
+Notes to the Financial Statements
+Number
+of shares
+(millions)
+36,496
+34,145
+637,830
+589,073
+481,236
+486,426
+(ii)
+Nominal
+value
+There was no overdue payment for staff salaries, bonuses, allowances, subsidies payables as at 31 December 2016 (31
+December 2015: Nil).
+40. SHARE CAPITAL
+Issued and fully paid:
+H shares of RMB1 Yuan each
+A shares of RMB1 Yuan each
+2016
+2015
+Number
+of shares
+As at 31 December 2016, the amount of other liabilities due within one year was RMB514,673 million (31 December 2015:
+RMB518,166 million).
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+41. OTHER EQUITY INSTRUMENTS
+(1) Preference shares
+RMB
+2014-12-10
+2014-12-10 Equity
+2014-12-10 Equity
+Equity
+6.00% 20USD/Share
+147
+6.00%
+15EUR/Share
+EUR
+བ༦
+17,991
+None
+Mandatory
+40
+600
+4,558 None
+Mandatory
+2,940
+USD
+Shares in:
+Overseas Preference
+(a) Preference shares outstanding at the end of the year
+Amount
+In original
+Financial instrument
+outstanding
+Issue date
+Accounting
+classification
+Dividend
+(million
+currency
+In RMB
+Conversion
+rate
+Issue price
+shares)
+(million)
+(million) Maturity
+condition Conversion
+e.
+Mandatory conversion trigger events
+Upon the occurrence of an Additional Tier 1 Capital Trigger Event (Core Tier 1 Capital Adequacy Ratio of the Group falling
+to 5.125% or below), the Group shall have the right to convert all or part of the Preference Shares into A shares, in order
+to restore the Core Tier 1 Capital Adequacy Ratio of the Group to above 5.125%; If Preference Shares were converted to A
+shares, they may not be converted to Preference Shares again.
+Upon the occurrence of a Non-Viability Trigger Event (Earlier of the two situations: (1) CBRC has determined that the Group
+would become non-viable if there is no conversion or write-down of capital; or (2) the relevant authorities have determined
+that a public sector injection of capital or equivalent support is necessary, without which the Group would become non-
+viable), the Group shall have the right to convert all Preference Shares into A shares. If Preference Shares were converted to
+A shares, they may not be converted to Preference Shares again.
+Amount
+currency
+In RMB
+Amount
+currency
+In RMB
+(million)
+In RMB
+(million pieces)
+(million)
+(million pieces)
+(million)
+(million)
+USD Perpetual bond
+1
+1,000
+(million)
+6,691
+In original
+Increase during the year
+In original
+(3)
+reduction or cancellation of all or a part of the principal and/or distribution of the perpetual bond;
+the conversion of all or a part of the principal and/or distribution of the perpetual bond into shares of ICBC Asia or
+another person; and/or
+the amendment of the maturity, distribution payment date and/or the distribution amount of the perpetual bond.
+ICBC Asia has a call option to redeem all the outstanding perpetual bond from 21 July 2021 or any subsequent distribution
+payment date thereafter.
+Annual Report 2016
+207
+Notes to the Financial Statements
+31 December 2016
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+1 January 2016
+Financial
+instrument
+Amount
+outstanding
+(million pieces)
+In original
+currency
+(million)
+(c) Changes in perpetual bond outstanding
+1
+1,000
+6,691
+11,412
+(1) Equity attribute to non-controlling interests of ordinary shares
+11,045
+11,412
+(2) Equity attribute to non-controlling interests of other equity instruments
+42. RESERVES
+(a) Capital reserve
+11,045
+Capital reserve mainly includes share premium arising from the issuance of new shares at prices in excess of par value.
+(i) Statutory surplus reserve
+The Bank is required to appropriate 10% of its profit for the year pursuant to the Company Law of the People's Republic of
+China and the Articles to the statutory surplus reserve until the reserve balance reaches 50% of its registered capital.
+Subject to the approval of the shareholders, the statutory surplus reserve may be used to offset accumulated losses of the
+Bank, if any, and may also be converted into capital of the Bank, provided that the balance of the statutory surplus reserve
+after such capitalisation is not less than 25% of the registered capital immediately before capitalisation.
+Pursuant to the resolution of the board of directors' meeting held on 30 March 2017, the total surplus reserve of the Bank
+was RMB26,312 million (2015: RMB26,398 million), among which an appropriation of 10% of the profit of the Bank for the
+year determined under the generally accepted accounting principles of PRC ("PRC GAAP") to the statutory surplus reserve,
+in the amount of RMB26,228 million (2015: RMB26,327 million) was approved and the total surplus reserve made by some
+overseas branches was RMB84 million (2015: RMB71 million) pursuant to the requirements of local authorities.
+208
+ICBC
+Other financial institutions
+(b) Surplus reserves
+86,051
+79,375
+1,883,700
+Total
+1,000
+6,691
+1
+1,000
+6,691
+(3) Interests attribute to equity instruments' holders
+Equity instrument
+1 January
+2016
+31 December
+2016
+1
+2.
+Total equity attribute to equity holders of the parent company
+(1) Equity attribute to ordinary equity holders of the parent company
+(2) Equity attribute to other equity holders of the parent company
+Total equity attribute to non-controlling interests
+1,789,474
+1,969,751
+1,710,099
+(2)
+92,327
+(1)
+The distribution shall be payable semi-annually, with the first distribution payment date being 21 January 2017. ICBC
+Asia has the right to cancel distribution payment (subject to the requirement as set out in the terms and conditions of the
+perpetual bond) and the distribution cancelled shall not be cumulative.
+EUR
+40
+RMB
+Domestic
+RMB
+Total
+120
+450
+757
+147
+and
+In original currency(million)
+In RMB (million)
+2,940
+600
+12,000
+45,000
+N/A
+17,991
+31 December 2016
+4,558
+Amount(million shares)
+USD
+f.
+Redemption
+Five years after the first redemption date of issuance (18 November 2015) under the premise of obtaining the approval of
+the CBRC and meets regulatory requirements, the Group has right to redeem all or some of domestic preference shares. The
+redemption period of preference shares ranges the start date from the date of redemption to conversion of all (redemption
+price is equal to book value plus accrued dividend in current period).
+g.
+Dividend setting mechanism
+Non cumulative dividend is a dividend on preference shares which does not cumulate upon omission of payment so as to
+require payment of a passed or omitted dividend of one year out of earnings of a following year. After receiving dividend
+at agreed dividend rate, preference shareholders of the Group will not participate the distribution of residual profits with
+ordinary shareholders.
+The Group could pay dividends while the Group still has distributable after-tax profit after making up previous years' losses,
+contributing to the statutory reserve and making general provisions, and the Group's capital adequacy ratio meets regulatory
+requirements. Preference shareholders of the Group are senior to the ordinary shareholders on the right to dividends.
+1 January 2016
+206
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+The Group shall distribute dividends for the Preference Shares in cash, based on the total amount of the issued and
+outstanding Preference Shares on the corresponding times (i.e. the product of the issue price of preference shares and the
+number of the issued and outstanding preference shares). Interest method of the Preference Shares of the Group is once a
+year.
+(c) Changes in preference shares outstanding
+Preference shares
+Overseas
+Financial instrument outstanding
+ICBC
+12,000
+45,000
+79,549
+Conversion
+1,000
+6,691
+None
+None
+No
+Total
+Conversion
+condition
+1
+Less: Issue fees
+15
+Book value
+6,676
+Note: USD perpetual bond was issued by ICBC Asia, a subsidiary of the Bank.
+(b) Main Clauses
+On 21 July 2016, ICBC Asia issued Basel III-compliant Non-Cumulative Subordinated Additional Tier 1 Capital Securities
+(hereinafter referred to as "Perpetual Bond") in the aggregate amount of US$1 billion (equivalent to approximately
+RMB6,676 million net of related issuance costs). Fixed rate for the first 5 years after issuance of the bond is 4.25%. If
+perpetual bonds are not called, distribution will be reset based on the then prevailing 5-year USA national bonds yield plus a
+fixed initial spread (3.135 percent. Per annum) every 5 years.
+6,691
+(million) Maturity
+(million)
+pieces)
+(2) Perpetual Bond
+(a) Perpetual bond outstanding at the end of the year
+Amount
+In original
+Financial instrument
+Accounting
+(million
+currency
+In RMB
+outstanding
+Issue date
+USD Perpetual bond
+2016-07-21
+classification
+Equity
+Interest rate
+4.25%
+Issue price
+1,000USD/Piece
+The perpetual bond will be written off up to the amount as directed by the Hong Kong Monetary Authority (hereinafter
+referred to as "HKMA") if the HKMA notifies ICBC Asia that in the opinion of the HKMA or a relevant government body,
+ICBC Asia would become non-viable if there is no written off of the principal. The perpetual bond also contain Hong Kong
+Bail-in Power. Each holder of the perpetual bond shall be subject to the exercise by the Hong Kong Resolution Authority to
+any or a combination of the following:
+132,850
+366,384
+4,843
+59,083
+357,937
+306,622
+279,446
+240,175
+As at 31 December 2016, the amount of debt securities issued due within one year was RMB28,277 million (31 December
+2015: RMB38,723 million).
+(1) Subordinated bonds and Tier 2 Capital Notes
+The Bank:
+As approved by the PBOC and the CBRC, the Bank issued callable subordinated bonds through open market bidding in
+2009, 2010, 2011, 2012 and 2014. Approved by the PBOC, these subordinated bonds were traded in the bond market
+among banks. The relevant information on these subordinated bonds is set out below:
+Issue Price
+Amount
+Ending
+balance
+Coupon
+Name
+Issue date
+97,447
+111,069
+163,126
+51,986
+181,092
+Subsidiaries
+12,812
+14,461
+194,811
+195,553
+181,999
+(In RMB)
+181,092
+The Bank
+97,447
+59,083
+97,447
+59,083
+Subsidiaries
+65,679
+Other debt securities issued by
+181,999
+(In RMB)
+rate
+4.10%
+14/09/2010
+14/09/2025
+03/11/2010
+(ii)
+11 ICBC 01 Bond
+29/06/2011
+100 Yuan
+38,000
+38,000
+5.56%
+30/06/2011
+30/06/2031
+30/08/2011
+(iii)
+16,200
+16,200
+100 Yuan
+10/09/2010
+Value date
+Maturity date
+Circulation date Notes
+(million)
+(million)
+09 ICBC 02 Bond
+16/07/2009
+(In RMB)
+100 Yuan
+24,000
+4.00%
+20/07/2009
+20/07/2024
+20/08/2009
+(i)
+10 ICBC 02 Bond
+24,000
+181,092
+181,999
+The Bank
+304,987
+130,830
+36. CERTIFICATES OF DEPOSIT
+Certificates of deposit issued by Hong Kong Branch, Tokyo Branch, Singapore Branch, Luxembourg Branch, Seoul Branch,
+Doha Branch, New York Branch, Sydney Branch, London Branch, Dubai (DIFC) Branch, ICBC Asia, ICBC Macau, ICBC New
+Zealand and ICBC Standard were recognised at amortised cost.
+Annual Report 2016
+199
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+37. DUE TO CUSTOMERS
+Group
+Bank
+2016
+2015
+2016
+2015
+313,306
+561,031
+9,465
+7,753
+Others
+132,625
+400
+9,410
+561,031
+313,306
+304,987
+Demand deposits:
+130,830
+Securities
+553,278
+Bills
+7,753
+303,841
+9,465
+297,234
+121,365
+Repurchases analysed by collateral:
+Corporate customers
+5,271,686
+4,507,661
+243,811
+236,366
+243,721
+17,825,302
+16,281,939
+17,235,587
+38. DEBT SECURITIES ISSUED
+236,501
+Group
+2016
+2015
+2016
+2015
+Subordinated bonds and Tier 2
+Capital Notes issued by
+(1)
+Bank
+11 ICBC 02 Bond
+Others
+4,321,056
+5,156,745
+4,413,305
+Personal customers
+3,720,374
+3,390,514
+3,655,850
+3,344,216
+4,134,525
+Time deposits:
+Corporate customers
+4,176,834
+3,929,353
+3,865,570
+3,645,906
+4,419,907
+4,210,600
+Personal customers
+29/12/2011
+15,781,673
+50,000
+ICBC Asia issued notes amounting to RMB852 million denominated in HKD and RMB with maturities between 2017
+and 2020 at fixed interest rates. Of which, in 2016 ICBC Asia issued interbank deposits amounting to RMB1,236
+million denominated in RMB with maturities in 2017 at fixed interest rates.
+ICBC Financial Leasing issued debt securities and notes amounting to RMB47,979 million denominated in RMB and
+USD with maturities between 2017 and 2026 at fixed or floating interest rates. Of which, Skysea International Capital
+Management Limited ("Skysea International"), which is controlled by the Group, issued guaranteed notes of USD750
+million with a fixed interest rate of 4.875% in 2011. As at 31 December 2016, Skysea International has redeemed
+USD139 million and the carrying amount of the Notes were RMB4,231 million. The Notes were guaranteed by
+Hong Kong Branch and were issued at the price fixed at 97.708% of the nominal amount with maturities due on 7
+December 2021. By satisfying certain conditions, Skysea International has the option to redeem all of the notes at any
+time. The Notes were listed on the Stock Exchange of Hong Kong Limited.
+ICBCIL Finance Co., Ltd., which is controlled by the Group, issued medium-term debt securities and short-term notes
+amounting to RMB42,473 million denominated in RMB and USD, with maturities between 2017 and 2026 at fixed or
+floating interest rates. Of which, in 2016, ICBCIL Finance Co., Ltd. issued medium-term debt securities amounting to
+RMB20,284 million denominated in USD, with maturities between 2018 and 2026 at fixed interest rates. By satisfying
+certain conditions, ICBCIL Finance Co., Ltd. has the option to redeem all of the debt securities at any time. Above debt
+securities were guaranteed by ICBC Financial Leasing Co., Ltd. and listed on the Irish Stock Exchange and the Stock
+Exchange of Hong Kong Limited respectively. In 2016, ICBCIL Finance Co., Ltd. issued short-term notes amounting to
+RMB3,926 million denominated in USD with maturity in 2017.
+202
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(iii)
+(iv)
+(v)
+(vi)
+Hai Jiao 1400 limited, which is controlled by the Group, issued a private placement bond amounting to RMB1,275
+million denominated in USD with maturity in 2025 at a fixed interest rate. The bond was guaranteed by The Export-
+Import Bank of Korea.
+ICBC Thai issued debt securities amounting to RMB5,669 million denominated in THB with maturities between 2017
+and 2026 at fixed interest rates. Of which, in 2016, ICBC Thai issued debt securities of RMB1,629 million denominated
+in THB with maturities between 2017 and 2026 at fixed interest rates.
+ICBC International issued medium-term bonds amounting to RMB9,339 million denominated in USD with maturity in
+2017 and 2019 at a fixed interest rate. Of which, in 2016, ICBC International issued medium-term bonds amounting
+to RMB4,825 million denominated in USD with maturity in 2019 at fixed interest rates.
+ICBC Indonesia issued a medium-term note amounting to RMB119 million denominated in IDR with maturity in 2017
+at a fixed interest rate.
+(ii)
+(i)
+Subsidiaries:
+The Head Office issued debt securities in London amounting to RMB698 million denominated in RMB with maturities
+in 2018 at fixed interest rates.
+The Bank:
+(i)
+(ii)
+(iii)
+(iv)
+(v)
+(vi)
+(vii) ICBC Argentina issued a medium-term note amounting to RMB89 million denominated in ARS with maturities in 2017
+at a floating interest rate.
+Sydney Branch issued debt securities amounting to RMB12,211 million denominated in AUD, CHF, RMB, EUR, HKD
+and USD with maturities between 2017 and 2024 at fixed or floating interest rates. Of which, in 2016, Sydney Branch
+issued debt securities amounting to RMB4,486 million denominated in AUD at floating interest rates and in RMB at
+fixed interest rates with maturity in 2018 and 2019.
+In 2016, Tokyo Branch issued notes amounting to RMB1,921 million denominated in JPY and RMB with maturities in
+2017 and 2019 at fixed interest rates.
+New York Branch issued notes amounting to RMB36,953 million denominated in USD with maturities between
+2017 and 2021 at fixed or floating interest rates. Of which, in 2016, New York Branch issued notes amounting to
+RMB14,548 million denominated in USD with maturities in 2017 and 2021 at fixed interest rates.
+Luxembourg Branch issued notes amounting to RMB17,858 million denominated in USD with maturities between
+2017 and 2019 at fixed or floating interest rates. Of which, in 2016, Luxembourg Branch issued notes amounting to
+RMB13,689 million denominated in USD with maturities in 2017 and 2019 at fixed or floating interest rates.
+Dubai (DIFC) Branch issued debt securities amounting to RMB7,851 million denominated in USD with maturities
+between 2019 and 2021 at fixed or floating interest rates. Of which, in 2016, Dubai (DIFC) Branch issued debt
+securities amounting to RMB4,391 million denominated in USD with maturities in 2019 and 2021 at fixed or floating
+interest rates.
+(vii) In 2016, Hong Kong Branch issued debt securities amounting to RMB3,459 million denominated in USD with maturity
+in 2019 at floating interest rate.
+(viii) The Head Office issued debt securities in Hong Kong amounting to RMB501 million denominated in RMB with maturity
+in 2019 at fixed interest rates.
+(ix)
+Singapore Branch issued notes amounting to RMB15,889 million denominated in RMB and USD with maturities
+between 2018 and 2021 at fixed interest rates. Of which, in 2016, Singapore Branch issued notes amounting to
+RMB10,618 million denominated USD and RMB with maturity in 2018 and 2019 at fixed rates.
+39. OTHER LIABILITIES
+(i)
+Group
+22,085
+Early retirement benefits
+2,739
+4,716
+2,739
+4,716
+Sundry tax payables
+22,923
+10,916
+10,552
+11,455
+Promissory notes
+2,438
+100 Yuan
+1,258
+5,052
+11,968
+As at 31 December 2016, the Group's other debt securities issued mainly include:
+23,748
+subsidies payables (i)
+Bank
+2016
+2015
+2016
+2015
+Interest payable
+243,064
+24,924
+254,942
+250,425
+Settlement accounts
+220,899
+196,320
+169,899
+158,757
+Salaries, bonuses, allowances and
+237,369
+(2) Other debt securities issued
+ICBC New Zealand issued medium-term bonds and notes amounting to RMB502 million denominated in AUD, NZD
+and USD with maturities between 2017 and 2020 at fixed or floating interest rates. Of which, in 2016, ICBC New
+Zealand issued medium-term bonds amounting to RMB41 million denominated in NZD with maturity in 2020 at fixed
+interest rates and in AUD with maturity in 2020 at a floating interest rate.
+Financial Statements for the year ended 31 December 2016
+05/08/2024
+24/09/2014
+(vi)
+200
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(i)
+(ii)
+(iii)
+(iv)
+(v)
+(vi)
+The Bank has the option to redeem all or part of the bonds at face value on 20 July 2019. If the Bank does not exercise this
+option, the annual coupon rate will increase by 300 basis points thereafter.
+The Bank has the option to redeem all of the bonds on 14 September 2020 upon the approval of the relevant regulatory
+authorities.
+The Bank has the option to redeem all of the bonds on 30 June 2026 upon the approval of the relevant regulatory authorities.
+The Bank has the option to redeem all of the bonds on 30 December 2021 upon the approval of the relevant regulatory
+authorities.
+The Bank has the option to redeem all of the bonds on 13 June 2022 upon the approval of the relevant regulatory authorities.
+The Bank has the option to redeem all of the bonds on 5 August 2019 upon the approval of the relevant regulatory
+authorities
+05/08/2014
+5.80%
+20,000
+20,000
+50,000
+5.50%
+30/12/2011
+(In RMB millions, unless otherwise stated)
+17/01/2012
+(iv)
+12 ICBC 01 Bond
+14 ICBC 01 Bond
+11/06/2012
+In 2015, the Bank issued Tier 2 Capital Notes denominated in USD. Approved by the Stock Exchange of Hong Kong Limited
+for listing and dealing, the Notes are listed on the Stock Exchange of Hong Kong Limited. The relevant information is set out
+below:
+100 Yuan
+20,000
+4.99%
+13/06/2012
+13/06/2027
+13/07/2012
+(v)
+04/08/2014
+100 Yuan
+20,000
+Amount
+30/12/2026
+On 2 December 2009, ICBC Standard issued a subordinated bond with an amount of USD500 million, bearing a fixed
+interest rate of 8.125% per annum and with maturity due on 2 December 2019.
+21/09/2015
+21/09/2025
+22/09/2015 (vii)
+(vii)
+On 15 September 2015, the Bank issued Tier 2 Capital Notes with an aggregate nominal amount of USD2,000 million,
+bearing a fixed interest rate of 4.875% per annum. The listing and permission to deal in the Stock Exchange of Hong Kong
+Limited became effective on 22 September 2015. The Notes were issued at the price fixed at 99.189% of the nominal amount
+with maturity due on 21 September 2025 and cannot be redeemed before maturity.
+The Bank has not had any defaults of principal or interest or other breaches with respect to the subordinated bonds during
+the period (2015: Nil).
+13,896 4.875%
+Subsidiaries:
+On 10 October 2013, ICBC Asia issued a subordinated bond with an aggregate nominal amount of USD500 million, bearing
+a fixed interest rate of 4.50% per annum. The bond was issued at the price fixed at 99.463% of the nominal amount with
+maturity due on 10 October 2023.
+On 10 September 2014, ICBC Macau issued a subordinated bond with an aggregate nominal amount of USD320 million,
+bearing a floating interest rate. The bond was issued at the price fixed at 99.298% of the nominal amount with maturity due
+on 10 September 2024.
+The above subordinated bonds and notes are separately listed on the Singapore Exchange Securities Trading Limited, the
+Stock Exchange of Hong Kong Limited and the London Stock Exchange Plc. ICBC Asia, ICBC Macau and ICBC Standard have
+not had any defaults of principal or interest or other breaches with respect to the subordinated bonds and notes during the
+period (2015: Nil).
+Ending
+balance
+201
+Annual Report 2016
+On 30 November 2010, ICBC Asia issued a subordinated bond with an aggregate nominal amount of USD500 million,
+bearing a fixed interest rate of 5.125% per annum. The bond was issued at the price fixed at 99.737% of the nominal
+amount with maturity due on 30 November 2020.
+2,000
+Notes to the Financial Statements
+USD
+(Original
+Name
+Issue date Currency
+Issue Price
+Currency)
+(million)
+99.189
+Coupon
+rate
+Value date
+Maturity date
+Circulation date Notes
+(In RMB)
+15/09/2015
+Tier 2 Capital Notes
+15 USD
+(million)
+2015
+2,297,884
+2,713,875
+2,289,444
+Credit risk-weighted assets of
+(d) Legal proceedings
+credit commitments(i)
+Group
+Bank
+2015
+(i) Internal Ratings-Based approach was adopted to calculate the credit risk-weighted assets according to the scope
+approved by the CBRC, and others were calculated by weighted approach.
+1,042,388
+1,194,507
+1,071,193
+2,778,412
+2016
+1,231,376
+2016
+527,533
+45,752
+538,709
+27,148
+42,966
+25,588
+Usance letters of credit and other commitments
+143,393
+219,199
+135,910
+210,786
+Loan commitments:
+620,680
+As at 31 December 2016, there were a number of legal proceedings outstanding against the Bank and/or its subsidiaries
+with a claimed amount of RMB5,515 million (31 December 2015: RMB4,715 million).
+173,392
+102,375
+159,962
+91,546
+1,064,189
+727,316
+1,011,280
+691,737
+647,448
+With an original maturity of under one year
+With an original maturity of one year or over
+Undrawn credit card limit
+In the opinion of management, the Group and the Bank have made adequate allowance for any probable losses based on
+the current facts and circumstances, and the ultimate outcome of these lawsuits will not have a material impact on the
+financial position or operations of the Group and the Bank.
+2015
+As an underwriting agent of the Government, the Bank underwrites certain PRC government bonds and sells the bonds
+to the general public. The Bank is obliged to redeem these bonds at the discretion of the holders at any time prior to
+maturity. The redemption price for the bonds is based on the nominal value of the bonds plus any interest accrued up to
+the redemption date. As at 31 December 2016, the Bank had underwritten and sold bonds with an accumulated amount of
+RMB97,646 million (31 December 2015: RMB97,477 million) to the general public, and these government bonds have not
+yet matured nor been redeemed. Management expects that the amount of redemption of these government bonds through
+the Bank prior to maturity will not be material.
+In addition to the transactions detailed elsewhere in these financial statements, the Group had the following transactions
+with related parties during the year:
+(a) Shareholders with significant influence
+(i)
+The MOF
+The MOF is a ministry under the State Council of the PRC, primarily responsible for, among others, state fiscal revenues,
+expenses and taxation policies. As at 31 December 2016, the MOF directly owned approximately 34.60% (31 December
+2015: approximately 34.60%) of the issued share capital of the Bank. The Group enters into banking transactions with the
+MOF in its normal course of business, including the subscription and redemption of government bonds issued by the MOF.
+Details of the material transactions are as follows:
+Balances at end of the year:
+The PRC government bonds and the special government bond
+Transactions during the year:
+Subscription of the PRC government bonds
+2016
+89,719
+127,314
+48,340
+225,366
+2015
+2016
+834,549
+847,923
+2015
+52. RELATED PARTY DISCLOSURES
+(e) Redemption commitments of government bonds
+The Group provides custody, trust and asset management services to third parties. Revenue from such activities is included in
+"net fee and commission income" set out in note 7 above. Those assets held in a fiduciary capacity are not included in the
+Group's consolidated statement of financial position.
+Financial assets of the Group including securities, bills and loans have been pledged as collateral for liabilities or contingent
+liabilities, mainly the repurchase agreements and derivative contracts. As at 31 December 2016, the carrying value of the
+financial assets of the Group pledged as collateral amounted to approximately RMB341,593 million (31 December 2015:
+RMB144,813 million).
+The MOF will not provide funding for the early redemption of these government bonds on a back-to-back basis but is
+obliged to repay the principal and the respective interest upon maturity.
+(f) Underwriting obligations
+As at 31 December 2016, the Group and the Bank had no unexpired securities underwriting obligations (31 December 2015:
+Nil).
+Annual Report 2016
+215
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+49. DESIGNATED FUNDS AND LOANS
+Designated funds
+Designated loans
+Group
+2016
+1,170,264
+1,169,979
+1,013,303
+1,012,587
+The designated funds represent the funding that the trustors have instructed the Group to use to make loans to third parties
+as designated by them. The credit risk remains with the trustors.
+The designated loans represent the loans granted to specific borrowers designated by the trustors on their behalf according
+to the entrusted agreements signed by the Group and the trustors. The Group does not bear any risk.
+50. ASSETS PLEDGED AS SECURITY
+51. FIDUCIARY ACTIVITIES
+Sight letters of credit
+3,261
+301,898
+Bank
+2016
+2015
+2016
+2015
+Within one year
+5,455
+5,516
+4,922
+4,965
+Over one year but within five years
+9,899
+11,093
+9,034
+10,030
+Over five years
+2,266
+2,369
+2,044
+Group
+2,094
+At the end of the reporting period, the Group and the Bank leased certain office properties under operating lease
+arrangements, and the total future minimum lease payments in respect of non-cancellable operating leases were as follows:
+(b) Operating lease commitments
+31,006
+Group
+Bank
+2016
+2015
+2016
+2015
+Authorised, but not contracted for
+535
+Contracted, but not provided for
+27,833
+719
+22,081
+495
+701
+3,602
+28,368
+22,800
+4,097
+3,962
+Operating lease commitments — Lessee
+17,620
+18,978
+16,000
+The contractual amounts of credit commitments by category are set out below. The amounts disclosed in respect of loan
+commitments and undrawn credit card limit are under the assumption that the amounts will be fully advanced. The amounts
+for bank acceptances, letters of credit and guarantees represent the maximum potential losses that would be recognised at
+the end of the reporting period had the counterparties failed to perform as contracted.
+Group
+Bank
+2016
+Bank acceptances
+271,691
+2015
+339,494
+2016
+265,625
+2015
+336,461
+Guarantees issued:
+Financing letters of guarantees
+137,076
+61,839
+175,554
+110,738
+Non-financing letters of guarantees
+295,471
+281,804
+The Group provides letters of credit and financial guarantees to guarantee the performance of customers to third parties.
+Bank acceptances comprise undertakings by the Group to pay bills of exchange drawn on customers. The Group expects
+most acceptances to be settled simultaneously with the reimbursement from the customers.
+At any given time, the Group has outstanding commitments to extend credit. These commitments are in the form of
+approved loans and undrawn credit card limits.
+(c) Credit commitments
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+17,089
+Operating lease commitments — Lessor
+At the end of the reporting period, the Group leased certain aircraft and vessels to third parties under operating lease
+arrangements, and the total future minimum lease receivables in respect of non-cancellable operating leases with its tenants
+were as follows:
+Within one year
+Over one year but within five years
+Over five years
+214
+ICBC
+Group
+295,055
+2016
+10,046
+10,198
+39,092
+39,463
+37,331
+39,344
+86,469
+89,005
+Notes to the Financial Statements
+2015
+29,169
+0.72 to 4.50
+-0.12 to 60.00
+0.70 to 6.61
+%
+3,643
+1,893
+18,456
+4,496
+21,328
+11,689
+3,599
+12,500
+103,473
+109,424
+Transactions during the year:
+Interest income on debt securities purchased
+Interest income on amounts due from banks and other financial institutions
+Interest income on loans and advances to customers
+Interest expense on amounts due to banks and other financial institutions
+Net trading expense
+Net fee and commission income
+Interest rate ranges during the year are as follows:
+Debt securities purchased
+Due from banks and other financial institutions
+Loans and advances to customers
+385,187
+Due to banks and other financial institutions
+435,283
+8,757
+Balances at end of the year:
+Debt securities purchased
+Due from banks and other financial institutions
+Loans and advances to customers
+Derivative financial assets
+Due to banks and other financial institutions
+Derivative financial liabilities
+Reverse repurchase agreements
+Repurchase agreements
+Financial investments
+Credit commitments
+2016
+2015
+25,971
+19,827
+427,149
+362,556
+15,442
+31,906
+3,169
+2016
+2015
+135
+Due to customers
+Derivative financial liabilities
+Credit commitments
+218
+ICBC
+2016
+2015
+1,714
+1,062
+1,802
+329
+1,151
+2,242
+8,588
+11,957
+7
+941
+43
+66
+2,003
+305
+Due to banks and other financial institutions
+Derivative financial assets
+Loans and advances to customers
+Due from banks and other financial institutions
+55
+955
+779
+314
+91
+917
+616
+350
+106
+(b) Subsidiaries
+1,285
+%
+%
+At the end of the reporting period, the Group and the Bank had capital commitments as follows:
+0 to 20.00
+0.73 to 4.50
+0 to 8.00
+0.05 to 6.46
+0.01 to 9.00
+The material balances and transactions with subsidiaries have been eliminated in the consolidated financial statements.
+(c)
+Associates and affiliates
+Balances at end of the year:
+881
+%
+The interest rates disclosed above vary across product groups and transactions depending on the maturity date, credit risk
+of counterparty and currency. In particular, given local market conditions, the spread of certain significant or long dated
+transactions can vary across the market.
+0.50 to 6.50
+0 to 6.20
+0.70 to 3.80
+0 to 5.45
+Interest rate ranges during the year are as follows:
+Debt securities purchased
+Due to customers
+2016
+2015
+16,786
+200
+16,897
+18,322
+200
+22,765
+59
+21
+5,000
+2016
+2015
+621
+722
+569
+662
+146
+Net loss on financial liabilities designated at fair value through profit or loss
+515
+Interest income on debt securities purchased
+Transactions during the year:
+Redemption of the PRC government bonds
+Interest income on the PRC government bonds
+Interest rate ranges during the year are as follows:
+Bond investments
+2.10 to 6.15
+216
+ICBC
+2.16 to 6.34
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+As at 31 December 2016, the Group holds a series of long term bonds issued by Huarong, which is under the control of
+the MOF, with an aggregate amount of RMB94,249 million (31 December 2015: RMB108,187 million). The details of the
+Huarong bonds are included in note 27.
+Other related party transactions between the Group and enterprises under the control or joint control of the MOF are
+disclosed in note 52(g) "transactions with state-owned entities in the PRC".
+(ii) Huijin
+As at 31 December 2016, Central Huijin Investment Ltd ("Huijin") directly owned approximately 34.71% (31 December
+2015: approximately 34.71%) of the issued share capital of the Bank. Huijin is a state-owned investment company
+established on 16 December 2003 under the Company Law of the PRC. Huijin has total registered and paid-in capital of
+RMB828,209 million. Huijin is a wholly-owned subsidiary of China Investment Corporation, and in accordance with the
+authorisation by the State, Huijin makes equity investments in the key state-owned financial institutions, and shall, to the
+extent of its capital contribution, exercise the rights and perform the obligations as an investor on behalf of the State in
+accordance with applicable laws, to achieve the goal of preserving and enhancing the value of state-owned financial assets.
+Huijin does not engage in other business activities, and does not intervene in the day-to-day business operations of the key
+state-owned financial institutions it controls.
+As at 31 December 2016, the Huijin Bonds held by the Bank are of an aggregate face value of RMB16.91 billion (31
+December 2015: RMB16.91 billion), with terms ranging from 3 to 30 years and coupon rates ranging from 3.16% to 4.20%
+per annum. The Huijin Bonds are government-backed and the Bank's subscription of the Huijin Bonds was conducted in the
+ordinary course of business, in compliance with relevant regulatory requirements and the corporate governance of the Bank.
+The Group entered into banking transactions with Huijin in the ordinary course of business under normal commercial terms
+and at the market rates. Details of the material transactions are as follows:
+Balances at end of the year:
+Interest receivable
+Debt securities purchased
+Due to customers
+Interest payable
+Financial liabilities designated at fair value through profit or loss
+Interest expense on due to customers
+%
+%
+3.16 to 4.20
+0.01 to 2.00
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Transactions during the year:
+Interest income on debt securities purchased
+Interest income on amounts due from banks and other financial institutions
+Interest income on loans and advances to customers
+Interest expense on amounts due to banks and other financial institutions
+Interest rate ranges during the year are as follows:
+Debt securities purchased
+Due from banks and other financial institutions
+Loans and advances to customers
+2016
+2015
+28,746
+32,756
+130
+263
+31
+1,051
+%
+16
+1,666
+%
+0.12 to 6.80
+0 to 15.00
+1.33 to 6.50
+0 to 6.95
+Notes to the Financial Statements
+217
+Annual Report 2016
+814
+158,662
+833
+14,945
+3.16 to 4.20
+0.01 to 2.99
+Huijin has equity interests in certain other banks and financial institutions under the direction of the Government. The
+Group enters into transactions with these banks and financial institutions in the ordinary course of business under normal
+commercial terms. Management considers that these banks and financial institutions are competitors of the Group.
+Significant transactions during the year conducted with these banks and financial institutions, and the corresponding
+balances as at 31 December 2016 are as follows:
+Balances at end of the year:
+Debt securities purchased
+Due from banks and other financial institutions
+Loans and advances to customers
+Derivative financial assets
+Due to banks and other financial institutions
+Derivative financial liabilities
+Due to banks and other financial institutions
+Credit commitments
+2015
+781,753
+870,280
+59,283
+702
+76,449
+2,366
+2,329
+140,601
+2,533
+13,530
+2016
+(a) Capital commitments
+215,504
+The Bank's share appreciation rights plan was approved in 2006, which allows share appreciation rights to be granted to
+eligible participants including directors, supervisors, senior management and other key personnel designated by the board of
+directors. The share appreciation rights will be granted and exercised based on the price of the Bank's H shares and will be
+valid for 10 years. As at the approval date of these financial statements, no share appreciation rights have been granted.
+(25,444)
+261,218
+235,774
+2015 final (note 18)
+Dividends-preference shares (note 18)
+Appropriation to surplus reserve (i)
+(83,150) (83,150)
+(4,450)
+(4,450)
+26,312
+26,312
+(26,312)
+Appropriation to general reserve
+Others
+Balance as at 31 December 2016
+4,799
+4,799
+(4,799)
+9
+(81)
+9
+(672)
+(26,055)
+Total comprehensive income
+Dividends - ordinary shares
+356,407
+79,375
+156,195
+175,668
+241,509
+28,489
+(1,601)
+(4,079)
+596,181
+729,783
+1,761,746
+261,218 261,218
+(26,055) 1,364
+(672)
+(81)
+(25,444)
+(25,444)
+1,364
+Other comprehensive income
+9
+79,375
+(8,854)
+(29,449)
+25,745
+Effective hedging portion of gains or losses arising from cash flow
+hedging instruments:
+Loss during the year
+Less: Income tax effect
+(781)
+(88)
+30
+(751)
+(88)
+Share of the other comprehensive income of investees accounted for
+using equity method which may be reclassified subsequently to profit or loss
+Foreign currency translation differences
+(860)
+156
+13,608
+(5,400)
+Others
+9,172
+356,407
+(2,357)
+Less: Transfer to profit or loss arising from disposal/impairment
+Income tax effect
+156,204 201,980 246,308
+2,434
+(237)
+(4,751)
+(81) 601,857 872,290
+1,909,929
+(i)
+Includes the appropriation made by overseas branches in the amount of RMB84 million (2015: RMB71 million).
+43. COMPONENTS OF OTHER COMPREHENSIVE INCOME
+Items that will not be reclassified to profit or loss:
+2016
+2015
+Share of the other comprehensive income of the investees accounted for
+using equity method which will not be reclassified to profit or loss
+Others
+15
+(3)
+Items that may be reclassified subsequently to profit or loss:
+Net (losses)/gains from change in fair value of available-for-sale financial assets
+(37,375)
+36,956
+(1,246)
+Profit for the year
+and 1 January 2016
+Balance as at 31 December 2015
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+The statement of changes in equity of the Bank during the year are set out below.
+Reserves
+Other
+Equity
+component
+of
+Foreign
+Balance as at 1 January 2015
+Issued
+share equity convertible Capital Surplus General revaluation translation
+capital instrument bonds reserve reserve reserve
+353,495 34,428
+388 148,437 149,270 218,078
+Investment currency
+Cash flow
+hedging
+Other
+reserve
+reserve
+reserve
+reserves
+Retained Total
+Subtotal profits equity
+3,852
+Notes to the Financial Statements
+(1,698)
+209
+The Bank's distributable profits are based on the retained profits of the Bank as determined under PRC GAAP and IFRSS,
+whichever is lower. The amount that the Bank's subsidiaries can legally distribute is determined by reference to their profits
+as reflected in their financial statements prepared in accordance with the accounting regulations and principles promulgated
+by the local regulatory bodies of the respective countries/regions. These profits may differ from those dealt with in these
+financial statements, which are prepared in accordance with IFRSS.
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(ii) Discretionary surplus reserve
+After making the appropriation to the statutory surplus reserve, the Bank may also appropriate its profit for the year
+determined under PRC GAAP to the discretionary surplus reserve upon approval by the shareholders in general meetings.
+Subject to the approval by the shareholders, the discretionary surplus reserve may be used to offset accumulated losses of
+the Bank, if any, and may be converted into capital.
+(iii) Other surplus reserve
+The Bank's overseas entities appropriate their profits to the surplus reserve in accordance with the relevant regulations
+promulgated by the local regulatory bodies.
+(c) General reserve
+From 1 July 2012, the Bank is required by the MOF to maintain a general reserve within equity, through the appropriation of
+profit, which should not be less than 1.5% of the year end balance of its risk assets.
+The Bank's subsidiaries appropriate their profits to the general reserve according to the applicable local regulations.
+The general reserve balance of the Bank as at 31 December 2016 amounted to RMB246,308 million (2015: RMB241,509
+million), which has reached 1.5% of the year end balance of the Bank's risk assets.
+(d) Investment revaluation reserve
+The investment revaluation reserve records the fair value changes of available-for-sale financial assets.
+(e) Foreign currency translation reserve
+The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial
+statements of the subsidiaries and branches incorporated outside Mainland China.
+(f) Cash flow hedge reserve
+The cash flow hedge reserve comprises the effective portion of the gain or loss on the hedging instrument.
+(g) Other reserves
+Other reserves represent reserves of subsidiaries and share of reserves of associates and joint ventures other than the items
+listed above.
+(h) Distributable profits
+Annual Report 2016
+(4,036)
+513,903 610,647 1,512,861
+Profit for the year
+10,285
+Dividends - ordinary shares
+2014 final (note 18)
+(91,026)
+(91,026)
+Dividends preference shares (note 18)
+Appropriation to surplus reserve (i)
+(2,331) (2,331)
+26,398
+26,398
+(26,398)
+Appropriation to general reserve
+Others
+23,431
+23,431
+(23,431)
+(3)
+(3)
+(3)
+7,761
+7,761
+88
+(388)
+-
+262,322
+262,322
+Other comprehensive income
+24,637
+97
+(43)
+24,691
+Total comprehensive income
+(75)
+24,637
+(43)
+24,691
+262,322
+287,013
+Capital injection by other equity holders
+44,947
+44,947
+Convertible bonds
+2,912
+97
+(17,515)
+20,405
+ICBC
+The aggregated amount of the investment funds sponsored and issued by the Group after 1 January 2016 but matured
+before 31 December 2016 was RMB5,244 million (The aggregated amount of the investment funds sponsored and issued by
+the Group after 1 January 2015 but matured before 31 December 2015 was RMB57,936 million).
+212
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+45. NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT
+Analysis of balances of cash and cash equivalents
+Note
+2016
+2015
+Cash on hand
+Balances with central banks other than restricted deposits
+20
+20
+84,572
+85,226
+20
+113,106
+94,843
+Nostro accounts with banks and other financial institutions with
+original maturity of three months or less
+The aggregated amount of the non-principal-guaranteed wealth management products sponsored and issued by the Group
+after 1 January 2016 but matured before 31 December 2016 was RMB252,931 million (The aggregated amount of the non-
+principal-guaranteed wealth management products sponsored and issued by the Group after 1 January 2015 but matured
+before 31 December 2015 was RMB821,477 million).
+86,312
+During the year of 2016, the amount of income received from such category of investment funds was RMB1 million. (2015:
+RMB57 million).
+(3) Unconsolidated structured entities sponsored by the Group during the year which the
+Group does not have an interest in 31 December 2016
+at fair value
+assets
+through
+profit or loss
+Receivables
+5,679
+27,593
+200
+181,376
+34,128
+3,657
+306
+306
+6,480
+39,752
+306
+90
+181,682
+38,075
+The maximum exposures to loss in the above investment funds, wealth management products, segregated asset
+management plans, trust plans and asset-backed securities are the amortised cost or fair value of the assets held by the
+Group at the reporting date in accordance with the line items of these assets recognised in the statement of financial
+positions.
+(2) Structured entities sponsored by the Group which the Group did not consolidate but
+held an interest
+The types of unconsolidated structured entities sponsored by the Group include non-principal-guaranteed wealth
+management products and investment funds. The nature and purpose of these structured entities are to generate fees
+from managing assets on behalf of investors. These structured entities are financed through the issue of notes to investors.
+Interest held by the Group includes investments in notes issued by these structured entities and fees charged by providing
+management services. As at 31 December 2016, the carrying amounts of the investments in the notes issued by these
+structured entities and fee receivables being recognised were not material in the statement of financial positions.
+As at 31 December 2016, the amount of assets held by the unconsolidated non-principal-guaranteed wealth management
+products and investment funds, which are sponsored by the Group, were RMB2,423,950 million (31 December 2015:
+RMB2,385,200 million) and RMB1,127,964 million (31 December 2015: RMB936,220 million) respectively.
+During the year of 2016, the amount of fee and commission income received from such category of non-principal-
+guaranteed wealth management products by the Group was RMB2, 169 million (2015: RMB6,076 million).
+122,082
+Placements with banks and other financial institutions with
+original maturity of three months or less
+assets
+7,191
+liabilities
+7,107
+75,081
+63,834
+100,309
+25,160
+71,025
+7,107
+Securitisation transactions
+The Group enters into securitisation transactions in the normal course of business by which it transfers credit assets to
+structured entities which issue asset-backed securities to investors.
+As the Group neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset and it
+has retained control of them, those financial assets are recognised on the statement of financial position to the extent of
+the Group's continuing involvement. The extent of the Group's continuing involvement is the extent to which the Group is
+exposed to changes in the value of the transferred assets. As at 31 December 2016, loans with an original carrying amount
+of RMB45,290 million (31 December 2015: RMB29,527 million) had been securitised by the Group under arrangements in
+which the Group retains a continuing involvement in such assets in the form of subordinated tranches. As at 31 December
+2016, the carrying amount of assets that the Group continues to recognise was RMB2,107 million (31 December 2015:
+RMB1,310 million).
+Annual Report 2016
+213
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+With respect to the securitisation of financial assets that do not qualify for derecognition, the relevant financial assets are
+not derecognised, and the consideration paid by third parties are recorded as a financial liability. As at 31 December 2016,
+the Group does not have carrying amount of transferred assets that did not qualify for derecognition and carrying amount of
+their associated liabilities (31 December 2015: RMB122 million and RMB17 million respectively).
+47. SHARE APPRECIATION RIGHTS PLAN
+25,160
+25,228
+liabilities
+assets
+249,296
+235,904
+Reverse repurchase agreements with original maturity of
+three months or less
+656,082
+903,243
+1,189,368
+1,441,298
+46. TRANSFERRED FINANCIAL ASSETS
+The Group enters into transactions in the normal course of business by which it transfers recognised financial assets to third
+parties or to structured entities. In some cases where these transfers may give rise to full or partial derecognition of the
+financial assets concerned. In other cases where the transferred assets do not qualify for derecognition as the Group has
+retained substantially all the risks and rewards of these assets, the Group continued to recognise the transferred assets.
+for-sale
+financial
+Repurchase transactions and securities lending transactions
+The following table analyses the carrying amount of the above mentioned financial assets transferred to third parties that did
+not qualify for derecognition and their associated financial liabilities:
+Repurchase agreements
+Securities lending agreements
+31 December 2016
+Carrying
+amount of
+transferred
+Carrying
+amount of
+associated
+31 December 2015
+Carrying
+amount of
+transferred
+Carrying
+amount of
+associated
+Transferred financial assets that do not qualify for derecognition mainly include debt securities held by counterparties as
+collateral under repurchase agreements and debt securities lent to counterparties under securities lending agreements.
+The counterparties are allowed to sell or repledge those securities sold under repurchase agreements in the absence of
+default by the Group, but has an obligation to return the securities at the maturity of the contract. If the securities increase
+or decrease in value, the Group may in certain circumstances require or be required to pay additional cash collateral in
+certain circumstance. The Group has determined that it retains substantially all the risks and rewards of these securities and
+therefore has not derecognised them. In addition, it recognises a financial liability for cash received as collateral.
+48. COMMITMENTS AND CONTINGENT LIABILITIES
+maturity
+investments
+Available-
+27,793
+27,793
+Segregated asset management plans
+Trust plans
+243,722
+243,722
+215,504
+12,560
+12,560
+3,657
+3,657
+Asset-backed securities
+11,214
+11,214
+7,182
+7,182
+282,255
+282,255
+259,815
+259,815
+6,189
+The following table sets out an analysis of the line items in the statement of financial position as at 31 December 2016 in
+which assets were recognised relating to the Group's interests in structured entities sponsored by third parties:
+6,189
+5,679
+210
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+44. INVOLVEMENT WITH UNCONSOLIDATED STRUCTURED ENTITIES
+(1) Structured entities sponsored by third party institutions in which the Group held an
+interest
+The Group holds an interest in some structured entities sponsored by third party institutions through investments in the
+notes issued by these structured entities. Such structured entities include investment funds, wealth management products,
+segregated asset management plans, trust plans and asset-backed securities and the Group does not consolidate these
+structured entities. The nature and purpose of these structured entities are to generate fees from managing assets on behalf
+of investors and are financed through the issue of notes to investors.
+The following table sets out an analysis of the carrying amounts of interests held by the Group as at 31 December 2016 in
+the structured entities sponsored by third party institutions:
+Group
+31 December 2016
+Carrying
+Maximum
+31 December 2015
+Carrying
+Maximum
+amount
+exposure
+amount
+exposure
+Investment funds
+8,570
+8,570
+5,679
+Wealth management products
+Investment funds
+Wealth management products
+Segregated asset management plans
+1,049
+179
+25,241
+208,582
+48,253
+Annual Report 2016
+211
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Investment funds
+Wealth management products
+Segregated asset management plans
+Trust plans
+Asset-backed securities
+Group
+31 December 2015
+Financial
+assets
+designated
+619
+9,367
+179
+12,560
+Trust plans
+Asset-backed securities
+Group
+31 December 2016
+Financial
+Available-
+assets
+designated
+at fair value
+Held-to
+maturity
+for-sale
+financial
+Held-to
+investments
+through
+profit or loss
+Receivables
+7,070
+1,500
+4,125
+2,064
+4,679
+207,963
+31,080
+assets
+24,691
+Other income/(expense), net (i)
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+China
+China
+others Eliminations
+Total
+External net interest income
+210,421
+56,386
+47,333
+24,031
+49,421
+78,677
+17,092
+24,506
+507,867
+Internal net interest (expense)/income
+(135,954)
+26,121
+10,207
+76,079
+13,620
+3,182
+8,185
+(1,440)
+Net fee and commission income
+4,639
+China
+35,803
+Rim
+River Delta
+(i)
+Including long term receivables, intangible assets, goodwill, long term deferred expenses and other non-current assets.
+2,778,412
+662,510
+441,169
+314,846
+485,726
+158,583
+249,912
+67,703
+397,963
+Annual Report 2016
+223
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Year ended 31 December 2015
+Mainland China (HO and domestic branches)
+Yangtze
+Pearl
+Bohai
+Central
+Western
+Northeastern
+Overseas and
+Head Office
+River Delta
+Credit commitments
+22,685
+21,179
+(25,271)
+(37,297)
+(34,545)
+(39,482)
+(14,593)
+(15,362)
+106
+(220,835)
+Impairment losses on:
+Loans and advances to customers
+(6,047)
+(24,946)
+(20,546)
+(11,034)
+(9,080)
+(10,984)
+(1,769)
+(1,616)
+(86,022)
+Others
+(185)
+(113)
+(176)
+(24)
+(7)
+(35,297)
+24,685
+(19,094)
+668,733
+20,588
+5,751
+8,167
+(106)
+143,391
+Other (expense)/income, net (i)
+(2,146)
+(649)
+1,082
+6,209
+227
+1,811
+(131)
+11,072
+17,475
+Operating income
+76,960
+117,661
+81,307
+131,004
+84,447
+104,258
+30,897
+42,305
+(106)
+Operating expenses
+(21)
+Other segment information:
+Total liabilities
+597
+235
+187
+93
+263
+389
+77
+218
+2,059
+Capital expenditure
+3,772
+4,747
+3,458
+5,339
+7,328
+8,948
+4,236
+17,556
+55,384
+(i)
+Including net trading income, net loss on financial assets and liabilities designated at fair value through profit or loss, net gain
+on financial investments and other operating income (net).
+Assets by geographical areas
+Including: Investments in associates and
+As at 31 December 2016
+Mainland China (HO and domestic branches)
+Amortisation
+Head Office
+14,660
+1,161
+Profit before taxation
+Income tax expense
+Profit for the year
+2,604
+2,604
+46,345
+67,388
+45,486
+73,386
+39,510
+47,199
+13,144
+30,821
+363,279
+(84,173)
+279,106
+Other segment
+information:
+Depreciation
+1,841
+2,074
+1,412
+2,198
+2,566
+3,010
+398
+22,156,102
+Yangtze
+River Delta
+Bohai
+Rim
+Other non-current assets (i)
+10,561
+5,811
+3,557
+3,985
+5,691
+7,563
+1,358
+4,417
+42,943
+Unallocated assets
+28,398
+Total assets
+24,137,265
+Liabilities by geographical areas
+6,820,411
+5,453,036
+3,318,068
+5,242,654 2,384,189 2,771,987
+1,074,621
+517,154
+(5,479,261)
+22,102,859
+Unallocated liabilities
+53,243
+246,209
+Pearl
+River Delta
+122,451
+23,418
+Central
+China
+Western
+China
+Northeastern
+China
+Overseas and
+others
+8,368,773
+5,194,868
+3,096,641
+3,626,559
+2,275,456
+2,827,331
+1,068,632
+3,129,868
+Eliminations
+(5,479,261)
+Total
+24,108,867
+joint ventures
+30,077
+30,077
+Property and equipment
+13,020
+28,803
+11,072
+17,791
+19,263
+10,391
+joint ventures
+(2)
+(971)
+54. FINANCIAL INSTRUMENTS RISK MANAGEMENT
+A description and an analysis of the major risks faced by the Group are as follows:
+The board of directors (the "Board") has the ultimate responsibility for risk management and oversees the Group's risk
+management functions through the Risk Management Committee and the Audit Committee of the Board.
+The President supervises the risk management strategies and reports directly to the Board. He chairs two management
+committees including the Risk Management Committee and the Asset and Liability Management Committee. These two
+committees formulate and make recommendations in respect of risk management strategies and policies through the
+President to the Risk Management Committee of the Board. The Chief Risk Officer assists the President to supervise and
+manage various risks.
+The Group has also assigned departments monitoring financial risks within the Group, including the Credit Management
+Department to monitor credit risk, the Risk Management Department together with the Asset and Liability Management
+Department to monitor market and liquidity risks, and the Internal Control and Compliance Department to monitor
+operational risk. The Risk Management Department is primarily responsible for coordinating and establishing a
+comprehensive risk management framework, preparing consolidated reports on credit risk, market risk and operational risk
+and reporting directly to the Chief Risk Officer.
+The Bank maintains a dual-reporting line structure at the branch level for risk management purposes. Under this structure,
+the risk management departments of the branches report to both the corresponding risk management departments at the
+Head Office and management of the relevant branches.
+Annual Report 2016
+225
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(a) Credit risk
+Credit risk is the risk of loss arising from a borrower's or counterparty's inability to meet its obligations. Credit risk can also
+arise from operational failures that result in an unauthorised or inappropriate guarantee, commitment or investment of
+funds. The Group is exposed to credit risk primarily due to loans, guarantees and other credit related commitments.
+The principal features of the Group's credit risk management function include:
+.
+Centralised credit management policies and procedures;
+Risk management rules and procedures that focus on risk control throughout the entire credit business process,
+including customer investigation and credit rating, granting of credit limits, loan evaluation, loan review and approval,
+granting of loan and post-disbursement loan monitoring;
+•
+Stringent qualification system for the loan approval officers; and
+Information management systems designed to enable a real time risk monitoring.
+To enhance the credit risk management practices, the Group also launches training programs periodically for credit officers
+at different levels.
+In addition to the credit risk exposures on credit-related assets and amounts due from or lending to banks and other
+financial institutions, credit risk also arises in other areas. For instance, credit risk exposure also arises from derivative
+financial instruments which is, however, limited to those with positive fair values, as recorded in the statement of financial
+position. In addition, the Group also makes available to its customers' guarantees which may require the Group to make
+payments on their behalf. Such payments are collected from customers based on the terms of the agreements signed. They
+expose the Group to similar risks as loans and these are mitigated by the same control processes and policies.
+The Group will normally sign an International Swaps and Derivatives Association ("ISDA") Master Agreement, a China
+Interbank Market Financial Derivatives Master Agreement ("NAFMII master agreement") with its counterparties for
+documenting over-the-counter derivative activities. Each of these master agreements provides the contractual framework
+within which derivative dealing activities are conducted. Under each of these master agreements, close-out netting shall be
+applied across all outstanding transactions covered by the agreement if either party defaults.
+Risk concentration
+Credit risk is often greater when counterparties are concentrated in one single industry or geographical location or have
+comparable economic characteristics.
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Impairment assessment
+Notes to the Financial Statements
+224
+4,995,033
+3,497,543
+4,799,262
+2,289,592
+2,732,706
+1,024,661
+810,582
+(7,372,469)
+20,345,000
+Unallocated liabilities
+64,261
+20,409,261
+Total liabilities
+Other segment information:
+Credit commitments
+558,184
+398,045
+250,410
+415,973
+149,897
+207,604
+54,608
+263,163
+2,297,884
+Including long term receivables, intangible assets, goodwill, long term deferred expenses and other non-current assets.
+ICBC
+7,568,090
+The main considerations for the loan impairment assessment include whether any payments of principal or interest are
+overdue or whether there are any liquidity problems of counterparties, credit rating downgrades, or infringement of the
+original terms of the contract. The Group addresses impairment assessment in two areas: individually assessed impairment
+and collectively assessed impairment.
+All corporate loans and discounted bills are individually reviewed for objective evidence of impairment and classified based
+on a five-tier classification system. Corporate loans and discounted bills that are classified as substandard, doubtful or loss
+are assessed individually for impairment.
+For homogeneous groups of loans, the Group uses a collective assessment approach for impairment losses. The approach
+analyses historical trends of probability of default and the amount of the consequential loss, as well as evaluates current
+economic conditions that may have a consequential impact on inherent losses in the portfolio.
+Annual Report 2016
+227
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(a) Credit risk (continued)
+Individually assessed loans with no objective evidence of impairment
+Individually assessed loans with no objective evidence of impairment are grouped together in portfolios of similar credit
+risk characteristics for the purpose of assessing a collective impairment loss. The collective impairment loss is assessed after
+taking into account:
+•
+Historical loss experience in portfolios of similar risk characteristics; and
+•
+The current economic and credit environment and, whether these, in management's experience, indicate that the
+actual level of incurred but not yet identified losses is likely to be greater or less than that suggested by historical
+experience.
+As soon as information that specifically identifies objective evidence of impairment on individual assets in a pool is available,
+those assets are excluded and individually assessed. Assets that are individually assessed for impairment and for which an
+impairment loss is or continues to be recognised are not included in a collective assessment for impairment.
+Collateral
+The amount and type of collateral required depend on the assessment of the credit risk of the counterparty. Guidelines are
+in place specifying the types of collateral and valuation parameters which can be accepted.
+Reverse repurchase business is mainly collateralised by bills, loans or investment securities. As part of the reverse repurchase
+agreements, the Group has received securities that it is allowed to sell or repledge in the absence of default by their owners.
+Fair value of collateral is shown in note 25.
+Corporate loans are mainly collateralised by properties or other assets. As at 31 December 2016, the carrying value
+of corporate loans and discounted bills covered by collateral amounted to RMB8,860,677 million (31 December 2015:
+RMB8,391,604 million), of which credit exposure of corporate loans covered by collateral amounted to RMB3,771,915
+million (31 December 2015: RMB3,712,124 million).
+Retail loans are mainly collateralised by residential properties. As at 31 December 2016, the carrying value of retail loans
+covered by collateral amounted to RMB4, 196,169 million (31 December 2015: RMB3,541,862 million), of which credit
+exposure of retail loans covered by collateral amounted to RMB3,666,608 million (31 December 2015: RMB3,027,428
+million).
+The Group prefers more liquid collateral with relatively stable market value and does not accept collateral that is illiquid,
+with difficulties in registration or high fluctuations in market value. The value of collateral should be assessed and confirmed
+by the Group or valuation agents identified by the Group. The value of collateral should adequately cover the outstanding
+balance of loans. The loan-to-value ratio depends on types of collateral, usage condition, liquidity, price volatility and
+realisation cost. All collateral has to be registered in accordance with the relevant laws and regulations. The credit officers
+inspect the collateral and assess the changes in the value of collateral regularly.
+Although collateral can be an important mitigation of credit risk, the Group grants loans based on the assessment of the
+borrowers' ability to meet obligations out of their cash flow, instead of the value of collateral. The necessity of a collateral
+is dependent on the nature of the loan. In the event of default, the Group might sell the collateral for repayment. The fair
+value of collateral of past due but not impaired loans and impaired loans are disclosed in note 54(a)(iii).
+Management monitors the market value of collateral periodically and requests additional collateral in accordance with the
+underlying agreement when it is considered necessary.
+It is the Group's policy to dispose of repossessed assets in an orderly manner. In general, the Group does not occupy
+repossessed assets for business use.
+228
+ICBC
+Homogenous groups of loans not considered individually significant
+Individually assessed loans
+National or local economic conditions that correlate with defaults on assets in the portfolio of loans.
+Adverse changes in the payment status of borrowers in the group of loans; and
+226
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(a) Credit risk (continued)
+If there is objective evidence that an impairment loss on a loan or advance has incurred on an individual basis, the amount of
+the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash
+flows discounted at the asset's original effective interest rate. The allowance for impairment loss is deducted in the carrying
+amount. The impairment loss is recognised in the statement of profit or loss. In determining allowances on an individual
+basis, the following factors are considered:
+•
+The sustainability of the counterparty's business plan;
+.
+The borrower's ability to improve performance once a financial difficulty has arisen;
+•
+Projected receipts and the expected payout should bankruptcy ensue;
+Notes to the Financial Statements
+The availability of other financial support and the realisable value of collateral; and
+•
+The timing of the expected cash flows.
+It may not be possible to identify a single, discrete event that caused the impairment, but it may be possible to identify
+impairment through the combined effect of several events. The impairment losses are evaluated at the end of each reporting
+period, unless unforeseen circumstances require more careful attention.
+Collectively assessed loans
+Loans that are assessed for impairment losses on a collective basis include the following:
+Homogeneous groups of loans, including all personal loans; and
+•
+.
+All loans for which no impairment can be identified individually, either due to the absence of any loss events or due to
+an inability to measure reliably the impact of potential loss events on future cash flows.
+For the purpose of collective assessment, assets are grouped on the basis of similar credit risk characteristics that are
+indicative of the debtors' ability to pay all amounts due according to the contractual terms.
+Objective evidence of impairment losses on a collective basis consists of observable data indicating a measurable decrease in
+the estimated future cash flows from a portfolio of loans since the initial recognition of those loans, including:
+•
+.
+(443)
+Liabilities by geographical areas
+Total assets
+Depreciation
+1,823
+2,178
+1,435
+2,131
+2,528
+2,968
+1,117
+380
+14,560
+Amortisation
+779
+267
+104
+144
+261
+372
+68
+300
+2,295
+Capital expenditure
+2,488
+6,026
+1,081
+1,906
+Other segment information:
+2,727
+277,720
+363,235
+Operating profit
+51,634
+57,305
+35,314
+82,649
+40,815
+53,771
+14,533
+24,884
+360,905
+Share of profits of associates and
+joint ventures
+Profit before taxation
+Income tax expense
+Profit for the year
+2,330
+2,330
+51,634
+57,305
+35,314
+82,649
+40,815
+53,771
+14,533
+27,214
+(85,515)
+22,209,780
+3,649
+38,487
+joint ventures
+24,185
+24,185
+Property and equipment
+14,164
+29,480
+11,843
+18,844
+19,906
+24,329
+10,771
+95,089
+224,426
+Other non-current assets (i)
+10,717
+5,839
+3,086
+4,031
+5,610
+7,209
+1,318
+3,970
+41,780
+Unallocated assets
+21,066
+Including: Investments in associates and
+1,137
+22,188,714
+2,450,563
+57,501
+(i)
+Including net trading income, net loss on financial assets and liabilities designated at fair value through profit or loss, net gain
+on financial investments and other operating income (net).
+(i)
+As at 31 December 2015
+Mainland China (HO and domestic branches)
+Head Office
+Yangtze
+River Delta
+Pearl
+River Delta
+Bohai
+Rim
+Central
+China
+Western
+China
+Northeastern
+China
+Overseas and
+others
+Eliminations
+Total
+Assets by geographical areas
+9,142,237
+4,862,465
+3,366,173
+3,633,597
+2,216,719
+2,819,807
+1,069,622
+(7,372,469)
+Share of profits of associates and
+•
+28,217
+66,856
+263
+363,279
+Income tax expense
+(84,173)
+Profit for the year
+Other segment information:
+Depreciation
+Amortisation
+279,106
+6,535
+5,254
+2,578
+293
+14,660
+948
+657
+397
+57
+2,059
+Capital expenditure
+24,779
+19,758
+9,716
+1,131
+131,327
+55,384
+164,833
+2,604
+641,681
+Operating expenses
+(76,432)
+(93,718)
+(16,628)
+(6,334)
+(193,112)
+Impairment losses on:
+Loans and advances to customers
+(73,050)
+(13,088)
+(86,138)
+Others
+(83)
+(1,004)
+(669)
+(1,756)
+Operating profit/(loss)
+164,833
+131,327
+66,856
+(2,341)
+360,675
+Share of profits of associates and joint ventures
+2,604
+Profit before taxation
+4,662
+As at 31 December 2016
+8,914,597
+(ii)
+Including long term receivables, intangible assets, goodwill, long term deferred expenses and other non-current assets.
+Annual Report 2016
+221
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Year ended 31 December 2015
+Corporate
+Personal
+banking
+banking
+Treasury
+operations
+Others
+Total
+External net interest income
+287,137
+26,963
+193,767
+507,867
+Internal net interest (expense)/income
+(45,613)
+152,758
+(107,145)
+Net fee and commission income
+78,211
+Including net trading income, net loss on financial assets and liabilities designated at fair value through profit or loss, net gain
+on financial investments and other operating income (net).
+Segment assets
+(i)
+647,448
+4,245,097
+10,840,773
+136,798
+24,137,265
+Including: Investments in associates and joint ventures
+30,077
+30,077
+Property and equipment
+Other non-current assets (ii)
+99,810
+19,817
+Segment liabilities
+10,088,166
+79,878
+7,189
+8,376,975
+39,045
+27,476
+246,209
+4,547
+11,390
+42,943
+3,536,514
+154,447
+22,156,102
+Other segment information:
+Credit commitments
+2,130,964
+2,778,412
+64,709
+84,488
+314,398
+Transactions during the year:
+Interest expense on due to customers
+Interest rate ranges during the year are as follows:
+Due to customers
+2
+%
+0 to 1.30
+%
+0.35 to 1.15
+In the opinion of management, the transactions between the Group and the aforementioned parties were conducted in the
+ordinary course of business under normal terms and conditions and at market rates.
+(e) Key management personnel
+The key management personnel are those persons who have the authority and responsibility to plan, direct and control
+the activities of the Group, directly or indirectly, including members of the board of directors, the supervisory board and
+executive officers.
+The aggregate compensation for the year, other than those for the personnel disclosed in note 13 above, is as follows:
+Short term employment benefits
+Post-employment benefits
+2016
+RMB'000
+2,665
+159
+2015
+RMB'000
+6,699
+245
+2,824
+6,944
+Note: The above remuneration before tax payable to key management personnel for 2015 represents the total amount of annual
+remuneration, which includes the amount disclosed in the 2015 Annual Report.
+The total compensation packages for senior management of the Bank for the year ended 31 December 2016 have not
+been finalised in accordance with the regulations of the PRC relevant authorities. The remuneration not yet accrued is not
+expected to have a significant impact on the Group's and the Bank's 2016 financial statements. The total compensation
+packages will be further disclosed when determined by the relevant authorities.
+Annual Report 2016
+219
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Companies or corporations, in which the key management of the Group or their close relatives are shareholders or key
+management personnel who are able to exercise control directly or indirectly are also considered as related parties of the Group.
+The transactions between the Group and the aforementioned parties for the year are as follows:
+2015
+2016
+2016
+227
+360,675
+2016
+2015
+Transactions during the year:
+Interest income on amounts due from banks and other financial institutions
+Interest income on loans and advances to customers
+Interest expense on amounts due to banks and other financial institutions
+Interest rate ranges during the year are as follows:
+Due from banks and other financial institutions
+Loans and advances to customers
+Due to banks and other financial institutions
+Due to customers
+57
+163
+104
+552
+65
+%
+0 to 9.81
+1.77 to 2.11
+0 to 4.92
+0 to 0.30
+129
+%
+0 to 8.99
+1.61 to 2.69
+0 to 4.51
+0 to 0.45
+The major transactions between the Group and the associates and their affiliates mainly comprised due from banks and
+other financial institutions, loans and advances to customers and due to banks and other financial institutions and the
+corresponding interest income and interest expense. In the opinion of management, the transactions between the Group
+and the associates and their affiliates were conducted under normal commercial terms and conditions.
+(d) Joint ventures and affiliates
+Due to customers
+2016
+2015
+16
+238,133
+RMB'000
+2,693
+Personal
+banking
+banking
+Treasury
+operations
+Others
+External net interest income
+242,432
+30,433
+198,981
+Total
+471,846
+Internal net interest (expense)/income
+(13,456)
+142,221
+(128,765)
+Net fee and commission income
+79,012
+65,882
+79
+144,973
+6,410
+(403)
+14,193
+4,662
+24,862
+Operating income
+Corporate
+2015
+RMB'000
+Year ended 31 December 2016
+Transactions between segments mainly represent the provision of funding to and from individual segments. These
+transactions are conducted on terms determined with reference to the average cost of funding and have been reflected
+in the performance of each segment. Net interest income and expenses arising on internal fund transfer are referred to
+as "internal net interest income/expense". Net interest income and expenses relating to third parties are referred to as
+"external net interest income/expense".
+Loans
+There were no other material transactions and balances with key management personnel on an individual basis for the
+year ended 31 December 2016. The Group enters into banking transactions with key management personnel in the normal
+course of business.
+The aggregated balance of loans and credit card overdraft to the person which are considered as related parties according
+to the relevant rules of Shanghai Stock Exchange was RMB28.58 million as at 31 December 2016 (31 December 2015:
+RMB6.86 million).
+In the opinion of management, the transactions between the Group and the aforementioned parties were conducted in the
+ordinary course of business under normal terms and conditions and at market rates.
+(f) Annuity Fund
+Apart from the obligations for defined contributions to the Annuity Fund, Annuity Fund does not hold any share or bond
+issued by the Group as at 31 December 2016 (31 December 2015: Nil).
+(g) Transactions with state-owned entities in the PRC
+The Group operates in an economic environment predominated by enterprises directly or indirectly owned and/or controlled
+by the Government through its authorities, affiliates or other organizations (collectively the "state-owned entities"). During
+the year, the Group entered into extensive banking transactions with these state-owned entities including, but not limited
+to, lending and deposit taking, taking and placing of interbank balances, entrusted lending and the provision of intermediary
+services, the sale, purchase, underwriting and redemption of bonds issued by other state-owned entities, and the sale,
+purchase, and leasing of properties and other assets.
+Management considers that transactions with state-owned entities are activities conducted in the ordinary course of business,
+and that the dealings of the Group have not been significantly or unduly affected by the fact that the Group and those state-
+owned entities are ultimately controlled or owned by the Government. The Group has also established pricing policies for
+products and services and such pricing policies do not depend on whether or not the customers are state-owned entities.
+53. SEGMENT INFORMATION
+(a) Operating segments
+For management purposes, the Group is organised into different operating segments, namely corporate banking, personal
+banking and treasury operations, based on internal organisational structure, management requirement and internal
+reporting system.
+Corporate banking
+The corporate banking segment covers the provision of financial products and services to corporations, government agencies
+and financial institutions. The products and services include corporate loans, trade financing, deposit-taking activities,
+corporate wealth management services, custody activities and various types of corporate intermediary services, etc.
+Personal banking
+The personal banking segment covers the provision of financial products and services to individual customers. The products
+and services include personal loans, deposit-taking activities, card business, personal wealth management services and
+various types of personal intermediary services, etc.
+Treasury operations
+The treasury operations segment covers the Group's treasury operations which include money market transactions,
+investment securities, foreign exchange transactions and the holding of derivative positions, for its own accounts or on
+behalf of customers, etc.
+220
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Others
+This segment covers the Group's assets, liabilities, income and expenses that are not directly attributable or cannot be
+allocated to a segment on a reasonable basis.
+Management monitors the operating results of the Group's business units separately for the purpose of making decisions
+about resources allocation and performance assessment. Segment information is prepared in conformity with the accounting
+policies adopted for preparing and presenting the financial statements of the Group.
+Segment revenues, expenses, results, assets and liabilities include items directly attributable to a segment as well as those
+that can be allocated on a reasonable basis. The basis for allocation is mainly based on occupation of or contribution to
+resources. Income taxes are managed on a group basis and are not allocated to operating segments.
+471
+Balances at end of the year:
+Other income, net (i)
+30,708
+471,846
+Internal net interest (expense)/income
+(142,386)
+29,542
+13,398
+70,362
+15,497
+7,927
+7,796
+(2,136)
+Net fee and commission income
+4,357
+38,348
+23,417
+24,919
+19,993
+20,293
+6,068
+7,600
+(22)
+144,973
+Other income, net (i)
+786
+923
+14,378
+1,294
+67,278
+21,868
+222
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Year ended 31 December 2016
+Mainland China (HO and domestic branches)
+Yangtze
+Pearl
+Bohai
+Central
+Western
+Northeastern
+Head Office
+River Delta
+River Delta
+Rim
+China
+China
+China
+Overseas and
+others
+Eliminations
+Total
+External net interest income
+207,530
+44,617
+41,865
+43,602
+ICBC
+6,342
+1,534
+(12,278)
+(18,194)
+(10,489)
+(16,384)
+(2,549)
+(2,827)
+(86,138)
+Others
+24
+(85)
+(333)
+(104)
+(74)
+(14)
+(1,095)
+(1,756)
+Operating profit
+46,345
+67,388
+45,486
+73,386
+39,510
+47,199
+143,391
+13,144
+(15,477)
+611
+(7,940)
+Impairment (losses)/reversal on:
+209
+13,163
+24,862
+Operating income
+70,287
+113,430
+79,974
+123,491
+79,703
+97,032
+28,451
+49,335
+(22)
+641,681
+Operating expenses
+(16,026)
+(30,480)
+(21,877)
+(31,807)
+(29,630)
+(33,374)
+(12,744)
+(17,196)
+22
+(193,112)
+Loans and advances to customers
+branches located outside Mainland China, domestic and overseas subsidiaries, and investments in
+associates and joint ventures.
+(75)
+including Chongqing, Sichuan, Guizhou, Yunnan, Guangxi, Shaanxi, Gansu, Qinghai, Ningxia,
+Xinjiang, Inner Mongolia and Tibet; and
+121,212
+74,444
+(916)
+360,905
+Share of profits of associates and joint ventures
+2,330
+2,330
+Profit before taxation
+166,165
+121,212
+74,444
+1,414
+363,235
+Income tax expense
+(85,515)
+Profit for the year
+Other segment information:
+Depreciation
+Amortisation
+277,720
+6,534
+5,109
+2,625
+292
+14,560
+166,165
+1,053
+Operating profit/(loss)
+(568)
+15
+including Liaoning, Heilongjiang, Jilin and Dalian.
+6,179
+5,519
+5,762
+17,475
+Operating income
+325,914
+92,612
+5,762
+668,733
+Operating expenses
+(95,797)
+(100,962)
+(17,966)
+(6,110)
+(220,835)
+Impairment losses on:
+Loans and advances to customers
+(63,752)
+(22,270)
+(86,022)
+Others
+(200)
+(202)
+(971)
+704
+244,445
+64
+3,379,557
+112,712
+20,409,261
+Other segment information:
+including Beijing, Tianjin, Hebei, Shandong and Qingdao;
+Credit commitments
+1,759,175
+538,709
+2,297,884
+Including net trading income, net loss on financial assets and liabilities designated at fair value through profit or loss, net gain
+on financial investments and other operating income (net).
+(ii) Including long term receivables, intangible assets, goodwill, long term deferred expenses and other non-current assets.
+41,780
+(b) Geographical information
+The distribution of the geographical areas is as follows:
+Mainland China (Head Office and domestic branches):
+Head Office ("HO"):
+Yangtze River Delta:
+Pearl River Delta:
+Bohai Rim:
+Central China:
+Western China:
+Northeastern China:
+Overseas and others:
+the HO business division (including institutions directly controlled by the HO and their offices);
+including Shanghai, Jiangsu, Zhejiang and Ningbo;
+including Shanxi, Henan, Hubei, Hunan, Anhui, Jiangxi and Hainan;
+including Guangdong, Shenzhen, Fujian and Xiamen;
+The Group operates principally in Mainland China, and also has branches and subsidiaries operating outside Mainland China
+(including: Hong Kong, Macau, Singapore, Frankfurt, Luxembourg, Seoul, Tokyo, London, Almaty, Jakarta, Moscow, Doha,
+Dubai, Abu Dhabi, Sydney, Toronto, Kuala Lumpur, Hanoi, Bangkok, New York, Karachi, Mumbai, Phnom Penh, Vientiane,
+Lima, Buenos Aires, Sao Paulo, Auckland, Kuwait City, Mexico City, Yangon, Riyadh and Istanbul, etc.).
+11,083
+(i)
+224,426
+2,295
+Capital expenditure
+25,873
+20,045
+5,077
+1,189
+57,501
+As at 31 December 2015
+Segment assets
+8,427,930
+3,587,372
+10,075,355
+119,123
+10,394
+Including: Investments in associates and joint ventures
+Property and equipment
+30,156
+22,209,780
+35,629
+69,444
+7,148
+7,843,009
+9,073,983
+Segment liabilities
+18,472
+474
+Other non-current assets (ii)
+89,197
+24,185
+24,185
+33,290
+through profit or loss
+277
+64
+42
+204,917
+19
+50
+Financial assets designated at fair value
+12
+901
+Derivative financial assets
+Reverse repurchase agreements
+18,916
+2,746
+1,347
+1,726
+792,876
+206
+843
+7,268
+206,282
+238
+84,112
+95
+China
+China
+China
+792,876
+16,509
+30,432
+22,002
+and others
+71,382
+Total
+2,909,988
+Due from banks and
+other financial institutions
+526,428
+4,265
+5,133
+21,434
+1,763
+949
+555
+212,041
+772,568
+Financial assets held for trading
+115,855
+115,950
+Loans and advances to customers
+28,973
+2,237,047
+875,753
+54,154
+34,253
+237,336
+19,189
+20,394
+2,642
+53,182
+1,296,903
+Others
+-Available-for-sale financial assets
+136,668
+10,966
+20,274
+11,813
+13,253
+3,177
+4,776
+Total maximum credit risk exposure
+Bohai Rim
+219,948
+Credit commitments
+19,021
+2,813,091
+38,125
+9,607
+1,513,330
+1,977,195
+1,636,115
+2,130,405
+654,867
+405,176
+11,026,476
+Financial investments
+- Receivables
+327,410
+635
+484
+5,508
+4,260
+302
+240
+338,839
+-Held-to-maturity investments
+2,647,078
+42,541
+21,454
+13,469
+11,844
+472,341
+Delta
+72,786
+44,072
+2,546,091
+1,783,466
+2,264,366
+691,375
+572,980
+12,033,200
+Financial investments
+- Receivables
+255,701
+153
+494
+2,120,405
+2,756
+312
+240
+263,456
+-Held-to-maturity investments
+2,685,913
+35,640
+17,402
+16,551
+27,706
+39,190
+3,800
+1,704,380
+2,362,003
+534,225
+182
+270,197
+8,459,693
+558,584
+9,018,277
+193
+205
+46
+917
+272,118
+Derivative financial assets
+47,920
+3,107
+2,255
+1,634
+178
+640
+416
+6,742
+62,892
+Reverse repurchase agreements
+501,776
+520
+502,296
+Loans and advances to customers
+9,607
+66,674
+2,876,081
+1,084,057
+1,874,336
+2,376,379
+716,756
+22,068,516
+497,717
+3,240,626
+168,277
+253,367
+69,844
+2,042,613
+2,629,746
+2,742,909
+786,600
+Yangtze
+North
+Head
+Office
+River Pearl River
+Delta
+Central
+Western
+eastern
+Overseas
+Balances with central banks
+31 December 2015
+The compositions of each geographical distribution above are set out in note 53(b), except that "overseas and others" does
+not include domestic and overseas subsidiaries.
+1,085,954
+275,895 2,713,875
+1,361,849 24,782,391
+329,705
+2,153,682
+51,435
+29,902
+227,690
+20,845
+26,833
+2,408
+89,157
+1,532,327
+Others
+170,667
+15,449
+13,374
+18,327
+13,000
+14,371
+3,130
+4,626
+252,944
+Credit commitments
+Total maximum credit risk exposure
+8,922,323
+664,711
+9,587,034
+2,525,882
+454,359
+2,980,241
+1,823,977
+-Available-for-sale financial assets
+2,427,147
+412,366
+2,839,513
+719,993
+13,056,846
+2,566,066
+432,707
+2,998,773
+10,979,700
+145,475
+173,857
+11,299,032
+(272,556)
+11,026,476
+232
+ICBC
+(a) Credit risk (continued)
+Notes to the Financial Statements
+11,980,647
+127,030
+205,133
+12,312,810
+(279,610)
+12,033,200
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+The balance of loans and advances to customers of the Group and the Bank that are neither past due nor impaired analysed
+by five-tier classification and by collateral are as follows:
+Group
+2016
+Pass
+Special
+mention
+Total
+Pass
+2015
+Special
+mention
+Total
+Unsecured loans
+Neither past due nor impaired
+3,445,069
+11,599,446
+154,502
+179,518
+11,933,466
+(280,654)
+11,652,812
+(289,512)
+3,541,862
+4,108,440
+3,471,539
+Discounted bills
+Total for loans and advances to customers
+522,052
+11,933,466
+708,339
+12,312,810
+511,707
+11,299,032
+(iii) Loans and advances to customers
+The total credit risk exposures of loans and advances to customers are summarised as follows:
+12,767,334
+Group
+2016
+2015
+2016
+2015
+Neither past due nor impaired
+Past due but not impaired
+Impaired
+12,706,016
+139,029
+211,801
+13,056,846
+Less: Allowance for impairment losses
+Bank
+Guaranteed loans
+1,676,309
+Loans secured by mortgages
+Group
+2016
+2015
+Corporate
+loans and
+Personal
+advances
+loans
+Total
+Corporate
+loans and
+advances
+Personal
+loans
+The following tables present the ageing analysis of each type of loans and advances to customers of the Group and the Bank
+that are subject to credit risk which are past due but not impaired as at the end of the reporting period:
+Total
+Less than one month
+57,540
+17,324
+74,864
+68,926
+15,913
+84,839
+One to two months
+259
+13,414
+Past due for:
+Past due but not impaired
+36,398 3,172,254
+118,830 1,471,205
+184,160 4,886,116
+30,412 1,450,125
+369,800 10,979,700
+58,996 3,435,130 3,135,856
+136,101 1,690,207 1,352,375
+215,490 5,307,521 4,701,956
+26,290 1,547,789 1,419,713
+436,877 11,980,647 10,609,900
+5,561,633
+Pledged loans
+1,570,704
+12,253,715
+60,195 3,505,264
+137,312 1,813,621 1,425,870
+227,619 5,789,252 5,131,186
+27,175 1,597,879 1,454,131
+452,301 12,706,016 11,220,411
+3,209,224
+38,155 3,247,379
+119,735 1,545,605
+189,839 5,321,025
+31,306 1,485,437
+379,035 11,599,446
+Bank
+2016
+Pass
+Special
+mention
+Total
+Pass
+2015
+Special
+mention
+Total
+Unsecured loans
+3,376,134
+Guaranteed loans
+1,554,106
+Loans secured by mortgages
+5,092,031
+Pledged loans
+1,521,499
+11,543,770
+4,196,169
+Subtotal for personal loans
+712,843
+673,362
+Transportation, storage and postal services
+1,640,498
+1,551,248
+1,553,297
+1,458,156
+Manufacturing
+1,550,544
+1,603,631
+1,487,718
+1,527,906
+2015
+Production and supply of electricity,
+891,870
+835,616
+860,182
+799,646
+Leasing and commercial services
+Wholesale and retail
+Real estate
+828,686
+724,246
+792,786
+heating, gas and water
+2016
+2015
+2016
+1,701,750
+155,694
+1,857,444
+2,224,964
+693,945
+792,851
+20,526,211
+211,347
+57,204
+192,852
+2,289,444
+2,436,311
+751,149
+985,703 22,815,655
+The compositions of each geographical distribution above are set out in note 53(b), except that "overseas and others" does
+not include domestic and overseas subsidiaries.
+Annual Report 2016
+231
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(a) Credit risk (continued)
+By industry distribution
+The credit risk exposures of the Group mainly comprise loans and advances to customers and investments in securities.
+Details of the composition of the Group's investments in debt securities are set out in note 54(a)(iv) to the financial
+statements. The composition of the Group's and of the Bank's gross loans and advances to customers by industry is analysed
+as follows:
+Group
+Bank
+696,444
+1,659,795
+268,690
+1,928,485
+776,739
+723,799
+136,799
+137,497
+127,104
+128,682
+Others
+397,951
+409,583
+320,923
+326,232
+Subtotal for corporate loans
+Science, education, culture and sanitation
+8,140,684
+7,496,031
+7,315,786
+Personal mortgage and business loans
+3,497,110
+2,811,288
+3,435,078
+2,758,696
+Others
+699,059
+730,574
+7,869,552
+213,570
+195,771
+226,619
+821,903
+642,423
+562,917
+495,609
+453,665
+Water, environment and
+public utility management
+536,718
+472,791
+520,598
+463,172
+Mining
+274,273
+280,556
+244,543
+261,988
+Finance
+251,733
+198,069
+173,701
+164,422
+Construction
+212,450
+866,779
+119
+1,083,560
+Financial assets designated at fair value
+183,315
+Financial assets designated at fair value
+through profit or loss
+119
+259
+182
+270,197
+193
+Derivative financial assets
+40,803
+47,540
+3,107
+1,634
+178
+2015
+205
+46
+13,943
+285,144
+640
+416
+45,419
+2,255
+94,452
+135,775
+797,473
+and others
+Total
+Balances with central banks
+2,860,191
+44,528
+50,706
+84,806
+23,158
+29,242
+9,372
+Financial assets held for trading
+164,213
+Due from banks and
+other financial institutions
+529,573
+11,524
+1,347
+449
+1,970
+1,089
+162
+251,359
+3,266,216
+Reverse repurchase agreements
+483,320
+272,307
+27,706
+39,190
+9,607
+148,504
+2,973,042
+- Available-for-sale financial assets
+51,435
+29,902
+227,690
+20,845
+16,551
+26,833
+286,761
+1,729,434
+Others
+170,596
+15,449
+13,374
+18,327
+13,000
+14,371
+3,130
+2,408
+17,402
+35,640
+2,678,442
+755,627
+Loans and advances to customers
+534,225
+2,361,303
+1,704,380
+2,112,523
+1,783,466
+2,264,366
+691,375
+1,315,696
+12,767,334
+Financial investments
+- Receivables
+236,101
+153
+494
+2,756
+3,800
+312
+240
+47,514
+291,370
+-Held-to-maturity investments
+China
+China
+China
+Bohai Rim
+115,950
+Financial assets designated at fair value
+through profit or loss
+285,144
+210,434
+272,118
+206,282
+Derivative financial assets
+94,452
+78,870
+135,775
+62,892
+Reverse repurchase agreements
+Loans and advances to customers
+755,627
+12,767,334
+996,333
+11,652,812
+502,296
+792,876
+12,033,200
+11,026,476
+Financial investments
+33,290
+132,465
+183,315
+Financial assets held for trading
+7,437
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(a) Credit risk (continued)
+(i) Maximum exposure to credit risk without taking account of any collateral and other credit
+enhancements
+As at the end of the reporting period, the maximum credit risk exposure of the Group and of the Bank without taking
+account of any collateral and other credit enhancements is set out below:
+Group
+Bank
+2016
+2015
+2016
+2015
+Balances with central banks
+3,266,216
+2,974,407
+3,209,722
+2,909,988
+Due from banks and other financial
+institutions
+797,473
+683,793
+927,705
+772,568
+Receivables
+67,478
+291,370
+263,456
+(ii) Risk concentrations
+Credit risk is often greater when counterparties are concentrated in one single industry or geographic location or have
+comparable economic features. In addition, different geographic areas and industrial sectors have their unique characteristics
+in terms of economic development, and could present a different credit risk.
+Annual Report 2016
+229
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(a) Credit risk (continued)
+By geographical distribution
+The following tables set out the breakdown of the Group's and the Bank's maximum credit risk exposure without taking
+account of any collateral and other credit enhancements, as categorised by geographical distribution:
+22,815,655
+Group
+Yangtze
+North
+Head
+Office
+River Pearl River
+Delta
+Central
+Western
+eastern
+Overseas
+Delta
+31 December 2016
+24,782,391
+23,952,537
+2,289,444
+Held-to-maturity investments
+2,973,042
+2,870,353
+2,876,081
+338,839
+2,813,091
+― Available-for-sale financial assets
+Others
+1,729,434
+1,430,266
+1,532,327
+1,296,903
+315,725
+272,777
+252,944
+219,948
+23,459,132
+21,654,653
+22,068,516
+20,526,211
+Credit commitments
+Total maximum credit risk exposure
+2,778,412
+26,237,544
+2,297,884
+2,713,875
+352,143
+315,725
+8,752,705
+2,523,398
+11,813
+13,253
+3,177
+57,630
+272,777
+8,335,564
+2,427,092
+Credit commitments
+Total maximum credit risk exposure
+558,184
+8,893,748
+20,274
+398,045
+2,825,137
+2,559,122
+415,973
+2,975,095
+1,701,458
+2,224,317
+693,752
+2,058,094 21,654,653
+149,897
+207,604
+1,851,355
+2,431,921
+54,608
+748,360
+1,655,254
+250,410
+1,905,664
+10,966
+19,021
+136,643
+13,304
+352,143
+-Held-to-maturity investments
+2,643,343
+42,541
+21,454
+13,469
+11,844
+28,973
+9,607
+99,122
+2,870,353
+- Available-for-sale financial assets
+875,753
+54,154
+34,253
+237,336
+19,189
+20,394
+2,642
+186,545
+1,430,266
+Others
+263,163
+2,321,257 23,952,537
+240
+2,297,884
+230
+44,528
+50,706
+84,806
+23,158
+29,242
+9,372
+107,719
+3,209,722
+Due from banks and
+other financial institutions
+2,860,191
+645,979
+5,282
+543
+1,990
+1,220
+162
+259,221
+927,705
+Financial assets held for trading
+135,775
+135,775
+13,308
+Balances with central banks
+Total
+and others
+ICBC
+(a)
+Credit risk (continued)
+Bank
+31 December 2016
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Yangtze
+North
+Head
+River
+Pearl River
+Central
+Western
+eastern
+Overseas
+Office
+Delta
+Delta
+Bohai Rim
+China
+China
+China
+The compositions of each geographical distribution above are set out in note 53(b).
+through profit or loss
+302
+5,508
+Balances with central banks
+2,546,091
+Yangtze
+River Delta
+66,674
+Pearl River
+Central
+Western
+eastern
+Delta
+Bohai Rim
+China
+Head
+Office
+China
+Overseas
+and others
+72,786
+84,112
+16,509
+30,432
+22,002
+135,801
+Total
+2,974,407
+Due from banks and
+other financial institutions
+China
+North
+31 December 2015
+The compositions of each geographical distribution above are set out in note 53(b).
+1,820,042
+2,734,933
+1,874,316
+2,376,248
+716,756
+2,660,734
+23,459,132
+Credit commitments
+Total maximum credit risk exposure
+662,510
+9,415,215
+441,169
+2,964,567
+314,846
+2,134,888
+485,726
+3,220,659
+158,583
+249,912
+67,703
+397,963
+2,778,412
+2,032,899
+2,626,160
+784,459
+3,058,697
+26,237,544
+411,713
+4,260
+4,210
+21,413
+843
+54,006
+78,870
+Reverse repurchase agreements
+788,380
+207,953
+996,333
+Loans and advances to customers
+472,341
+2,237,047
+206
+1,513,330
+1,636,115
+2,129,451
+654,867
+1,039,389
+11,652,812
+Financial investments
+- Receivables
+327,410
+635
+484
+1,970,272
+238
+1,726
+1,347
+1,471
+1,256
+362
+242,776
+683,793
+Financial assets held for trading
+115,855
+95
+16,515
+132,465
+Financial assets designated at fair value
+through profit or loss
+277
+64
+42
+204,917
+19
+50
+12
+5,053
+210,434
+Derivative financial assets
+2,746
+592
+20,851
+17,758
+7,870
+2,534,397
+1,593,183
+12,853
+5,006,699
+Investments in associates and joint ventures
+30,077
+30,077
+Property and equipment
+246,209
+246,209
+610,237
+Others
+44,195
+28,506
+Total assets
+1,035,584
+1,911,679
+1,311,953
+53,039
+3,903,389
+33,428
+5,829,888
+35,983
+6,810,136
+41,900
+377,080
+185,303
+70,726
+Financial investments
+14,260
+36,078
+205,253
+23,791
+4,108
+285,144
+Derivative financial assets
+254
+14,989
+20,320
+39,732
+14,489
+4,668
+94,452
+Loans and advances to customers
+62,087
+874,345
+774,633
+2,785,447
+2,970,082
+5,144,336
+156,404
+12,767,334
+614,131
+3,334,636
+24,137,265
+Liabilities:
+51,580
+2,606,105
+Certificates of deposit
+29,968
+67,031
+103,774
+17,201
+453
+218,427
+Due to customers
+9,783,195
+859,223
+1,286,200
+3,705,472
+2,185,850
+5,362
+17,825,302
+Debt securities issued
+6,006
+8,318
+13,953
+136,514
+193,146
+24,320
+206
+239,314
+816,224
+Due to central banks
+118
+427
+545
+Financial liabilities designated at fair value
+through profit or loss
+59,279
+75,000
+168,142
+46,949
+15,144
+2,238
+366,752
+Derivative financial liabilities
+409
+10,099
+21,143
+36,924
+15,687
+5,698
+89,960
+Due to banks and other financial institutions (**)
+1,283,492
+191,175
+1,448
+through profit or loss
+Financial assets designated at fair value
+24
+Corporate entities
+Less: Individual allowance for
+impairment losses
+Subtotal
+Total
+(*)
+107
+107
+24
+107
+131
+(24)
+(46)
+(70)
+61
+61
+314,159
+2,813,091
+1,296,903
+115,950
+22,009
+4,562,112
+24
+Impaired debt securities above are mainly determined based on individual assessments. In determining whether a debt security
+is impaired, the Bank considers the evidence of a loss event and the decreases in estimated future cash flows. No collateral
+was held by the Bank as security of the impaired debt securities.
+Banks and other financial institutions
+4,562,051
+40,572
+11,818
+404,528
+33,127
+10,028
+500,073
+Subtotal
+314,159
+2,813,094
+1,296,842
+115,950
+22,009
+4,562,054
+Less: Collective allowance for
+impairment losses
+(3)
+(3)
+Subtotal
+314,159
+2,813,091
+1,296,842
+115,950
+22,009
+Impaired (*)
+357,937
+236
+Notes to the Financial Statements
+436,282
+11,639
+18,517
+47,281
+2,837,069
+3,350,788
+Due from banks and
+other financial institutions (*)
+158,433
+849,479
+244,926
+228,917
+71,304
+41
+1,553,100
+Financial assets held for trading
+46,100
+25,488
+102,658
+935
+8,134
+6,016
+189,331
+Cash and balances with central banks
+ICBC
+Assets:
+Undated
+(***)
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(b) Liquidity risk
+Liquidity risk is the risk that funds will not be sufficient or will not be raised at a reasonable cost in a timely manner to meet
+the need of asset growth or repayment of debts due, although remaining solvent. This may arise from amount or maturity
+mismatches of assets and liabilities.
+The Group manages its liquidity risk through the Asset and Liability Management Department and aims at:
+•
+•
+•
+optimising the structure of assets and liabilities;
+maintaining the stability of the deposit base;
+projecting cash flows and evaluating the level of current assets; and
+in terms of liquidity of the branches, maintaining an efficient internal fund transfer mechanism.
+(i) Analysis of the remaining maturity of the assets and liabilities
+The Group and the Bank's expected remaining maturity of its financial instruments may vary significantly from the following
+analysis. For example, demand deposits from customers are expected to maintain a stable or increasing balance although
+they have been classified as repayable on demand in the following tables.
+Group
+31 December 2016
+Overdue/
+repayable
+on demand
+Less than
+one month
+One to
+three
+months
+Three
+months to
+one year
+One to five
+years
+More than
+five years
+Total
+Corporate entities
+Others
+300,535
+59,151
+81,382
+122,790
+22,124
+17,267
+1,213
+303,927
+Derivative financial liabilities
+512
+11,467
+through profit or loss
+12,890
+17,170
+6,232
+76,826
+Due to banks and other financial institutions (**)
+1,541,535
+590,578
+178,260
+210,401
+45,149
+37,128
+28,555
+Financial liabilities designated at fair value
+210
+160
+224,426
+Others
+270,430
+51,295
+9,188
+53,048
+23,629
+33,018
+39,157
+479,765
+Total assets
+1,018,365
+2,021,133
+1,153,259
+4,099,861
+5,485,073
+5,387,465
+3,044,624
+22,209,780
+Liabilities:
+Due to central banks
+20
+30
+2,603,051
+Certificates of deposit
+35,579
+53,158
+653,334
+10,404,186
+1,698,538
+1,694,145
+4,073,614
+2,288,046
+250,732
+20,409,261
+Net liquidity gap
+(9,385,821)
+322,595
+(540,886)
+26,247
+3,197,027
+5,136,733
+3,044,624
+1,800,519
+(*)
+Includes reverse repurchase agreements.
+(**) Includes repurchase agreements.
+(***) Includes loans and advances to customers and bond investments that are impaired or not impaired but overdue for more than
+one month.
+238
+ICBC
+6,896
+224,426
+64,250
+73,697
+77,938
+16,234
+443
+183,352
+Due to customers
+8,515,746
+891,898
+1,241,541
+3,574,017
+2,055,662
+3,075
+16,281,939
+Debt securities issued
+9,880
+11,789
+17,054
+72,154
+195,745
+306,622
+Others
+Total liabilities
+287,242
+77,754
+143,495
+Property and equipment
+24,185
+24,185
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(b) Liquidity risk (continued)
+31 December 2015
+Assets:
+Cash and balances with central banks
+Due from banks and
+Overdue/
+repayable
+One to
+Three
+Less than
+three
+months to
+One to
+on demand
+one month
+months
+one year
+five years
+More than
+five years
+Undated
+(***)
+Total
+471,606
+Notes to the Financial Statements
+2,588,027
+237
+(***) Includes loans and advances to customers and bond investments that are impaired or not impaired but overdue for more than
+one month.
+72,155
+60,357
+11,426,910
+1,868,675
+1,802,366
+Net liquidity gap
+(10,391,326)
+43,004
+(490,413)
+135,012
+4,281,516
+(378,127)
+70,885
+52,130
+691,074
+2,466,028
+310,607
+22,156,102
+3,363,860
+6,499,529
+3,334,636
+1,981,163
+(*)
+Includes reverse repurchase agreements.
+(**) Includes repurchase agreements.
+Annual Report 2016
+Total liabilities
+3,059,633
+Financial assets held for trading
+12,841
+31,758
+18,134
+4,340
+78,870
+Loans and advances to customers
+68,278
+755,892
+739,152
+2,918,622
+2,881,766
+4,139,152
+149,950
+11,652,812
+Financial investments
+97,632
+207,490
+808,375
+2,344,194
+1,194,931
+14,069
+4,666,691
+Investments in associates and joint ventures
+11,116
+other financial institutions (*)
+681
+210,434
+206,836
+1,091,447
+153,808
+197,090
+30,904
+41
+1,680,126
+12,700
+24,030
+81,757
+11,660
+2,318
+373
+132,838
+Financial assets designated at fair value
+through profit or loss
+534
+1,051
+6,750
+9,211
+174,786
+13,665
+4,437
+Derivative financial assets
+602,198
+22,052
+76,100
+4,548
+10,576
+1,319,450
+Public sector entities
+2,200
+22,236
+141,405
+10,938
+2,212
+178,991
+Banks and other financial institutions
+134,579
+47,724
+369,938
+107,963
+21,277
+681,481
+Corporate entities
+22,386
+35,329
+329,358
+45,678
+6,808
+334,477
+439,559
+969,849
+2,542,487
+(a) Credit risk (continued)
+(iv) Debt securities
+The credit risk of debt securities mainly arises from the risk that the issuer might default on a payment or go into liquidation.
+Debt securities by different types of issuers are generally subject to different degrees of credit risk.
+The following tables present an analysis of the Group's total credit risk exposures of debt securities by types of issuers and
+investments:
+Group
+31 December 2016
+Receivables
+Held-to-
+maturity
+investments
+Available-
+for-sale
+financial
+Financial
+assets held
+Financial
+assets
+designated
+at fair value
+through
+assets
+for trading
+profit or loss
+Total
+Neither past due nor impaired
+Governments and central banks
+85,000
+1,897,917
+545,382
+14,188
+Policy banks
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Subtotal
+2,973,055
+impairment losses
+Subtotal
+Total
+(94)
+(357)
+(451)
+70
+70
+244,165
+2,973,042
+1,720,630
+183,315
+40,873
+5,162,025
+31 December 2015
+Financial
+assets
+Available-
+designated
+Held-to-
+maturity
+Receivables investments
+for-sale
+financial
+assets
+Financial
+assets held
+for trading
+at fair value
+through
+profit or loss
+521
+244,165
+427
+427
+1,720,560
+183,315
+40,873
+5,161,968
+Less: Collective allowance for
+impairment losses
+(13)
+(13)
+Subtotal
+244,165
+2,973,042
+1,720,560
+183,315
+40,873
+5,161,955
+Impaired (*)
+Banks and other financial institutions
+Corporate entities
+Less: Individual allowance for
+8$
+68
+68
+26
+453
+Total
+Notes to the Financial Statements
+234
+(a) Credit risk (continued)
+Bank
+2016
+2015
+Corporate
+Corporate
+loans and
+Personal
+loans and
+Personal
+advances
+loans
+Total
+advances
+loans
+Total
+Past due for:
+Less than one month
+48,816
+14,962
+63,778
+62,514
+15,138
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+77,652
+Notes to the Financial Statements
+Annual Report 2016
+1,104
+154,502
+33,425
+121,077
+139,029
+34,617
+104,412
+Total
+39,741
+9,642
+30,099
+43,314
+9,856
+33,458
+Two to three months
+29,922
+Fair value of collateral held
+103,327
+67,707
+171,034
+118,814
+65,453
+184,267
+233
+ICBC
+One to two months
+7,237
+Renegotiated loans and advances to customers
+The Group has formulated a set of loan restructuring policies to renegotiate the contractual terms with customers, to
+maximise the collectability of loans and to manage customer relationships.
+The carrying amount of renegotiated loans and advances to customers is as follows:
+Group
+Bank
+2016
+2015
+2016
+2015
+Renegotiated loans and advances to
+customers
+5,541
+4,557
+5,052
+4,441
+Including: Impaired loans and advances to
+customers included in above
+2,085
+1,942
+1,652
+1,905
+Collateral repossessed
+During the year, the Group took possession of collateral held as security with a carrying amount of RMB2, 106 million (2015:
+RMB3,690 million). Such collateral mainly comprises land and buildings, equipment and others.
+The fair values of collateral that the Group and the Bank hold relating to loans individually determined to be impaired as
+at 31 December 2016 amounted to RMB42,046 million (31 December 2015: RMB43,771 million) and RMB40,477 million
+(31 December 2015: RMB42,196 million), respectively. The collateral mainly consists of land and buildings, equipment and
+others.
+12,988
+Impaired loans and advances are defined as those loans and advances having objective evidence of impairment as a result of
+one or more events that occured after initial recognition and that event has an impact on the estimated future cash flows
+of loans and advances that can be reliably estimated. These loans and advances include corporate loans and personal loans
+which are graded as "Substandard", "Doubtful" or "Loss".
+179,870
+20,225
+21,964
+7,544
+29,508
+Two to three months
+33,267
+9,760
+43,027
+28,699
+9,616
+38,315
+Total
+95,071
+127,030
+113,177
+32,298
+145,475
+Fair value of collateral held
+99,153
+65,137
+164,290
+116,546
+63,324
+Impaired
+Neither past due nor impaired
+31,959
+Policy banks
+4,831,492
+Less: Collective allowance for
+impairment losses
+(13)
+(13)
+Subtotal
+246,766
+2,876,081
+1,532,257
+135,774
+40,601
+4,831,479
+Impaired (*)
+Corporate entities
+26
+195
+221
+26
+195
+221
+Less: Individual allowance for
+impairment losses
+(26)
+40,601
+(125)
+135,774
+2,876,094
+Public sector entities
+2,200
+20,023
+137,463
+1,207
+2,212
+163,105
+Banks and other financial institutions
+137,180
+45,435
+314,156
+103,133
+21,277
+621,181
+Corporate entities
+22,386
+7,525
+297,021
+22,521
+6,536
+355,989
+Subtotal
+246,766
+1,532,257
+1,231,184
+(151)
+Total
+1,607,344
+153,413
+842
+1,846,599
+Policy banks
+15,090
+1,149,092
+323,325
+1,609
+9,970
+1,499,086
+Public sector entities
+1,500
+16,671
+90,748
+4,272
+907
+114,098
+Banks and other financial institutions
+171,997
+28,169
+Governments and central banks
+324,828
+85,000
+Subtotal
+Governments and central banks
+Total
+70
+70
+246,766
+2,876,081
+1,532,327
+135,774
+40,601
+4,831,549
+31 December 2015
+Financial
+Available-
+Held-to-
+for-sale
+Receivables
+maturity
+investments
+Financial
+assets held
+assets
+designated
+at fair value
+through
+assets
+for trading
+profit or loss
+Neither past due nor impaired
+10,576
+financial
+275,427
+38,635
+10,208
+563,828
+Subtotal
+314,159
+2,870,356
+1,402,532
+132,465
+22,224
+4,741,736
+Less: Collective allowance for
+impairment losses
+(3)
+Subtotal
+314,159
+2,870,353
+1,402,532
+132,465
+22,224
+4,741,733
+Impaired (*)
+Banks and other financial institutions
+92
+442,169
+92
+32,244
+637,043
+85,000
+15,090
+1,639,828
+179,759
+5,512
+1,910,099
+1,159,165
+1,095
+1,726
+9,970
+1,513,092
+Public sector entities
+1,500
+17,726
+93,269
+4,272
+907
+117,674
+Banks and other financial institutions
+Corporate entities
+171,997
+21,393
+360,194
+82,320
+1,139
+40,572
+Corporate entities
+327,141
+impairment losses
+Available-
+Financial
+assets
+designated
+at fair value
+Held-to-
+for-sale
+maturity
+2,460,033
+7,818
+508,190
+1,859,025
+85,000
+Governments and central banks
+Neither past due nor impaired
+Total
+profit or loss
+for trading
+assets
+Receivables investments
+through
+Financial
+assets held
+financial
+Less: Individual allowance for
+Policy banks
+Bank
+(a) Credit risk (continued)
+31 December 2016
+Notes to the Financial Statements
+Subtotal
+Total
+(*)
+434
+434
+92
+434
+526
+(92)
+(293)
+(385)
+314,159
+2,870,353
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+944,086
+141
+132,465
+22,224
+4,741,874
+Impaired debt securities above are mainly determined based on individual assessments. In determining whether a debt security
+is impaired, the Group considers the evidence of a loss event and the decreases in estimated future cash flows. No collateral
+was held by the Group as security of the impaired debt securities.
+Annual Report 2016
+235
+141
+1,402,673
+Notes to the Financial Statements
+Overdue/
+31 December 2015
+(b) Liquidity risk (continued)
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+One to
+243
+Financial assets:
+repayable
+on demand
+1,014,641 181,145
+128,273
+Due from banks and other financial institutions (*)
+2,995,051
+2,553,024
+3,432
+438,595
+Cash and balances with central banks
+Annual Report 2016
+Non-derivative cash flows:
+Three
+Total
+Undated
+More than
+five years
+five years
+one year
+months
+one month
+One to
+months to
+three
+Less than
+(***)
+Includes repurchase agreements.
+Derivative financial instruments settled on gross basis:
+8,582
+3,311
+1,403
+164
+1,547,794 3,996,689
+1,477,495
+11,094,851
+386,052
+237,300
+122,264
+17,392,308
+6,017
+2,227,466
+196,812
+480
+17,359
+2,229,691
+191,278
+(*)
+2,389,059
+20,752,996
+(3,473,190)
+3,481,772
+1,644
+(1,804)
+(160)
+808,559 999,032 1,605,798 66,739
+(807,068) (997,897) (1,599,245) (67,176)
+1,491 1,135
+6,553
+(437)
+- Cash outflow
+- Cash inflow
+228,150
+(137)
+(39)
+102
+(214)
+(99)
+113
+Derivative financial instruments settled on net basis
+Derivative cash flows:
+247,108
+22,038
+84,740 202,449
+24,743
+255
+1,924,986 1,258,455 4,337,552
+1,576,747
+Financial liabilities:
+Non-derivative cash flows:
+Total
+Undated
+More than
+five years
+five years
+Financial liabilities designated at fair value
+One to
+One to
+three
+months
+Less than
+one month
+on demand
+Overdue/
+repayable
+31 December 2015
+(***) Includes loans and advances to customers and bond investments that are impaired or not impaired but overdue for more than
+one month.
+Three
+months to
+one year
+through profit or loss
+55,866
+Due to banks and other financial institutions (*)
+70,933
+4,436
+16,214
+24,723 40,857
+766,165 1,159,609 3,534,130
+8,372,886
+Due to customers
+Certificates of deposit
+300,380
+2,244,378
+25,199
+164,771
+17,829
+22,046
+123,150
+81,489
+425,997 127,520
+1,500,891
+(**) The maturity profile of the renegotiated loans' contractual undiscounted cash flows is determined according to the negotiated
+terms.
+Includes reverse repurchase agreements.
+(*)
+2,789,206 24,650,961
+13,689
+171,009
+9,404
+6,802
+1,065
+534
+through profit or loss
+Financial assets designated at fair value
+117,655
+802
+2,396
+78,395
+23,960
+12,102
+Financial assets held for trading
+Loans and advances to customers (**)
+2,500
+66,217
+Financial investments
+6,893,090
+6,632,848
+1,192 207,892
+2,227 4,580,716
+1,206,316
+5
+5
+2,312,027
+206,940
+14,965,960
+4,437
+228,326
+5,669,778
+4,125,373
+3,248,159
+772,957
+487
+814,824
+181,205
+Others
+787,695 840,412
+356,476
+61,974
+36,934
+49,222
+840,779
+725,987
+2,675,726
+2,682,913
+4,904,653
+Loans and advances to customers
+153,920
+Financial investments
+168,848
+580,312
+2,334,396
+1,526,334
+76,512
+12,033,200
+62,892
+787
+1,749
+184,074
+Financial assets designated at fair value
+through profit or loss
+1,297
+206
+14,260
+30,745
+201,682
+19,820
+4,108
+272,118
+Derivative financial assets
+12,974
+16,639
+30,743
+4,748,376
+Investments in subsidiaries and associates
+136,530
+136,530
+Liabilities:
+Due to central banks
+379
+379
+Financial liabilities designated at fair value
+through profit or loss
+59,185
+74,912
+168,127
+36,092
+13,685
+352,001
+Derivative financial liabilities
+522
+8,762
+22,788,080
+48,300
+3,372,603
+506,530
+Property and equipment
+124,089
+124,089
+Others
+319,652
+38,678
+8,739
+49,645
+Total assets
+850,439
+1,770,045 1,258,322
+3,741,091
+25,465
+5,304,678
+34,468
+29,883
+6,490,902
+15,752
+838
+77,676
+Total
+Undated
+More than
+five years
+five years
+One to
+Three
+months to
+one year
+Non-derivative cash flows:
+One to
+three
+months
+on demand
+Overdue/
+repayable
+(b) Liquidity risk (continued)
+Bank
+31 December 2016
+Notes to the Financial Statements
+Less than
+one month
+Financial liabilities:
+Due to central banks
+379
+75,114 169,491
+645,735 141,531 191,340
+27,104 56,790
+95,079
+725,189 1,178,132 3,651,288
+1,686 21,491
+557
+1,042
+184,801
+Others
+3,311
+Debt securities issued
+9,604,216
+Due to customers
+Certificates of deposit
+1,246,649
+Due to banks and other financial institutions (*)
+59,185
+through profit or loss
+Financial liabilities designated at fair value
+379
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Assets:
+Cash and balances with central banks
+Due from banks and
+(***)
+Total
+2,799,261
+3,290,270
+other financial institutions (*)
+66,696
+761,207
+292,443
+248,963
+56,690
+4,002
+1,430,001
+Financial assets held for trading
+42,588
+12,889
+Undated
+1,783
+More than
+five years
+One to
+413,572
+11,639
+18,517
+47,281
+Overdue/
+Less
+One to
+Three
+repayable
+than one
+three
+on demand
+month
+months
+months to
+one year
+five years
+153,249
+optimising the differences in timing between contractual repricing (maturities) of interest-generating assets and
+interest-bearing liabilities; and
+3,441
+Increased by 100 basis points
+Effect on
+net interest
+Group
+2016
+The effect of the net interest income is the effect of the assumed changes in interest rates on the net interest income,
+arising from the financial assets and financial liabilities held at year end that are subject to repricing within the coming year,
+including the effect of hedging instruments. The effect of equity is the effect of the assumed changes in interest rates on
+other comprehensive income, calculated by revaluing fixed rate available-for-sale financial assets held at year end, including
+the effect of any associated hedges.
+The following tables demonstrate the sensitivity to a reasonably possible change in interest rates, with all other variables held
+constant, of the Group's and the Bank's net interest income and equity.
+revenue.
+A principal part of the Group's management of interest rate risk is to monitor the sensitivity of projected net interest income
+under varying interest rate scenarios (simulation modeling). The Group aims to mitigate the impact of prospective interest
+rate movements which could reduce future net interest income, while balancing the cost of such hedging on the current
+managing the deviation of the pricing of interest-generating assets and interest-bearing liabilities from the PBOC
+benchmark interest rates.
+18,411
+•
+regularly monitoring the macroeconomic factors that may have impact on the PBOC benchmark interest rates;
+•
+The Group manages its interest rate risk by:
+The Group's interest rate risk mainly arises from the mismatches between the repricing dates of interest-generating assets
+and interest-bearing liabilities. The Group's interest-generating assets and interest-bearing liabilities are mainly denominated
+in RMB.
+(ii) Interest rate risk
+(c) Market risk (continued)
+Currency
+RMB
+income
+(8,885)
+Effect on
+equity
+(139)
+(8)
+139
+HKD
+4,453
+178
+(4,450)
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(178)
+50,242
+8,885
+(46,604)
+equity
+income
+Effect on
+Decreased by 100 basis points
+Effect on
+net interest
+USD
+8
+Notes to the Financial Statements
+246
+63
+21
+72
+46
+55
+Lowest
+Highest
+Average
+31 December 2015
+2015
+Total portfolio VaR
+Commodity risk
+Interest rate risk
+Currency risk
+76
+328
+64
+141
+34
+13
+VaR relies heavily on historical data to provide information and may not clearly predict the future changes and
+modifications of the risk factors, especially those of an exceptional nature due to significant market moves.
+Even though positions may change throughout the day, VaR only represents the risk of the portfolios at the close of
+each business day, and it does not account for any losses that may occur beyond the 99% confidence level; and
+VaR does not reflect liquidity risk. In the VaR model, a one-day holding period assumes that it is possible to hedge or
+dispose of positions within that period without restriction, the price of the financial instruments will fluctuate in the
+specified range, and the correlation between these market prices will remain unchanged. This may not fully reflect
+the market risk arising at times of severe illiquidity, when a one-day holding period may be insufficient to liquidate or
+hedge all positions fully;
+(3)
+(2)
+(1)
+Although VaR is an important tool for measuring market risk under normal market environment, the assumptions on which
+the model is based do give rise to some limitations, mainly including the following:
+ICBC
+VaR.
+60
+156
+90
+81
+4
+41
+17
+VaR for each risk factor is the derived largest potential loss due to fluctuations solely in that risk factor. As there is a
+diversification effect due to the correlation amongst the risk factors, the individual VaR does not add up to the total portfolio
+Others
+467
+(635)
+(347)
+185
+(8,660)
+8
+186
+(8)
+(186)
+1,727
+(250)
+(1,726)
+250
+45,581
+8,909
+(42,723)
+(8,909)
+equity
+(185)
+347
+(44,804)
+8,660
+ICBC
+The interest rate sensitivities set out in the tables above are for illustration only and are based on simplified scenarios. The
+figures represent the effect of the pro forma movements in net interest income and equity based on the projected yield
+curve scenarios and the Group's and the Bank's current interest rate risk profile. This effect, however, does not incorporate
+actions that would be taken by management to mitigate the impact of interest rate risk. The projections above also assume
+that interest rates of all maturities move by the same amount and, therefore, do not reflect the potential impact on net
+interest income and equity in the case where some rates change while others remain unchanged.
+36,791
+equity
+6,348
+income
+Effect on
+equity
+(34,323)
+income
+(6,348)
+Total
+Effect on
+Effect on
+net interest
+Effect on
+net interest
+Decreased by 100 basis points
+Increased by 100 basis points
+47,663
+income
+equity
+income
+Effect on
+income
+5,926
+Decreased by 100 basis points
+Effect on
+net interest
+Effect on
+equity
+(38,609)
+(5,926)
+income
+Effect on
+net interest
+Increased by 100 basis points
+Effect on
+equity
+Total
+55,338
+8,457
+(51,697)
+(8,457)
+Total
+635
+(467)
+2015
+204
+41,729
+247
+Effect on
+net interest
+Effect on
+Decreased by 100 basis points
+Increased by 100 basis points
+Effect on
+net interest
+2015
+Total
+Others
+Annual Report 2016
+HKD
+RMB
+Currency
+2016
+Bank
+(c) Market risk (continued)
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+USD
+2,099,811
+258
+54
+Less than
+Repayable
+on demand
+Three
+31 December 2015
+Credit commitments
+31 December 2016
+Group
+Management expects that not all of the commitments will be drawn before the expiry of the commitments.
+(iii) Analysis of credit commitments by contractual expiry date
+(b) Liquidity risk (continued)
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+244
+Includes repurchase agreements.
+One to
+one month
+three months
+months to
+one year
+One to
+Three
+months to
+One to
+three months
+Less than
+one month
+Repayable
+on demand
+2,778,412
+313,218
+(*)
+760,743
+230,641
+105,676
+756,778
+Total
+More than
+five years
+five years
+One to
+611,356
+one year
+254
+776
+2,227,619
+3,808,847
+183,413
+3,952
+748
+323,063
+229,869
+67,818
+16,240
+727
+7,894
+100
+1,242
+2,377
+1,301,993 1,459,130
+175,509
+10,105,152
+Others
+Debt securities issued
+15,936,042
+237,784
+19,140,525
+Derivative cash flows:
+Derivative financial instruments settled on net basis
+3,984
+2,458,099
+(2,457,845)
+(1,488)
+(77,517)
+1,432
+78,293
+707,203 458,376 1,212,795
+(709,123) (460,906) (1,208,811)
+(1,920) (2,530)
+(56)
+- Cash outflow
+Derivative financial instruments settled on gross basis:
+(45)
+(68)
+(19)
+(87)
+(127)
+256
+- Cash inflow
+five years
+More than
+five years
+Total
+VaR analysis is a statistical technique which estimates the potential maximum losses that could occur on risk positions taken
+due to movements in interest rates, foreign exchange rates or prices over a specified time horizon and at a specified level
+of confidence. The Bank adopts a historical simulation model to calculate and monitor trading portfolio VaR with 250 days'
+historical market data (with a 99% confidence level, and one-day holding period) on a daily basis.
+(i) VaR
+The Group considers the market risk arising from stock price fluctuations in respect of its investment portfolios as immaterial.
+Sensitivity analysis, interest rate repricing gap analysis and currency risk concentration analysis are the major market risk
+management tools used by the Group. The Bank monitors market risk separately in respect of trading and other non-
+trading portfolios. The Bank adopts VaR analysis as the major tool for calculating and monitoring the market risk of trading
+portfolios. The following sections include a VaR analysis by risk type of the Group's trading portfolios of the parent company
+and a sensitivity analysis based on the Group's interest rate risk exposure and currency risk exposure (both trading and non-
+trading portfolios).
+(c) Market risk (continued)
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+245
+Annual Report 2016
+The Group's currency risk mainly results from the risk arising from exchange rate fluctuations on its foreign exchange
+exposures. Foreign exchange exposures include the mismatch of foreign exchange assets and liabilities, and off-balance
+sheet foreign exchange positions arising from derivative transactions.
+The Group is primarily exposed to structural interest rate risk arising from commercial banking and position risk arising from
+treasury transactions. Interest rate risk is inherent in many of its businesses and largely arises from mismatches between the
+repricing dates of interest-generating assets and interest-bearing liabilities.
+Market risk is the risk of loss, in respect of the Group's on and off-balance sheet activities, arising from adverse movements
+in market rates including interest rates, foreign exchange rates, commodity prices and stock prices. Market risk arises from
+both the Group's trading and non-trading businesses.
+(c) Market risk
+2,289,444
+136,900
+557,562
+A summary of VaR by risk type of the Bank's trading portfolios is as follows:
+2016
+31 December 2016
+Average
+18
+12
+65
+325
+189
+240
+Total portfolio VaR
+490,244
+Commodity risk
+38
+76
+58
+66
+Interest rate risk
+Lowest
+Highest
+Currency risk
+249,381
+142,472
+712,885
+One to
+three months
+Less than
+one month
+Repayable
+on demand
+Credit commitments
+31 December 2015
+Credit commitments
+31 December 2016
+Three
+months to
+Bank
+142,591
+554,572
+480,940
+249,287
+151,167
+719,327
+Credit commitments
+2,297,884
+4
+one year
+More than
+five years
+Total
+More than
+five years
+One to
+five years
+one year
+Three
+months to
+One to
+three months
+Less than
+one month
+One to
+five years
+Repayable
+on demand
+300,301
+727,543
+620,022
+225,685
+91,832
+748,492
+Total
+2,713,875
+27,813
+548,562
+983
+202,647
+34,250
+50
+1,692,809
+Financial assets held for trading
+12,729
+24,225
+83,231
+248
+4,916
+373
+139,264
+Financial assets designated at fair value
+through profit or loss
+534
+155,711
+1,065
+1,093,314
+Due from banks and other financial institutions (*)
+one month
+months
+months to
+one year
+five years
+One to More than
+five years
+Undated
+(***)
+Total
+Non-derivative cash flows:
+Financial assets:
+Cash and balances with central banks
+471,606
+3,480
+2,588,027
+3,063,113
+206,837
+three
+6,802
+69,484
+2,242 277,906
+2,844,939 25,975,994
+(*)
+Includes reverse repurchase agreements.
+(**) The maturity profile of the renegotiated loans' contractual undiscounted cash flows is determined according to the negotiated
+terms.
+(***) Includes loans and advances to customers and bond investments that are impaired or not impaired but overdue for more than
+one month.
+31 December 2015
+Overdue/
+repayable
+on demand
+Less than
+one month
+One to
+three
+months
+Three
+months to
+one year
+One to
+five years
+More than
+five years
+Undated
+7,148,222
+Loans and advances to customers (**)
+508
+5,903,532
+1,225,527
+815,009
+878,558
+Financial investments
+98,461
+Others
+222,918
+33,767
+971,379
+2,054,345
+212,512 835,939
+5,282
+7,374
+1,286,570 4,546,050
+9,776
+3,407,083 4,481,120
+2,414,570
+5,815
+7,124,489
+174,944
+13,689
+4,437
+211,247
+235,756 15,790,542
+14,104 4,801,113
+Less than
+repayable
+on demand
+Three
+68,179
+2,631,028
+Certificates of deposit
+Due to customers
+9,791,273
+Debt securities issued
+6,035
+Others
+293,113
+11,428,173
+28,511
+8,894 4,237 5,340
+1,799,704 1,759,288 4,207,082
+30,075 67,511
+861,958 1,316,461 3,777,425
+9,400
+105,233
+17,590
+480
+220,889
+27,095
+2,305,827
+192,176 242,106
+2,277
+Non-derivative cash flows:
+Financial liabilities:
+Due to central banks
+119
+427
+546
+Financial liabilities designated at fair value
+through profit or loss
+59,943
+Due to banks and other financial institutions (*)
+1,283,844
+75,114
+817,628
+169,503
+48,348
+16,141
+371,326
+6,017
+18,058,961
+186,995
+(137)
+(181)
+115
+182
+(73)
+(*)
+Includes repurchase agreements.
+Annual Report 2016
+241
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(b) Liquidity risk (continued)
+31 December 2015
+Overdue/
+One to
+(52)
+23,398
+4,046,269
+(4,022,871)
+171,304 17,675
+(166,880) (17,001)
+4,424
+674
+245,210
+476,151
+13,900
+2,567,975
+10,383
+332,546
+335,867
+22,094,768
+Derivative cash flows:
+Total
+Derivative financial instruments settled on net basis
+- Cash inflow
+- Cash outflow
+15,916
+(15,820)
+96
+4,125
+1,009,201 1,107,223 1,724,950
+(1,005,076) (1,103,824) (1,714,270)
+10,680
+3,399
+Derivative financial instruments settled on gross basis:
+Total
+Non-derivative cash flows:
+Due to central banks
+(***)
+Total
+Non-derivative cash flows:
+Financial assets:
+Cash and balances with central banks
+413,572
+11,639
+22,296
+47,281
+2,799,261
+3,294,049
+Due from banks and other financial institutions (*)
+66,701
+763,079
+295,868
+More than Undated
+five years
+254,645
+five years
+months to
+one year
+(3,934,091)
+5,093
+2,790
+(1,141)
+3,632
+(b) Liquidity risk (continued)
+Bank
+31 December 2016
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Overdue/
+repayable
+on demand
+One to
+Three
+Less than
+one month
+three
+months
+One to
+3,937,723
+58,529
+1,443,636
+63,376
+Others
+311,382
+23,554
+174,177
+119
+600,938
+242
+203,245
+4,425,087
+2,413,765
+59
+842,940 1,805,746 1,387,549 4,187,684
+7,102,874
+8,805,983
+20,178
+7,210,629 257,043 16,885,364
+1,569,467 76,512 4,898,235
+1,425 336,781
+3,186,649 27,319,425
+4,108 275,157
+(*)
+Includes reverse repurchase agreements.
+(**) The maturity profile of the renegotiated loans' contractual undiscounted cash flows is determined according to the negotiated
+terms.
+Financial investments
+4,814
+3,173,863
+49,988
+Financial assets held for trading
+42,658
+13,020
+79,141
+2,189
+895
+48,300
+186,203
+Financial assets designated at fair value
+through profit or loss
+1,297
+219
+14,536
+31,574
+Loans and advances to customers (**)
+901,221 867,533
+35,759
+(36,900)
+267,045
+(264,255)
+1,592,386
+(1,587,293)
+37,141
+2,613,633
+Certificates of deposit
+35,766
+53,905
+79,441
+17,207
+522
+186,841
+Due to customers
+8,516,764
+893,282
+1,264,680 3,632,057
+2,128,421
+3,457
+47,487
+16,438,661
+214,820
+592,445
+20
+31
+160
+211
+Financial liabilities designated at fair value
+through profit or loss
+59,200
+81,491
+123,294
+22,503
+19,300
+1,240
+307,028
+Due to banks and other financial institutions (*)
+1,541,557
+180,183
+Debt securities issued
+Others
+196,112
+- Cash outflow
+(*)
+Includes repurchase agreements.
+242
+ICBC
+557
+(105)
+(37)
+67
+37
+519
+55,558 1,234,460
+(55,435) (1,235,452)
+123
+(992)
+752,515
+(754,756)
+(2,241)
+- Cash inflow
+Derivative financial instruments settled on gross basis:
+Derivative financial instruments settled on net basis
+Derivative cash flows:
+9,987
+9,825
+12,784
+25,980
+106,603
+250,514
+405,868
+2,497
+Financial liabilities:
+3,387
+30,908
+276,855
+10,313,633 1,622,796
+1,637,363 3,978,219
+2,353,304
+323,782
+20,229,097
+34,126
+Undated
+More than
+five years
+One to
+five years
+206,282
+Derivative financial assets
+6,854
+5,689
+18,098
+1,897
+752
+33,290
+Loans and advances to customers
+65,032
+731,234
+708,366
+2,785,871 2,616,127
+3,973,504
+146,342
+4,437
+11,026,476
+13,665
+8,994
+(***)
+Total
+2,553,024
+2,991,619
+1,565,444
+115,950
+20,299
+2,118
+1,844
+796
+Financial assets designated at fair value
+through profit or loss
+534
+1,051
+6,750
+170,851
+Undated
+Financial investments
+197,508
+51,224
+3,909,781
+22,751
+5,079,320
+32,679
+27,437
+391,910
+5,199,869
+2,998,444
+21,046,946
+Liabilities:
+Financial liabilities designated at fair value
+through profit or loss
+55,866
+81,380
+122,646
+21,682
+1,129,136
+84,014
+1,886,322
+Total assets
+745,343
+2,245,551
+1,176,355
+2,227
+4,450,998
+Investments in subsidiaries and associates
+135,308
+135,308
+Property and equipment
+129,669
+129,669
+Others
+211,640
+38,449
+7,730
+844,074
+More than
+five years
+five years
+one year
+3,591,901
+2,155,589
+5,362
+17,235,587
+Debt securities issued
+Others
+Total liabilities
+Net liquidity gap
+(10,284,864)
+3,308
+1,042
+226,524
+59,374
+53,285
+11,135,303 1,542,494 1,593,317
+227,551 (334,995)
+10,832
+128,418
+58,133
+4,078,089 2,331,863 197,085
+(336,998) 2,972,815 6,293,817
+80,530
+183,734
+279,446
+6,553
+1,154,911
+532,287
+724,528
+Due to customers
+58,179
+Due to banks and other financial institutions (**)
+1,246,298
+644,608
+141,150
+189,312
+4,401
+2,225,769
+Certificates of deposit
+27,002
+56,391
+93,721
+16,936
+453
+194,503
+9,603,296
+20,878,151
+3,372,603
+1,909,929
+12,091
+23,854
+77,365
+Overdue/
+Less
+One to
+Three
+repayable
+than one
+three
+months to
+One to
+on demand
+month
+months
+Financial assets held for trading
+222,886
+179,239
+1,012,629
+(*)
+Includes reverse repurchase agreements.
+(**) Includes repurchase agreements.
+(***) Includes loans and advances to customers and bond investments that are impaired or not impaired but overdue for more than
+one month.
+Annual Report 2016
+239
+Notes to the Financial Statements
+15,840
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+31 December 2015
+Assets:
+Cash and balances with central banks
+Due from banks and
+438,595
+other financial institutions (*)
+128,273
+(b) Liquidity risk (continued)
+297,414
+Derivative financial liabilities
+8,404
+105,143
+3,398
+13,085
+6,016
+199,626
+Financial assets designated at fair value
+through profit or loss
+1,448
+219
+14,536
+36,907
+206,982
+24,149
+4,108
+288,349
+25,796
+Loans and advances to customers (**)
+46,188
+1,568,507
+Financial assets:
+Cash and balances with central banks
+436,282
+11,639
+22,347
+47,281
+2,837,069
+3,354,618
+Due from banks and other financial institutions (*)
+158,439
+851,293
+247,894
+235,908
+74,923
+50
+Financial assets held for trading
+62,950
+937,939
+924,671
+1,430,599
+4,377,470
+7,738,564
+9,240,148
+3,249 421,631
+3,127,194 28,893,629
+(*)
+Includes reverse repurchase agreements.
+(**) The maturity profile of the renegotiated loans' contractual undiscounted cash flows is determined according to the negotiated
+terms.
+(***) Includes loans and advances to customers and bond investments that are impaired or not impaired but overdue for more than
+one month.
+31 December 2016
+Overdue/
+repayable
+on demand
+Less than
+one month
+One to
+three
+months
+Three
+months to
+one year
+1,947,363
+1,032,291
+12,853 5,172,520
+1,642,179
+416
+3,313,707
+4,824,943
+7,560,269
+263,899
+17,888,378
+Financial investments
+72,261
+Non-derivative cash flows:
+191,060
+2,621,704
+Others
+373,172
+27,824
+4,295
+6,061
+6,614
+632,463
+2,210
+Total
+More than
+five years
+Due to customers
+8,372,090
+765,431
+1,136,934
+3,476,619
+2,027,537
+3,062
+15,781,673
+Debt securities issued
+1,240
+Others
+219,042
+57,126
+Total liabilities
+10,147,865
+150,113
+1,362,442
+443
+69,614
+7,140
+14,665
+2,004
+931
+33,144
+Due to banks and other financial institutions (**)
+1,500,867
+424,289
+125,601
+160,226
+23,136
+2,234,119
+Certificates of deposit
+24,572
+40,220
+15,264
+Net liquidity gap
+(9,303,791)
+523,880
+Group
+31 December 2016
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Overdue/
+repayable
+One to
+Three
+Less than
+three
+on demand
+one month
+months
+months to
+one year
+One to
+five years
+(b) Liquidity risk (continued)
+ICBC
+240
+The tables below summarise the maturity profile of the Group's and of the Bank's financial instruments based on the
+contractual undiscounted cash flows. The balances of some items in the tables below are different from the balances on
+the statement of financial position as the tables incorporate all cash flows relating to both principal and interest. The Group
+and the Bank's expected cash flows on these instruments may vary significantly from the following analysis. For example,
+demand deposits from customers are expected to maintain a stable or increasing balance although they have been classified
+as repayable on demand in the following tables.
+7,197
+69,291
+1,509,029
+(379,893)
+8,872
+139,405
+57,009
+3,891,083 2,179,640
+18,698 2,899,680
+38,850
+184,016
+240,175
+6,689
+195,141
+5,004,728
+Undated
+(***)
+19,285,200
+1,761,746
+(*)
+Includes reverse repurchase agreements.
+(**) Includes repurchase agreements.
+(***) Includes loans and advances to customers and bond investments that are impaired or not impaired but overdue for more than
+one month.
+(ii)
+Maturity analysis of contractual undiscounted cash flows
+2,998,444
+13,790
+(***) Includes loans and advances to customers and bond investments that are impaired or not impaired but overdue for more than
+one month.
+31 December 2016
+657
+Total
+Assets:
+Cash and balances with central banks
+2,893,681
+396,589
+3,290,270
+Due from banks and
+other financial institutions (*)
+1,166,598
+196,166
+54,667
+12,570
+1,430,001
+Financial assets held for trading
+bearing
+interest-
+More than
+five years
+One to
+five years
+N/A
+N/A
+(*)
+Includes reverse repurchase agreements.
+(**) Includes repurchase agreements.
+250
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(c) Market risk (continued)
+The tables below summarise the contractual repricing or maturity dates, whichever is earlier, of the Bank's assets and
+liabilities:
+31 December 2016
+Less than
+three
+months
+Three
+months to
+one year
+Non-
+56,958
+76,803
+1,706
+307
+12,033,200
+Financial investments
+351,472
+600,860
+2,210,827
+1,508,705
+93,639
+76,512
+Investments in subsidiaries and
+associates
+136,530
+136,530
+Property and equipment
+124,089
+4,748,376
+86,977
+106,364
+4,240,147
+48,300
+184,074
+Financial assets designated at
+fair value through profit or loss
+16,157
+31,502
+199,990
+19,063
+5,406
+272,118
+Derivative financial assets
+62,892
+62,892
+Loans and advances to customers
+7,506,073
+1,119,599
+399,606
+1,588,520
+(1,481,484)
+20
+30
+160
+210
+Financial liabilities designated at
+fair value through profit or loss
+Due to central banks
+204,160
+15,953
+62,132
+303,927
+Derivative financial liabilities
+76,826
+76,826
+21,682
+Liabilities:
+22,209,780
+1,322,729
+Investments in associates and
+joint ventures
+24,185
+24,185
+Property and equipment
+224,426
+224,426
+Others
+Total assets
+10,045
+11,516,538
+225
+5,492,430
+469,495
+479,765
+2,553,859
+1,324,224
+Due to banks and
+other financial institutions (**)
+2,332,698
+234,978
+33,046
+3,371
+16,674
+150
+63,223
+193,679
+306,622
+617
+Total liabilities
+12,998,022
+3,903,910
+2,154,253
+623
+204,625
+648,573
+1,148,451
+653,334
+20,409,261
+Interest rate mismatch
+Others
+124,089
+Debt securities issued
+345,463
+13,113
+6,805
+15,457
+2,603,051
+Certificates of deposit
+107,758
+66,575
+8,576
+443
+183,352
+Due to customers
+10,316,969
+3,563,821
+2,052,611
+3,075
+16,281,939
+Others
+506,530
+506,530
+1,565,444
+Financial assets held for trading
+36,356
+77,365
+1,433
+796
+10,114
+115,950
+fair value through profit or loss
+9,405
+9,122
+169,119
+13,665
+4,971
+Financial assets designated at
+2,118
+20,299
+221,232
+One to
+More than
+interest-
+five years
+five years
+bearing
+Total
+Assets:
+Cash and balances with central banks
+2,607,873
+383,746
+2,991,619
+Due from banks and
+other financial institutions (*)
+1,311,681
+206,282
+Derivative financial assets
+33,290
+33,290
+129,669
+129,669
+Others
+391,910
+391,910
+Total assets
+10,843,015
+5,332,737
+2,381,853
+1,298,457
+1,190,884
+21,046,946
+Liabilities:
+Financial liabilities designated at
+fair value through profit or loss
+Property and equipment
+months to
+one year
+135,308
+associates
+Loans and advances to customers
+6,457,483
+4,218,448
+130,127
+120,707
+99,711
+11,026,476
+Financial investments
+420,217
+806,570
+2,060,875
+1,161,171
+2,165
+4,450,998
+Investments in subsidiaries and
+135,308
+4,666,691
+Non-
+Less than
+three
+months
+58,179
+58,179
+Due to banks and
+other financial institutions (**)
+2,029,768
+184,154
+Derivative financial liabilities
+2,755
+2,225,769
+Certificates of deposit
+104,292
+83,427
+6,331
+453
+9,092
+352,001
+59,185
+9,695
+Total assets
+11,990,939
+5,145,478
+2,573,554
+1,615,052
+1,463,057
+22,788,080
+Liabilities:
+Due to central banks
+379
+379
+Financial liabilities designated at
+fair value through profit or loss
+247,029
+36,092
+194,503
+Due to customers
+11,251,659
+3,591,913
+2,237,087
+336,467
+189,549
+1,425,503
+890,401
+20,878,151
+N/A
+N/A
+(*)
+Includes reverse repurchase agreements.
+(**) Includes repurchase agreements.
+Annual Report 2016
+251
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+4,450,998
+31 December 2015
+1,239,065
+Three
+(1,663,762)
+3,906,413
+2,154,995
+5,362
+231,658
+17,235,587
+Debt securities issued
+21,953
+10,827
+62,932
+183,734
+279,446
+Others
+532,287
+532,287
+Total liabilities
+13,654,701
+Interest rate mismatch
+13,929
+1,177,390
+2,158,378
+129,669
+210
+9
+255
+129,195
+Property and equipment
+Others
+135,308
+44,820
+10,012
+17,352
+Investments in subsidiaries and associates
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+63,124
+252,894
+35,499
+5,174
+297,414
+55,866
+8,496
+233,052
+through profit or loss
+Financial liabilities designated at fair value
+Liabilities:
+21,046,946
+361,871
+100,883
+938,826
+19,645,366
+Total assets
+391,910
+98,343
+(c) Market risk (continued)
+The tables below summarise the contractual repricing or maturity dates, whichever is earlier, of the Group's assets and
+liabilities:
+31 December 2016
+Less than
+three
+months
+1,553,100
+Financial assets held for trading
+73,827
+102,259
+4,126
+3,103
+6,016
+189,331
+Financial assets designated at
+fair value through profit or loss
+16,157
+40,807
+203,561
+19,063
+5,556
+30,457
+Derivative financial liabilities
+41
+175,706
+Three
+months to
+one year
+Non-
+One to
+five years
+More than
+five years
+interest-
+bearing
+Total
+Assets:
+Cash and balances with central banks
+2,950,175
+400,613
+3,350,788
+Due from banks and
+other financial institutions (*)
+1,281,652
+65,244
+285,144
+25,202
+2,687
+(**) Includes repurchase agreements.
+Includes reverse repurchase agreements.
+(*)
+2,289,444
+75,742
+10,982
+Annual Report 2016
+377,739
+Credit commitments
+1,761,746
+112,774
+34,737
+45,601
+1,568,634
+1,824,981
+257
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+37,195
+ICBC
+258
+The capital adequacy ratios and related components of the Group are calculated in accordance with the statutory financial
+statements of the Group prepared under PRC GAAP. During the year, the Group has complied in full with all its externally
+imposed capital requirements.
+The Group calculates the following core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio
+in accordance with Regulation Governing Capital of Commercial Banks (Provisional) and relevant requirements promulgated
+by the CBRC. The requirements pursuant to these regulations may have certain differences comparing to those applicable in
+Hong Kong and other jurisdictions.
+The CBRC requires commercial banks to meet the requirements of capital adequacy ratios by the end of 2018 in accordance
+with Regulation Governing Capital of Commercial Banks (Provisional). For systemically important banks, CBRC requires
+minimum core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio of 8.50%, 9.50% and
+11.50%, respectively. For non-systemically important banks, CBRC requires corresponding minimum ratios of 7.50%, 8.50%
+and 10.50%, respectively. In addition, overseas entities are directly regulated by local banking regulatory commissions, and
+the requirements of capital adequacy ratios differ by countries.
+From 1 January 2013, the Group commenced to calculate the capital adequacy ratios in accordance with Regulation
+Governing Capital of Commercial Banks (Provisional) and other relevant regulations promulgated by the CBRC. In April 2014,
+CBRC officially approved the Bank to adopt advanced capital management approaches. Within the scope of the approval,
+the foundation internal ratings-based (IRB) approach is adopted to corporate credit risk, the IRB approach to retail credit
+risk, the internal model approach (IMA) to market risk, and the standardized approach to operational risk meeting regulatory
+requirements.
+The Group's Management monitors the capital adequacy ratios regularly based on regulations issued by the CBRC. The
+required information is respectively filed with the CBRC by the Group and the Bank semi-annually and quarterly.
+The Group manages its capital structure and makes adjustments in light of changes in economic conditions and the risk
+profile of its activities. In order to maintain or adjust the capital structure, the Group may adjust its profit distribution
+policy, issue or repurchase own shares, qualifying other tier 1 capital instruments, qualifying tier 2 capital instruments and
+convertible bonds, etc.
+Make reasonable use of various capital instruments, continuously enhance capital strengths, refine capital structure,
+improve capital quality, reduce capital cost, and maximize shareholder returns.
+Adopt the advanced measurement approaches, improve the internal capital adequacy assessment process (ICAAP),
+disclose information on capital management, cover all types of risks, and ensure the stable operation of the Group;
+Integrate the quantified results of various risks into daily management, establish a bank value management system
+with economic capital as the core tool, improve the policy, process and application management system, strengthen
+the capital constraint and incentive mechanism, enhance the product pricing and decision-making capabilities, and
+improve the capital allocation efficiency; and
+Maintain reasonable capital adequacy ratio to continuously meet regulatory requirements on capital. Keeping stable
+capital base to ensure the Group's business growth and the implementation of business development and strategic
+plan in order to achieve comprehensive, coordinated and sustainable development;
+•
+The Group's objectives on capital management are:
+(d) Capital management
+Net position
+19,285,200
+249,097
+66,146
+15,361,944
+Due to customers
+150,113
+25,626
+1,974
+86,173
+36,340
+Certificates of deposit
+2,234,119
+106,173
+47,131
+348,135
+1,732,680
+Due to banks and other financial institutions (**)
+33,144
+360,613
+5,255
+12,466
+15,781,673
+893,225
+18,076,732
+548,562
+4,738
+2,677
+34,326
+506,821
+Total liabilities
+Others
+240,175
+7,357
+1,898
+50,227
+180,693
+Debt securities issued
+46,650
+204,026
+Derivative financial assets
+94,452
+Less than
+three
+months
+Three
+Non-
+months to
+one year
+One to
+More than
+31 December 2015
+interest-
+five years
+bearing
+Total
+Assets:
+Cash and balances with central banks
+2,672,292
+five years
+(c) Market risk (continued)
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+Interest rate mismatch
+(1,577,446)
+1,156,751
+487,380
+190,934
+1,584
+208,533
+1,531,435
+357,937
+678,275
+1,146,532
+N/A
+691,074
+22,156,102
+N/A
+(*)
+Includes reverse repurchase agreements.
+(**) Includes repurchase agreements.
+Annual Report 2016
+249
+387,341
+3,059,633
+Due from banks and
+other financial institutions (*)
+4,971
+210,434
+Derivative financial assets
+78,870
+78,870
+Loans and advances to customers
+6,897,524
+4,333,873
+188,200
+130,887
+102,328
+11,652,812
+Financial investments
+447,620
+869,374
+13,665
+2,264
+2,315,505
+173,054
+9,405
+1,438,201
+197,465
+27,608
+41
+16,811
+1,680,126
+Financial assets held for trading
+41,451
+82,154
+6,619
+2,241
+373
+132,838
+Financial assets designated at
+fair value through profit or loss
+9,339
+94,452
+4,130,911
+Total liabilities
+246,209
+246,209
+Others
+Total assets
+9,294
+12,777,175
+209
+5,287,662
+Property and equipment
+604,628
+2,802,885
+1,739,968
+1,529,575
+24,137,265
+Liabilities:
+Due to central banks
+614,131
+30,077
+30,077
+joint ventures
+Loans and advances to customers
+8,042,786
+4,331,521
+154,613
+139,700
+98,714
+12,767,334
+Financial investments
+403,284
+637,160
+2,375,341
+1,578,061
+12,853
+5,006,699
+Investments in associates and
+118
+427
+545
+Financial liabilities designated at
+6,331
+453
+218,427
+Due to customers
+11,660,480
+3,705,066
+2,166,979
+5,362
+287,415
+17,825,302
+Debt securities issued
+Others
+34,242
+8,569
+16,039
+382
+116,722
+93,236
+14,354,621
+118,407
+2,606,105
+fair value through profit or loss
+247,084
+45,217
+9,870
+Derivative financial liabilities
+64,581
+89,960
+366,752
+89,960
+Due to banks and
+other financial institutions (**)
+2,285,839
+270,853
+12,912
+10,200
+26,301
+Certificates of deposit
+21,682
+(c) Market risk (continued)
+Derivative financial liabilities
+564,520
+73,183
+5,548
+10,083
+653,334
+18,327,589
+1,457,834
+Total liabilities
+247,850
+20,409,261
+Net position
+1,610,763
+98,444
+(7,552)
+98,864
+1,800,519
+375,988
+Credit commitments
+Others
+17,743
+Certificates of deposit
+40,813
+108,770
+7,211
+26,558
+183,352
+Due to customers
+306,622
+15,435,986
+202,105
+128,333
+16,281,939
+Debt securities issued
+196,986
+89,408
+2,485
+515,515
+1,840,354
+355,858
+25,449
+Cash and balances with central banks
+3,069,074
+179,180
+7,264
+34,752
+3,290,270
+Due from banks and other financial institutions (*)
+Assets:
+1,020,638
+73,128
+44,306
+1,430,001
+Financial assets held for trading
+182,281
+1,543
+250
+291,929
+Total
+Others
+(equivalent
+to RMB)
+(equivalent
+to RMB)
+76,223
+2,297,884
+(*)
+Includes reverse repurchase agreements.
+(**) Includes repurchase agreements.
+Annual Report 2016
+255
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(c) Market risk (continued)
+Bank
+31 December 2016
+USD
+HKD
+(equivalent
+RMB
+to RMB)
+2,603,051
+125,640
+22,891
+624,804
+8,015
+78,870
+Loans and advances to customers
+10,629,123
+714,769
+171,499
+137,421
+6,736
+11,652,812
+4,423,990
+165,656
+16,668
+60,377
+4,666,691
+Investments in associates and joint ventures
+231
+Financial investments
+37,476
+26,643
+Derivative financial assets
+373,998
+14,612
+65,014
+1,680,126
+Financial assets held for trading
+116,092
+11,654
+139
+4,953
+132,838
+Financial assets designated at fair value
+though profit or loss
+209,444
+252
+166
+572
+210,434
+352
+184,074
+1,508
+24,185
+160
+210
+Financial liabilities designated at fair value
+through profit or loss
+233,169
+11,249
+59,509
+50
+303,927
+26,349
+34,905
+7,610
+7,962
+76,826
+Due to banks and other financial institutions (**)
+1,829,716
+Derivative financial liabilities
+Due to central banks
+Liabilities:
+22,209,780
+Property and equipment
+138,760
+83,631
+688
+1,347
+224,426
+Others
+274,586
+95,968
+9,029
+100,182
+479,765
+Total assets
+19,938,352
+1,556,278
+240,298
+474,852
+22,094
+1,226,502
+Financial assets designated at fair value
+271,781
+Credit commitments
+2,096,950
+514,280
+4,868
+97,777
+2,713,875
+(*)
+1,909,929
+Includes reverse repurchase agreements.
+256
+ICBC
+(c) Market risk (continued)
+31 December 2015
+Assets:
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(**) Includes repurchase agreements.
+RMB
+180,234
+110,388
+6,199
+279,446
+Others
+Total liabilities
+471,796
+52,601
+795
+27,632
+7,095
+19,238,918
+1,218,422
+122,007
+298,804
+20,878,151
+Net position
+1,591,675
+532,287
+USD
+(equivalent
+to RMB)
+HKD
+(equivalent
+to RMB)
+563
+206,282
+Derivative financial assets
+26,269
+5,133
+1,888
+33,290
+210
+Loans and advances to customers
+514,733
+5,614
+65,319
+11,026,476
+Financial investments
+15,840
+4,325,530
+10,440,810
+205,509
+though profit or loss
+Financial assets designated at fair value
+Others
+(equivalent
+to RMB)
+Total
+Cash and balances with central banks
+2,884,990
+61,956
+1,698
+42,975
+2,991,619
+Due from banks and other financial institutions (*)
+1,246,867
+223,412
+42,911
+52,254
+1,565,444
+Financial assets held for trading
+115,950
+115,950
+723
+94,553
+177,971
+Debt securities issued
+Investments in subsidiaries and associates
+17,353
+10,011
+44,820
+64,346
+136,530
+Property and equipment
+4,748,376
+123,613
+9
+218
+124,089
+Others
+266,238
+51,642
+504
+249
+46,841
+14,757
+132,229
+231
+106
+272,118
+Derivative financial assets
+40,325
+18,623
+2
+3,942
+62,892
+Loans and advances to customers
+11,284,741
+643,173
+9,155
+96,131
+12,033,200
+Financial investments
+4,554,549
+188,146
+though profit or loss
+506,530
+20,830,593
+401,106
+97,087
+103,898
+2,225,769
+Certificates of deposit
+25,667
+122,962
+1,623,678
+10,691
+194,503
+Due to customers
+16,640,183
+502,777
+12,709
+79,918
+17,235,587
+35,183
+Due to banks and other financial institutions (**)
+58,179
+6,147
+1,328,810
+149,639
+479,038
+22,788,080
+Liabilities:
+Due to central banks
+379
+379
+through profit or loss
+279,504
+12,512
+59,985
+352,001
+Derivative financial liabilities
+20,119
+31,911
+2
+Total assets
+Due from banks and other financial institutions (*)
+Financial liabilities designated at fair value
+74,877
+253
+Annual Report 2016
+While the tables above indicates the effect on profit before taxation and equity of 1% depreciation of USD and HKD, there
+will be an opposite effect with the same amount if the currencies appreciate by the same percentage.
+(14)
+(19)
+(22)
+(27)
+49
+152
+78
+188
+-1%
+-1%
+2015
+Effect on equity
+2016
+2015
+Effect on profit
+before taxation
+2016
+Notes to the Financial Statements
+Change in
+currency rate
+USD
+Currency
+Bank
+(795)
+(929)
+402
+-1%
+HKD
+(280)
+(313)
+75
+66
+-1%
+USD
+HKD
+2015
+Financial Statements for the year ended 31 December 2016
+(c) Market risk (continued)
+189,331
+2,967
+5,732
+180,632
+Financial assets held for trading
+1,553,100
+38,569
+7,557
+483,688
+1,023,286
+Due from banks and other financial institutions (*)
+3,350,788
+56,117
+17,442
+(In RMB millions, unless otherwise stated)
+195,520
+Cash and balances with central banks
+Total
+Others
+(equivalent
+to RMB)
+to RMB)
+to RMB)
+RMB
+(equivalent
+(equivalent
+HKD
+USD
+Assets:
+31 December 2016
+Group
+A breakdown of the assets and liabilities analysed by currency is as follows:
+3,081,709
+2016
+2015
+2016
+Others
+240,175
+184,016
+30,098
+8,872
+17,189
+Debt securities issued
+15,781,673
+236,395
+3,061
+2,027,361
+3,463,631
+10,051,225
+Due to customers
+548,562
+2,234,119
+150,113
+8,074
+58,563
+83,033
+Certificates of deposit
+23,556
+1,894
+179,112
+2,029,557
+other financial institutions (**)
+Due to banks and
+33,144
+55,866
+33,144
+297,414
+3,059,633
+443
+Total liabilities
+12,385,030
+3,731,860
+Effect on equity
+Effect on profit
+before taxation
+Change in
+currency rate
+Currency
+Group
+The tables below indicate a sensitivity analysis of exchange rate changes of the currencies to which the Group had significant
+exposure on its monetary assets and liabilities and its forecasted cash flows. The analysis calculates the effect of a reasonably
+possible movement in the currency rates against RMB, with all other variables held constant, on profit before taxation and
+equity. A negative amount in the table reflects a potential net reduction in profit before taxation or equity, while a positive
+amount reflects a potential net increase. This effect, however, is based on the assumption that the Group's foreign exchange
+exposures as at the year end are kept unchanged and, therefore, have not incorporated actions that would be taken by the
+Group to mitigate the adverse impact of this currency risk.
+The Group manages its currency risk through various methods, including limitation management and risk hedging to hedge
+currency risk, and performing currency risk sensitivity analysis and stress testing regularly.
+The exchange rate of RMB to USD is managed under a floating exchange rate system. The HKD exchange rate has been
+pegged to USD and therefore the exchange rate of RMB to HKD has fluctuated in line with the changes in the exchange rate
+of RMB to USD.
+The Group conducts its businesses mainly in RMB, with certain transactions denominated in USD, HKD and, to a lesser
+extent, other currencies. Transactions in foreign currencies mainly arise from the Group's treasury operations, foreign
+exchange dealings and overseas investments.
+(iii) Currency risk
+(c) Market risk (continued)
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+252
+(**) Includes repurchase agreements.
+87,616
+2,083,267
+187,520
+897,523
+548,562
+19,285,200
+Interest rate mismatch
+Financial assets designated at fair value
+(1,542,015)
+298,586
+1,110,937
+N/A
+N/A
+(*)
+Includes reverse repurchase agreements.
+1,600,877
+though profit or loss
+275
+9,536
+Assets:
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+USD
+(equivalent
+HKD
+(equivalent
+19,253
+Others
+(equivalent
+RMB
+to RMB)
+to RMB)
+to RMB)
+Total
+Cash and balances with central banks
+31 December 2015
+726
+182,367
+Debt securities issued
+17,825,302
+167,648
+235,360
+699,543
+16,722,751
+Due to customers
+218,427
+37,633
+13,330
+137,310
+30,154
+Certificates of deposit
+153,201
+357,937
+(c) Market risk (continued)
+254
+Others
+Total liabilities
+579,749
+93,117
+6,335
+11,873
+691,074
+19,553,185
+1,866,559
+304,446
+271,780
+431,912
+22,156,102
+Net position
+ICBC
+1,636,859
+(23,300)
+164,069
+1,981,163
+Credit commitments
+2,120,542
+500,612
+2,892,981
+30,896
+126,362
+2,778,412
+72,522
+(*)
+Includes reverse repurchase agreements.
+(**) Includes repurchase agreements.
+203,535
+118,324
+2,606,105
+723,289
+20,374
+70,534
+5,006,699
+Investments in associates and joint ventures
+660
+875
+240,949
+1,627
+30,077
+Property and equipment
+131,354
+112,653
+758
+1,444
+26,915
+246,209
+4,674,842
+12,767,334
+272
+3,556
+285,144
+Derivative financial assets
+41,478
+32,020
+Financial investments
+8,575
+94,452
+Loans and advances to customers
+11,490,448
+863,960
+220,280
+192,646
+12,379
+35,485
+Others
+125,161
+1,729,007
+Due to banks and other financial institutions (**)
+89,960
+10,711
+13,210
+46,150
+19,889
+Derivative financial liabilities
+366,752
+63,565
+13,949
+289,238
+through profit or loss
+293,855
+545
+Financial liabilities designated at fair value
+21,643
+4,261
+30
+Due to central banks
+Liabilities:
+24,137,265
+190,854
+595,981
+515
+281,146
+2,070,094
+21,190,044
+Total assets
+614,131
+1,904,587
+154,512
+1,608,201
+68,186
+12,836
+Financial liabilities which are measured at
+1,045
+351
+1,396
+Commodity derivatives and others
+1,705
+2
+1,707
+324
+57,336
+519
+Interest rate contracts
+58,179
+396,825
+519
+410,180
+Annual Report 2016
+263
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(a) Financial instruments recorded at fair value (continued)
+31 December 2015
+201
+2,127,285
+55,076
+54,586
+fair value on a recurring basis:
+Financial liabilities designated at fair value
+through profit or loss
+Wealth management products
+Structured deposits
+270,831
+8,674
+Financial liabilities related to
+precious metals
+59,185
+Debt securities issued
+166
+12,512
+12,512
+339,489
+| |
+270,831
+270,674
+59,185
+13,311
+352,001
+Derivative financial liabilities
+Exchange rate contracts
+324
+799
+1,540,869
+1,479
+1,532,327
+153,792
+52,019
+Others
+25,706
+25,706
+40,601
+39,682
+919
+Other debt instruments
+Debt securities
+through profit or loss
+184,074
+135,774
+48,300
+184,074
+135,774
+48,300
+Financial assets designated at fair value
+Debt securities
+Equity investments
+Financial assets held for trading
+fair value on a recurring basis:
+Financial assets which are measured at
+Total
+Level 3
+Level 2
+Level 1
+205,811
+67,131
+919
+153,792
+201
+1,465,826
+66,300
+75,874
+75,043
+831
+Debt securities
+Equity investments
+Available-for-sale financial assets
+62,892
+519
+62,237
+136
+8,078
+2
+8,076
+Commodity derivatives and others
+351
+1,128
+Interest rate contracts
+53,335
+166
+53,033
+136
+Exchange rate contracts
+Derivative financial assets
+272,118
+117,407
+Level 2
+(i) Transfers between level 1 and level 2
+Total
+8,033
+(c) Transfers between levels
+Level 1
+Due to changes in market conditions for certain securities, quoted prices in active markets were available for these securities.
+Therefore, these securities were transferred from level 2 to level 1 of the fair value hierarchy on the balance sheet date.
+Due to changes in market conditions for certain securities, quoted prices in active markets were no longer available for
+these securities. However, there was sufficient information available to measure the fair values of these securities based on
+observable market inputs. Therefore, these securities were transferred from level 1 to level 2 of the fair value hierarchy on
+the balance sheet date.
+During the year, the transfers between level 1 and level 2 of the fair value hierarchy for financial assets and liabilities of the
+Group were immaterial.
+(ii) Transfers between level 2 and level 3
+On the balance sheet date, certain financial instruments were transferred out from level 3 to level 2 of the fair value
+hierarchy for financial assets and liabilities when significant inputs used in their fair value measurements, which was
+previously unobservable became observable.
+During the year, certain derivatives financial instruments were transferred out from level 3 to level 2 of the fair value
+hierarchy when significant inputs used in their fair value measurements such as market price volatility, which was previously
+unobservable became observable.
+(d) Valuation of financial instruments with significant unobservable inputs
+Financial instruments valued with significant unobservable inputs are primarily certain structured derivatives, certain debt
+securities and asset-backed securities. These financial instruments are valued using cash flow discount model. The models
+incorporate various non-observable assumptions such as discount rate and market rate volatilities.
+As at 31 December 2016, the effects of changes in significant unobservable assumptions to reasonably possible alternative
+assumptions were immaterial.
+1,550
+Annual Report 2016
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(e) Fair value of financial assets and liabilities not carried at fair value
+The following table summarises the carrying amounts, the fair value and the analysis by level of the fair value hierarchy of
+held-to-maturity investments, receivables, subordinated bonds and tier 2 capital notes:
+Group
+2016
+Carrying
+amount
+Fair value
+Level 1
+Level 2
+Level 3
+267
+Financial assets
+6,483
+1,420
+| | | |
+| | |
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(b) Movement in level 3 financial instruments measured at fair value (continued)
+Gains or losses on level 3 financial instruments included in the statement of profit or loss for the year comprise:
+2016
+Realised
+Group
+Unrealised
+Total
+Realised
+Bank
+Unrealised
+Total gains for the year
+8,174
+5,302
+8,142
+5,061
+2,101
+Total
+7,162
+2015
+Total gains for the year
+Realised
+6,754
+Group
+Unrealised
+Total
+Realised
+Bank
+Unrealised
+Total
+2,840
+Held-to-maturity investments
+2,973,042
+2,996,641
+2,944,661
+56,841
+2,654,913
+232,907
+773
+115,950
+115,950
+115,950
+115,950
+fair value on a recurring basis:
+Financial liabilities which are measured at
+Debt securities
+Equity investments
+2,870,353
+Available-for-sale financial assets
+Interest rate contracts
+Exchange rate contracts
+Derivative financial assets
+Others
+Other debt instruments
+Debt securities
+through profit or loss
+Financial assets designated at fair value
+Debt securities
+Financial assets held for trading
+fair value on a recurring basis:
+Financial assets which are measured at
+Commodity derivatives and others
+Held-to-maturity investments
+Financial assets
+Level 3
+3,440
+Receivables
+291,370
+291,577
+2,992,779
+56,753
+422
+234,824
+Subtotal
+3,264,412
+3,288,218
+3,440
+3,049,532
+235,246
+Financial liabilities
+Subordinated bonds and Tier 2 Capital Notes
+194,811
+202,034
+202,034
+Subtotal
+194,811
+202,034
+202,034
+2015
+Carrying
+amount
+Fair value
+Level 1
+Level 2
+Level 3
+31 December 2016
+(In RMB millions, unless otherwise stated)
+(a) Financial instruments recorded at fair value (continued)
+19,161
+1
+Interest rate contracts
+60,217
+310
+59,581
+326
+Exchange rate contracts
+Derivative financial liabilities
+366,752
+2,101
+351,774
+1,308
+12,877
+2,101
+3,089
+365
+Others
+13,377
+865
+12,512
+Other debt securities issued
+59,192
+59,192
+precious metals
+Financial liabilities related to
+5,555
+17,797
+20,470
+5,239
+Debt securities
+Equity investments
+Financial assets held for trading
+fair value on a recurring basis:
+Financial assets which are measured at
+Total
+Level 3
+Level 2
+Level 1
+31 December 2015
+(a) Financial instruments recorded at fair value (continued)
+Financial Statements for the year ended 31 December 2016
+Commodity derivatives and others
+Notes to the Financial Statements
+Annual Report 2016
+456,712
+3,892
+434,377
+18,443
+89,960
+1,791
+82,603
+5,566
+9,273
+173
+3,861
+261
+17,797
+Structured deposits
+270,831
+9,836
+67
+15,565
+5,880
+87,773
+799
+94,452
+Available-for-sale financial assets
+Equity investments
+11,114
+338
+11,452
+5,662
+Debt securities
+1,635,493
+1,264
+Other debt instruments
+94,987
+110,942
+8,804
+1,644,635
+2,039,321
+1,264
+1,720,630
+8,804
+1,740,886
+159,550
+2,309,813
+Financial liabilities which are measured at
+fair value on a recurring basis:
+| | ||
+83,873
+Commodity derivatives and others
+20,609
+412
+270,831
+Wealth management products
+through profit or loss
+Financial liabilities designated at fair value
+919
+39,954
+40,873
+Other debt instruments
+25,706
+25,706
+Others
+61,269
+157,296
+218,565
+919
+126,929
+157,296
+285,144
+Derivative financial asset
+Exchange rate contracts
+188
+57,770
+320
+58,278
+Interest rate contracts
+30
+20,167
+373
+14,808
+117,657
+15,181
+117,657
+2,091
+6,508
+2,211
+4,153
+144
+Others
+8,496
+6,549
+1,947
+Other debt securities issued
+55,871
+55,871
+299,625
+precious metals
+27,521
+27,521
+Structured deposits
+205,531
+205,531
+Wealth management products
+Financial liabilities designated at fair value
+fair value on a recurring basis:
+Financial liabilities which are measured at
+through profit or loss
+1,865,499
+188,566
+Financial liabilities related to
+2,211
+303,927
+Derivative financial liabilities
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+262
+380,753
+4,681
+367,618
+8,454
+76,826
+2,470
+67,993
+6,363
+9,665
+55
+3,366
+6,244
+Commodity derivatives and others
+28,236
+2,181
+26,052
+3
+Interest rate contracts
+38,925
+234
+38,575
+116
+Exchange rate contracts
+1,509,367
+Bank
+167,566
+6,146
+36,607
+228
+36,277
+102
+Exchange rate contracts
+Derivative financial assets
+210,434
+181,376
+28,234
+824
+181,910
+181,376
+Interest rate contracts
+534
+6,300
+6,300
+22,224
+21,400
+824
+132,838
+132,465
+373
+Other debt instruments
+Debt securities
+through profit or loss
+Financial assets designated at fair value
+Others
+25
+26,249
+715
+1,294,439
+142,772
+27,593
+27,593
+1,402,673
+5,520
+13,091
+626
+134
+-
+Other debt instruments
+1,266,712
+130,441
+Debt securities
+12,331
+Equity investments
+Available-for-sale financial assets
+78,870
+1,044
+69,037
+8,789
+15,274
+101
+6,511
+8,662
+Commodity derivatives and others
+26,989
+1,443,357
+---961
+(2,101)
+104
+1,264
+Equity investments
+626
+(316)
+(310)
+188,566
+7,402
+(38)
+12,445
+(14,951)
+(4,129)
+(29,745)
+(3,567)
+159,550
+Financial liabilities designated at fair value
+through profit or loss
+(2,211)
+67
+1
+Derivative financial liabilities
+Exchange rate contracts
+(234)
+(24)
+Interest rate contracts
+(2,181)
+736
+Financial liabilities:
+Commodity derivatives and others
+(900)
+(38)
+(8)
+(46)
+67
+50
+(150)
+(252)
+69
+799
+Financial assets held for trading
+96
+497
+(92)
+239
+(310)
+Financial assets designated at fair value
+through profit or loss
+181,376
+7,258
+11,659
+(13,493)
+(29,504)
+157,296
+Available-for-sale financial assets
+Debt securities
+5,520
+10
+191
+(55)
+(39)
+(4,681)
+profit or loss
+in other
+comprehensive
+income
+Additions
+Disposals
+Settlements
+Transfer out of
+Level 3
+As at 31
+December 2015
+Financial assets:
+Derivative financial assets
+Exchange rate contracts
+1,140
+Interest rate contracts
+Commodity derivatives and others
+2015
+1,942
+(153)
+149
+770
+(113)
+121
+32
+38
+བྷངཿཝཱ
+34
+(228)
+304
+(855)
+ཤྲུཎྜབྷྲ
+Total gains
+recorded
+Total
+(losses)/gains
+recorded in
+1 January
+740
+12
+92
+(83)
+22
+Debt securities
+(9)
+(3)
+36
+(76)
+(310)
+(2)
+147
+26
+(34)
+(1,308)
+(134)
+6
+48
+1
+(173)
+(133)
+242
+27
+(87)
+(3,892)
+As at
+33
+412
+34
+(179)
+1,224,821
+565
+1,298,336
+73,723
+1,401,356
+178,779
+1,653,858
+Financial liabilities designated at fair value
+through profit or loss
+Wealth management products
+205,531
+Structured deposits
+72,950
+27,521
+precious metals
+55,866
+Debt securities issued
+1,947
+6,549
+1,947
+295,467
+Derivative financial liabilities
+Exchange rate contracts
+Interest rate contracts
+Commodity derivatives and others
+264
+Financial liabilities related to
+1,296,903
+565
+1,224,821
+21,236
+22,009
+6,300
+6,300
+534
+177,439
+177,973
+773
+28,070
+177,439
+206,282
+| | ||
+27,695
+208
+27,903
+1,146
+530
+1,676
+3,674
+37
+3,711
+32,515
+775
+33,290
+1,433
+1,433
+71,517
+ICBC
+(53)
+205,531
+55,866
+2016
+profit or loss
+comprehensive
+income
+Additions
+Disposals
+Settlements
+Transfer out of
+Level 3
+As at 31
+December 2016
+Exchange rate contracts
+228
+72
+Interest rate contracts
+in other
+715
+Commodity derivatives and others
+101
+(13)
+1,044
+38
+5235
+15
+(3)
+(27)
+35
+320
+(139)
+(21)
+gains/(losses)
+recorded in
+1 January
+As at
+8,496
+297,414
+30,074
+208
+30,282
+1,330
+530
+1,860
+986
+16
+1,002
+32,390
+754
+33,144
+1,947
+327,857
+754
+330,558
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(b) Movement in level 3 financial instruments measured at fair value
+The following table shows a reconciliation of the opening and closing balance of level 3 financial assets and liabilities which
+are recorded at fair value and the movement during the year:
+Group
+Financial assets:
+Derivative financial assets
+Total
+Total gains
+recorded
+27,521
+228
+(6)
+(57)
+(519)
+As at
+1 January
+2015
+Total
+gains/(losses)
+recorded in
+profit or loss
+Total gains
+recorded
+in other
+comprehensive
+Transfer out of
+income
+Additions
+Disposals
+Settlements
+(351)
+Level 3
+Financial assets:
+Derivative financial assets
+Exchange rate contracts
+1,149
+6
+Interest rate contracts
+770
+(177)
+Commodity derivatives and others
+32
+8
+1,951
+(163)
+As at 31
+December 2015
+(166)
+| | ||
+| | | |
+6,921
+ΞΕ
+(17)
+(358)
+-- 201
+(17)
+11,487
+(13,154)
+(29,504)
+154,512
+Financial liabilities:
+Derivative financial liabilities
+Exchange rate contracts
+(208)
+44
+Interest rate contracts
+(530)
+181
+Commodity derivatives and others
+(16)
+16
+| | |
+(2)
+(754)
+241
+(6)
+| | ||
+| | ||
+178,779
+| | |
+(83)
+(5,861)
+(140)
+178,779
+Financial liabilities:
+Derivative financial liabilities
+Exchange rate contracts
+(1,263)
+(6)
+Interest rate contracts
+(721)
+176
+Commodity derivatives and others
+(49,310)
+(34)
+(2,018)
+183
+266
+ICBC
+100
+(208)
+11
+4
+(530)
+5
+(16)
+977
+13
+81,540
+16
+7,850
+208
+---(6)
+(57)
+530
+(3)
+37
+(873)
+(140)
+775
+|
+Financial assets designated at fair value
+through profit or loss
+137,116
+8,075
+81,340
+(49,092)
+177,439
+Available-for-sale financial assets
+Debt securities
+5,617
+(62)
+16
+200
+(218)
+(4,988)
+565
+144,684
+(864)
+(754)
+11
+Debt securities
+(13,532)
+(110)
+188,566
+Financial liabilities:
+Financial liabilities designated at fair value
+through profit or loss
+202
+(2,413)
+(2,211)
+Derivative financial liabilities
+Exchange rate contracts
+(1,319)
+(49,310)
+173
+1,012
+105
+Interest rate contracts
+(726)
+(746)
+(725)
+14
+152
+(234)
+(2,181)
+Commodity derivatives and others
+(34)
+(205)
+87,529
+370
+8,517
+715
+(3)
+101
+(864)
+(110)
+1,044
+Financial assets designated at fair value
+through profit or loss
+139,004
+8,411
+83,053
+(49,092)
+181,376
+Available-for-sale financial assets
+Debt securities
+13,852
+334
+48
+4,172
+(218)
+(12,668)
+5,520
+Equity investments
+304
+322
+626
+155,102
+28
+565
+(378)
+-
+Interest rate contracts
+530
+(181)
+Commodity derivatives and others
+37
+(37)
+775
+(262)
+| | ||
+-2---1 166
+2
+6
+(44)
+| | |
+351
+..
+2
+519
+Financial assets designated at fair value
+through profit or loss
+177,439
+7,172
+11,481
+(12,796)
+(29,504)
+153,792
+Available-for-sale financial assets
+| | ||
+208
+Exchange rate contracts
+Derivative financial assets
+(55)
+(2,079)
+(343)
+(3,721)
+1,355
+107
+(4,681)
+Annual Report 2016
+265
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(b) Movement in level 3 financial instruments measured at fair value (continued)
+Bank
+As at
+1 January
+Total
+gains/(losses)
+recorded in
+Total gains
+recorded
+in other
+comprehensive
+2016
+profit or loss
+income
+Additions
+Disposals
+Settlements
+Transfer out of
+Level 3
+As at 31
+December 2016
+Financial assets:
+329
+through profit or loss
+Additional tier 1 capital instruments and related premium
+189,331
+Level 3
+Financial assets
+Held-to-maturity investments
+Receivables
+Subtotal
+Financial liabilities
+Subordinated bonds and Tier 2 Capital Notes
+181,999
+188,693
+Subtotal
+181,999
+188,693
+2,876,081
+2,899,455
+2,388
+263,456
+263,698
+3,139,537
+3,163,153
+2,388
+2,897,067
+75,189
+2,972,256
+Level 2
+Level 1
+Fair value
+Carrying
+amount
+Receivables
+352,143
+353,223
+109,005
+244,218
+Subtotal
+3,222,496
+3,297,884
+56,841
+2,763,918
+Net core tier 1 capital
+477,125
+Subordinated bonds and Tier 2 Capital Notes
+195,553
+215,581
+Subtotal
+195,553
+215,581
+215,581
+215,581
+Bank
+2016
+Financial liabilities
+Financial assets designated at fair value
+5,700
+Investment in core tier 1 capital instruments issued by financial
+institutions that are under control but not subject to consolidation
+205,021
+Surplus reserve
+151,963
+151,998
+Valid portion of capital reserve
+356,407
+356,407
+1,713,160
+1,886,536
+Paid-in capital
+Core tier 1 capital
+31 December 2015
+31 December 2016
+The capital adequacy ratios calculated after implementation of the advanced capital management approaches are as follows:
+(d) Capital management (continued)
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+268
+188,693
+188,693
+178,040
+General reserve
+251,349
+246,356
+(3,869)
+(4,618)
+that are not fair valued on the balance sheet
+Cash flow hedge reserves that relate to the hedging of items
+1,356
+1,477
+Other intangible assets other than land use rights
+8,478
+9,001
+Goodwill
+5,700
+11,665
+(5,799)
+(21,640)
+4,340
+3,164
+Core tier 1 capital deductions
+Others
+Valid portion of minority interests
+781,853
+940,237
+Retained profits
+11,560
+188,509
+188,509
+419
+Significant minority investments in tier 2 capital instruments issued by
+financial institutions that are not subject to consolidation
+5,600
+13,600
+Net capital base
+2,127,462
+2,012,103
+Risk-weighted assets (i)
+14,564,617
+13,600
+13,216,687
+12.87%
+12.87%
+Tier 1 capital adequacy ratio
+13.42%
+13.48%
+Capital adequacy ratio
+14.61%
+15.22%
+(i)
+Core tier 1 capital adequacy ratio
+5,600
+Tier 2 capital deductions
+1,001
+Tier 2 capital
+1,781,062
+1,954,770
+Net tier 1 capital
+192
+Valid portion of tier 2 capital instruments and related premium
+Valid portion of minority interests
+79,375
+79,375
+79,567
+79,794
+Additional tier 1 capital
+1,701,495
+1,874,976
+154,861
+180,242
+Surplus provision for loan impairment
+19,195
+63,398
+Valid portion of minority interests
+4,236
+Refers to risk-weighted assets after capital floor and adjustments.
+Annual Report 2016
+259
+Notes to the Financial Statements
+The following tables show an analysis of financial instruments recorded at fair value by level of the fair value hierarchy:
+Group
+31 December 2016
+Financial assets which are measured at
+Level 1
+Level 2
+Level 3
+Total
+fair value on a recurring basis:
+Financial assets held for trading
+Equity investments
+Debt securities
+6,016
+6,016
+3,140
+179,984
+191
+183,315
+9,156
+179,984
+191
+(a) Financial instruments recorded at fair value
+178,292
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+ICBC
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+55. FAIR VALUE OF FINANCIAL INSTRUMENTS
+Fair value estimates are generally subjective in nature, and are made as of a specific point in time based on the characteristics
+of the financial instruments and relevant market information. The Group uses the following hierarchy for determining and
+disclosing the fair value of financial instruments:
+Level 1:
+Level 2:
+Level 3:
+quoted (unadjusted) prices in active markets for identical assets or liabilities;
+valuation techniques for which all inputs which have a significant effect on the recorded fair value are
+observable, either directly or indirectly; and
+valuation techniques which use inputs which have a significant effect on the recorded fair value that are not
+based on observable market data.
+The Group has established policies and internal controls with respect to the measurement of fair values, specify the
+framework of fair value measurement of financial instrument, fair value measurement methodologies and procedures. Fair
+value measurement policies specify valuation techniques, parameter selection and relevant concepts, models and parameter
+solutions. Operating procedures specify measurement operating procedures, valuation date, market parameter selection
+and corresponding allocation of responsibilities. In the process of fair value measurement, front office is responsible for
+daily transactions management. Financial Accounting Department plays a lead role of developing accounting policies of fair
+value measurement, valuation methodologies and system implementation. Risk Management Department is responsible for
+verifying trade details and valuation models.
+The following is a description of the fair value of the financial instruments recorded at fair value which are determined using
+valuation techniques. These incorporate the Group's estimate of assumptions that a market participant would make when
+valuing the instruments.
+Financial investments
+Financial investments valued using valuation techniques consist of debt securities and asset-backed securities. The Group
+values such securities in use of a discounted cash flow analysis which incorporates either only observable data or both
+observable and non-observable data. Observable inputs include assumptions regarding current interest rates; unobservable
+inputs include assumptions regarding expected future default rates, prepayment rates and market liquidity discounts.
+A majority of the debt securities classified as level 2 are RMB bonds. The fair value of these bonds are determined based on
+the valuation results provided by China Central Depository & Clearing Co., Ltd., which are determined based on a valuation
+technique for which all significant inputs are observable market data.
+Derivatives
+Derivatives valued using a valuation technique with market observable inputs are mainly interest rate swaps, foreign
+exchange forwards, swaps and options, etc.. The most frequently applied valuation techniques include discounted cash flow
+model and Black-Scholes model. The models incorporate various inputs including foreign exchange spot and forward rates,
+foreign exchange rate volatility, interest rate yield curves, etc..
+Structured products are mainly valued using dealer's quotations.
+Other liabilities designated at fair value through profit or loss
+For unquoted other liabilities designated at fair value through profit or loss, the discounted cash flow model is used based
+on current yield curve appropriate for the remaining term to maturity adjusted for market liquidity and credit spreads; and
+Heston model is applied based on yield curves, foreign exchange forward rates, foreign exchange rate volatilities, etc., which
+is calibrated by active market quotes of standard European options with the same underlying.
+260
+Notes to the Financial Statements
+244,641
+3,290,270
+Notes to the Financial Statements
+Notes
+57. COMPANY-LEVEL STATEMENT OF FINANCIAL POSITION
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2016
+Notes to the Financial Statements
+269
+Annual Report 2016
+On 23 March 2016, the MOF issued "Notice of Overall Implementation of Pilot Program for Value Added Tax Replacing
+Business Tax" (Cai Shui [2016] No. 36). Pursuant to the Notice, value added tax replacing the existing business tax has been
+levied for certain pilot industries, including financial industry, since 1 May 2016 on a national-wide basis, the applicable tax
+rate for the Bank is 6%. Value added tax and related underlying value of the invoice for value added taxable income and
+expenses shall be stated and accounted for separately. Such changes had impacts on both the Group's consolidated financial
+statements and related financial indicators.
+The impact of value added tax replacing business tax
+56. OTHER IMPORTANT MATTERS
+Due to customers
+Other financial liabilities
+Due to banks and other financial institutions
+Repurchase agreements
+Liabilities
+Other financial assets
+Loans and advances to customers
+Reverse repurchase agreements
+Due from banks and other financial institutions
+31 December
+2016
+927,705
+31 December
+ASSETS
+22222222023 ≈≈
+Other assets
+Deferred income tax assets
+Property and equipment
+29
+Investments in associates
+Investments in subsidiaries
+Financial investments
+Loans and advances to customers
+25
+Reverse repurchase agreements
+Derivative financial assets
+Financial assets designated at fair value through profit or loss
+Financial assets held for trading
+21
+Due from banks and other financial institutions
+Cash and balances with central banks
+2015
+2,991,619
+Assets
+All of the above-mentioned assumptions and methods provide a consistent basis for the calculation of the fair values of
+the Group and the Bank's assets and liabilities. However, other institutions may use different assumptions and methods.
+Therefore, the fair values disclosed by different financial institutions may not be entirely comparable.
+2,637,893
+121,305
+339,918
+338,839
+Receivables
+19,943
+2,887,836
+2,813,091
+Held-to-maturity investments
+Financial assets
+Level 3
+Level 2
+Level 1
+Fair value
+amount
+Carrying
+2015
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+230,000
+Those financial instruments for which their carrying amounts are the reasonable approximations of their fair values because,
+for example, they are short term in nature or repriced at current market rates frequently, are as follows:
+218,613
+3,151,930
+772,568
+(iii) Available-for-sale equity investments measured at cost were all non-listed shares. The fair values are estimated on the
+basis of pricing models or discounted cash flows. The fair value was approximately the same with its book value and
+classified in fair value hierarchy level 3.
+The fair values of held-to-maturity investments, subordinated bonds and tier 2 capital notes are determined with
+reference to the available market values. If quoted market prices are not available, then fair values are estimated on
+the basis of pricing models or discounted cash flows.
+The receivables are not quoted in an active market. The fair values of those receivables relating to the restructuring
+of the Bank are estimated on the basis of the stated interest rates and the consideration of the relevant special
+clauses of the instruments evaluated in the absence of any other relevant observable market data, and the fair values
+approximate to their carrying amounts. The fair values of receivables other than those relating to the restructuring of
+the Bank are estimated on the basis of pricing models or discounted cash flows.
+(i)
+Subject to the existence of an active market, such as an authorised securities exchange, the market value is the best
+reflection of the fair value of financial instruments. As there is no available market value for certain of the financial assets
+and liabilities held and issued by the Group, the discounted cash flow method or other valuation methods described below
+are adopted to determine the fair values of these assets and liabilities:
+192,431
+192,431
+192,431
+192,431
+181,092
+181,092
+Subordinated bonds and Tier 2 Capital Notes
+Subtotal
+Financial liabilities
+448,613
+2,759,198
+19,943
+3,227,754
+Subtotal
+Balances with central banks
+9,556
+13,224
+85,749
+3,666,608
+4,196,169
+Subtotal of personal loans
+16,473
+16,473
+32,727
+207,874
+699,059
+Others
+82,410
+82,410
+53,022
+3,458,734
+3,497,110
+Personal mortgage and business loans
+190,285
+125,028
+65,257
+159,871
+258,650
+3,051,922
+8,140,684
+Subtotal of corporate loans
+8,257
+6,568
+1,689
+5,549
+12,397
+98,883
+207,188
+98,883
+Total loans and advances to customers
+Overdue
+loans and
+advances
+Loans and
+advances
+covered by
+collateral
+to customers
+and advances
+Gross loans
+Loans and
+*
+31 December 2015
+Please see section (e) (iii) for the definition of overdue loans and advances to customers.
+Uncovered portion of overdue loans and advances *
+*
+205,435
+140,692
+Covered portion of overdue loans and advances *
+302,018
+the covered portion of overdue loans and advances *
+Current market value of collateral held against
+289,512
+223,955
+344
+44
+300
+65,557
+160,469
+346,127
+7,438,523
+598
+1,728
+719,993
+719,993
+13,056,846
+Discounted bills
+397,951
+Others
+2,257
+1,302
+2,068
+228,496
+536,718
+Water, environment and public utility management
+13,238
+9,155
+4,083
+184,074
+22,288
+423,175
+642,423
+Real estate
+37,540
+12,875
+24,665
+59,057
+80,928
+349,761
+776,739
+Wholesale and retail
+14,396
+12,146
+2,250
+5,103
+9,836
+432,921
+828,686
+Leasing and commercial services
+243
+7,820
+8,063
+Mining
+1,987
+270
+687
+927
+42,783
+136,799
+Science, education, culture and sanitation
+5,364
+3,394
+1,970
+4,396
+6,434
+80,341
+212,450
+12,983
+Construction
+976
+34
+50
+879
+78,695
+251,733
+Finance
+8,921
+5,249
+3,672
+6,819
+9,613
+43,017
+274,273
+1,010
+115,950
+379
+352,001
+58,179
+1,920,782
+304,987
+206,282
+Others
+sector
+sector
+Non-bank
+private
+Official
+Banks and
+other
+financial
+institutions
+31 December 2016
+Total
+A country or geographical area is reported where it constitutes 10% or more of the aggregate amount of international
+claims, after taking into account any risk transfers. Risk transfers are only made if the claims are guaranteed by a party in a
+country which is different from that of the counterparty or if the claims are on an overseas branch of a bank whose Head
+Office is located in another country.
+(d) International claims
+investments in overseas subsidiaries, associates and joint ventures.
+.
+capital and statutory reserves of overseas branches; and
+•
+property and equipment, net of depreciation charges;
+The net option position is calculated using the delta equivalent approach required by the Hong Kong Monetary Authority.
+The net structural position of the Group includes the structural positions of the Bank's overseas branches, banking
+subsidiaries and other subsidiaries substantially involved in foreign exchange. Structural assets and liabilities include:
+International claims refer to the sum of cross-border claims in all currencies and local claims in foreign currencies, including
+loans and advances to customers, balances with central banks, amounts due from banks and other financial institutions and
+debt investments.
+For the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Asia Pacific
+180,831
+281,452
+401,338
+285,041
+9,332
+124,562
+100,621
+50,526
+350,812
+370,270
+262,675
+16,904
+21,608
+of which attributed to Hong Kong
+North and South America
+1,534,277
+73,934
+928,700
+69,083
+1,053,262
+Unaudited Supplementary Financial Information
+272
+Forward sales
+53,298
+1,263,904
+Forward purchases
+(247,850)
+(1,432,026)
+Spot liabilities
+(1,277,231)
+238,102
+Spot assets
+HKD
+USD
+31 December 2015
+113,363
+28,359
+1,863
+1,472,295
+ICBC
+(21,979)
+Total
+2,161,808
+(2,055,864)
+83,812
+23,441
+2,196
+58,175
+69,622
+(3,464)
+(200)
+24,373
+Others
+451,411
+(375,988)
+528,589
+(579,439)
+21,629
+Net structural position
+Net long position
+58
+(3,322)
+Net option position
+(1,878,649)
+1,845,791
+23,620
+83,141
+83,266
+31 December 2015
+Total
+assessed
+assessed
+be impaired
+Collectively
+Individually
+Allowance for impairment losses
+Transportation, storage and postal services
+individually
+assessed to
+Loans and
+loans and
+advances
+Overdue
+Loans and
+advances
+covered by
+collateral
+to customers
+to customers
+Gross loans
+and advances
+advances
+31 December 2016
+1,640,498
+11,629
+166,134
+891,870
+gas and water
+Production and supply of electricity, heating
+51,809
+27,168
+24,641
+402,876
+63,253
+596,535
+1,550,544
+Manufacturing
+26,206
+24,707
+1,499
+3,588
+100,133
+1,819,318
+Analysis by industry sector
+(e) Loans and advances to customers
+20,074
+of which attributed to Hong Kong
+1,346,011
+65,720
+892,630
+121,857
+265,804
+18,258
+Asia Pacific
+Others
+sector
+sector
+institutions
+Non-bank
+private
+Official
+Banks and
+other
+financial
+Total
+(i)
+257,330
+351,431
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2016
+Unaudited Supplementary Financial Information
+273
+Annual Report 2016
+1,575,940
+73,426
+55,769
+971,996
+344,654
+229,929
+7,706
+79,366
+64,007
+78,850
+North and South America
+185,864
+272,118
+Net structural position
+21,368
+17,235,587
+37
+150,113
+194,503
+36
+130,830
+2,103,289
+15,781,673
+33,144
+advances
+individually
+assessed to
+35
+32 mm 3 m
+34
+24
+33
+Share capital
+297,414
+EQUITY
+51,051
+38
+79,375
+79,375
+Including: Preference shares
+79,375
+79,375
+41
+Other equity instruments
+62,136
+356,407
+40
+486,426
+19,285,200
+20,878,151
+481,236
+39
+240,175
+279,446
+356,407
+Reserves
+TOTAL LIABILITIES
+Debt securities issued
+34,242
+34,242
+101,066
+102,288
+28
+4,450,998
+4,748,376
+124,089
+27
+12,033,200
+26
+792,876
+502,296
+33,290
+62,892
+24
+11,026,476
+Other liabilities
+129,669
+27,334
+Income tax payable
+Due to customers
+Certificates of deposit
+Repurchase agreements
+Due to banks and other financial institutions
+Derivative financial liabilities
+Financial liabilities designated at fair value through profit or loss
+31
+Due to central banks
+21,046,946
+22,788,080
+TOTAL ASSETS
+371,556
+479,196
+32
+20,354
+LIABILITIES
+53,526
+22
+601,857
+Total
+Others
+567,622
+(431,912)
+(303,924)
+(1,836,172)
+Spot liabilities
+31 December 2016
+HKD
+278,761
+1,956,566
+2,802,949
+Spot assets
+(c) Foreign currency concentrations
+The Group prepares the liquidity ratios on a semi-annual basis and the disclosed average liquidity ratio is the arithmetic mean
+of two consecutive liquidity ratios as at 30 June and 31 December.
+The above liquidity ratios are calculated in accordance with the formula promulgated by the CBRC and based on the
+financial information prepared in accordance with PRC GAAP.
+103.42%
+35.58%
+2015
+Average for
+the year
+ended
+31 December
+USD
+98.12%
+(2,572,008)
+2,797,668
+44,409
+(12,251)
+Net (short)/long position
+(42,825)
+(102)
+543
+(43,266)
+Forward purchases
+Net option position
+(1,122,168)
+(104,903)
+(2,887,047)
+Forward sales
+3,979,528
+1,007,928
+173,932
+(4,114,118)
+42
+94.37%
+2015
+35.50%
+A final dividend of RMB0.2343 per share after the appropriation of statutory surplus reserve and general reserve, was
+approved at the board of directors' meeting held on 30 March 2017, and is subject to the approval of the Bank's
+shareholders at the forthcoming annual general meeting. Based on the number of ordinary shares issued as at 31 December
+2016, the final dividend amounted to approximately RMB83,506 million. The dividend payable was not recognised as a
+liability as at 31 December 2016.
+58. AFTER THE REPORTING PERIOD EVENT
+The profit distribution plan
+Financial Statements for the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+270
+21,046,946
+59. COMPARATIVE AMOUNTS
+22,788,080
+1,761,746
+1,909,929
+TOTAL EQUITY
+729,783
+872,290
+Retained profits
+596,181
+TOTAL EQUITY AND LIABILITIES
+82.28%
+Certain comparative amounts have been reclassified to conform with the current year's presentation.
+The financial statements were approved and authorised for issue by the board of directors on 30 March 2017.
+31 December
+As at
+Average for
+the year
+ended
+31 December
+2016
+35.81%
+2016
+35.72%
+31 December
+As at
+Foreign currency current assets to foreign
+currency current liabilities
+60. APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTS
+RMB current assets to RMB current liabilities
+There are no differences between the profit attributable to equity holders of the parent company under PRC GAAP and
+IFRSS for the year ended 31 December 2016 (2015: no differences). There are no differences between the equity attributable
+to equity holders of the parent company under PRC GAAP and IFRSS as at 31 December 2016 (31 December 2015: no
+differences).
+(a) Illustration of differences between the financial statements prepared under IFRSS and
+those prepared in accordance with PRC GAAP
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2016
+Unaudited Supplementary Financial Information
+271
+Annual Report 2016
+(b) Liquidity ratios
+Allowance for impairment losses
+562,917
+Collectively
+28,627
+10,111
+36,233
+Western China
+63,411
+24,800
+8,783
+9,980
+25,265
+32,952
+Bohai Rim
+58,973
+25,973
+8,304
+26,305
+8,431
+8,870
+28,325
+27,867
+68,270
+Individually
+assessed
+allowance for
+impairment
+losses
+Individually
+assessed to
+Individually
+assessed
+allowance for
+Collectively
+assessed
+allowance for
+impairment
+impairment
+67,431
+be impaired
+losses
+Head Office
+Yangtze River Delta
+20,288
+600
+476
+598
+476
+losses
+be impaired
+Pearl River Delta
+24,372
+5,829
+3,090
+5,664
+3,768
+5,422
+Total
+332,698
+16,028
+133,732
+135,780
+51,499
+229,155
+276
+ICBC
+(v) Renegotiated loans and advances to customers
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+50,296
+51,568
+Overseas and others
+3,304
+9,113
+24,610
+9,187
+22,883
+Central China
+39,890
+18,294
+10,401
+7,335
+7,352
+24,669
+Northeastern China
+15,109
+5,997
+3,215
+6,038
+18,673
+31 December 2016
+Gross amount
+and advances to customers
+12,043
+12,073
+31,426
+Western China
+64,688
+26,498
+12,241
+35,970
+28,178
+36,473
+Yangtze River Delta
+52,983
+27,327
+10,551
+27,693
+10,675
+12,668
+37,747
+77,630
+518
+assessed
+allowance for
+impairment
+impairment
+Gross amount
+be impaired
+losses
+46,341
+be impaired
+losses
+Head Office
+Bohai Rim
+19,725
+1,205
+518
+1,205
+losses
+Individually
+assessed to
+Pearl River Delta
+29,414
+6,998
+3,459
+7,555
+4,486
+7,139
+Total
+346,127
+19,601
+156,345
+160,469
+65,557
+223,955
+31 December 2015
+Overdue loans
+and advances to customers
+Impaired loans
+63,446
+47,815
+Overseas and others
+3,711
+13,571
+29,901
+13,798
+25,394
+Central China
+46,969
+20,570
+11,386
+7,398
+7,628
+28,049
+Northeastern China
+16,716
+8,363
+3,665
+8,452
+21,427
+Collectively
+31 December 2015
+% of total
+Valid portion to core tier 1 capital during the transition
+period (only applicable to non-joint stock companies.
+Fill in 0 for joint stock banks)
+56
+Valid portion of minority interests
+Core tier 1 capital before regulatory adjustments
+3,164
+4
+4,340
+1,886,536
+1,713,160
+9
+Core tier 1 capital: Regulatory adjustments
+7
+184
+Prudential valuation adjustments
+X25
+Goodwill (net of deferred tax liabilities)
+X24
+(21,640)
+Retained profits
+940,237
+781,853
+X23
+3
+Accumulated other comprehensive income (and other
+130,358
+(5,799)
+146,164
+За
+Capital reserve
+151,998
+151,963
+X19
+3b
+Others
+public reserves)
+2c
+9,001
+Other intangible assets other than land use rights (net of
+deferred tax liabilities)
+banks or between banks and other financial institutions
+18
+Deductible amount of non-significant minority
+--
+investment in core tier 1 capital instruments issued
+by financial institutions that are not subject to
+consolidation
+19
+20
+Directly or indirectly holding in own ordinary shares
+Reciprocal cross-holdings in core tier 1 capital between
+21
+278
+Deductible amount of significant minority investment
+in core tier 1 capital instruments issued by financial
+institutions that are not subject to consolidation
+Mortgage servicing rights
+Deductible amount in deferred tax assets arising from
+temporary differences
+Deductible amount exceeding the 15% threshold for
+significant minority capital investments in core tier
+1 capital instruments issued by financial institutions
+that are not subject to consolidation and undeducted
+portion of deferred tax assets arising from temporary
+differences
+ICBC
+N/A N/A
+22
+8,478
+17
+Defined-benefit pension fund net assets (net of related
+deferred tax liabilities)
+1,477
+1,356
+X16
+X14-X15
+10
+11
+Deferred tax assets that rely on future profitability
+excluding those arising from temporary differences
+Cash flow hedge reserves that relate to the hedging of
+items that are not fair valued on the balance sheet
+(4,618)
+16
+(3,869)
+12
+Shortfall of provision for loan impairment
+13
+Gain on sale related to asset securitization
+14
+Unrealized gains and losses due to changes in own credit
+risk on fair valued liabilities
+15
+X20
+% of total
+X22
+251,349
+2,987
+0.03%
+(f) Overdue placements with banks and other financial institutions
+2016
+2015
+The Group's gross placements with banks and other financial institutions which
+have been overdue with respect to either principal or interest for a period of:
+Over 12 months
+16
+0.03%
+16
+Over 12 months
+0.00%
+0.01%
+(g) Exposures to Mainland China non-bank entities
+On-balance sheet exposure
+Off-balance sheet exposure
+Individually assessed allowance for impairment losses
+As a percentage of total gross placements with banks and other
+financial institutions:
+2016
+4,143
+Renegotiated loans and advances overdue
+loans and
+loans and
+advances
+advances
+Renegotiated loans and advances
+Less: Renegotiated loans and advances
+5,541
+for less than three months
+0.04%
+0.04%
+overdue for more than three months
+(1,398)
+(0.01%)
+(1,570)
+(0.01%)
+241
+4,557
+246,356
+2015
+2,764,365
+2015
+Index
+356,407
+356,407
+X18
+2
+Retained earnings
+31 December
+1,396,607
+2a
+Surplus reserve
+205,021
+178,040
+X21
+2b
+General reserve
+1,206,249
+15,090,659
+31 December
+2016
+Core tier 1 capital:
+14,033,030
+2,270,023
+17,855,024
+16,303,053
+64,183
+51,127
+In addition to those disclosed above, exposures to other non-bank counterparties outside Mainland China to which credit is
+granted for use in Mainland China are considered insignificant to the Group.
+Annual Report 2016
+Paid-in capital
+277
+For the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(h) Correspondence between balance sheet in published financial statements and capital
+composition
+The disclosure of correspondence between balance sheet in published financial statements and capital composition is based
+on CBRC Notice on issuing regulatory documents on capital regulation for Commercial Banks (Yin Jian Fa, No. 33, 2013)
+Appendix 2 Notice on Enhancing Disclosure Requirements for Composition of Capital.
+(i) Capital composition
+1
+Item
+Unaudited Supplementary Financial Information
+Individually
+Individually
+assessed
+allowance for
+impairment
+7,254
+Subtotal of corporate loans
+7,869,552
+3,190,072
+254,379
+135,256
+51,235
+6,245
+126,734
+Personal mortgage and business loans
+2,811,288
+2,745,301
+48,487
+73,950
+73,950
+Others
+177,969
+730,574
+1,009
+4,888
+7,964
+3,599
+995
+3,615
+4,610
+Science, education, culture and sanitation
+137,497
+2,264
+44,063
+576
+197
+2,244
+2,441
+Others
+383,437
+107,909
+1,024
+147,758
+282,127
+19,217
+229,155
+280,654
+Current market value of collateral held against
+the covered portion of overdue loans and advances *
+300,497
+Covered portion of overdue loans and advances *
+146,208
+51,499
+Uncovered portion of overdue loans and advances *
+186,490
+274
+ICBC
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+The amount of new impairment loss charged to the consolidated statement of profit or loss and the amount of impaired
+loans and advances written off during the year are set out below:
+2016
+Please see section (e) (iii) for the definition of overdue loans and advances to customers.
+29,115
+135,780
+6,739,552
+19,217
+Subtotal of personal loans
+3,541,862
+3,027,428
+77,602
+93,167
+93,167
+332,698
+Discounted bills
+522,052
+11,933,466
+522,052
+717
+524
+264
+9,254
+9,518
+Total loans and advances to customers
+2015
+224,215
+5,129
+27,166
+Wholesale and retail
+866,779
+433,413
+83,422
+48,829
+16,747
+25,349
+13,403
+Production and supply of electricity, heating
+gas and water
+835,616
+161,857
+2,726
+2,341
+1,462
+30,150
+13,654
+1,817
+11,537
+to customers
+be impaired
+assessed
+assessed
+Total
+Manufacturing
+1,603,631
+4,262
+644,478
+54,124
+21,447
+25,390
+46,837
+Transportation, storage and postal services
+1,551,248
+437,972
+94,341
+Lodging and catering
+15,116
+724,246
+7,881
+Mining
+280,556
+43,415
+9,313
+4,008
+1,235
+7,742
+4,532
+Construction
+226,619
+96,557
+10,064
+3,304
+1,470
+3,659
+5,767
+Leasing and commercial services
+139
+1,685
+425,061
+9,762
+5,229
+1,995
+11,782
+13,777
+Real estate
+286
+398,193
+6,434
+2,722
+9,119
+11,841
+Water, environment and public utility management
+472,791
+249,396
+17,653
+Individually
+assessed to
+New
+New
+of which attributed to Hong Kong
+Europe
+Africa
+North and South America
+2016
+2015
+12,053,041
+Asia Pacific (excluding Mainland China)
+11,207,140
+510,034
+449,217
+363,267
+112,985
+81,203
+115,371
+37,533
+622,803
+152,646
+Mainland China
+60,296
+43,176
+4,614
+28,358
+2,775
+Subtotal for personal loans
+70,512
+8,145
+(ii) Analysis by location of the counterparties
+54,569
+Discounted bills
+69
+10,299
+Total for loans and advances to customers
+262,569
+74,144
+226,140
+9,931
+Others
+97,556
+11,933,466
+0.18%
+0.26%
+Between 6 and 12 months
+Over 12 months
+0.39%
+0.45%
+0.91%
+0.65%
+As a percentage of the total gross loans and advances to customers:
+Between 3 and 6 months
+1.48%
+The definition of overdue loans and advances to customers is set out as follows:
+Loans and advances with a specific repayment date are classified as overdue when the principal or interest is overdue.
+For loans and advances repayable by regular instalments, if part of the instalments is overdue, the whole amounts of these
+loans and advances would be classified as overdue.
+(iv) Overdue and impaired loans and advances to customers by geographical distribution
+31 December 2016
+Overdue loans
+and advances to customers
+Impaired loans
+and advances to customers
+Individually
+assessed to
+Individually
+assessed
+allowance for
+1.36%
+13,056,846
+162,796
+77,988
+Annual Report 2016
+275
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+(iii) Overdue loans and advances to customers
+2016
+2015
+195,012
+Gross loans and advances to customers of the Group which have been overdue
+with respect to either principal or interest for periods of:
+24,128
+31,177
+Between 6 and 12 months
+51,422
+53,631
+Over 12 months
+119,462
+Between 3 and 6 months
+Write-offs
+7,156
+3,531
+803
+20,114
+163
+Leasing and commercial services
+11,037
+1,073
+21,818
+6,422
+844
+51,328
+23,754
+37,653
+22,265
+Real estate
+10,168
+1,955
+Wholesale and retail
+2,619
+gas and water
+22,354
+Write-offs
+impairment
+loss
+of impaired
+loans
+impairment
+loss
+of impaired
+loans
+Production and supply of electricity, heating,
+Transportation, storage and postal services
+1,395
+24,724
+1,148
+Manufacturing
+73,061
+30,920
+38,239
+10,232
+26,211
+377
+management
+1,776
+74
+2,924
+187
+Others
+7,873
+2,573
+Science, education, culture and sanitation
+7,707
+Subtotal for corporate loans
+191,988
+65,999
+161,272
+50,365
+1,518
+27,336
+1,448
+Water, environment and public utility
+960
+1,528
+5,764
+430
+132
+17
+Mining
+6,375
+1,492
+3,396
+1,737
+Finance
+1,393
+2
+209
+30
+Construction
+6,559
+572
+36,058
+Personal mortgage and business loans
+511
+477,593
+500,107
+500,107
+institutions
+Placements from banks and other financial
+210
+1,788,267
+210
+1,788,267
+545
+1,516,692
+1,516,692
+Due to banks and other financial institutions
+545
+Due to central banks
+Liabilities
+consolidation (i)
+scope of
+Under
+regulatory
+Balance sheet
+as in published
+financial
+statements (i)
+353,794
+24,039,536
+347,004
+337,210
+22,209,780
+22,148,637
+(i)
+477,593
+Prepared in accordance with PRC GAAP.
+281
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+31 December 2016 31 December 2016 31 December 2015 31 December 2015
+Balance sheet
+as in published
+financial
+statements (i)
+Under
+regulatory
+scope of
+consolidation (i)
+Annual Report 2016
+24,137,265
+Financial liabilities at fair value through
+Derivative financial liabilities
+63,500
+63,557
+Taxes payable
+31,470
+31,717
+32,536
+32,864
+Employee benefits payable
+16,283,105
+16,281,939
+17,828,084
+17,825,302
+Due to customers
+183,352
+183,352
+218,427
+218,427
+Repurchase agreements
+366,752
+366,740
+303,927
+303,916
+89,960
+profit or loss
+89,960
+76,826
+589,306
+579,651
+337,191
+329,896
+Certificates of deposit
+76,826
+Total assets
+368,232
+Other assets
+78,870
+78,870
+94,452
+755,557
+12,766,888
+1,708,102
+1,742,287
+Available-for-sale financial assets
+12,767,334
+Loans and advances to customers
+755,627
+Reverse repurchase agreements
+94,452
+Derivative financial assets
+343,246
+343,272
+474,450
+474,475
+or loss
+Financial assets at fair value through profit
+262,582
+211,559
+204,607
+Precious metals
+220,091
+220,091
+996,333
+114,619
+Placements with banks and
+other financial institutions
+527,415
+527,415
+472,234
+472,234
+114,619
+996,333
+11,652,812
+11,652,264
+220,651
+220,609
+195,401
+195,357
+Construction in progress
+22,968
+Fixed assets
+22,968
+26,101
+Deferred income tax assets
+28,398
+28,398
+21,066
+21,066
+26,101
+75,234
+29,885
+35,777
+1,444,195
+1,421,231
+Held-to-maturity investments
+2,973,042
+2,972,444
+2,870,353
+24,185
+2,869,642
+291,370
+245,221
+352,143
+326,339
+Long term equity investments
+30,077
+Receivables
+270,058
+75,201
+357,937
+1,708,102
+Available-for-sale financial assets
+X04
+13,498
+tier 2 capital under the Internal Ratings-Based Approach
+Including: Valid cap of provision for loan impairment to
+X03
+267,008
+Ratings-Based Approach
+Less: Provision for loan impairment under the Internal
+X02
+5,697
+X01
+22,504
+tier 2 capital under the weighted approach
+Less: Provision for loan impairment under the weighted approach
+Including: Valid cap of provision for loan impairment to
+13,056,400
+282
+ICBC
+(iii) Description of related items
+Unaudited Supplementary Financial Information
+(In RMB millions, unless otherwise stated)
+31 December 2016
+Bond investment measured at fair value
+Under
+regulatory
+Item
+Loans and advances to customers
+consolidation
+Index
+12,766,888
+Total loans and advances to customers
+scope of
+Prepared in accordance with PRC GAAP.
+1,612,679
+instruments issued by financial institutions
+Including: Undeducted portion of significant minority investments
+in capital instruments issued by financial institutions
+that are not subject to consolidation
+Including: Undeducted portion of non-significant minority investments
+in capital instruments issued by financial institutions
+that are not subject to consolidation
+issued by financial institutions that are under control
+but not subject to consolidation
+Including: Investment in core tier1 capital instruments
+Long term equity investments
+Including: Significant minority investments in tier 2 capital
+instruments issued by financial institutions that
+are not subject to consolidation
+X09
+28,292
+Including: Non-significant minority investments in tier 2 capital
+instruments issued by financial institutions that
+are not subject to consolidation
+245,221
+Receivables
+X08
+2,100
+that are not subject to consolidation
+instruments issued by financial institutions
+Including: Non-significant minority investments in tier 2 capital
+2,972,444
+that are not subject to consolidation
+Other debt instrument investment measured at fair value
+Equity investment
+Including: Undeducted portion of non-significant minority investments
+in capital instruments issued by financial institutions
+that are not subject to consolidation
+Including: Undeducted portion of significant minority investments
+in capital instruments issued by financial institutions
+that are not subject to consolidation
+5,947
+Including: Non-significant minority investments in tier 2 capital
+X05
+4,086
+610
+X06
+Held-to-maturity investments
+90
+X07
+91,337
+(i)
+1,788,195
+6,647
+1,794,842
+1,789,474
+11,045
+1,800,519
+79,375
+79,375
+79,375
+79,375
+Including: Preference shares
+79,375
+79,375
+86,051
+86,051
+Other equity instruments
+356,407
+356,407
+356,407
+356,407
+Share capital
+Equity
+754
+496,583
+20,353,795
+357,937
+306,622
+306,622
+Deferred income tax liabilities
+604
+327
+Perpetual bond
+995
+594,049
+508,235
+Total liabilities
+22,156,102
+22,062,741
+545,388
+20,409,261
+Other liabilities
+6,676
+6,676
+Capital reserve
+246,356
+Retained profits
+940,663
+940,237
+781,988
+781,853
+246,356
+Equity attributable to equity holders of the
+1,969,751
+Non-controlling interests
+11,412
+Total equity
+1,981,163
+1,969,423
+7,372
+1,976,795
+parent company
+Debt securities issued
+251,349
+General reserve
+151,998
+151,998
+151,963
+151,963
+Other comprehensive income
+(21,738)
+251,349
+(21,640)
+(5,799)
+Surplus reserve
+205,021
+205,021
+178,040
+178,040
+(4,655)
+3,059,633
+3,059,633
+3,350,788
+1,954,770
+Tier 1 capital (core tier 1 capital + additional tier 1
+capital)
+45
+79,794
+Additional tier 1 capital
+44
+Total regulatory adjustments to additional tier 1
+capital
+43
+Undeducted shortfall that should be deducted from tier 2
+capital
+42
+Item
+Index
+2015
+31 December
+31 December
+2016
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2016
+40
+40
+Significant minority investments in additional tier 1
+capital instruments issued by financial institutions that
+are not subject to consolidation
+--
+41a
+Investment in additional tier 1 capital instruments issued
+by financial institutions that are under control but not
+subject to consolidation
+79,567
+1,781,062
+--
+Shortfall in additional tier 1 capital instruments issued
+by financial institutions that are under control but not
+subject to consolidation
+41c
+Others that should be deducted from additional tier 1
+capital
+Annual Report 2016
+279
+Unaudited Supplementary Financial Information
+41b
+Deductible amount of non-significant minority
+investment in additional tier 1 capital instruments
+issued by financial institutions that are not subject to
+consolidation
+Tier 2 capital:
+Tier 2 capital instruments and related premium
+Investment in tier 2 capital instruments issued by financial
+institutions that are under control but not subject to
+consolidation
+instruments issued by financial institutions that are not
+subject to consolidation
+Directly or indirectly holding tier 2 capital of the Bank
+Reciprocal cross-holdings in tier 2 capital between banks
+or between banks and other financial institutions
+Deductible portion of non-significant minority investment
+in tier 2 capital instruments issued by financial
+institutions that are not subject to consolidation
+Significant minority investments in tier 2 capital
+56a
+55
+54
+53
+52
+Tier 2 capital: Regulatory adjustments
+X02+X04
+63,398
+244,641
+19,195
+178,292
+Valid portion of surplus provision for loan impairment
+Tier 2 capital before regulatory adjustments
+51
+50
+transition period
+Including: Invalid portion to tier 2 capital after the
+154,861
+180,242
+X17
+47
+Invalid instruments to tier 2 capital after the
+121,710
+46
+144,158
+48
+Valid portion of minority interests
+4,236
+1,001
+X27
+49
+transition period
+Reciprocal cross-holdings in additional tier 1 capital
+between banks or between banks and other financial
+institutions
+Directly or indirectly holding additional tier 1 capital of
+the Bank
+39
+28
+additional tier 1 capital and tier 2 capital
+Others that should be deducted from core tier 1 capital
+Undeducted shortfall that should be deducted from
+27
+26c
+subject to consolidation
+financial institutions that are under control but not
+Shortfall in core tier 1 capital instruments issued by
+26b
+X11
+5,700
+5,700
+Investment in core tier 1 capital instruments issued by
+financial institutions that are under control but not
+subject to consolidation
+26a
+Including: Deductible amount in deferred tax assets
+arising from temporary differences
+25
+N/A
+Item
+23
+24
+24
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Total regulatory adjustments to core tier 1 capital
+Including: Deductible amount of significant minority
+instruments issued by financial institutions
+Including: Deductible amount of mortgage servicing
+rights
+31 December
+2016
+31 December
+2015
+Index
+N/A
+investments in core tier 1 capital
+11,560
+29
+Core tier 1 capital
+Valid portion of minority interests
+419
+192
+X26
+35
+Including: Invalid portion to additional tier 1 capital
+after the transition period
+34
+36
+79,794
+79,567
+adjustments
+Additional tier 1 capital: Regulatory adjustments
+37
+38
+Additional tier 1 capital before regulatory
+56b
+transition period
+33
+1,874,976
+11,665
+1,701,495
+Additional tier 1 capital:
+30
+Additional tier 1 capital instruments and related premium
+79,375
+Invalid instruments to additional tier 1 capital after the
+79,375
+Including: Portion classified as equity
+79,375
+79,375
+X28
+32
+Including: Portion classified as liabilities
+31
+Shortfall in tier 2 capital instruments issued by financial
+institutions that are under control but not subject to
+consolidation
+5,600
+13,600
+X03
+262,825
+267,008
+Provision for loan impairment under the internal ratings-
+based approach
+78
+X02
+5,381
+5,697
+Valid cap of provision for loan impairment to tier 2
+capital under the weighted approach
+77
+X01
+17,829
+22,504
+Provision for loan impairment under the weighted
+approach
+76
+tier 2 capital
+N/A
+20,313
+Valid caps of surplus provision for loan impairment to
+31 December
+31 December
+2016
+2015
+Index
+79
+37,049
+X05+X06+
+X08+X09+X12
+26,859
+21,669
+X07+X13
+N/A
+28,072
+48,007
+Valid cap of provision for loan impairment to tier 2
+capital under the internal ratings-based approach
+13,498
+58,017
+Consolidated financial statements
+Balance sheet
+as in published
+financial
+statements (i)
+Under
+regulatory
+scope of
+consolidation (i)
+(ii)
+31 December 2016 31 December 2016 31 December 2015 31 December 2015
+Under
+regulatory
+scope of
+consolidation (i)
+Assets
+Cash and balances with central banks
+Due from banks and other financial
+institutions
+3,350,788
+Balance sheet
+as in published
+financial
+statements (i)
+Deferred tax assets arising from temporary differences
+(net of deferred tax liabilities)
+15,311
+144,158
+X04
+80
+Capital instruments subject to phase-out arrangements
+Valid cap to core tier 1 capital instruments for the current
+period due to phase-out arrangements
+81
+Excluded from core tier 1 capital due to cap
+82
+26,547
+Valid cap to additional tier 1 capital instruments for the
+83
+Excluded from additional tier 1 capital due to cap
+84
+85
+Valid cap to tier 2 capital instruments for the current
+period due to phase-out arrangements
+Excluded from tier 2 capital for the current period due to
+cap
+121,710
+current period due to phase-out arrangements
+5,600
+75
+Undeducted amount of non-significant minority
+investments in capital instruments issued by financial
+institutions that are not subject to consolidation
+Undeducted amount of significant minority investments
+in capital instruments issued by financial institutions
+that are not subject to consolidation
+Mortgage servicing rights (net of deferred tax liabilities)
+3.5%
+Institution specific buffer requirement
+64
+15.22%
+14.61%
+Capital adequacy ratio
+63
+13.48%
+13.42%
+Tier 1 capital adequacy ratio
+62
+12.87%
+12.87%
+Core tier 1 capital adequacy ratio
+61
+Requirements for capital adequacy ratio and reserve capital
+13,600
+231,041
+2,012,103
+13,216,687
+X10
+56c
+Others that should be deducted from tier 2 capital
+57
+Total regulatory adjustments to tier 2 capital
+58
+3.5%
+Tier 2 capital
+59
+Total capital (tier 1 capital tier 2 capital)
+2,127,462
+60
+Total risk-weighted assets
+14,564,617
+5,600
+172,692
+65
+Including: Capital conservation buffer requirement
+2.5%
+Capital adequacy ratio
+5%
+5%
+6%
+6%
+8%
+Core tier 1 capital adequacy ratio
+8%
+ICBC
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Item
+Amounts below the thresholds for deduction
+72
+73
+280
+74
+71
+70
+2.5%
+66
+Including: Countercyclical buffer requirement
+67
+Including: G-SIB buffer requirement
+1%
+Tier 1 capital adequacy ratio
+1%
+Percentage of core tier 1 capital meeting buffers to risk-
+7.87%
+7.87%
+weighted assets
+Domestic minima for regulatory capital
+69
+68
+X10
+For the year ended 31 December 2016
+5,700
+full or partial
+Including: If write-down,
+write-down trigger(s)
+ICBC
+ICBC
+ICBC
+ICBC
+N/A
+N/A
+Core tier 1 capital
+Core tier 1 capital
+Core tier 1 capital
+Core tier 1 capital
+N/A
+름름
+ICBC
+instrument it converts into
+occurs
+Preference
+shares(Domestic)
+The initial
+conversion price
+is equal to the
+average trading
+price of the A
+Shares of the
+Bank for the
+Unaudited Supplementary Financial Information
+20 trading days
+preceding 25 July
+2014, the date of
+publication of the
+Board resolution
+in respect of the
+issuance plan
+Mandatory
+N/A
+Including: If convertible,
+N/A
+specify instrument
+type convertible into
+Including: If convertible,
+specify issuer of
+Including: If convertible,
+mandatory or optional
+conversion
+Fully or partially
+convertible when
+an Additional Tier
+1 Capital Trigger
+Event occurs; fully
+convertible when
+a Tier 2 Capital
+Trigger Event
+For the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+capital instrument
+N/A
+Including: If write-down,
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+Including: If write-down,
+No
+No
+No
+Ordinary shares
+(A share)
+Ordinary shares
+Preference
+(H share)
+shares (Offshore)
+Preference
+shares (Offshore)
+Main features of regulatory
+Preference
+shares (Offshore)
+shares (Domestic)
+Write-down feature
+No
+No
+No
+Preference
+Event
+issuance plan
+Mandatory
+2014, the date of
+publication of the
+Board resolution
+in respect of the
+Including: If convertible,
+Additional Tier 1
+Capital Trigger
+Event or Tier 2
+Capital Trigger
+Additional Tier 1
+Capital Trigger
+Event or Tier 2
+Capital Trigger
+Event
+Event
+Event or Tier 2
+Additional Tier 1
+Capital Trigger
+Capital Trigger
+Additional Tier 1
+N/A
+N/A
+Yes
+Yes
+Yes
+Yes
+No
+No
+Non-cumulative
+Convertible or non-convertible
+Including: If convertible,
+conversion trigger(s)
+No
+Non-cumulative
+No
+N/A
+Non-cumulative
+No
+Non-cumulative
+Non-cumulative
+No
+No
+Non-cumulative
+No
+NAG
+N/A
+fully or partially
+occurs
+Preference
+shares(Offshore)
+The initial
+conversion price
+is equal to the
+average trading
+price of the H
+shares of the
+Bank for the
+20 trading days
+preceding 25 July
+convertible when
+a Tier 2 Capital
+Trigger Event
+2014, the date of
+publication of the
+Board resolution
+in respect of the
+35,777
+occurs
+Preference
+shares(Offshore)
+The initial
+conversion price
+is equal to the
+average trading
+price of the H
+shares of the
+Bank for the
+20 trading days
+preceding 25 July
+issuance plan
+Mandatory
+N/A
+Fully or partially
+convertible when
+an Additional Tier
+1 Capital Trigger
+Event occurs; fully
+issuance plan
+Mandatory
+Main features of regulatory
+Ordinary
+capital instrument
+Including: If convertible,
+shares(A share)
+N/A
+Ordinary
+shares(H share)
+Capital Trigger
+N/A
+N/A
+Event or Tier 2
+Capital Trigger
+Event
+Fully or partially
+convertible when
+an Additional Tier
+1 Capital Trigger
+Event occurs; fully
+convertible when
+a Tier 2 Capital
+Trigger Event
+occurs
+Preference
+shares(Offshore)
+The initial
+conversion price
+is equal to the
+average trading
+price of the H
+shares of the
+Bank for the
+20 trading days
+preceding 25 July
+2014, the date of
+publication of the
+Board resolution
+in respect of the
+conversion rate
+or cumulative
+permanent or temporary
+N/A
+USD500
+Tier 2 capital instrument
+RMB equivalent 1,834
+Including: Redemption incentive mechanism
+Including: Non-cumulative or cumulative
+Including: Fixed or floating dividend/coupon
+Including: Coupon rate and any related index
+Including: Existence of a dividend stopper
+Including: Fully discretionary, partially
+discretionary or mandatory cancellation of
+coupons/dividends
+Issuer call (subject to prior supervisory approval)
+Including: Optional call date, contingent
+call dates and redemption amount
+Including: Subsequent call dates, if applicable
+Coupons/dividends
+Including: Original maturity date
+Perpetual or dated
+Original date of issuance
+Accounting treatment
+Par value of instrument (in millions)
+(in millions, as at the latest reporting date)
+Amount recognized in regulatory capital
+Instrument type
+the parent company/group level
+Including: Eligible to
+Commercial Banks (Provisional)
+Tier 2 capital
+Securities Law of the People's
+Republic of China/China
+Rule 144A ISIN:
+US455881AD47
+Regulation S ISIN:
+USY39656AC06
+The Notes and the Fiscal
+Agency Agreement shall be
+governed by, and shall be
+construed in accordance with,
+New York law, except that the
+provisions of the Notes relating
+to subordination shall be
+governed by, and construed in
+accordance with, PRC law
+Group
+Regulatory treatment
+Regulation Governing Capital of
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Including: Transition arrangement of
+Regulation Governing Capital of
+Commercial Banks (Provisional)
+Including: Post-transition arrangement of
+The Notes and any non-
+contractual obligations arising
+out of or in connection with
+the Notes will be governed
+by, and shall be construed in
+accordance with English law,
+except that the provision of the
+Notes relating to Subordination
+shall be governed by, and
+construed in accordance with,
+the laws of Hong Kong
+Parent company
+/Group
+Tier 2 capital instrument
+RMB20,005
+10 October 2013
+Dated
+ICBC
+288
+No
+Cumulative
+No
+Mandatory
+4.875%
+Fixed
+N/A
+Cumulative
+No
+Fully discretionary
+No
+Fixed
+5.80%
+in full amount
+N/A
+5 August 2019,
+Cumulative
+No
+Mandatory
+Debt securities issued
+4 August 2014
+Dated
+5 August 2024
+Parent company
+/Group
+Tier 2 capital instrument
+RMB equivalent 13,753
+USD2,000
+Debt securities issued
+21 September 2015
+Dated
+21 September 2025
+Yes
+RMB20,000
+No
+Debt securities issued
+10 October 2023
+Yes
+10 October 2018,
+in full amount
+N/A
+Fixed
+4.50%
+No
+N/A
+Tier 2 capital bonds
+Tier 2 capital bonds
+ICBC
+1428009
+ISIN: XS0976879279
+BBGID:BBG005CMF4N6
+After all liabilities
+of the Bank and
+instruments issued
+or guaranteed
+by the Bank
+ranking senior
+to the Offshore
+Preference Shares,
+After all liabilities
+of the Bank and
+instruments issued
+After all liabilities
+of the Bank and
+instruments issued
+or guaranteed
+by the Bank
+ranking senior
+to the Offshore
+Preference Shares,
+ranking senior
+to the Offshore
+Preference Shares,
+After all liabilities
+of the Bank and
+instruments issued
+or guaranteed
+by the Bank
+creditor of the
+subordinated
+debts, and
+preference
+shareholders
+creditor of the
+subordinated
+debts, and
+preference
+shareholders
+N/A
+N/A
+N/A
+름름름
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+description of write-up
+mechanism
+Position in subordination
+After depositor,
+After depositor,
+or guaranteed
+by the Bank
+ranking senior
+to the Domestic
+Preference Shares,
+hierarchy in liquidation
+general creditor,
+(specify instrument type
+immediately senior to
+instrument)
+름름
+N/A
+general creditor,
+in the same
+liquidation order
+in the same
+liquidation order
+with the holders of
+N/A
+non-compliant features
+Annual Report 2016
+287
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2016
+N/A
+(In RMB millions, unless otherwise stated)
+capital instrument
+Issuer
+Unique identifier
+Governing law(s) of the instrument
+ICBC
+Tier 2 capital bonds
+ICBC (Asia)
+Main features of regulatory
+Including: If temporary write-down,
+N/A
+N/A
+Parity Obligations
+in the same
+liquidation order
+with the holders of
+Parity Obligations
+in the same
+liquidation order
+with the holders of
+Parity Obligations
+with the holders of
+Parity Obligations
+Non-compliant transitioned
+No
+N/A
+No
+No
+No
+No
+features
+Including: If yes, specify
+N/A
+No
+Including: Non-cumulative
+Fully or partially
+convertible when
+an Additional Tier
+1 Capital Trigger
+Event occurs; fully
+convertible when
+a Tier 2 Capital
+Trigger Event
+Including: Redemption
+ICBC
+ICBC
+601398
+Securities Law of the
+People's Republic
+of China/China
+Governing law(s) of the instrument
+Unique identifier
+Issuer
+Preference
+shares (Offshore)
+Preference
+shares (Offshore)
+Ordinary shares
+(H share)
+Ordinary shares
+(A share)
+capital instrument
+Main features of regulatory
+For the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+(iv) Main features of eligible capital instruments
+ICBC
+284
+X27
+X22
+Retained profits
+940,237
+incentive mechanism
+Minority interests
+7,372
+ICBC
+Including: Valid portion to core tier 1 capital
+X25
+Including: Valid portion to additional tier 1 capital
+419
+X26
+Including: Valid portion to tier 2 capital
+4,236
+3,164
+251,349
+ICBC
+4603
+arrangement of Regulation
+Core tier 1 capital
+Core tier 1 capital
+Including: Post-transition
+Additional tier
+1 capital
+Additional tier
+1 capital
+Additional tier
+1 capital
+Additional tier
+1 capital
+of Regulation Governing Capital
+of Commercial Banks (Provisional)
+Core tier 1 capital
+Core tier 1 capital
+Regulatory treatment
+Including: Transition arrangement
+the Issuance of
+Preference Shares of
+Commercial Banks
+to Replenish Tier 1
+Capital/China
+Guidance on
+of China, Securities
+Law of the People's
+Republic of China,
+Guidance of the
+State Council on
+Launch of Preference
+Shares Pilot, Trial
+Administrative
+Measures on
+Preference Shares,
+People's Republic
+Company Law of the
+4604
+Hong Kong
+/Hong Kong, China
+Preference
+shares (Offshore)
+ICBC
+84602
+Preference
+shares (Domestic)
+1398
+Securities and Futures
+Ordinance of
+ICBC
+360011
+The creation and
+issue of the Offshore
+Preference Shares
+and the rights and
+obligations (including
+non-contractual
+rights and
+obligations) attached
+to them are
+governed by, and
+shall be construed in
+accordance with,
+PRC law
+The creation and
+issue of the Offshore
+Preference Shares
+and the rights and
+obligations (including
+non-contractual
+rights and
+obligations) attached
+to them are
+governed by, and
+shall be construed in
+accordance with,
+PRC law
+The creation and
+issue of the Offshore
+Preference Shares
+and the rights and
+obligations (including
+non-contractual
+rights and
+obligations) attached
+to them are
+governed by, and
+shall be construed in
+accordance with,
+PRC law
+General reserve
+X21
+205,021
+X16
+9,001
+190,083
+X15
+19,265
+X14
+20,742
+111,301
+353,794
+Index
+consolidation
+Goodwill
+Other receivables
+Including: land use rights
+Intangible assets
+Interest receivable
+Other assets
+X11
+100
+X12
+26,769
+X13
+Annual Report 2016
+Long-term deferred and prepaid expenses
+283
+For the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+31 December 2016
+Under
+regulatory
+scope of
+Item
+Unaudited Supplementary Financial Information
+4,370
+Repossessed assets
+8,274
+Other comprehensive income
+(21,640)
+X24
+Reserve for changes in fair value of available-for-sale financial assets
+1,152
+Reserve for cash flow hedging
+X19
+(4,645)
+(4,618)
+X20
+Changes in share of other owners' equity of associates and joint ventures
+Foreign currency translation reserve
+(322)
+(17,825)
+Surplus reserve
+Including: Cash flow hedge reserves that relate to the hedging of
+items that are not fair valued on the balance sheet
+Additional tier
+1 capital
+151,998
+X28
+Others
+10,023
+Debt securities issued
+357,937
+Including: Valid portion of tier 2 capital instruments and their premium
+154,861
+Capital reserve
+X17
+356,407
+X18
+Other equity instruments
+86,051
+Including: Preference shares
+79,375
+Share capital
+Additional tier
+1 capital
+X23
+Additional tier
+Preference
+shares (Offshore)
+Preference
+shares (Offshore)
+Preference
+shares (Offshore)
+Ordinary shares
+(H share)
+(A share)
+capital instrument
+Ordinary shares
+Main features of regulatory
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2016
+Unaudited Supplementary Financial Information
+286
+285
+Annual Report 2016
+all the Domestic
+Preference Shares
+or conversion of
+2020) and ends
+on the completion
+date of redemption
+MA
+The First
+Redemption Date
+is 10 December
+N/A
+2019, in full or
+partial amount
+10 December in
+each year after the
+First Redemption
+Date
+The First
+Redemption Date
+Preference
+shares (Domestic)
+is 10 December
+2021, in full or
+partial amount
+10 December in
+each year after the
+First Redemption
+The First
+Redemption Date
+is 10 December
+2019, in full or
+partial amount
+10 December in
+each year after the
+First Redemption
+Date
+The First
+Redemption Date
+is 18 November
+2020, in full or
+partial amount
+Commences on the
+First Redemption
+Date (18 November
+Date
+N/A
+Coupons/dividends
+Floating
+coupons/dividends
+mandatory cancellation of
+partially discretionary or
+Partially
+discretionary
+Additional tier
+1 capital
+Partially
+discretionary
+Partially
+discretionary
+discretionary
+discretionary
+Fully
+Fully
+Including: Fully discretionary,
+dividend stopper
+Yes
+4.50% (dividend
+rate) before 18
+November 2020
+6% (dividend
+rate) before 10
+December 2019
+Yes
+6% (dividend
+rate) before 10
+December 2021
+Yes
+Floating
+Fixed to floating
+Fixed to floating
+Fixed to floating
+Fixed to floating
+dividend/coupon
+Including: Fixed or floating
+Including: Coupon rate and
+N/A
+any related index
+Including: Existence of a
+N/A
+N/A
+6% (dividend
+rate) before 10
+December 2019
+Yes
+N/A
+if applicable
+Partially
+discretionary
+Yes
+Parent company/
+Parent company/
+Parent company/
+Parent company/
+Parent company/
+Group
+Parent company/
+Group
+capital instrument
+Core tier 1
+capital instrument
+RMB339,126
+RMB169,202
+Group
+Additional tier 1
+capital instrument
+RMB equivalent
+17,928
+Group
+Additional tier 1
+capital instrument
+RMB equivalent
+Core tier 1
+Group
+Including: Optional call date,
+contingent call dates and
+redemption amount
+Issuer call (subject to prior
+Including: Subsequent call dates,
+1 capital
+Governing Capital of Commercial
+Banks (Provisional)
+Instrument type
+Amount recognized in regulatory
+capital (in millions, as at the
+supervisory approval)
+latest reporting date)
+Accounting treatment
+Original date of issuance
+Perpetual or dated
+Including: Original maturity date
+Main features of regulatory
+capital instrument
+Par value of instrument (in millions)
+Group
+Including: Eligible to the parent
+company/group level
+RMB11,958
+Additional tier 1
+capital instrument
+18 November 2015
+Perpetual
+Yes
+No maturity date
+Preference
+shares(Offshore)
+Perpetual
+Yes
+No maturity date
+Preference
+shares(Offshore)
+Perpetual
+10 December 2014
+Yes
+Perpetual
+No maturity date
+Preference
+shares(Offshore)
+10 December 2014
+USD2,940
+Other equity
+N/A
+N/A
+RMB45,000
+Other equity
+Perpetual
+Additional tier 1
+capital instrument
+No maturity date
+Ordinary
+shares(H share)
+No
+RMB44,947
+4,542
+EUR 600
+Other equity
+RMB12,000
+Other equity
+No maturity date
+Preference
+shares(Domestic)
+RMB269,612
+Share capital,
+Capital reserve
+10 December 2014
+19 October 2006
+Perpetual
+No maturity date
+Ordinary
+shares(A share)
+No
+RMB86,795
+Share capital,
+Capital reserve
+19 October 2006
+3,456,697
+Yangtze River Delta
+0.5
+74,081
+0.4
+Head Office
+(%)
+Amount
+(%)
+Amount
+Item
+Percentage
+69,210
+19.4
+Pearl River Delta
+19.5
+2,397,059
+13.4
+2,086,992
+Bohai Rim
+4,795,528
+26.9
+4,339,841
+26.6
+Central China
+2,561,772
+Percentage
+14.4
+2,374,052
+3,185,840
+12.8
+7,601,114
+In RMB millions, except for percentages
+Personal deposits
+14.6
+Time deposits
+Demand deposits
+Subtotal
+Other deposits (1)
+Total
+4,419,907
+24.8
+4,210,600
+25.9
+3,720,374
+20.9
+3,390,514
+20.8
+8,140,281
+45.7
+46.7
+236,501
+1.3
+243,811
+1.5
+17,825,302
+100.0
+16,281,939
+100.0
+Note: (1) Includes outward remittance and remittance payables.
+DISTRIBUTION OF DUE TO CUSTOMERS BY GEOGRAPHIC AREA
+At 31 December 2016
+At 31 December 2015
+Western China
+Percentage
+16.2
+(%)
+Amount
+(%)
+9,783,195
+54.9
+8,515,746
+52.3
+2,145,423
+12.0
+2,133,439
+13.1
+3,705,472
+20.8
+3,574,017
+22.0
+2,185,850
+12.3
+2,055,662
+12.6
+5,362
+0.0
+3,075
+0.0
+17,825,302
+100.0
+16,281,939
+100.0
+1,444,195
+51.8
+Amount
+2,881,274
+Percentage
+At 31 December 2015
+2,717,941
+16.7
+Northeastern China
+986,703
+5.5
+938,199
+5.8
+Overseas and others
+677,059
+3.8
+564,993
+3.5
+Total
+17,825,302
+100.0
+16,281,939
+100.0
+DISTRIBUTION OF DUE TO CUSTOMERS BY REMAINING MATURITY
+Remaining maturity
+Demand deposits(1)
+Less than 3 months
+3 to 12 months
+1 to 5 years
+Over 5 years
+Total
+Note: (1) Includes time deposits payable on demand.
+28
+ICBC
+In RMB millions, except for percentages
+At 31 December 2016
+8,437,014
+31.8
+9,448,520
+84,488
+36.6
+244,445
+37.1
+238,133
+48.7
+325,914
+49.0
+314,398
+(%)
+Amount
+(%)
+Amount
+Percentage
+Percentage
+2015
+2016
+13.2
+92,612
+13.8
+4,662
+(%)
+Amount
+Item
+Percentage
+Percentage
+2015
+2016
+In RMB millions, except for percentages
+In RMB millions, except for percentages
+SUMMARY GEOGRAPHICAL SEGMENT INFORMATION
+Please refer to the section headed "Discussion and Analysis
+each of these operating segments.
+100.0
+668,733
+100.0
+641,681
+0.9
+5,762
+0.7
+Business Overview" for the details on the development of
+Amount
+Total operating income
+Treasury operations
+31,966
+(10.3)
+(236)
+2,295
+2,059
+Others
+Amortisation
+(59.1)
+(25,001)
+42,320
+17,319
+Taxes and surcharges
+1.1
+300
+28,114
+28,414
+Premises and equipment expenses
+33,933
+(1,967)
+(5.8)
+Total
+Personal banking
+Corporate banking
+Item
+SUMMARY OPERATING SEGMENT INFORMATION
+The Bank's principal operating segments include corporate banking, personal banking and treasury operations. The Bank
+adopts the MOVA (Management of Value Accounting) to evaluate the performance of each of its operating segments.
+Segment Information
+Discussion and Analysis
+ICBC
+Others
+20
+Income Tax Expense
+In 2016, the Bank set aside an allowance for impairment losses of RMB87,894 million, an increase of RMB901 million or
+1.0% as compared to that of last year. Specifically, the allowance for impairment losses on loans was RMB86,138 million,
+indicating an increase of RMB116 million or 0.1%. Please refer to "Note 26. to the Financial Statements: Loans and
+Advances to Customers" and "Note 15. to the Financial Statements: Impairment Losses on Assets Other than Loans and
+Advances to Customers" for details.
+Impairment Losses
+The Bank continued to exercise strict cost control and management. Operating expenses recorded at RMB193,112 million,
+RMB27,723 million or 12.6% lower than that of the previous year. Specifically, taxes and surcharges dropped by RMB25,001
+million, principally because the Bank replaced the business tax with VAT since 1 May 2016, resulting in the decrease of
+business tax expense. Staff costs decreased by 0.7% to RMB113,354 million. Other operating expenses decreased by 5.8%
+to RMB31,966 million, mainly because the tax originally included in the operating expenses was adjusted to taxes and
+surcharges and expenses on electricity, printing, purchase of low-value consumables and other items dropped relatively
+significantly.
+(12.6)
+(27,723)
+220,835
+193,112
+Income tax expense was RMB84,173 million, RMB1,342 million or 1.6% lower than that of the previous year. The effective
+tax rate stood at 23.17%. Please see "Note 16. to the Financial Statements: Income Tax Expense" for the reconciliation of
+income tax expense applicable to profit before tax at the PRC statutory income tax rate and the effective income tax rate.
+(%)
+Head Office
+70,265
+Amount
+11,933,466
+Percentage
+(%)
+13,056,846
+Amount
+Total loans and advances to customers
+Item
+At 31 December 2015
+In RMB millions, except for percentages
+At 31 December 2016
+ASSETS DEPLOYMENT
+As at the end of 2016, total assets of the Bank amounted to RMB24,137,265 million, RMB1,927,485 million or 8.7% higher
+than that at the end of the previous year. Specifically, total loans and advances to customers (collectively referred to as "total
+loans") increased by RMB1,123,380 million or 9.4%, investment increased by RMB471,211 million or 9.4%, and cash and
+balances with central banks increased by RMB291,155 million or 9.5%. In terms of structure, net loans and advances to
+customers accounted for 52.9% of total assets; investment accounted for 22.7%; and cash and balances with central banks
+accounted for 13.9%.
+Assets Deployment
+Discussion and Analysis
+21
+Annual Report 2016
+In 2016, the Bank timely adjusted its business strategy based on the external macroeconomic environment, improved the
+asset and liability structure, maintained coordinated development of deposit and loan business, and enhanced the efficiency
+of resource allocation for assets and liabilities. Taking development needs of the real economy into account, the Bank
+reasonably controlled the aggregate amount, direction and pace of lending. Closely monitoring the trends of the domestic
+and international financial markets, the Bank appropriately expanded its investment scale and optimized the structure of
+investment portfolios. Furthermore, the Bank actively adopted measures to promote steady growth in due to customers, and
+refined the liability period structure, thereby ensuring a stable and sustainable growth of funding sources.
+Balance Sheet Analysis
+Percentage
+(%)
+Less: Allowance for impairment losses on
+loans
+289,512
+280,654
+683,793
+3.3
+797,473
+13.8
+3,059,633
+13.9
+3,350,788
+Cash and balances with central banks
+Due from banks and other financial
+institutions
+Note: Please see "Note 53. to the Financial Statements: Segment Information" for the Bank's classification of geographic regions.
+22.5
+22.7
+5,481,174
+Investment
+52.5
+11,652,812
+52.9
+12,767,334
+Loans and advances to customers, net
+5,009,963
+100.0
+668,733
+100.0
+19.6
+131,004
+19.2
+123,491
+Bohai Rim
+12.2
+81,307
+12.5
+Central China
+79,974
+17.6
+117,661
+17.7
+113,430
+Yangtze River Delta
+11.5
+76,854
+11.0
+Pearl River Delta
+(0.7)
+79,703
+84,447
+641,681
+Total operating income
+6.3
+42,305
+7.7
+49,335
+Overseas and others
+4.6
+12.4
+30,897
+28,451
+Northeastern China
+15.6
+104,258
+15.1
+97,032
+Western China
+12.6
+4.4
+3.1
+(819)
+113,354
+37,670
+Bank card business
+(%)
+Growth rate
+In RMB millions, except for percentages
+Increase/
+(decrease)
+2015
+2016
+Item
+NET FEE AND COMMISSION INCOME
+The Bank actively optimized income structure. In 2016, the Bank realized non-interest income of RMB169,835 million,
+RMB8,969 million or 5.6% higher than that of the previous year. The non-interest income took up 26.5% of the operating
+income, up 2.4 percentage points. Specifically, net fee and commission income grew by 1.1% to RMB144,973 million, and
+other non-interest income grew by 42.3% to RMB24,862 million.
+Non-interest Income
+Interest expense on debt securities issued was RMB17,470 million, RMB1,369 million or 8.5% higher than that of last year,
+mainly attributable to the increase in the issuance of corporate bonds and bills by overseas institutions. Please refer to "Note
+38. to the Financial Statements: Debt Securities Issued" for the debt securities issued by the Bank.
+♦ Interest Expense on Debt Securities Issued
+Interest expense on due to banks and other financial institutions was RMB44,314 million, RMB5,487 million or 11.0% lower
+than the previous year, principally attributable to a decrease of RMB148,365 million in average balance of due to banks and
+other financial institutions.
+♦ Interest Expense on Due to Banks and Other Financial Institutions
+Discussion and Analysis
+28.8
+37,684
+(14)
+0.0
+Personal wealth management and
+20,440
+Corporate wealth management services
+(6.6)
+(1,767)
+26,791
+25,024
+Investment banking business
+(6.7)
+Held-to-maturity investments(2)
+(1,878)
+26,108
+cash management
+Settlement, clearing business and
+4.8
+1,715
+35,910
+37,625
+private banking services
+27,986
+18,305
+2,973,042
+2,870,353
+5.07%
+29 November 2017
+Policy bank bonds 2008
+16,228
+4.95%
+Policy bank bonds 2011
+14,018
+4.49%
+11 March 2018
+25 August 2018
+Policy bank bonds 2011
+11,430
+4.25%
+24 March 2018
+Policy bank bonds 2012
+11,420
+3.94%
+21 August 2019
+17,300
+Policy bank bonds 2007
+Maturity
+Annual
+interest rate
+57.3
+Receivables(2)
+291,370
+5.3
+352,143
+7.0
+Total
+5,481,174
+54.2
+100.0
+100.0
+Notes: (1) Includes finanical assets held for trading and financial assets designated at fair value through profit or loss.
+(2) Please see "Note 27. to the Financial Statements: Financial Investments" for details.
+As at the end of 2016, the Group held RMB2,000,925 million of financial bonds', including RMB1,319,450 million of policy
+bank bonds and RMB681,475 million of bonds issued by banks and non-bank financial institutions, accounting for 65.9%
+and 34.1% of financial bonds, respectively.
+TOP 10 FINANCIAL BONDS HELD BY THE BANK
+In RMB millions, except for percentages
+Nominal
+Debt securities
+value
+5,009,963
+2,135
+11.7
+Asset custody business
+4,920
+4,545
+Net gain on financial investments
+N/A
+5,849
+(5,953)
+(104)
+loss
+Net loss on financial assets and liabilities
+designated at fair value through profit or
+52.8
+2,230
+4,227
+6,457
+Net trading income
+(%)
+Growth rate
+Increase/
+(decrease)
+(375)
+(7.6)
+Other operating income, net
+13,964
+Staff costs
+(%)
+Growth rate
+In RMB millions, except for percentages
+Increase/
+(decrease)
+2015
+2016
+Item
+OPERATING EXPENSES
+2015
+Operating Expenses
+42.3
+7,387
+17,475
+24,862
+Total
+(2.2)
+(317)
+14,281
+Other non-interest related gain was RMB24,862 million, RMB7,387 million or 42.3% higher than that of the previous year.
+Specifically, net loss on financial assets and liabilities designated at fair value through profit or loss declined by RMB5,849
+million, mainly because of a decrease in the Bank's expenses in payment to customers related to structural deposits due to
+the changes of wealth management product structure. Net trading income increased by RMB2,230 million, mainly driven by
+the increasing income from derivative valuation.
+2016
+Item
+In RMB millions, except for percentages
+313
+2,784
+3,097
+Others
+(3.6)
+(72)
+1,979
+1,907
+11.2
+Trust and agency services
+1,263
+4,687
+5,950
+Guarantee and commitment business
+24.3
+1,349
+5,544
+6,893
+26.9
+114,173
+Fee and commission income
+161,670
+OTHER NON-INTEREST RELATED GAIN
+Discussion and Analysis
+19
+Annual Report 2016
+Income from settlement, clearing business and cash management services and investment banking business was lowered
+compared to the previous year because of a series of factors, including voluntary lowering or exemption of certain business
+fees in order to reduce fees and share profits with the real economy and consumers, greater discounts for settlement
+business, lowered income from personal RMB settlement business, as well as decreased income from international
+settlement business and investment banking advisory services due to external economic environment.
+Continuously centered on customer demands, the Bank promoted innovation in products, services and channels, offered
+greater discounts for settlement business, and propelled strategic transformation and development of retail, asset
+management, investment banking and other businesses. In 2016, the Bank realized fee and commission income of
+RMB164,714 million, RMB3,044 million or 1.9% higher than that of the previous year. Specifically, income from personal
+wealth management and private banking services increased by RMB1,715 million, mainly due to the increase of income
+from personal insurance brokerage business. Income from corporate wealth management services rose by RMB2,135
+million, mainly due to the increase in investment management fee of corporate wealth management products, income from
+corporate foreign exchange business and income from agency bond issuance and underwriting. Income from asset custody
+business increased by RMB1,349 million, mainly because of the increase of custody assets. Income from guarantee and
+commitment business recorded an increase of RMB1,263 million, mainly due to the growth of income from commitment
+business.
+1.1
+1,582
+164,714
+143,391
+Net fee and commission income
+8.0
+1,462
+18,279
+19,741
+Less: Fee and commission expense
+1.9
+3,044
+144,973
+Reverse repurchase agreements
+Others
+Total assets
+1.2
+58,024
+32.3
+1,468,674
+48.1
+2,399,463
+(%)
+Amount
+(%)
+Amount
+Percentage
+Percentage
+At 31 December 2016
+Total
+Other bonds
+Policy bank bonds
+Central bank bills
+356,425
+7.8
+1,319,450
+26.5
+3 to 12 months
+Less than 3 months
+Undated (1)
+Remaining maturity
+At 31 December 2015
+In RMB millions, except for percentages
+DISTRIBUTION OF INVESTMENT IN BONDS NOT RELATED TO RESTRUCTURING BY REMAINING MATURITY
+In terms of distribution by issuers, government bonds increased by RMB930,789 million or 63.4%; central bank bills
+decreased by RMB298,401 million or 83.7%; policy bank bonds went down by RMB193,642 million or 12.8%; and other
+bonds dropped by RMB4,657 million or 0.4%. The Bank stepped up the investment in local government bonds and treasury
+bonds in order to support the development of real economy under the influence of changes in normal maturity of bonds
+and supply structure of the bond market, the balances of central bank bills, policy bank bonds and other bonds declined by
+different extent during the reporting period.
+Government bonds
+100.0
+100.0
+4,982,776
+26.6
+1,210,496
+24.2
+1,205,839
+33.3
+1,513,092
+4,548,687
+1 to 5 years
+Item
+DISTRIBUTION OF INVESTMENT IN BONDS NOT RELATED TO RESTRUCTURING BY ISSUERS
+179,249
+Investment in bonds related to restructuring
+90.8
+4,548,687
+90.9
+4,982,776
+restructuring
+Investment in bonds not related to
+95.3
+(%)
+Percentage
+4,775,767
+94.8
+Amount
+(%)
+Percentage
+At 31 December 2016
+3.3
+193,187
+3.9
+Other debt instruments
+Discussion and Analysis
+ICBC
+24
+Investment in bonds not related to restructuring amounted to RMB4,982,776 million, representing an increase of
+RMB434,089 million or 9.5% as compared to the end of last year. Investment in bonds related to restructuring amounted
+to RMB179,249 million, representing a decrease of RMB13,938 million, mainly due to advance repayment of part of the
+Huarong bonds. For details of the investment in bonds related to restructuring, please refer to "Note 27.(a) to the Financial
+Statements: Receivables".
+100.0
+5,009,963
+100.0
+5,481,174
+In RMB millions, except for percentages
+At 31 December 2015
+Total
+234,196
+5.2
+284,639
+Equity instruments and others
+0.6
+33,893
+0.6
+34,510
+4.7
+Over 5 years
+At 31 December 2016
+Percentage
+4,548,687
+100.0
+4,982,776
+Total
+1.8
+81,976
+1.9
+95,380
+Other foreign currency bonds
+3.9
+176,607
+5.0
+246,275
+USD-denominated bonds
+94.3
+(%)
+Amount
+4,290,104
+100.0
+Annual Report 2016
+25
+Discussion and Analysis
+Available-for-sale financial assets (2)
+6.9
+343,272
+8.7
+474,475
+profit or loss (1)
+Financial assets at fair value through
+(%)
+93.1
+Percentage
+At 31 December 2015
+In RMB millions, except for percentages
+Percentage
+(%)
+Amount
+At 31 December 2016
+Item
+DISTRIBUTION OF INVESTMENT BY HOLDING PURPOSE
+In terms of currency structure, RMB-denominated bonds rose by RMB351,017 million or 8.2%; USD-denominated bonds
+increased by the equivalent of RMB69,668 million or 39.4%; and other foreign currency bonds increased by an equivalent of
+RMB13,404 million or 16.4%. During the reporting period, the Bank adjusted the currency structure of its foreign currency
+bond portfolios, increased the percentage of USD-denominated bonds and enhanced the liquidity.
+Amount
+4,641,121
+RMB-denominated bonds
+(%)
+2,415,432
+19.2
+873,122
+14.6
+729,375
+7.3
+330,174
+6.6
+48.5
+328,648
+141
+0.0
+150
+(%)
+Amount
+(%)
+Amount
+Percentage
+0.0
+5,196,535
+2,243,337
+1,509,171
+Amount
+Item
+Percentage
+Percentage
+At 31 December 2015
+At 31 December 2016
+In RMB millions, except for percentages
+DISTRIBUTION OF INVESTMENT IN BONDS NOT RELATED TO RESTRUCTURING BY CURRENCY
+49.3
+In terms of remaining maturity structure, bonds not related to restructuring within 1-year maturity decreased by
+RMB145,264 million from the end of the previous year and their percentage decreased by 5.2 percentage points; and bonds
+not related to restructuring beyond 5-year maturity increased by RMB407,258 million or 6.1 percentage points. This is mainly
+due to the increase of medium and long term bonds resulted from the relatively longer maturity of new investment in local
+government bonds.
+Total
+100.0
+4,548,687
+100.0
+4,982,776
+24.2
+1,101,913
+30.3
+Note: (1) Refers to impaired bonds.
+Amount
+Debt instruments
+Item
+100.0
+29.7
+3,541,862
+11,933,466
+100.0
+32.1
+4,196,169
+13,056,846
+4.4
+522,052
+5.5
+719,993
+65.9
+7,869,552
+62.4
+8,140,684
+(%)
+Amount
+(%)
+DISTRIBUTION OF CORPORATE LOANS BY MATURITY
+In RMB millions, except for percentages
+At 31 December 2016
+At 31 December 2015
+Total
+63.3
+4,983,604
+66.5
+5,410,811
+Medium to long-term corporate loans
+36.7
+2,885,948
+Amount
+33.5
+Short-term corporate loans
+(%)
+Amount
+(%)
+Amount
+Item
+Percentage
+Percentage
+2,729,873
+Percentage
+Percentage
+At 31 December 2016
+30,635
+35,419
+41,962
+Unit: RMB100 millions
+Composition of Loan
+In 2016, in response to the changes in macroeconomic environment and
+financial regulatory requirements, the Bank actively implemented national
+policies, further supported the supply-side structural reform, continued
+to improve the credit structure and worked hard to enhance its quality
+and efficiency in serving the real economy. The Bank continued to bolster
+the government's key programs and significant construction projects, and
+proactively aligned with the national development strategies on the "four
+regions" (western regions, northeastern regions, eastern regions and
+central regions) and the "three supporting belts" (the "Belt and Road"
+initiative, the coordinated development of the Beijing-Tianjin-Hebei region
+and the development of the Yangtze River Economic Zone). In addition,
+it strove to promote the innovative small and micro enterprises financial
+service model and took initiatives to back up the citizens' reasonable credit
+requirement and consumption upgrading. As at the end of 2016, total
+loans amounted to RMB13,056,846 million, RMB1,123,380 million or
+9.4% higher compared with the end of the previous year, of which, RMB-
+denominated loans of domestic branches were RMB11,442,941 million,
+RMB844,905 million or 8.0% higher than that at the end of 2015.
+Loan
+100.0
+7,200
+22,209,780
+3.6
+807,246
+4.1
+984,869
+24,137,265
+4.5
+996,333
+3.1
+755,627
+100.0
+8,140,684
+5,221
+76,126
+At 31 December 2015
+In RMB millions, except for percentages
+Discussion and Analysis
+Total
+Personal loans
+Discounted bills
+Corporate loans
+Item
+3,503
+DISTRIBUTION OF LOANS BY BUSINESS LINE
+22
+Personal loans
+Discounted bills
+2016
+2015
+Corporate loans
+2014
+78,696
+81,407
+ICBC
+Policy bank bonds 2012
+100.0
+100.0
+8.8
+311,075
+5.9
+247,020
+Personal consumption loans
+71.1
+2,516,197
+77.2
+3,240,838
+Residential mortgages
+(%)
+Amount
+(%)
+Amount
+Item
+Percentage
+Percentage
+Personal business loans
+256,272
+6.1
+295,091
+At 31 December 2015
+In RMB millions, except for percentages
+INVESTMENT
+In 2016, the Bank continued to improve the bond portfolio investment structure, strongly supported the development of real
+economy, and appropriately expanded its investment scale on the basis of guaranteeing liquidity and controllable risk. As at
+the end of 2016, investment amounted to RMB5,481,174 million, RMB471,211 million or 9.4% higher compared with the
+end of the previous year.
+Investment
+Please see "Discussion and Analysis - Risk Management" for detailed analysis of the Bank's loans and their quality.
+Personal loans increased by RMB654,307 million or 18.5% than that at the end of last year. Specifically, residential
+mortgages grew by RMB724,641 million or 28.8%, mainly because the Bank actively supported the citizens' borrowing
+need for owner-occupied houses in line with the adjustment of governmental property policy. Personal consumption
+loans dropped by RMB64,055 million or 20.6%, principally because the Bank strengthened management on the purposes
+of personal consumption loans and personal consumption financing demand declined as Internet-based finance was
+becoming more competitive. Personal business loans declined by RMB38,819 million or 13.2%, mainly dragged down
+by the decreasing demand of some small and micro business owners for effective financing. Credit card overdrafts grew
+by RMB32,540 million or 7.8%, primarily attributable to a stable growth in the number of credit cards issued and their
+consumption volume as well as the development of credit card installment business.
+100.0
+At 31 December 2016
+3,541,862
+4,196,169
+Total
+11.8
+419,499
+10.8
+452,039
+Credit card overdrafts
+8.3
+100.0
+At 31 December 2015
+In RMB millions, except for percentages
+DISTRIBUTION OF PERSONAL LOANS BY PRODUCT LINE
+601,526
+Including: Trade finance
+43.9
+3,454,731
+42.0
+3,420,387
+Working capital loans
+(%)
+670,325
+Amount
+Amount
+Item
+Percentage
+Percentage
+At 31 December 2016
+At 31 December 2015
+In RMB millions, except for percentages
+DISTRIBUTION OF CORPORATE LOANS BY PRODUCT LINE
+(%)
+7,869,552
+8.5
+4,209,340
+Discussion and Analysis
+23
+Annual Report 2016
+Discounted bills rose by RMB197,941 million or 37.9% compared with the end of last year, principally because the Bank
+moderately increased its asset allocation to discounted bills to satisfy the management requirements of asset-liability
+portfolios.
+Corporate loans rose by RMB271,132 million or 3.4% from the end of last year. In terms of product type, working capital
+loans reduced by RMB34,344 million, mainly because of the decrease in enterprises' credit demands for working capital
+as affected by economic structural adjustment and industry transformation and upgrading and decrease in import and
+export values. Project loans increased by RMB273,323 million or 6.9%, mainly due to the continuous support for national
+key programs and significant projects and the strengthened support for development of real economy and industry
+transformation and upgrading.
+100.0
+7,869,552
+100.0
+Project loans
+8,140,684
+6.1
+478,804
+6.3
+510,957
+Property loans
+50.0
+3,936,017
+51.7
+Total
+53.0
+7.4
+11,300
+Debt securities issued
+357,937
+1.6
+306,622
+1.5
+Others
+Total liabilities
+1.7
+1,366,758
+22,156,102
+1,217,649
+5.9
+100.0
+20,409,261
+100.0
+Due to Customers
+Due to customers is the Bank's main source of funds. As at the end of
+2016, due to customers was RMB17,825,302 million, RMB1,543,363
+million or 9.5% higher than that at the end of the previous year. In terms
+of customer structure, the balance of corporate deposits increased by
+RMB1,011,506 million or 12.0%; and the balance of personal deposits
+increased by RMB539,167 million or 7.1%. In terms of maturity structure,
+the balance of time deposits increased by RMB456,788 million or 5.6%,
+while the balance of demand deposits increased by RMB1,093,885 million
+or 13.8%.
+6.1
+Composition of Due to Customers
+337,191
+589,306
+Percentage
+Item
+Amount
+(%)
+Due to customers
+17,825,302
+80.5
+2.7
+Amount
+16,281,939
+79.8
+Due to banks and other financial institutions
+2,016,799
+9.1
+2,265,860
+11.1
+Repurchase agreements
+(%)
+Unit: RMB100 millions
+2,365
+2,438
+(%)
+Amount
+Percentage
+(%)
+Corporate deposits
+Time deposits
+4,176,834
+Percentage
+23.4
+24.1
+Demand deposits
+5,271,686
+29.6
+4,507,661
+27.7
+Subtotal
+3,929,353
+At 31 December 2016
+At 31 December 2015
+In RMB millions, except for percentages
+3,309
+81,403
+76,011
+71,886
+94,485
+84,370
+80,371
+2014
+2015
+2016
+Corporate deposits Personal deposits
+Other deposits
+Annual Report 2016
+27
+Discussion and Analysis
+DISTRIBUTION OF DUE TO CUSTOMERS BY BUSINESS LINE
+Item
+Percentage
+In RMB millions, except for percentages
+At December 31, 2015
+Amount
+LIABILITIES
+At December 31, 2016
+1,742,287
+4.04%
+Policy bank bonds 2010
+3.51%
+Policy bank bonds 2012
+10,993
+3.76%
+25 June 2022
+27 July 2020
+13 July 2019
+Policy bank bonds 2011
+10,505
+4.62%
+11,050
+Policy bank bonds 2014
+22 February 2021
+Liabilities
+ICBC
+26
+1 Financial bonds refer to the debt securities issued by financial institutions on the bond market, including bonds issued by policy banks,
+banks and non-bank financial institutions but excluding debt securities related to restructuring and central bank bills.
+Discussion and Analysis
+Impairment
+14 January 2019
+5.75%
+10,410
+loss
+As at the end of 2016, total liabilities of the Bank amounted to RMB22,156,102 million, RMB1,746,841 million or 8.6%
+higher than that at the end of the previous year.
+Effective notional amount of written credit derivatives
+(20,409)
+58,813
+56,396
+10
+11
+Less: Adjusted effective notional deductions for written credit derivatives
+Total derivative exposures
+(27,517)
+691,845
+114,393
+12
+Gross SFT assets (with no recognition of netting), after adjusting for sale
+accounting transactions
+511,185
+13
+Less: Netted amounts of cash payables and cash receivables of gross SFT
+assets
+14
+CCR exposure for SFT assets
+9
+188,185
+(10,325)
+31 December
+2015
+Less: Exempted CCP leg of client-cleared trade exposures
+1
+2 3 4
+56
+On-balance sheet items (excluding derivatives and SFTs, but including
+collateral)
+Less: Asset amounts deducted in determining Basel III Tier 1 capital
+Balance of adjusted on-balance sheet assets (excluding derivatives and SFTs)
+Replacement cost associated with all derivatives transactions (ie net of
+eligible cash variation margin)
+31 December
+2016
+57,298
+(14,896)
+23,433,899
+21,377,922
+(11,665)
+21,366,257
+113,669
+39,582
+58,116
+49,149
+7
+Add-on amounts for PFE associated with all derivatives transactions
+Gross-up for derivatives collateral provided where deducted from the
+balance sheet assets pursuant to the operative accounting framework
+Less: Deductions of receivables assets for cash variation margin provided in
+derivatives transactions
+8
+(11,560)
+23,422,339
+38,855
+19
+Agent transaction exposures
+22
+Leverage ratio
+7.55%
+7.48%
+290
+ICBC
+(j)
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Quantitative Information Disclosure of Liquidity Coverage Ratio Using Advanced Approaches
+10 Most Popular Investment Products
+Best Private Bank in China - Best Asset Management Award
+Best Private Bank in China
+Wealth Plus
+Best Global Cash Management Bank
+Best Treasury Innovation Product
+Best Cash Management Bank
+Treasury China
+Risk Control Bank of the Year
+Best Banker Group
+23,813,992
+15
+25,904,533
+21
+16
+Total securities financing transaction exposures
+568,483
+17
+Off-balance sheet exposure at gross notional amount
+3,435,098
+730,700
+3,027,744
+18
+Less: Adjustments for conversion to credit equivalent amounts
+(1,709,572)
+(1,425,102)
+S/N Item
+Balance of adjusted off-balance sheet assets
+1,725,526
+1,602,642
+20
+Net tier 1 capital
+1,954,770
+1,781,062
+Balance of adjusted on-and off-balance sheet assets
+Leverage Ratio, Net Tier 1 Capital, Balance of Adjusted On-and Off-balance Sheet Assets and Related
+Information
+Adjustment for off-balance sheet items
+(11,665)
+description of write-up mechanism
+Position in subordination hierarchy in liquidation
+(specify instrument type immediately
+senior to instrument)
+Including: If temporary write-down,
+permanent or temporary
+Including: If write-down,
+Including: If write-down, full or partial
+necessary, without which the
+Issuer would become non-viable
+Full write-down
+Permanent write-down
+viable; or (ii) any relevant
+authority having decided that
+a public sector injection of
+capital or equivalent support is
+The occurrence of the earlier
+of either: (i) the CBRC having
+decided that a write-off is
+necessary, without which the
+Issuer would become non-
+Non-compliant transitioned features
+Yes
+Non-viability
+Non-viability of
+ICBC (Asia) or the Bank
+China Business Network
+Yes
+Yes
+N/A
+§
+N/A
+of the Bank
+Including: If yes, specify non-compliant features
+Full write-down
+Permanent write-down
+Full write-down
+Permanent write-down
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2016
+Unaudited Supplementary Financial Information
+289
+Annual Report 2016
+N/A
+No
+debts
+After depositor and general
+creditor, in the same liquidation
+order with other subordinated
+N/A
+N/A
+debts
+No
+After depositor and general
+creditor, in the same liquidation
+order with other subordinated
+N/A
+No
+debts
+After depositor and general
+creditor, in the same liquidation
+order with other subordinated
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+(61,143)
+3
+Adjustments for fiduciary assets
+4
+Adjustments for derivative financial instruments
+5
+Adjustment for securities financing transactions
+6
+7
+Other adjustments
+8
+Balance of adjusted on-and off-balance sheet assets
+93,733
+35,523
+57,298
+38,855
+1,725,526
+1,602,642
+(11,560)
+25,904,533
+(97,729)
+23,813,992
+regulatory consolidation
+22,209,780
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+(i) Disclosure of Leverage Ratio
+The following information is disclosed in accordance with the CBRC Administrative Measures for Leverage Ratio of
+Commercial Banks (Revised) (CBRC No.1, 2015) Appendix 3 Disclosure Templates of Leverage Ratio.
+Comparison of Regulatory Leverage Ratio Items and Accounting Items
+S/N
+Item
+1
+Total consolidated assets as per published financial statements
+2
+31 December
+2016
+31 December
+2015
+24,137,265
+Consolidated adjustments for accounting purposes but outside the scope of
+Best Board
+Directors & Boards
+Best Local Private Bank in China
+139.75%
+Data of the above table are all the simple arithmetic means of the month-end figures of the recent quarter.
+Liquidity coverage ratio (%)
+3,439,602
+4,803,766
+23
+Annual Report 2016
+Total net cash outflows
+Total HQLA
+21
+value
+Total adjusted
+2,366,021
+3,595,891
+22
+Total cash inflows
+291
+2016 Ranking
+The 4th place among the Top 500 Enterprises of China
+Ranking in terms of operating income
+China Enterprise Confederation
+The 27th place among the Top 100 Most Valuable Global Brands
+(The 2nd place among the brands of financial institutions)
+Ranking in terms of brand value
+Millward Brown
+The 1st place among the Top 500 Banking Brands rankings
+Ranking in terms of brand value of a bank
+Brand Finance
+2016 Ranking and Awards
+(The 1st place on the sub-list of commercial banks)
+Ranking in terms of operating income
+Fortune
+The 1st place among the Top 1000 World Banks
+Ranking in terms of tier 1 capital of a bank
+The Banker
+Ranking in terms of combination of sales, profit,
+assets and market value
+The 1st place among the Global 2000
+Forbes
+The 15th place among the Global 500
+2016 Awards
+20
+1,037,439
+42,207
+42,344
+Other contractual funding obligations
+14
+174,767
+2,099,231
+15
+Credit and liquidity facilities
+Outflows related to loss of funding on debt products
+12
+1,024,266
+1,024,266
+Outflows related to derivative exposures and other collateral requirements
+11
+13
+1,032,815
+Other contingent funding obligations
+17,328
+Other cash inflows
+19
+929,214
+1,427,088
+Inflows from fully performing exposures
+18
+750,628
+403,992
+Secured lending (including reverse repos and securities borrowing)
+17
+Cash inflows
+5,805,623
+Total cash outflows
+16
+1,131,364
+OVERSEAS AWARDS
+Global Finance
+World's Best Emerging Markets Bank
+PBC Technological Development Award
+PBC
+DOMESTIC AWARDS
+Award for Best Foreign Card Merchant Development
+Most Popular Product Award
+JCB
+CBRC
+Best Product Design Award - ICBC-Shangri-La Co-brand Card
+Award for Best Fraud Risk Control
+Visa High-end Merchant Co-brand Card
+Visa Best Payment Innovation Award
+Visa Risk Control
+Visa Best Partner
+Visa Cross-border Promotion
+Visa Inc.
+MasterCard Worldwide
+Recognition of Performance Excellence 9th APCCAL Awards
+Award for Excellent Performance in the "Popularizing Financial
+Knowledge" Service Promotion Month
+Best Call Center of the Year
+Excellent Innovation Award for Excellent Customer Service
+Center in the Chinese Banking Sector
+Advanced Group in Online Competition of the Chinese Banking
+Sector about Consumer Protection Knowledge
+Outstanding Contribution Award in Civilized and Standard
+Services of the Chinese Banking Sector
+Best Effect Award for “Popularizing Financial Knowledge"
+Series in Chinese Banking Industry
+Award for Excellent Legal Risk Management
+Best Growth Award for Pension Service
+The 1st place in terms of social contribution
+Ministry of Industry and Information Technology, China
+Electronics Chamber of Commerce
+The 1st place in terms of comprehensive wealth management
+capability
+Best Social Responsibility Special Contribution Outlet Award
+Best Performance Award for Syndicated Loans
+Best Management Award for Syndicated Loans
+Best Project Award for Syndicated Loans
+Excellent Service Award
+Best Social Responsibility Financial Institution Award
+Best CSR Management Award
+China Banking Association
+2016 Ranking and Awards
+292
+ICBC
+Top 50 Financial Products for Serving Micro and Small-sized
+Enterprises
+Asia Pacific Contact Centre Association Leaders
+Chairman Yi Huiman:
+Listed Companies
+Best Listed Company
+FinanceAsia
+Best Private Bank for Global Investment Exposure
+Best Private Bank in China
+Best Domestic Bank in China
+Asiamoney
+Best Precious Metal Trading Bank in China
+Best Bank in China
+Best Cash Manager in China
+Best Corporate Digital Bank in China
+Best Consumer Digital Bank in China
+Best Precious Metals Broker in China
+Best Consumer Credit Card Program in China
+Best Corporate Bank in China
+Best Bank in China
+Euromoney
+The Asian Banker
+Custodian Bank of the Year in China
+Best Mega Private Bank in China
+Most Influential Leader
+Ta Kung Wen Wei Media Group
+Hong Kong Corporate Governance Excellence Award
+The Chamber of Hong Kong Listed Companies
+Precious Metal Trading Bank in China
+Financial Times
+Golden Award for Best RMB Internationalization Service
+(Greater China)
+Institutional Investor
+Platinum Award
+_
+The Asset Corporate Award
+Best Private Bank in China
+Best Domestic Bond House in China
+The Asset
+Best Market Risk Management in China
+The Best Cash Management Bank in China
+The Best Asian International Cash Management Bank in Asia Pacific
+1,199,033
+N/A
+3,123,497
+10
+Global Compact Network China
+Pioneer Enterprises for Achieving SDGs
+Creative Communication Management Research Centre of
+Peking University
+Best Brand for Spirit of Innovation in Mobile Marketing of
+the Year (ICBC Link)
+China News Service
+Most Responsible Enterprise
+Most Influential Financial Brand (ICBC Mobile)
+Chinese Financial Brand Bauhinia Award Best 10 Social
+Marketing Cases of the Chinese Banking Industry
+(Selection of ICBC Smart Girls)
+Organizing Committee of the 21st Century Asian Finance
+Annual Conference
+The Economic Observer
+Excellent Banker of the Year Chairman Yi Huiman
+Most Respectable Enterprise
+Financial News, Institute of Finance and Banking, Chinese
+Academy of Social Sciences
+Best Commercial Bank of the Year
+Top Ten Innovative Institutions in Internet-based Finance
+of the Year
+21st Century Business Herald
+Excellent Private Bank of the Year
+Best Commercial Bank in Asia
+_
+Chinese Financial Brand Bauhinia Award
+Organizing Committee of China International Financial
+Exhibition
+Most Reputed Financial Service of the Year
+Organizing Committee of China Gold Congress
+Best Market Expansion Award
+China Advertising Association
+China Advertising Great Wall Award: Advertiser
+Best Mobile Financial Social Platform (ICBC Link)
+Chinese Financial Brand Bauhinia Award
+China Electronic Finance Industry Alliance, Internet Finance
+Work Committee of Internet Society of China, Organizing
+Committee of China Inclusive Finance Conference
+Asia Pacific Call Center Association Leaders
+Recognition of Performance Excellence 9th APCCAL Awards
+Annual Report 2016
+293
+2016 Ranking and Awards
+Sina Finance, Chinese Financial Research Center of Tsinghua
+SEM, Center for Internet Development and Governance of
+Tsinghua SEM, Internet Finance Institute
+Excellent Inclusive Finance Provider of the Year
+ICBC Mobile
+Banker of the Year Chairman Yi Huiman
+Best Asset Management Bank in China
+Best Risk Management Bank
+Best FinTech Bank
+Information Times
+Best Customer Service Center of the Year
+Investor Journal Weekly
+Best Internet-based Credit Card Bank of the Year
+Leading Credit Card Bank of the Year
+Trade Finance
+Best Financial Innovation Award
+Best Cash Management Bank
+"Golden Pixiu" Awards
+-Gold E-banking of the Year
+"Golden Pixiu" Awards Gold Innovative Financial Product
+of the Year (Open-end Internet-based Banking)
+Gold Credit Card Bank of the Year
+Gold Wealth Management Bank of the Year
+Gold Asset Management Bank of the Year
+Gold Custodian Bank of the Year
+Financial Computerizing
+Award for Outstanding Contribution to Financial Product
+Innovation ICBC Mobile
+Award for Outstanding Contribution to Technological
+Innovation in the Financial Industry ― Contribution to
+Operation and Maintenance Innovation
+Hurun Report
+Financial Money
+Excellent Board of Directors of China's Strategic Listed
+Companies
+Top 10 Innovative Financial Products (Account-based FX)
+Top 10 Innovative Wealth Management
+ICBC Mobile
+China Business Journal
+Internet-based Finance Bank with Excellent Competitiveness
+SME Business Bank with Excellent Competitiveness
+China Fund Newspaper
+Best Selling Bank of PE Funds
+Securities Times
+Best Internet Innovation Bank in China (ICBC Mobile)
+Best Private Banking Brand in China
+Top 10 Financial Products (Corporate Banking)
+Southern Weekly
+National Business Daily
+Excellent Mobile Banking
+Excellent Credit Card Brand
+The Chinese Banker
+The 1st place in the Ranking of National Commercial Banks in
+Core Competitiveness
+Top 10 Internet-based Finance Innovation Award —
+The 1st place in the List of Chinese State-owned Listed
+Companies on Corporate Social Responsibilities
+Internet-based Finance Innovation Award in China -
+Internet Society of China, China Electronic Finance Industry
+Alliance, Internet Finance Work Committee of Internet Society
+of China
+Best Social Marketing Platform of the Chinese Banking Industry
+― WeChat Public Account of ICBC Mobile
+Best 10 Social Marketing Cases of the Chinese Banking
+Industry Call for Smart Heroes of ICBC Mobile
+Best E-banks in China - Best Personal Internet Banking
+Best E-banks in China - Best Internet Banking
+8,848,961
+Less stable deposits
+5,983
+167,106
+Stable deposits
+890,879
+884,896
+9,016,067
+23 456
+Cash outflows
+4,803,766
+Total high-quality liquid assets (HQLA)
+1
+Total
+weighted
+value
+Retail deposits and deposits form small business customers, of which:
+value
+Unsecured wholesale funding, of which:
+3,611,221
+44,955
+Secured funding
+9
+160,794
+160,794
+Unsecured debt
+10,631,454
+8
+4,306,537
+Non-operational deposits (all counterparties)
+7
+1,496,351
+6,164,123
+Operational deposits (excluding those generated from correspondent
+banking activities)
+1,954,076
+un-weighted
+Fourth-quarter 2016
+Total
+High-quality liquid assets
+Outstanding Contribution Award in Expansion of UnionPay
+Online Acquiring Business
+Award for Excellent Cooperation in and Promotion of UnionPay
+Card Product
+Outstanding Contribution Award in UnionPay Card Cross-bank
+Transaction Quality
+Award for Excellent Performance in Acquiring Cooperation of
+Mobile Internet Business
+China Committee of Corporate Citizenship of China Association
+of Social Workers
+Award for Excellent Risk Cooperation
+Most Responsible Enterprise
+Top 20 Boards of Supervisors of Listed Companies -
+Best Practice
+Social Responsibility Committee of The Chinese Institute of
+Business Administration, Beijing Rongzhi Corporate Social
+Responsibility Institute
+Model of Transparency to the Public
+China Council for Brand Development
+The 1st place in Best Chinese Brands
+China Financial Industry Call Center Development League
+Operation and Management Elite Team Award
+China Financial Certification Authority
+Chinese Association for Public Companies, Shanghai Stock
+Exchange, Shenzhen Stock Exchange
+Excellent Award for Implementation of UnionPay Card
+Technical Standards
+Excellent Award for Co-improvement of UnionPay Card
+Accepting Environment
+Outstanding Contribution Award in UnionPay Card Promotion
+Outstanding Contribution Award in UnionPay Card Cross-bank
+Transaction
+S/N Item
+China Foreign Exchange Trade System
+Best Market Maker
+Best Spot Market Making Award
+Deal of the Year
+Best Spot Trading Award
+Best Non-USD Trading Award
+Best Market Maker Award of RUB Direct Trading
+Best Market Maker Award in Back-office Support
+Best Non-USD Trading Member Award
+National Interbank Funding Center
+Best Clearing Agent of Foreign Institutions
+The Most Influential Institution
+The Best Market Maker in Interbank Bond Market
+Outstanding Contribution Award in Interbank CDs
+Award for Innovation in the Money Market
+Award for Development of Bond Borrowing Business
+Shanghai Gold Exchange
+First Award for Excellent Financial Institution Members
+Award for Outstanding Contribution to Enquiry Business
+First Award for Outstanding Commercial Banks in Leasing
+China Gold Association
+Outstanding Contribution Award for CSR in China's Gold Sector
+Award for Honest Operation in China's Gold Sector
+Special Contribution Award of the China Gold Congress
+China UnionPay
+Additional requirements, of which:
+N/A
+Hexun
+N/A
+Postcode: 310009
+ZHEJIANG PROVINCIAL BRANCH
+Address: No. 150 Zhonghe Middle
+Road, Hangzhou City,
+Zhejiang Province, China
+Tel: 0871-65536325/65536313
+Fax: 0871-63134637
+Postcode: 650021
+YUNNAN PROVINCIAL BRANCH
+Address: Bank Mansion, No. 395
+Qingnian Road, Kunming
+City, Yunnan Province,
+China
+Tel: 0891-6898019/6898002
+Fax: 0891-6898001
+Postcode: 850000
+Address: No. 31 Jinzhu Mid-Rd.,
+Lhasa, Tibet Autonomous
+Region
+TIBET AUTONOMOUS REGION
+BRANCH
+Tel: 0991-5981888
+Fax: 0991-2337527
+Postcode: 830002
+Address: No. 231 Remin Road,
+Tianshan District, Urumqi,
+Xinjiang Autonomous
+Region, China
+REGION BRANCH
+XINJIANG AUTONOMOUS
+Fax: 0592-5054663
+Tel: 0592-5292000
+Postcode: 361012
+N/A
+Fax: 0571-87808207
+ICBC Credit Suisse Asset
+Management Co., Ltd.
+Address: Tower A, Xinsheng Plaza,
+No. 5 Financial Street,
+Xicheng District, Beijing,
+China
+Postcode: 100033
+Postcode: 314200
+Province
+Address: No.258 Chengnan West
+Road, Pinghu, Zhejiang
+Bank Co., Ltd.
+Zhejiang Pinghu ICBC Rural
+Fax: 023-85297709
+Tel: 023-85297704
+Postcode: 402760
+Address: No. 17 Hubin North
+Road, Xiamen City, Fujian
+Province, China
+Address: No.1 Aokang Avenue,
+Bishan District, Chongqing
+Tel: 021-58792288
+Fax: 021-58792299
+Postcode: 200120
+ICBC-AXA Assurance Co., Ltd.
+Address: 19/F Mirae Asset Tower,
+No. 166 Lujiazui Ring
+Road, Pudong New Area,
+Shanghai
+Tel: 022-66283766/010-66105888
+Fax: 022-66224510/010-66105999
+Postcode: 300457
+ICBC Financial Leasing Co., Ltd.
+Address: E5AB, Finance Street,
+No. 20 Plaza East Road,
+Economic Development
+Zone, Tianjin
+Fax: 010-66583158
+Tel: 010-66583333
+Chongqing Bishan ICBC Rural
+Bank Co., Ltd.
+Tel: 0573-85139616
+Fax: 0573-85139626
+XIAMEN BRANCH
+Tel: 022-28400648
+Address: No. 395 Dongxin Street,
+SHAANXI PROVINCIAL BRANCH
+Fax: 0351-6248004
+Tel: 0351-6248888/6248011
+Postcode: 030001
+SHANXI PROVINCIAL BRANCH
+Address: No. 145 Yingze Street,
+Taiyuan City, Shanxi
+Province, China
+Fax: 0531-87941749
+Tel: 0531-66681622
+Postcode: 250001
+Address: No. 310 Jingsi Road, Jinan
+City, Shandong Province,
+China
+SHANDONG PROVINCIAL
+BRANCH
+Fax: 0971-6152326
+Tel: 0971-6169722/6152326
+Postcode: 810001
+QINGHAI PROVINCIAL BRANCH
+Address: No. 2 Shengli Road, Xining
+City, Qinghai Province,
+China
+Tel: 0532-85809988-621031
+Fax: 0532-85814711
+Postcode: 266071
+Xi'an City, Shaanxi
+Province, China
+Postcode: 710004
+Tel: 029-87602608/87602630
+Postcode: 300074
+TIANJIN MUNICIPAL BRANCH
+Address: No. 123 Weidi Road, Hexi
+District, Tianjin, China
+Fax: 028-82866025
+Tel: 028-82866000
+Postcode: 610016
+Jinjiang District, Chengdu
+City, Sichuan Province,
+China
+SICHUAN PROVINCIAL BRANCH
+Address: No. 35 Zongfu Road,
+Tel: 0755-82246400
+Fax: 0755-82062761
+Fax: 022-28400123/28400647
+Postcode: 518015
+Address: North Block Financial
+Center, No. 5055
+SHENZHEN BRANCH
+Fax: 021-58886888
+Tel: 021-58885888
+Postcode: 200120
+Pudong New District,
+Shanghai, China
+SHANGHAI MUNICIPAL BRANCH
+Address: No. 9 Pudong Avenue,
+Fax: 029-87602999
+Shennan East Road, Luohu
+District, Shenzhen City,
+Guangdong Province,
+China
+City, Shandong Province,
+China
+Annual Report 2016
+List of Domestic and Overseas Branches and Offices
+One BKC, C-66, G
+Address: 801, 8th Floor, A Wing,
+Bank of China Limited, Mumbai
+Branch
+Industrial and Commercial
+Tel: +92-2135208988
+Fax: +92-2135208930
+SWIFT: ICBKPKKAXXX
+Scheme #5, Main Clifton
+Road, Karachi, Pakistan.
+P.C:75600
+Industrial and Commercial Bank
+of China Limited Karachi Branch
+Address: 15th & 16th Floor, Ocean
+Tower, G-3, Block-9,
+Email: dboffice@dxb.icbc.com.cn
+Tel: +971-47031111
+Fax: +971-47031199
+SWIFT: ICBKAEAD
+International Financial
+Center, Dubai, United
+Arab Emirates P.O.Box:
+506856
+Building 1, Dubai
+Address: Floor 5&6, Gate Village
+Industrial and Commercial Bank
+of China Limited, Dubai (DIFC)
+Branch
+Email: dboffice@dxb.icbc.com.cn,
+Tel: +971-24998600
+Fax: +971-24998622
+SWIFT: ICBKAEAA
+Bainuna Street, Al Bateen
+Area, Abu Dhabi, United
+Arab Emirates
+Address: 9th floor & Mezzanine floor
+AKAR properties, Al Bateen
+Tower C6
+Industrial and Commercial Bank
+of China Limited, Abu Dhabi
+Branch
+Email: wangxq@doh.icbc.com.cn
+Tel: +974-44072761
+Fax: +974-44072751
+SWIFT: ICBKQAQAXXX
+Block, Bandra Kurla
+Complex, Bandra East,
+Mumbai-400051, India
+Email: icbcmumbai@india.icbc.com.cn
+Tel: +91-2271110300
+Fax: +91-2271110353
+SWIFT: ICBKINBBXXX
+298
+Main features of regulatory
+capital instrument
+Convertible or non-convertible
+Including: If convertible, conversion trigger (s)
+Including: If convertible, fully or partially
+Including: If convertible, conversion rate
+Including: If convertible, mandatory or
+optional conversion
+Including: If convertible, specify instrument
+type convertible into
+Address: Level 20, Burj Doha Tower,
+Al Corniche Street, West
+Bay, Doha, Qatar P.O.
+BOX: 11217
+Including: If convertible, specify issuer of
+Write-down feature
+Including: If write-down,
+write-down trigger(s)
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2016
+(In RMB millions, unless otherwise stated)
+Tier 2 capital bonds
+ICBC
+instrument it converts into
+297
+Industrial and Commercial Bank
+of China Limited, Doha (QFC)
+Branch
+Tel: +855-23955880
+Fax: +813-52198502
+Tel: +813-52232088
+Email: icbctokyo@icbc.co.jp
+0005, Japan
+Industrial and Commercial Bank
+of China Limited, Tokyo Branch
+Address: 2-1 Marunouchi 1-Chome,
+Chiyoda-Ku Tokyo, 100-
+Fax: +65-65381370
+SWIFT: ICBKSGSG
+Tel: +65-65381066
+Email: icbcsg@sg.icbc.com.cn
+Address: 6 Raffles Quay #12-01,
+Singapore 048580
+Industrial and Commercial Bank
+of China Limited, Singapore
+Branch
+Fax: +852-25881160
+SWIFT: ICBKHKHH
+Tel: +852-25881188
+Email: icbchk@icbcasia.com
+Garden Road, Central,
+Hong Kong
+Address: 33/F, ICBC Tower, 3
+Industrial and Commercial Bank
+of China Limited, Hong Kong
+Branch
+Overseas Institutions
+SWIFT: ICBKJPJT
+Industrial and Commercial Bank
+of China Limited, Seoul Branch
+Address: 16th Floor, Taepyeongno
+Bldg., #73 Sejong-daero,
+Jung-gu, Seoul 100-767,
+Korea
+Email: icbcseoul@kr.icbc.com.cn
+Tel: +82-237886670
+Email: icbckh@kh.icbc.com.cn
+Boulevard, Phsar Thmey I,
+Duan Penh, Phnom Penh,
+Cambodia
+Address: No. 15, Preah Norodom
+Industrial and Commercial Bank
+of China Limited, Phnom Penh
+Branch
+Address: Asean Road, Home
+No.358, Unit12,
+Sibounheuang Village,
+Chanthabouly District,
+Vientiane Capital, Lao PDR
+Email: icbcvte@la.icbc.com.cn
+Tel: +856-21258888
+Fax: +856-21258897
+SWIFT: ICBKLALA
+Industrial and Commercial Bank
+of China Limited, Vientiane
+Branch
+Fax: +84-462699800
+SWIFT: ICBKVNVN
+Tel: +84-462698888
+Fax: +855-23965268
+SWIFT: ICBKKHPP
+Email: admin@vn.icbc.com.cn
+Industrial and Commercial Bank
+of China Limited, Hanoi Branch
+Address: 3rd Floor Daeha Business
+Center, No.360,
+Fax: +82-514636880
+SWIFT: ICBKKRSE
+Tel: +82-514638868
+Email: busanadmin@kr.icbc.com.cn
+#184, Jungang-daero,
+Dong-gu, Busan 601-728,
+Korea
+Marine Insurance Bldg.,
+Industrial and Commercial Bank
+of China Limited, Busan Branch
+Address: 1st Floor, Samsung Fire &
+Fax: +82-27553748
+SWIFT: ICBKKRSE
+Kim Ma Str., Ba Dinh Dist.,
+Hanoi, Vietnam
+Address: No. 25 Shandong Road,
+Shinan District, Qingdao
+Tel: 0571-87803888
+Fax: 0951-5042348
+Postcode: 230001
+Hefei City, Anhui Province,
+China
+ANHUI PROVINCIAL BRANCH
+Address: No. 189 Wuhu Road,
+Comprehensive Model Award for Excellent Customer Service
+Center in the Chinese Banking Sector
+Domestic Institutions
+List of Domestic and Overseas Branches and Offices
+295
+Annual Report 2016
+2016 Ranking and Awards
+Best Employer in China — Employer Mostly Concerned by
+Women
+Best Employer in China
+Zhaopin.com
+Best Employers for University Students - Best Employer in
+Financial Industry
+Best Employers for University Students
+ChinaHR
+Tel: 0551-62869178/62868101
+Best Employer in China (Comprehensive Award in Financial
+Industry)
+Fax: 0551-62868077
+Address: Tower B, Tianyin Mansion,
+No. 2 Fuxingmen South
+Street, Xicheng District,
+Beijing, China
+Tel: 0591-88087810/88087819/
+Postcode: 350005
+FUJIAN PROVINCIAL BRANCH
+Address: No. 108 Gutian Road,
+Fuzhou City, Fujian
+Province, China
+Tel: 0411-82378888/82378000
+Fax: 0411-82808377
+Postcode: 116001
+Address: No. 5 Zhongshan Square,
+Dalian City, Liaoning
+Province, China
+DALIAN BRANCH
+Fax: 023-62918059
+Tel: 023-62918002
+Postcode: 400060
+Address: No. 9 Jiangnan Road,
+Nan'an District,
+Chongqing, China
+CHONGQING MUNICIPAL
+BRANCH
+Fax: 010-66410579
+Tel: 010-66410579
+Postcode: 100031
+BEIJING MUNICIPAL BRANCH
+Taihe Consulting
+E-banking Innovation Award of the Year: Best Innovation in
+Marketing Service
+E-banking Innovation Award of the Year: Best Practices in
+Financial Internet
+Sina.com
+ICBC
+294
+Most Reputable Banking Innovation Award
+Poverty Alleviation Award of the Year
+10th Anniversary Leading Enterprise Award in CSR of
+the People's Daily
+People.cn
+Platinum Credit Card Most Popular among Frequent Travelers
+CAAC Inflight Magazine, Civil Aviation Management
+Tier 2 capital bonds
+Tier 2 capital bonds
+3 3 3 3 3 3 3
+=
+No
+No
+N/A
+Best State-owned Commercial Bank
+Best Credit Card of the Year
+Best Mobile Banking
+JRJ.com
+Outstanding Chinese-funded Bank
+Outstanding Retail Bank
+China Internet Banking Union
+eStar Best E-commerce Platform Award (ICBC Mall)
+eStar Best Mobile Banking Award
+Analysys
+Consumer Satisfaction Awards: Internet Banking Service
+Bankrate.com.cn
+Most Innovative Underwriter of Medium and Long-term Bond
+88087000
+Underwriter of Innovative Bond Product with the Largest
+Market Influence
+Top 100 Hong Kong Stocks
+Tencent, Finet Group Limited
+Excellent Green Financial Institution
+Most Popular Mobile Finance Product
+QINGDAO BRANCH
+Outstanding Mobile Banking Brand
+Outstanding Custodian Bank
+Caishiv.com
+Fax: 0591-83353905/83347074
+Financial Institution with the Best Global Vision of the Year
+Postcode: 730030
+Province, China
+JIANGXI PROVINCIAL BRANCH
+Address: No. 233, Fuhe North Road,
+Nanchang City, Jiangxi
+Tel: 025-52858000
+Fax: 025-52858111
+Postcode: 210006
+South Road, Nanjing City,
+Jiangsu Province, China
+JIANGSU PROVINCIAL BRANCH
+Address: No. 408 Zhongshan
+Fax: 0431-88923808
+Tel: 0431-89569073/89569712
+Postcode: 130022
+Postcode: 330008
+Address: No. 9559 Renmin Avenue,
+Changchun City, Jilin
+Province, China
+Tel: 0731-84428833/84420000
+Fax: 0731-84430039
+Postcode: 410011
+HUNAN PROVINCIAL BRANCH
+Address: No. 619 Furong Middle
+Road Yi Duan, Changsha
+City, Hunan Province,
+China
+Tel: 027-69908676/69908658
+Fax: 027-69908040
+Postcode: 430071
+HUBEI PROVINCIAL BRANCH
+Address: No. 31 Zhongbei Road,
+Wuchang District, Wuhan
+City, Hubei Province,
+China
+Tel: 0451-84668023/84668577
+Fax: 0451-84698115
+Postcode: 150010
+China
+JILIN PROVINCIAL BRANCH
+Address: No. 218 Zhongyang Street,
+Daoli District, Harbin City,
+Heilongjiang Province,
+Tel: 0791-86695682/86695018
+LIAONING PROVINCIAL BRANCH
+Address: No. 88 Nanjing North
+Road, Heping District,
+Tel: 0951-5029200
+Postcode: 750002
+Address: No. 901 Huanghe East
+Road, Jinfeng District,
+Yinchuan City, Ningxia
+Autonomous Region,
+China
+NINGXIA AUTONOMOUS
+REGION BRANCH
+Fax: 0574-87361190
+Tel: 0574-87361162
+Postcode: 315010
+Address: No. 218 Zhongshan
+West Road, Ningbo City,
+Zhejiang Province, China
+NINGBO BRANCH
+Fax: 0791-86695230
+Fax: 0471-6940096
+GANSU PROVINCIAL BRANCH
+Address: No. 408 Qingyang Road,
+Chengguan District,
+Lanzhou City, Gansu
+Province, China
+Address: No. 10 East 2nd Ring
+Road, Hohhot City, Inner
+Mongolia Autonomous
+Region, China
+AUTONOMOUS REGION
+BRANCH
+INNER MONGOLIA
+List of Domestic and Overseas Branches and Offices
+ICBC
+296
+Postcode: 110001
+Tel: 024-23491600
+Fax: 024-23491609
+Shenyang City, Liaoning
+Province, China
+Tel: 0471-6940297
+HEILONGJIANG PROVINCIAL
+BRANCH
+Postcode: 010060
+Postcode: 450011
+HAINAN PROVINCIAL BRANCH
+Address: No. 54 Heping South
+Road, Haikou City, Hainan
+Province, China
+Tel: 0851-88620004/88620018
+Fax: 0851-85963911
+Postcode: 550001
+GUIZHOU PROVINCIAL BRANCH
+Address: No. 200 Zhonghua North
+Road, Guiyang City,
+Guizhou Province, China
+Fax: 0771-5316617/2806043
+Tel: 0771-5316617
+Postcode: 530022
+Address: No. 15-1 Jiaoyu Road,
+Nanning City, Guangxi
+Autonomous Region,
+China
+GUANGXI AUTONOMOUS
+REGION BRANCH
+Postcode: 570203
+Fax: 020-81308789
+Postcode: 510120
+China
+Road, Guangzhou City,
+Guangdong Province,
+Address: No. 123 Yanjiangxi
+BRANCH
+GUANGDONG PROVINCIAL
+Fax: 0931-8435166
+Tel: 0931-8434172
+Tel: 0371-65776888/65776808
+Fax: 0371-65776889/65776988
+Tel: 020-81308130/81308123
+Tel: 0898-65303138/65342829
+Fax: 0898-65303138
+China Central Depository & Clearing Co., Ltd.
+Excellent Proprietary Trading Institution Award
+Shangwu Tower, No. 188
+Zhongshan West Road,
+Shijiazhuang City, Hebei
+Province, China
+Postcode: 050051
+Tel: 0311-66001999/66000001
+Fax: 0311-66001889/66000002
+HENAN PROVINCIAL BRANCH
+Address: No. 99 Jingsan Road,
+Zhengzhou City, Henan
+Province, China
+HEBEI PROVINCIAL BRANCH
+Address: Tower B, Zhonghua
+ICBC (London) PLC
+Email: info@us.icbc.com.cn
+Tel: +1-2122388208
+Fax: +1-2126190315
+SWIFT: ICBKUS3N
+Industrial and Commercial Bank
+of China (USA) NA
+Address: 202 Canal Street, New
+York, NY 10013, USA
+Email: gongwen@tr.icbc.com.cn
+Tel: +90-2123355162
+SWIFT: ICBKTRISXXX
+2 Caddesi No: 13 34398
+Sariyer, İSTANBUL
+ICBC Turkey Bank Anonim Şirketi
+Address: Maslak Mah. Dereboyu,
+Tel: +44-2031455000
+Fax: +44-2031895000
+SWIFT: SBLLGB2L
+londonmarketing@icbcstandard.com
+Email:
+ICBC Standard Bank PLC
+Address: 20 Gresham Street,
+London, United Kingdom,
+EC2V 7JE
+Email: info@nz.icbc.com.cn
+Tel: +64-93747288
+SWIFT: ICBKRUMM
+Fax: +7-4952873098
+Email: info@ms.icbc.com.cn
+Tel: +7-4952873099
+SWIFT: ICBKNZ2A
+Serebryanicheskaya
+embankment, Moscow,
+Russia Federation 109028
+Bank ICBC (joint stock
+company)
+Industrial and Commercial Bank
+of China Financial Services LLC
+Address: 1633 Broadway, 28th
+Floor, New York, NY,
+10019, USA
+Fax: +352-26866666
+Tel: +352-2686661
+Email: office@eu.icbc.com.cn
+of China (Europe) S.A.
+Address: 32, Boulevard Royal,
+L-2449 Luxembourg
+Industrial and Commercial Bank
+Fax: +64-93747287
+SWIFT: ICBKGB2L
+Fax: +44-2073978899
+Tel: +44-2073978888
+Email: admin@icbclondon.com
+London EC4N 7BG, UK
+Address: 81 King William Street,
+Address: Building 29,
+SWIFT: ICBKLULU
+Email: info@icbkus.com
+SWIFT: ICBKUS33FIN, ICBKUS3F
+Fax: +51-16316803
+SWIFT: ICBKPEPL
+Industrial and Commercial
+Bank of China Limited, African
+Representative Office
+Address: 47 Price Drive, Constantia,
+Cape Town, South Africa,
+7806
+Email: icbc.africa@gmail.com
+Tel: +27-212008006, +27-
+761837882
+Fax: +27-212008012
+300
+ICBC
+ICBC
+郵編:100140
+Post Code: 100140
+中國北京市西城區復興門內大街55號
+No.55 Fuxingmennei Avenue, Xicheng District, Beijing, PRC
+wwww.icbc.com.cn, www.icbc-ltd.com
+Email: gongwen@pe.icbc.com.cn
+Tel: +51-16316801
+Fax: +1-2129937349
+Address: Av.Juan de Arona 151,
+Oficina 202, San Isidro,
+Lima27, Perú
+Tel: +55-1123956600
+Fax: +55-1123956600
+SWIFT: ICBKBRSP
+Industrial and Commercial Bank
+of China Mexico S.A.
+Address: Paseo de la Reforma
+250, Piso 18, Col.
+Juarez, C.P.06600, Del.
+Cuauhtemoc, Ciudad de
+Mexico
+Email: info@icbc.com.mx
+Tel: +52-5541253388
+SWIFT: ICBKMXMM
+Industrial and Commercial Bank
+of China (Canada)
+Address: Unit 3710, Bay Adelaide
+Centre, 333 Bay Street,
+Toronto, Ontario, M5H
+2R2, Canada
+Email: info@icbk.ca
+Tel: +1-4163665588
+Fax: +1-4166072000
+SWIFT: ICBKCAT2
+Industrial and Commercial Bank
+of China (Argentina) S.A.
+Address: Blvd. Cecilia Grierson
+355, (C1107 CPG) Buenos
+Aires, Argentina
+Email: gongwen@ar.icbc.com.cn
+Tel: +54-1148209022
+Fax: +54-1148201901
+SWIFT: ICBKARBA
+Industrial and Commercial Bank
+of China (Brasil) S.A.
+Address: Av. Brigadeiro Faria Lima,
+3477-Block B-6 andar-SAO
+PAULO/SP-Brasil
+Email: bxgw@br.icbc.com.cn
+ICBC PERU BANK
+Industrial and Commercial Bank
+of China (New Zealand) Limited
+Address: Level 11, 188 Quay Street,
+Auckland 1010, New
+Zealand
+Tel: +7-7272377085
+Email: office@kz.icbc.com.cn
+Email: icbc@icbc-ffm.de
+Tel: +49-6950604700
+Fax: +49-6950604708
+SWIFT: ICBKDEFF
+Industrial and Commercial
+Bank of China Limited, London
+Branch
+Address: 81 King William Street,
+London EC4N 7BG, UK
+Email: admin@icbclondon.com
+Tel: +44-2073978888
+Fax: +44-2073978890
+SWIFT: ICBKGB3L
+Industrial and Commercial Bank
+of China Limited, New York
+Branch
+Address: 725 Fifth Avenue, 20th
+Floor, New York, NY
+10022, USA
+Address: Bockenheimer Anlage 15,
+60322 Frankfurt am Main,
+Germany
+Email: info-nyb@us.icbc.com.cn
+Tel: +1-2128387799
+Fax: +1-2128386688
+SWIFT: ICBKUS33
+of China (Asia) Limited
+Address: 33/F, ICBC Tower, 3
+Garden Road, Central,
+Hong Kong
+Email: enquiry@icbcasia.com
+Tel: +852-35108888
+Fax: +852-28051166
+SWIFT: UBHKHKHH
+ICBC International Holdings
+Limited
+Industrial and Commercial Bank
+Tel: +965-22281777
+Industrial and Commercial Bank
+of China Limited, Frankfurt
+Branch
+Fax: +352-26866666
+Industrial and Commercial
+SWIFT: ICBKKWKW
+Fax: +965-22281799
+Bank of China Limited, Sydney
+Branch
+Address: Level 1, 220 George
+Street, Sydney NSW 2000,
+Australia
+SWIFT: ICBKLULL
+Email: info@icbc.com.au
+Fax: +612-92333982
+SWIFT: ICBKAU2S
+Industrial and Commercial Bank
+of China Limited, Luxembourg
+Branch
+Address: 32, Boulevard Royal,
+L-2449 Luxembourg,
+B.P.278 L-2012
+Luxembourg
+Email: office@eu.icbc.com.cn
+Tel: +352-2686661
+Tel: +612-94755588
+Tower), Floor 7, Al-Soor
+Street, Al-Morqab, Block3,
+Kuwait City, Kuwait
+Address: Building 2A (Al-Tijaria
+Industrial and Commercial
+Bank of China Limited, Kuwait
+Branch
+Industrial and Commercial Bank
+of China (Malaysia) Berhad
+Address: Level 35, Menara Maxis,
+Kuala Lumpur City Centre,
+50088 Kuala Lumpur,
+Malaysia
+Email: icbcmalaysia@my.icbc.com.cn
+Tel: +603-23013399
+Fax: +603-23013388
+SWIFT: ICBKMYKL
+PT. Bank ICBC Indonesia
+Address: 32nd TCT ICBC Tower,
+JI. MH. Thamrin No.81,
+Jakarta Pusat 10310,
+Indonesia
+Tel: +62-2123556000
+Fax: +62-2131996010
+SWIFT: ICBKIDJA
+Industrial and Commercial Bank
+of China (Thai) Public Company
+Limited
+SWIFT: ICBKMOMX
+Address: 622 Emporium Tower
+Tel: +66-26295588
+Fax: +66-26639888
+SWIFT: ICBKTHBK
+Annual Report 2016
+299
+List of Domestic and Overseas Branches and Offices
+Industrial and Commercial Bank
+of China (Almaty) Joint Stock
+Company
+Address: 150/230, Abai/Turgut
+Ozal Street, Almaty,
+Kazakhstan. 050046
+11th-13th Fl., Sukhumvit
+Road, Khlong Ton, Khlong
+Toei, Bangkok, Thailand
+Fax: +853-28338064
+Tel: +853-28555222
+Email: icbc@mc.icbc.com.cn
+SWIFT: ICBKSARI
+Fax: +966-112899879
+Tel: +966-112899800
+Email: service@sa.icbc.com.cn
+Unit No.:95, Kingdom of Saudi Arabia
+Building No: 7277-King
+Fahad Road Al Olaya, Zip
+Code: 12212, Additional
+No.: 3333,
+Industrial and Commercial Bank
+of China Limited, Riyadh Branch
+Address: T07&08, Level 7&8,
+Tel: +95-12306306-8810, 8830, 8821
+Fax: +95-12306305-8805, 8806
+SWIFT: ICBKMMMY
+Address: 459 Pyay Road, Kamayut
+Township, Yangon,
+Myanmar
+Industrial and Commercial
+Bank of China Limited, Yangon
+Branch
+List of Domestic and Overseas Branches and Offices
+Address: 37/F, ICBC Tower, 3
+Garden Road, Central,
+Hong Kong
+Email: info@icbci.com.hk
+Tel: +852-26833888
+Fax: +852-26833900
+SWIFT: ICBHHKHH
+Industrial and Commercial Bank
+of China (Macau) Limited
+Address: 18th Floor, ICBC Tower,
+Macau Landmark, 555
+Avenida da Amizade,
+Macau
+Fax: +7-7272377070
+SWIFT: ICBKKZKX
+Email: cs@ina.icbc.com.cn
+Tel: +1-2129937300
+The Bank completed the shift from ICBC Messenger and identified targeted customers by data mining to conduct
+precision marketing.
+Discussion and Analysis
+Small and Medium-Sized Enterprise Business
++
+The Bank promoted its specialized business model of micro and small enterprise banking centers, and established 198
+such centers. The centers boasted higher efficiency and better service quality with their batch-based, standardized and
+one-stop services.
+The Bank constantly innovated new products. It launched the petty secured loan to micro customers, the fixed asset
+procurement and construction loan to small and micro enterprises, the unsecured loan for tax payment of small and
+micro enterprises and the start-up secured loan, among other new products. Besides, it put more efforts to market
+the Government Subsidies loan, petty unsecured loan to small and micro enterprises, business property loan, standard
+plant mortgage loan and other key products.
+The Bank was honored with the "SME Business Bank with Excellent Competitiveness" by China Business Journal. The
+"ICBC Small and Micro Enterprise Banking" brand won the "Excellent Banking Service Award of the Year" in the
+China International Financial Exhibition.
+LOANS TO DOMESTIC SMALL (MICRO) AND MEDIUM-SIZED ENTERPRISES
+At 31 December 2016
+In RMB millions, except for percentages
+At 31 December 2015
+Percentage
+Percentage
+Item
+Amount
+(%)
+Loans to small (micro) and medium-sized enterprises
+ICBC
+4,803,727
+30
+2.9%
+Mining
+3.3%
+Construction
+2.7%
+Lodging and catering industry
+1.8%
+2014
+2015
+2016
+Science, education, culture
+1.8%
+and sanitation
+Demand deposits
+Time deposits
+Others
+Note: Domestic operations data.
+41,348
+41.0
+(%)
++
+Exploring internet-based finance, the Bank actively rolled out new products and services. It expanded the customer size
+and cemented customer base via five platforms, namely, Industrial and Commercial Enterprise Link, Small and Micro
+Enterprise Platform, ICBC e-Trade, ICBC e-Payment and Large-amount Fund Monitoring.
+The Bank innovated global cash management services in an effort to help Chinese enterprises go global. It actively
+marketed comprehensive financial solutions for cash management. In line with the policy on centralized operation of
+cross-border RMB and foreign exchange of multinational companies and the policy on financial reform pilot zones,
+the Bank provided customers with a full package of financial solutions covering six business lines, namely, account
+information, collection and payment, liquidity management, investment and financing and risk management.
+Annual Report 2016
+31
+Discussion and Analysis
+At the end of 2016, the Bank maintained 6,960 thousand corporate settlement accounts, representing an increase
+of 8.8% over the end of the previous year, and the volume of settlements reached RMB2,430 trillion, up 7.3% over
+the previous year. The Bank maintained its leading position in the business size. The number of cash management
+customers grew by 12.7% to 1,431 thousand, including 5,764 global cash management customers, representing an
+increase by 17.3% from last year.
+International Settlement and Trade Finance
++ Against the backdrop of ongoing sluggish foreign trade and more volatile RMB exchange rate, the Bank expanded its
+export business through product innovation, credit policies, approval procedures, green channels and other methods.
+The Bank kept enlarging the pilot coverage of the Bolero electronic document presentation business and signed
+a headquarter-level cooperation agreement with ESS DOCS. It also further diversified its cross-border remittance
+products.
+In 2016, domestic branches disbursed an aggregate of USD70.2 billion in international trade finance. International
+settlements registered USD2.5 trillion, of which USD897.3 billion were handled by overseas institutions.
+Investment Banking
++
+35,419
+In 2016, the number of ICBC Link customers exceeded 60 million.
+38
+Settlement and Cash Management
+Amount
+4,738,830
+The Bank stepped up efforts to promote the electronic systems for payment of cross-province traffic fines and
+centralized payment of local national treasury, with the business volume and transaction amount at the top of its
+peers. Moreover, it launched the electronic collection and payment of local non-tax revenue, making it the only pilot
+bank which launched all the payment channels at one go.
+The Bank gave impetus to innovation via cooperation with other financial institutions. The Bank kept leading the
+market in the amount of funds under custody for seven consecutive years.
+43.5
+Medium-sized enterprises
+2,769,684
+23.7
+2,855,622
+26.2
+Small and micro enterprises
+2,034,043
+17.3
+1,883,208
+17.3
+Notes: (1)
+"Percentage" refers to the proportion against domestic branch loans.
+(2) Small and micro enterprises loans include loans granted to small and micro enterprises, loans to privately or individually-owned
+business and loans to small and micro enterprise owners.
+Institutional Banking
+The Bank ranked first in the banking industry in terms of the amount of central finance and the number of
+government business cards issued under agency service, the amount of payments from pooled social security funds, as
+well as the number and investment volume of local government bonds for which it was the underwriter.
+ICBC
+45,077
+6.2%
+The Bank actively expanded its bond underwriting business and underwrote various debt financing instruments with
+a total value of RMB1,522.4 billion as the lead underwriter throughout 2016. Implementing the concept of "green
+finance", the Bank supported financing of projects via bond underwriting and other direct financing products in areas
+such as energy conservation and environment protection, pollution prevention and control, resource conservation and
+recycling. The volume of the green bonds it underwrote amounted to RMB38.3 billion, making the Bank the largest
+green bond underwriter in China.
+The Bank developed a new business line of investment banking debt advisory service, with focus on infrastructure
+and emerging industries and other important industries, and engaged in a number of structured financing projects
+with Yunnan Provincial Railway Investment Corporation, Transport Department of Shanxi Province, China Reform
+Investment, Jiangsu Tianpu Hongxin Scientific Park and Chengdu Financing Holding Group, etc.
+The Bank actively expanded its merger and acquisition (M&A) advisory business. It engaged in various domestic and
+overseas M&A projects including Sunac China's acquisition of Raycom's equities, Yunnan City Investment's acquisition
+of Chengdu New International Convention and Exhibition Center, Joyson Electronics' acquisition of KSS, the fourth
+largest global producer of automotive security systems, Biostime's acquisition of Swisse, a leading health care brand in
+Australia and Midea Group's acquisition of German KUKA Roboter GmbH.
+The Bank promoted its equity financing businesses in funds portfolio, government investment funds, mixed ownership
+reform, public-private-partnership (PPP) projects, industry funds and market-based funds, successfully operated
+influential fund businesses including China Government-Enterprise Cooperation Fund, China Internet Investment Fund,
+Guizhou Poverty Alleviation Fund and SDIC Advanced Manufacturing Investment Fund, and offered equity financing
+advisory service for almost 100 companies.
++
+Discussion and Analysis
+In terms of the currency structure, the balance of RMB deposits amounted to RMB16,722,751 million, which accounted for
+93.8% of the total balance of due to customers, RMB1,286,765 million or 8.3% higher than that at the end of the previous
+year. The balance of foreign currency deposits was equivalent to RMB1,102,551 million, an increase of RMB256,598 million
+or 30.3%.
+Repurchase Agreements
+Repurchase agreements were RMB589,306 million, representing an increase of RMB252,115 million or 74.8% from the
+end of the previous year, mainly because the Bank appropriately increased funds raised from the public market based on its
+internal and external liquidity status.
+Shareholders' Equity
+As at the end of 2016, shareholders' equity amounted to RMB1,981,163 million in aggregate, RMB180,644 million or
+10.0% higher than that at the end of the previous year. Equity attributable to equity holders of the parent company
+recorded an increase of RMB180,277 million or 10.1% to RMB1,969,751 million. Please refer to the "Financial Statements:
+Consolidated Statement of Changes in Equity" for details.
+For details on off-balance sheet items, please refer to "Note 48. to the Financial Statements: Commitments and Contingent
+Liabilities; Note 49. to the Financial Statements: Designated Funds and Loans".
+Analysis on Statement of Cash Flows
+Net cash inflows from operating activities amounted to RMB239,221 million, representing a decrease of RMB892,543 million
+as compared to the previous year, mainly due to the cash outflows as a result of lower deposits from banks and other
+financial institutions instead of cash inflows in the previous year and cash outflows caused by increased cash and balances
+with central banks instead of cash inflows in the previous year. Specifically, net cash outflows of operating assets increased
+by RMB584,785 million and net cash inflows of operating liabilities dropped by RMB295,639 million.
+Net cash outflows from investing activities amounted to RMB468,932 million. Specifically, cash inflows were RMB2,064,415
+million, representing an increase of RMB681,761 million, mainly due to the increased proceeds from the recovery of
+investment assets; and cash outflows were RMB2,533,347 million, representing a growth of RMB483,732 million from the
+previous year, mainly due to the increase in cash payment generated from bond investment.
+In 2016, fee income from investment banking was RMB25,024 million.
+Net cash outflows from financing activities amounted to RMB50,786 million, of which, cash inflows were RMB904,876
+million, mainly due to the issuance of debt securities by overseas institutions; and cash outflows were RMB955,662 million,
+mainly due to the repayment of debt securities.
+32
+Discussion and Analysis
+30,635
+Unit: RMB100 millions
+Growth of Personal Loans
+At the end of 2016, personal financial assets totaled RMB12.20
+trillion, representing an increase of RMB0.61 trillion compared with
+the end of last year and making the Bank remain the largest holder
+of personal financial assets. Meanwhile, the Bank had 530 million
+personal customers, including 11.33 million personal loan customers,
+representing an increase of 33.02 million and 0.89 million from the
+end of the previous year respectively. The personal loans stood at
+RMB4,196,169 million, representing an increase of RMB654,307
+million or 18.5%. The personal deposits arrived at RMB8,140,281
+million, representing an increase of RMB539,167 million or 7.1%.
+Grasping the opportunities arising from personal consumption
+upgrade, the Bank further promoted self-service loans pledged with
+personal financial assets under the guidance of internet thinking.
+It accelerated the system integration and innovation of mortgage
+loans for consumption and released the integrated consumption loan
+mortgaged with personal properties.
+The Bank actively backed the citizens' reasonable demand of funding for owner-occupied houses and better houses,
+propelled the optimization of the business management mechanism for residential mortgages, ameliorated policies
+and procedures, and rolled out innovative products such as loans for discharging mortgages and subsidized loans for
+change of housing provident fund loans to commercial loans. The customer experience became increasingly better.
+The Bank optimized the functions of Salary Premium No. 1, Jie Jie Gao No. 2 and CDs for personal customers by
+releasing the paper-based CDs and Jie Jie Gao deposit and adding the real-time limit inquiry function of CDs to drive
+the swift growth of innovative deposit products.
+The Bank took the lead in offering and promoting a variety of innovative retail banking products including the
+introduction of Type II and III accounts, information verification and multiple ways of transfer and remittance. It also
+established the bank-wide uniform personal customer labeling, researched, developed and released the customer
+profile marketing system for personal customers and created the multi-dimensional personel customer profiles with
+their characteristics so as to develop tailored and integrated recommendation of products and services for individual
+customers and automatically assess the investment behaviors and risk appetites of customers.
+The Bank was the first in the banking industry to debut the "ICBC Cloud Manager" special service which provides
+online financial services covering information access, product promotion, inquiry and online reservation via ICBC Link,
+telephone, SMS and other means. Besides, an internet bank-hospital service platform was also established.
++
+4
++
++
+With the mega retail strategy in mind, the Bank actively explored the integration of the internet, big data, artificial
+intelligence and other new technologies with the traditional banking services, focused on creating value with information,
+and advanced the transformation of marketing models and innovation of customer services and products.
+Personal Banking
+ICBC
+52,717
+Annual Report 2016
+Discussion and Analysis
+postal services
+41,768
+39,294
+Production and supply of
+11.9%
+electricity, heat, gas and water
+39,023
+Wholesale and retail
+9.0%
+Leasing and commercial services
+10.7%
+Water, environment and public
+7.5%
+utility management
+Real estate
+21.8%
+29
+Transportation, storage and
+Manufacturing
+BUSINESS OVERVIEW
+Corporate Banking
+Facing the new normal of economic development, the Bank strove to develop its corporate banking business by continuing
+to support the growth of the real economy and facilitate the supply-side structural reform. Through innovation, the Bank
+tapped into new markets.
++
++
++
+In line with the national strategies such as the "three supporting belts" and the "four regions", the Bank supported
+national key construction projects as a priority and also actively supported vital industries including infrastructure
+construction, transportation and logistics, modern services and energy, thereby facilitating the economic restructuring
+and upgrade.
+In response to the tendency of financial disintermediation, the Bank attached great importance to restructuring
+and reasonably deployed overall financing. With moderate growth in financing aggregate, it optimized the tenure
+arrangement and the investment strategies in terms of regions, industries, in- and off-balance sheet businesses and
+other products.
+For global development, the Bank pooled efforts from all dimensions and served cross-border customers with
+global syndicated loans and cross-border project pool. Capitalizing on the opportunities in overseas bond issuing, it
+successfully underwrote bonds in USD and EUR for a number of major customers via its marketing initiatives.
+To tackle with the impact from the internet, the Bank sped up the expansion of internet financing. It rolled out two
+types of products, "Quick Loan" and "Micro Loan" and launched such innovative products as internet unsecured loan
+for corporate customers, financing pledged with the assets in the online bill pool of corporate customers and online
+issuing of acceptance drafts under E-banking.
+The Bank was awarded the title of the "Best Corporate Bank in China" by Global Finance for seven years in a row. It
+was ranked first in the Asia Pacific region in terms of the aggregated amount of syndicated loans as lead arranger by
+Thomson Reuters.
+At the end of 2016, the number of the Bank's corporate customers increased by 463 thousand over the end of the
+previous year to 5,784 thousand. The balance of corporate loans reached RMB8,140,684 million, representing an
+increase of RMB271,132 million or 3.4% over the end of the previous year. The balance of corporate deposits hit
+RMB9,448,520 million, representing an increase of RMB1,011,506 million or 12.0%.
+Breakdown of Corporate Loans by Industry
+Growth of Corporate Deposits
+Unit: RMB100 millions
+20.4%
+41,962
++
+2015
+Precious Metal Business
++
++
+In view of the hot spots in the market, the Bank improved the physical goods sales models. Seizing the opportunities
+arising from the opening of the first Disney Resort in China, the Bank sold more than 1 million sets of Disney themed
+products in the off season. As the first bank to attempt brand cooperation, the Bank obtained support from third-party
+enterprises to develop "Good Luck Year" products for the traditional hot season.
+The Bank actively carried out financing pledged with precious metals, satisfying enterprises' financial and hedging
+demands and effectively supporting the transformation and upgrade of industries.
+The Bank integrated into the international mainstream commodity markets at a faster pace. It became a participant
+of the electronic auction process which sets the gold benchmark price at the London Intercontinental Exchange, and
+gradually accumulated market making experience in the main international gold markets. In the meanwhile, the Bank
+was among the first group of price setters of "Shanghai Gold", a gold pricing product denominated in RMB, at the
+Shanghai Gold Exchange, and actively engaged in the market making business.
+The Bank was awarded the "Best Precious Metal Trading Bank in China" by Euromoney for five consecutive years and
+the "Best Precious Metals Broker in China" by Global Finance for the first time.
+In 2016, the sum of precious metal business transactions was RMB1.69 trillion, up 35.2% from the end of last year.
+The Bank cleared RMB406.6 billion on behalf of the Shanghai Gold Exchange, ranking No. 1.
+Annual Report 2016
+35
+Discussion and Analysis
+Franchise Treasury Business
+The Bank continuously improved its ability to serve personal customers in foreign exchange trading and increased its
+coverage, reinforced the improvement of electronic channels and marketing initiatives. It kept enriching convertible
+currencies, developed RMB foreign exchange option business and RMB foreign exchange currency swap business. The
+volume of franchise foreign exchange trading hit USD390 billion in 2016.
+The foreign exchange-related products were more diversified. The Bank initiated the foreign currency trading business
+among the currencies of 80 emerging countries along the "Belt and Road". This move made foreign exchange
+business cover all the countries along the "Belt and Road". The volume of franchise foreign exchange trading stood at
+USD227.6 billion, up 72.0% over last year.
+The Bank innovatively launched paper natural gas and paper precious metal index products, further diversifying the
+paper trading products, and rolled out paper crude oil successive trading products, which met customers' long-term
+investment demands for crude oil. The size of the paper trading increased by 56.0% compared with the previous year
+to RMB505.6 billion.
+The Bank practiced inclusive finance. It issued innovative OTC bond products on a regular basis, and completed the
+issuance of 58 OTC treasury bonds and six OTC bonds of China Development Bank.
+Asset Securitization Business
+At the end of 2016, the pension funds under the Bank's trusteeship amounted to RMB96.2 billion; the Bank managed
+16.67 million individual pension accounts, and the pension funds under the Bank's custody totaled RMB446.7 billion.
+The Bank led other banks in terms of the scale of enterprise annuity funds under the Bank's trusteeship, number of
+individual enterprise annuity accounts and enterprise annuity funds under the Bank's custody.
+Pension services witnessed a steady growth in scale and continuously higher comprehensive benefits. The Bank actively
+launched innovative products, continued to enrich the service contents, promoted automatic and self-services and
+made the customer service quality better.
++
+Pension Services
+The Bank kept enriching the mobile payment products and service system and covered all the online, offline and 020
+payment scenarios.
+The Bank comprehensively improved the bank card security management, actively implemented classified management
+of accounts, and issued the first physical Type II debit card in China. It further adjusted the product structure, and
+promoted the issuing of native cipher algorithm-based cards and single chip cards. The chip debit cards issued
+accounted for 59.5% of all the debit cards.
+The Bank was awarded the "Best Consumer Credit Card in China" by Global Finance, the "Best Credit Card of the
+Year" by Sina.com, the "Excellent Credit Card Brand" by National Business Daily and the "Gold Credit Card Bank of
+the Year" by Financial Money.
+At the end of 2016, the Bank issued 830 million bank cards, representing an increase of 81.45 million cards from the
+end of the previous year. Bank card business generated a fee income of RMB37,670 million.
+Financial Asset Services
+Seizing the opportunities arising from customers' wealth increase and capital market growth, the Bank made efforts to
+establish a mega asset management business system across the whole value chain and enhance its specialized operating
+capabilities on the strength of the Group's asset management, custody, pension and precious metal businesses, and the
+functions of its comprehensive subsidiaries specialized in fund, insurance, leasing and investment banking. Thus, the Bank
+rendered diversified and integrated financial asset services for its customers.
+Wealth Management Services
+By upgrading product forms, re-arranging maturities and developing net worth-based transformation of products, the
+Bank has been continuously innovating in wealth management products and marketing models to meet the diverse
+demand of customers and further consolidate the customer base.
++
+By leveraging the big data techniques, the Bank created multi-dimensional customer profiles for wealth management
+customers. The Bank also conducted precise marketing strategies and appropriately allocated asset based on the
+preferences of different customer segments regarding their habits of consumption, investment, purchase channels and
+product choices, thereby effectively enlarging the size of wealth management customers and lifting the sales of wealth
+management products.
+34
+ICBC
+Discussion and Analysis
+Asset Custody Services
+The Bank developed a sound asset custody product and service system and remained a market leader in respect of
+custody products, e.g. securities investment funds, insurance, banking wealth management, enterprise annuities,
+special fund accounts and global assets.
+The Bank successfully obtained the custody qualification for national basic pension insurance and Korean Securities
+Depository (KSD).
+The Bank was awarded the "Custodian Bank of the Year in China" by The Asian Banker.
+At the end of 2016, total net value of assets under the Bank's custody increased by 22.6% from the previous year end
+to RMB14.1 trillion.
+At the end of 2016, the balance of stock wealth management products increased by 3.3% compared with the
+previous year end to RMB2,702,944 million, remaining the largest in the industry.
+The Bank was the first bank in China to establish a merchant development center for full-scale implementation of
+the merchant development strategies which are integrated online and offline, organization and facilitation of the
+marketing and promotion among all the merchants of the Bank and establishment and improvement of a payment
+acceptance environment.
+In 2016, in order to diversify the asset and capital management approaches and expand the NPA disposal channels,
+the Bank, as the issuer and facility provider, issued four tranches of asset securitization programs totaling RMB15,763
+million, three of which are NPA-backed securities, one residential mortgage-backed securities.
++ Following the changes in demands of customers and markets, the Bank actively tracked and adjusted the product
+structure and sales strategies of investment and wealth management businesses. Sales of funds under agency
+arrangement totaled RMB488.9 billion in 2016.
+37
+Discussion and Analysis
+Internet-based Finance
+The Bank advanced its internet-based finance development strategies on all fronts, played a guiding role in leading
+innovation, upgraded and improved the overall architecture of internet-based finance with the e-commerce platform ICBC
+Mall, the instant communication platform ICBC Link and the open-ended online banking platform ICBC Mobile as the main
+pillars and covering financial services, e-commerce, payment and social life. In line with its customer-centric concept, the
+Bank improved its risk prevention and control system to inject new vigor into the business transformation of the Bank.
+ICBC Mall
++
+4
+The e-commerce platform "ICBC Mall" helps the Bank gather together customers and merchants, connect trading and
+financing, innovate in the new-typed customer relationships featuring the integration of finance and commerce, and
+improve the customer viscosity and activeness.
+Capitalizing on its credit financing, bonus point consumption and other advantageous banking services, the Bank
+focused on attracting merchants from the real estate and automobile industries that were closely connected to
+finance. The Bank also introduced fast moving consumer goods and local specialties that customers are more loyal to
+and are suited to bonus point consumption.
+The Bank accelerated the development of mobile end of ICBC Mall with the transactions concluded on the mobile end
+accounting for half of all the transactions. It pushed forward with applications in various sectors by making Shanghai
+Disney Resort tickets and air tickets of major airlines available on ICBC Mall.
+In 2016, ICBC Mall achieved an accumulative transaction amount of over RMB1 trillion.
+ICBC Link
++ ICBC Link aims at becoming an interactive platform for instant information exchange, business consultancy,
+communication and sharing between the Bank and its customers, customer managers and customers and among the
+customers, and developing a new financial service model featuring socialized finance and interactive marketing.
+2014
+4
+The Bank explored new application areas, created featured service accounts, and seamlessly connected ICBC Link with
+financial services, campus finance, daily life and other application scenarios.
+The Bank developed China's first free anti-telecom fraud inquiry software, "ICBC e-Security Public Welfare Version"
+which enabled the public to check the safety of related accounts before any transfer and remittance to protect the
+safety of their properties. In 2016, it accumulatively identified and blocked over 60 thousand telecom frauds, involving
+more than RMB900 million.
+Annual Report 2016
+For details on the Bank's CDs and debt securities issued, please refer to "Notes to the Financial Statements: 36.
+Certificates of Deposit; 38. Debt Securities Issued".
+In line with its fund operation and liquidity management needs, the Bank rationally arranged the scale and structure
+of its active liabilities including interbank borrowing from the interbank market, short-term time deposits with other
+banks, interbank CDs and large-value CDs in order to enhance the supporting capacity of diverse liabilities to asset
+business growth.
++
+4
+Considering the characteristics of treasury bond products' yields, the Bank made efforts to attract customers preferring
+low risk levels. Sales of treasury bonds under agency arrangement amounted to RMB73.8 billion.
+The Bank further pushed the transformation and development of installment-based insurance under agency
+arrangement, achieving structural improvement and size enlargement. It further sharpened its edge in E-banking after
+adopting product segmentation and differentiated marketing approaches. The amount of insurance under agency
+sales registered RMB336 billion, representing an increase of 101.4%.
+36
+ICBC
+Discussion and Analysis
+Treasury Operations
+In 2016, the Bank duly adjusted its investment and trading strategies, reasonably arranged the investment products and
+structures and took multi-pronged measures in alignment with the trends in financial markets and the needs of liquidity
+management so as to make treasury operations more profitable.
+Agency Sales
+Money Market Activities
+The Bank stepped up market research and customer marketing, provided a good mix of products with reasonable
+maturity according to the market situation and its own capital position to increase the efficiency of fund operation. It
+dynamically adjusted the trading volume and direction of short-term financing products to ensure its liquidity.
+The Bank increasingly attracted non-bank financial institution customers. While prudently engaging in local and
+foreign currency interbank borrowing and lending business with non-bank financial institutions, it innovatively
+launched the foreign-currency interbank lending business, thereby further expanding the channels for its operations in
+foreign currency.
+In 2016, domestic trading amount in the interbank market was RMB37.29 trillion, of which lending amounted to
+RMB34.66 trillion. The transaction volume in foreign exchange money markets recorded USD285.2 billion.
+Investment
+The Bank strengthened research on the trend of market interest rate, effectively balancing the relationship between
+increasing portfolio return and preventing the risk of middle and long-term interest rate rebound. It continued to
+refine the system for tracking and assessing credit risk, comprehensively sorted out the credit debt portfolio to lower
+the overall credit risk of investment portfolios. It actively invested in local government bonds, corporate bonds and
+green bonds, effectively bolstering the development of the real economy.
+The Bank strengthened active management of foreign currency bond portfolios and their duration and invested more
+in bonds with floating rates to guard against the interest rate risk. The Bank became more capable of seizing market
+opportunities and earned higher spread income.
+In 2016, the transaction volume of RMB bonds and foreign currency bonds in the trading book scored RMB1,010.5
+billion and USD9.8 billion respectively.
+Financing
++
++
++
+Bank Card Business
+2016
++
++
++
+The Bank proactively adjusted the strategies on product offering and investment. It increased the offering of wealth
+management products for privileged private banking customers and modified the fundamental off-the-shelf products
+on a value only basis. Besides, it accelerated the expansion of innovative businesses, conducted agency investment
+services on a pilot basis for pledged financial assets, FOF equity funds, etc. It also promoted and implemented its pilot
+family wealth management business.
+The Bank promoted its speedy development of overseas private banking centers. The Bank built a Hong Kong Private
+Banking and Wealth Management Product Center, enhanced the building of its global wealth management funds and
+sales network, and successfully issued the second sub-fund of the global wealth management fund.
+Private Banking
+33
+Annual Report 2016
+Discussion and Analysis
+At the end of 2016, the Bank maintained 70,100 private banking customers, representing an increase of 7,700 or
+12.3% from the end of the previous year. Assets under management amounted to RMB1.21 trillion, growing by
+RMB146.8 billion or 14.2% from the end of the previous year.
+The Bank was awarded the "Best Private Bank in China" by The Asset again, the "Best Private Bank in China" and
+the "Best Private Bank for Global Investment Exposure" by Asiamoney, and the "Best Private Bank Brand in China" by
+Securities Times.
++
+Milan Branch (Italy)--
+(country/region)
+Number of
+institutions
+New York Branch (USA)-
+1
+(2)
+ICBC (USA) (USA)-
+14
+ICBCFS (USA)
+Institution
+America
+3
+ICBC Turkey (Turkey)-
+Bank ICBC (JSC) (Russia)-
+1
+1
+ICBC (London) (UK)-----
+Brussels Branch (Belgium) -----2
+2
+(the Netherlands)-
+Amsterdam Branch
+2
+48
+ICBC (Canada) (Canada)
+(country/region)
+**
+The Bank continued to perfect the customer information security protection system and stepped up its efforts to popularize
+network security awareness. Services such as one Type I account for each customer, delayed crediting of transfer via ATM
+and control over the amount and sum of transfers were launched successfully. The Bank launched diversified financial
+services for Type II & III accounts through mobile banking and established a long-effective mechanism to prevent telecom
+frauds. The Bank released Rong'an e Messenger the first risk information service product in the banking sector. The Bank
+also established a security monitoring and handling platform to enhance the sensitivity to internal and external threats.
+The Bank actively pushed forward innovative services that cover all customers, all channels and all products. It participated in
+the establishment of the bill trading platform, supported the Bill Exchange to open for business, and improved the efficiency
+of bill trading. The Bank successfully completed the "replacement of business tax with VAT". A series of fresh products
+such as loan for discharging mortgages, online unsecured loan of corporate customers, paper natural gas and paper crude
+oil were made debut. The Bank continued to push forward the development of systems for internationalized and diversified
+operations and successfully launched such systems in ICBC (Mexico), Zurich Branch and Prague Branch. The Bank improved
+ICBC Quick Remittance and realized cross-border direct remittance with Standard Bank of South Africa. It also continued to
+optimize the new-generation core insurance business system for individuals and the insurance asset management system of
+ICBC-AXA.
+In 2016, the Bank obtained 52 patents from the State Intellectual Property Office, and the total number of patents owned
+by the Bank increased to 456. The Bank had eight scientific and technological achievements that won the Technological
+Development Award of PBC, of which, the "three centers in two cities" project won the outstanding award as the only
+project to be so honored in the 2016 Technological Development Award. The Bank became the only commercial bank rated
+2A by the information technology supervision of CBRC for three consecutive years.
+Human Resources Management
+In line with the strategic needs of bank-wide information-based, internationalized and diversified development, the Bank
+carried forward innovation in concepts, methodology, system and mechanism of the Group's human resources management.
+It continued to strengthen the talent team building, broadened the career growth of employees, optimized staffing,
+improved management over organizations and institutions, pressed forward with innovation in organizational models and
+reinforced the incentives and restrictive roles of remuneration. The increasingly higher efficiency and effectiveness of human
+resources management offered solid organizational guarantee and talent support for the reform and development of the
+Bank.
+In line with the reform and development strategy and the new requirements on transformation and upgrading, the Bank
+advanced the establishment of the six systems for "ICBC College", conduced innovative training in all respects and ushered
+into new areas of education and training. By combining training with practice, the Bank realized coordinated planning and
+systemic advancement in training professionals. It reinforced the Party school training and highlighted the advantages of
+research-based learning. Besides, the Bank sharpened its ability in cross-cultural management, cross-border operation and
+local operation of overseas personnel, and set up a training system for overseas employees. It created a pragmatic and
+efficient mobile learning system, and intensified the timely transmission of business strategies and products. It implemented
+the optimization project of professional qualification certification and linked the certification with the business authorization
+and appointment of employees on all fronts. In 2016, the Bank organized 51 thousand sessions of training for 5.09 million
+employees, averaged to approximately 9.63 days of training per employee.
+The Bank continually promoted its corporate culture building. It carried out in-depth culture building activities, including the
+Ten Advanced Units Selection of "ICBC Cohesion" Corporate Culture Building, and the showcase of "Further Prospering
+ICBC through Five Years' Cultural Building and Pooling Our Force in Accomplishing Ten Events". The Bank also intensified
+the sub-culture building by publishing the compliance culture concepts of "Compliance principle, All accountable, Risk
+controllable, Efficiency sustainable" and the "Customer-centric, Satisfactorily served, Employee-based and Consistently
+honest" service cultural concepts and carrying forward the transmission and instilling of integrity culture. What's more, the
+Bank established a diversified and three-dimensional cultural transmission system by opening WeChat official account, ICBC
+Link service account, and capitalizing on external platforms, in an effort to enhance cultural communication with external
+parties and cultural display.
+48
+E
+1
+3
+Seoul Branch (South Korea):
+Busan Branch (South Korea)
+Hanoi Branch (Vietnam)----
+Vientiane Branch (Lao PDR)-
+3
+institutions
+1
+ICBC (Mexico) (Mexico)
+Number of
+ICBC (Peru) (Peru)--
+1
+ICBC (Brazil) (Brazil)
+ICBC (Argentina) (Argentina) --107
+Tokyo Branch (Japan)-
+Singapore Branch (Singapore)-------11
+Hong Kong and Macau)
+Asia-Pacific Region (except
+2
+Institution
+E
+10
+Madrid Branch (Spain)-
+ICBC (Europe) (Luxembourg)-----1
+Warsaw Branch (Poland).
+404
+412
+3,166
+346
+312
+3,247
+3,295
+279,830
+3,771
+306,450
+Total
+Investment in Standard
+Bank(1)
+404
+412
+2,820
+2,935
+276,535
+302,679
+Subtotal
+(38,718)
+(49,741)
+Eliminations
+1
+1
+African Representative Office
+134
+136
+436
+582
+55,853
+Note: (1) The assets represent the balance of the Bank's investment in Standard Bank and the profit before tax represents the Bank's gain
+on investment recognized by the Bank during the reporting period.
+1
+4
+◆ Diversified Operation
+1
+Paris Branch (France)·
+The Bank continued to enhance the production and operation service system. Under the new architecture of "three
+centers in two cities" which was already in normal operation, the Bank launched an 84-day local operation takeover,
+completed local switch at peak hours during the day for the first time and kept the impact of switch and switchback on
+business operations within one minute, promoted the intelligent monitoring platform to improve business operation level
+and continued to enhance disaster recovery technologies and business continuity management system, thus remarkably
+enhancing the information systems' continued operation capacity.
+10
+ICBC Standard (UK)----
+1
+London Branch (UK)
+-----5
+Frankfurt Branch (Germany) -
+1
+(Luxembourg)
+Luxembourg Branch
+institutions
+(country/region)
+Number of
+Institution
+Discussion and Analysis
+呂®
+DISTRIBUTION MAP OF OVERSEAS INSTITUTIONS
+42
+ICBC
+ICBC International, a licensed investment bank of the Group, accelerated its transformation and development, put
+equal emphasis on traditional investment banking business, asset management and investment business, thereby
+steadily enhancing its sustainability.
+ICBC-AXA made more efforts to realize installment-based payment transformation. Its high-speed growth in premium
+income fueled the increase of investment assets and the investment income was improved significantly.
+ICBC Leasing worked faster to secure professional, differentiated, featured and international development, and strove
+to shift from growth in size to that in quality and benefits.
+ICBC Credit Suisse Asset Management seized the opportunities from the policies and the market, further improved
+its functions as an all-round asset management platform, and kept enriching its products. The assets under its
+management exceeded RMB1 trillion.
+4
++
+As at the end of 2016, total assets of overseas institutions (including overseas branches, subsidiaries and investments
+in Standard Bank) of the Bank were USD306,450 million, an increase of USD26,620 million or 9.5% from the end of
+the previous year, and they accounted for 8.8% of the Group's total assets. Total loans amounted to USD175,871
+million, rising by USD31,811 million or 22.1%, and total deposits were USD97,223 million, increasing by USD10,465
+million or 12.1%. Profit before tax during the reporting period was USD3,247 million, increasing by 2.6% compared
+with the previous year and representing 6.2% of the Group's profit before tax.
+IT-based Banking Development
+ICBC-AXA, a subsidiary of the Bank, has a paid-up capital of RMB8,705 million, in which the Bank holds a 60% stake. It
+engages in a variety of insurance businesses such as life insurance, health insurance and accident insurance, and re-insurance
+of these businesses, businesses in which use of insurance capital is permitted by laws and regulations of the State, and other
+businesses approved by CIRC. At the end of 2016, ICBC-AXA recorded total assets of RMB104.85 billion and net assets of
+RMB8,926 million. It generated a net profit of RMB503 million during the year.
+47
+Hong Kong Branch
+ICBC (Almaty) (Kazakhstan)
+1
+Investments in Standard Bank
+(Hong Kong, China).
+2
+Sydney Branch (Australia) --
+4
+(South Africa)
+ICBC International
+ICBC (New Zealand)
+African Representative Office
+(South Africa)-
+22
+(Hong Kong, China).
+(New Zealand)--
+1
+1
+ICBC (Macau) (Macau, China) -- 24
+Europe
+Annual Report 2016
+Discussion and Analysis
+Controlled Subsidiaries and Major Equity Participating Company
+♦ Overseas Subsidiaries
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ASIA) LIMITED
+ICBC (Asia) is a wholly owned Hong Kong registered bank by the Bank, and has an issued share capital of HKD36,379
+million. It provides comprehensive commercial banking services and the major businesses include commercial credit, trade
+finance, investment service, retail banking, E-banking, custody, credit card, receiving bank services for IPOs and dividend
+distribution. At the end of 2016, ICBC (Asia) recorded total assets of USD103,087 million and net assets of USD10,818
+million. It generated a net profit of USD954 million during the year respectively.
+ICBC INTERNATIONAL HOLDINGS LIMITED
+.9
+ICBC International, a licensed investment bank in Hong Kong that is wholly owned by the Bank, has a paid-up capital of
+HKD4,882 million. It mainly renders a variety of investment banking services, including investment banking, investment
+management, sales transaction and asset management. At the end of 2016, ICBC International recorded total assets of
+USD4,672 million and net assets of USD966 million. It generated a net profit of USD79 million during the year.
+ICBC (Thai) (Thailand).
+Number of
+institutions
+64,723
+Doha Branch (Qatar)---------
+1
+Abu Dhabi Branch (UAE).
+1
+Riyadh Branch (Saudi Arabia)-
+1
+Dubai (DIFC) Branch (UAE)-
+1
+Kuwait Branch (Kuwait)
+1
+Africa
+ICBC (Asia) (Hong Kong, China) 73
+Hong Kong and Macau
+Institution
+Karachi Branch (Pakistan).
+Mumbai Branch (India)
+3
+1
+1
+E
+Number of
+institutions
+ICBC (Malaysia) (Malaysia) -
+ICBC (Indonesia) (Indonesia)
+5
+23
+Institution
+(country/region)
+(country/region)
+Discussion and Analysis
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (MACAU) LIMITED
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (MALAYSIA) BERHAD
+ICBC (Canada) is a subsidiary of the Bank in Canada with a paid-up capital of CAD158.00 million, in which the Bank holds
+an 80% stake. Holding a full-functional commercial banking license, ICBC (Canada) is the RMB clearing bank in North
+America and provides various corporate and retail banking services such as deposit, loan, settlement, remittance, trade
+finance, foreign exchange trading, funds clearing, cross-border RMB settlement, RMB currency notes, cash management,
+E-banking, bank card and investment and financing information consulting service. At the end of 2016, ICBC (Canada)
+recorded total assets of USD1,249 million and net assets of USD166 million. It generated a net profit of USD12.57 million
+during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ARGENTINA) S.A.
+ICBC (Argentina), a controlled subsidiary of the Bank in Argentina, has a share capital of ARS1,345 million, in which the
+Bank holds an 80% stake. With the full-functional commercial banking license, ICBC (Argentina) provides a full range of
+commercial banking services including deposit, loan and settlement. Its major businesses include working capital loan,
+syndicated loan, structured financing, trade finance, personal loan, auto loan, spot/forward foreign exchange trading,
+financial markets, cash management, investment banking, bond underwriting, asset custody, leasing, international
+settlement, E-banking, credit card and asset management. At the end of 2016, ICBC (Argentina) recorded total assets of
+USD4,876 million and net assets of USD596 million. It generated a net profit of USD183 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (BRASIL) S.A.
+ICBC (Brasil), a wholly-owned subsidiary of the Bank in Brazil, has a paid-up capital of BRL202 million. ICBC (Brasil) offers
+commercial banking and investment banking services such as deposit, loan, trade finance, international settlement, fund
+transaction, franchise wealth management and financial advisory. At the end of 2016, ICBC (Brasil) recorded total assets of
+USD215 million and net assets of USD66 million. It generated a net profit of USD1.63 million during the year.
+ICBC PERU BANK
+ICBC (Peru), a wholly-owned subsidiary of the Bank in Peru, has a paid-up capital of USD50.00 million. Holding a full-
+functional commercial banking license, ICBC (Peru) offers corporate deposit, loan, financial leasing, international settlement,
+trade finance, foreign exchange trading, offshore finance, E-banking and other services. At the end of 2016, ICBC (Peru)
+recorded total assets of USD122 million and net assets of USD28 million.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA MEXICO S.A.
+ICBC (Mexico), a wholly-owned subsidiary of the Bank in Mexico, has a paid-up capital of MXN664 million. Holding a full-
+functional commercial banking license, ICBC (Mexico) offers corporate deposit, loan, international settlement, trade finance,
+foreign exchange trading and other services. At the end of 2016, ICBC (Mexico) recorded total assets of USD46 million and
+net assets of USD26 million.
+ICBC TURKEY BANK ANONIM ŞIRKETI
+ICBC (Turkey), the first Chinese commercial bank in Turkey, has a share capital of TRY420 million in which the Bank holds a
+92.8169% stake. It holds commercial banking, investment banking and asset management licenses, and provides corporate
+customers with a basket of local and foreign currency-denominated financial services including RMB deposit, project loan,
+syndicated loan, trade finance, small and medium-sized enterprise loan, investment and financing advisory, securities
+brokerage and asset management, and renders personal customers with versatile local and foreign currency-denominated
+financial services such as RMB deposit, remittance, personal consumption loan, residential mortgages, credit card and
+E-banking. At the end of 2016, ICBC (Turkey) recorded total assets of USD2,344 million and net assets of USD172 million. It
+generated a net profit of USD5.48 million during the year.
+46
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (CANADA)
+ICBC
+ICBC STANDARD BANK PLC
+ICBC Standard Bank, a subsidiary of the Bank in the United Kingdom, has an issued share capital of USD1,083 million,
+in which the Bank holds a 60% stake directly. ICBC Standard Bank mainly provides global commodity trading businesses
+covering base metals, precious metals, bulk commodities and energy and global financial markets services such as exchange
+rate, interest rate, unsecured products and equities. With its headquarters in London as the major business entity, ICBC
+Standard Bank has ICBC Standard Resources (China) Ltd., ICBC Standard NY Holdings Inc., ICBC Standard Securities Inc. and
+ICBC Standard Resources (America) Inc., as well as four branches in Singapore, Tokyo, Hong Kong and Dubai, and Shanghai
+Representative Office under it. At the end of 2016, ICBC Standard Bank recorded total assets of USD20,187 million and net
+assets of USD957 million.
+◆ Major Domestic Subsidiaries
+ICBC CREDIT SUISSE ASSET MANAGEMENT CO., LTD.
+ICBC Credit Suisse Asset Management, a subsidiary of the Bank, has a paid-up capital of RMB200 million, in which the Bank
+holds an 80% stake. It mainly engages in fund placement, fund distribution, asset management and such other businesses
+as approved by CSRC, and owns many business qualifications including public fund, QDII, enterprise annuity, specific asset
+management, domestic and overseas investment manager of social security fund, RQFII, insurance asset management,
+special asset management, occupational annuity, manager of basic pension insurance investment. It is one of the fund
+companies with "full-qualification" in the industry. ICBC Credit Suisse Asset Management (International) and ICBC Credit
+Suisse Investment are structured under ICBC Credit Suisse Asset Management. At the end of 2016, ICBC Credit Suisse Asset
+Management managed a total of 99 public funds and nearly 600 enterprise annuity accounts and special accounts as well as
+special portfolios, with the assets under management amounting to RMB1.13 trillion, and recorded total assets of RMB5,754
+million and net assets of RMB4,471 million. It generated a net profit of RMB1,641 million during the year.
+ICBC FINANCIAL LEASING CO., LTD.
+ICBC Leasing, a wholly-owned subsidiary of the Bank, has a paid-up capital of RMB11.0 billion. It mainly engages in financial
+leasing of large-scale equipment in key fields such as aviation, shipping, energy and power, rail transit and equipment
+manufacturing and provides a variety of financial and industrial services including retail assignment, investment funds,
+securitization of investment assets, assets transactions and management. It has become a financial leasing company with the
+strongest comprehensive strength in China. At the end of 2016, ICBC Leasing recorded total assets of RMB300.6 billion and
+net assets of RMB26.2 billion. It generated a net profit of RMB3.42 billion during the year.
+ICBC-AXA ASSURANCE CO., LTD.
+Majority Equity Participation Company
+STANDARD BANK GROUP LIMITED
+Standard Bank is the largest commercial bank in Africa. Its scope of business covers commercial banking, investment
+banking, life insurance business and other areas. The Bank holds 20.08% ordinary shares of Standard Bank, and the two
+banks engage in cooperative and communication activities frequently. In 2016, in line with the spirit of cooperation for
+mutual beneficial and win-win outcomes, the Bank and Standard Bank continued their positive cooperation in a slew of
+areas including corporate banking, investment banking, financial market business, international clearing and settlement
+and information technology. The two sides also concluded the Main Framework Agreement on Cooperation in Respect of
+the Staff Exchange Program, giving a new boost to the bilateral strategic cooperation. At the end of 2016, Standard Bank
+recorded total assets of ZAR1,954,290 million and net assets of ZAR179,359 million. It generated a net profit of ZAR22,206
+million during the year.
+Annual Report 2016
+Discussion and Analysis
+ICBC (Macau) is the largest local legal banking entity in Macau. It has a share capital of MOP589 million, in which the Bank
+holds an 89.33% stake. ICBC (Macau) mainly engages in comprehensive commercial banking services such as deposit, loan,
+trade finance and international settlement. At the end of 2016, ICBC (Macau) recorded total assets of USD26,200 million
+and net assets of USD2,339 million. It generated a net profit of USD282 million during the year.
+Discussion and Analysis
+Annual Report 2016
+ICBC (Malaysia) is a wholly-owned subsidiary of the Bank established in Malaysia. With a paid-up capital of MYR833 million,
+it is able to provide a full range of commercial banking services. At the end of 2016, ICBC (Malaysia) recorded total assets of
+USD906 million and net assets of USD212 million. It generated a net profit of USD7.5 million during the year.
+PT. BANK ICBC INDONESIA
+ICBC (Indonesia) is a full-licensed commercial banking subsidiary of the Bank registered in Indonesia, with a paid-up capital
+of IDR2.69 trillion, in which ICBC holds a 98.61% stake. ICBC (Indonesia) mainly specializes in financial services such as
+deposit, loan, trade finance, settlement, agency services, interbank borrowing and lending and foreign exchange. At the end
+of 2016, ICBC (Indonesia) recorded total assets of USD3,535 million and net assets of USD333 million. It generated a net
+profit of USD41.44 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (THAI) PUBLIC COMPANY LIMITED
+ICBC (Thai), a subsidiary of the Bank in Thailand, has a share capital of THB20,132 million, in which the Bank holds a
+97.86% stake. ICBC (Thai) holds a comprehensive banking license and provides various services including deposit, loan, trade
+finance, remittance, settlement, leasing and consulting. At the end of 2016, ICBC (Thai) recorded total assets of USD5, 196
+million and net assets of USD735 million. It generated a net profit of USD41.05 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ALMATY) JOINT STOCK COMPANY
+ICBC (Almaty), a wholly-owned subsidiary of the Bank, was incorporated in Kazakhstan with a share capital of KZT8,933
+million. It principally engages in commercial banking services such as deposit, loan, international settlement and trade
+finance, foreign currency exchange, guarantee, account management, internet banking and bank card service. At the end
+of 2016, ICBC (Almaty) recorded total assets of USD155 million and net assets of USD51 million. It generated a net profit of
+USD7.25 million during the year.
+44
+ICBC
+Discussion and Analysis
+Yangon Branch (Myanmar) -
+Phnom Penh Branch (Cambodia) ---- 1
+45
+1
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (NEW ZEALAND) LIMITED
+ICBC (New Zealand), a wholly-owned subsidiary of the Bank in New Zealand, has a paid-up capital of NZD145.46 million.
+ICBC (New Zealand) provides corporate and personal banking services such as account management, transfer and
+remittance, international settlement, trade finance, corporate credit, residential mortgages and credit card business. At the
+end of 2016, ICBC (New Zealand) recorded total assets of USD628 million and net assets of USD98 million. It generated a
+net profit of USD830 thousand during the year.
+ICBC (LONDON) PLC
+ICBC (London), a wholly-owned subsidiary of the Bank, was incorporated in the United Kingdom with a paid-up capital of
+USD200 million, It provides banking services such as deposit and exchange, loan, trade finance, international settlement,
+funds clearing, agency, foreign exchange trading and retail business. At the end of 2016, ICBC (London) recorded total
+assets of USD2,723 million and net assets of USD378 million. It generated a net profit of USD20.59 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (EUROPE) S.A.
+ICBC (Europe), a wholly-owned subsidiary of the Bank, was incorporated in Luxembourg with a paid-up capital of EUR437
+million. Paris Branch, Amsterdam Branch, Brussels Branch, Milan Branch, Madrid Branch and Warsaw Branch are structured
+under ICBC (Europe), which mainly offers corporate and retail banking services such as remittance, settlement, loan, trade
+finance, treasury, investment banking, custody, franchise wealth management. At the end of 2016, ICBC (Europe) recorded
+total assets of USD7,760 million and net assets of USD630 million. It generated a net profit of USD34.41 million during the
+year.
+BANK ICBC (JOINT STOCK COMPANY)
+Bank ICBC (JSC), a wholly-owned subsidiary of the Bank, was incorporated in Russia with a share capital of RUB2,310
+million. Saint Petersburg Branch, a tier-2 branch, is structured under it. It mainly provides a full spectrum of corporate
+banking services including corporate and project loan, trade finance, deposit, settlement, securities brokerage, custody,
+franchise treasury business and securities trading, foreign currency exchange, global cash management, investment banking
+and corporate financial consulting, as well as personal banking services. Bank ICBC (JSC) is a RMB clearing bank in Russia
+designated by PBC, a RUB clearing bank for RMB trading against RUB on China Foreign Exchange Trade System, important
+market maker and RMB clearing bank for RMB trading against RUB on MICEX-RTS. At the end of 2016, Bank ICBC (JSC)
+recorded total assets of USD821 million and net assets of USD95 million. It generated a net profit of USD22.52 million
+during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (USA) NA
+ICBC (USA), a controlled subsidiary of the Bank in the United States, has a paid-up capital of USD309 million, in which the
+Bank holds an 80% stake. Holding a full-functional commercial banking license registered in the UFIQAC, ICBC (USA) is a
+member of Federal Deposit Insurance Corporation, providing corporate and retail banking services such as deposit, loan,
+settlement and remittance, trade finance, cross-border settlement, cash management, E-banking and bank card services. At
+the end of 2016, ICBC (USA) recorded total assets of USD2,229 million and net assets of USD321 million. It generated a net
+profit of USD7.03 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA FINANCIAL SERVICES LLC
+ICBCFS, a wholly-owned subsidiary of the Bank in the United States, has a paid-up capital of USD50.00 million. It mainly
+specializes in securities clearing business in Europe and America, and offers securities brokerage services including securities
+clearing and financing for institutional customers. At the end of 2016, ICBCFS recorded total assets of USD36,260 million
+and net assets of USD139 million. It generated a net profit of USD24.75 million during the year.
+1
+America
+43
+80
++
++
+The Bank controlled the total number of physical outlets, optimized outlet layout, and used light outlets as an effective
+way of making presence in emerging and blank areas. It established and enhanced outlet renovation standards,
+strengthened the internal layout planning of outlets and further improved the operation efficiency and marketing
+service capacity of outlets.
+The Bank merged the public processing procedures of multiple transactions, realized information sharing and solved
+the problems that the customers had to complete multiple forms, sign their names many times and enter passwords
+again and again.
+The Bank promoted the intelligent outlet services and enhanced the functions of intelligent services. It launched
+services such as application for credit card, change of mobile phone number and exemption of annual fee.
+The Bank analyzed the operation of self-service channels and customer data, enhanced the operation efficiency of
+self-service channels and strengthened the functional complementation and coordinated development with physical
+outlets.
+At the end of 2016, the Bank had 16,429 physical outlets and 29,385 self-service banks. The number of ATMs was
+100,083 and their transaction volume reached RMB13,265.7 billion.
+◆ The Bank accelerated the strategic layout and functional
+improvement of online channels.
++
+The open-ended personal internet banking was rolled out with
+optimized pages and transaction procedures so that even non-
+ICBC customers can also have access to the Bank's financial services
+online.
+The intelligent robot "ICBC Intellectual" was made available via SMS,
+WeChat, online customer service and ICBC Link to realize intelligent
+interaction with customers and offer intelligent suggestions.
+The E-banking transaction amount hit RMB599 trillion; the number
+ICBC
+Proportion of E-banking Business
+%
+80.2
+2013
+86.0
+2014
+92.0
+90.2
+2015
+2016
+Service Enhancement
++
+◆ The Bank promoted layout optimization of offline channels and transformation of business models.
+Channel Development
+Channel Development and Service Enhancement
+Discussion and Analysis
+78
++
++
+ICBC Mobile
+Discussion and Analysis
++
+The brand, functions and services of ICBC Mobile were wholly upgraded to make it more open, intelligent and
+individualized.
+The Bank pressed forward with product innovation, conducted R&D of products to improve user experience, and rolled
+out new functions such as withdrawing money by scanning QR code, registering for hospital for friends and relatives
+and remitting money to foreign banks.
+The Bank actively carried out various socialized marketing campaigns by utilizing live broadcasting video and other new
+platforms.
+In 2016, the number of ICBC Mobile customers surpassed 250 million.
+Internet Financing
++
+The Bank optimized outlet service experience. It solicited comments
++
+In respect of standardized small loan service with symmetrical information, the Bank utilized the internet and big data
+for risk control modeling, improved the products and processes, and realized self-service online operation, automatic
+business processing and accurate risk monitoring, which enhanced the customer experience.
+To facilitate the business handling of corporate customers, the Bank premiered a number of services including online
+unsecured loans for corporate customers, financing pledged with the assets in the online bill pool and online issuing of
+acceptance drafts under E-banking.
+The campaign of "the daily interest of each RMB 10,000 loan is just RMB1" earned the Bank a good reputation for its
+high limit, favorable price and quick disbursement.
+Payment
+The Bank improved the functions of its payment products, enriched application scenarios, made debut QR payment
+and promoted one-key payment. Thanks to these efforts, the number of "ICBC e-Payment" customers went beyond
+100 million.
+The Bank diversified the service items under "ICBC e-Bill Payment" for the convenience of the public such as water,
+electricity and gas bills and also other characteristic items such as traffic fines, ETC top-up. The Bank supported bill
+payment of non-ICBC customers at the mobile end, and handed out red pockets online to attract new users.
+The Bank was the first bank to conduct Apple Pay online business, and released the mobile payment products such as
+Samsung Pay, Huawei Pay and Mi Pay.
+Investment and Wealth Management
++
+The Bank improved the investment and trading system for individual investors. ICBC e-Investment covers a variety of
+products such as paper precious metals, paper crude oil and Gold Accumulation. Paper natural gas, paper base metals
+and paper agricultural products were added into it. The investment and wealth management product line registered a
+transaction amount of more than RMB500 billion in 2016.
+Annual Report 2016
+39
++
+Note: The proportion of E-banking business refers to the number of
+E-banking transactions against the total number of transactions
+of the Bank.
+of E-banking transactions accounted for 92.0% of total transactions
+of the Bank, rising by 1.8 percentage points from the last year.
+The service culture system was put in place. The Bank managed to shorten the customers' waiting time, diversify the
+products and improve the services and employees' attitude. The Bank created a brand with the unique features of
+ICBC's service culture becoming an important part of the corporate culture.
+of 2015
+2016
+2015
+Hong Kong and Macau
+159,445
+135,988
+1,646
+1,543
+of 2016
+108
+of 2015
+107
+Asia-Pacific Region
+(except Hong Kong and
+Macau)
+69,935
+67,323
+567
+783
+87
+84
+Europe
+58,317
+56,089
+and suggestions from customers across multiple channels and launched special campaigns to enhance the services.
+Customer experience indices covering multiple areas such as calibration, satisfaction and standardization were
+developed to precisely assess the service quality.
+of 2016
+Item
+140
+Number of institutions
+The Bank integrated the competitive edge of payment, loan and other key product lines and set up an efficient team
+based on the integration of technology and business. It utilized participation of user experience staff over the internet
+and set up the UI design team to enhance user experience.
+At the end At the end
+ICBC
+40
+Discussion and Analysis
+Consumer Protection
+The Bank enhanced the consumer protection policy framework, refined the working mechanisms and established
+supporting regulations, enabling the consumer protection work to be more systemized, standardized and
+institutionalized. The Bank attached importance to the integrated management of a full-process consumer protection,
+constantly strengthened consumer protection, enhanced financial products and services from the perspective of
+consumer protection, and promoted coordinated development of business operation and consumer protection and
+created a more harmonious market environment for financial consumers.
+The Bank fulfilled its duty for handling of consumer complaints, efficiently and properly solved consumer
+appeals, enhanced consumer experience by management and prevention in early stage and constantly improved
+standardization of service charge management. The Bank further expanded promotion channels to consumers,
+launched targeted financial knowledge propagandas in a routine and centralized manner for constantly enhancing the
+consumers' awareness of financial risks and ability to identify frauds.
+Internationalized and Diversified Operation
+The Bank steadily advanced global network layout channel building, and extended the presence network of overseas
+institutions. Overseas institutions further improved their capabilities for localized operation and sustainable development. A
+slew of global key product lines involving investment banking, cash management, financial markets, asset management and
+asset custody were developed in depth and breadth in a bid to sharpen competitive edges and influence on the international
+market. Leveraging on the investment and financing product lines such as global financing, investment banking and
+financial leasing, the Bank served the "Belt and Road" initiative and the cooperation in international production capacity
+and supported the "Going Global" drive of Chinese-funded enterprises. Comprehensive subsidiaries delivered stronger profit
+contributions and strategic synergies to the Group.
+♦ Internationalized Operation
++
++
+58
+The network of tier-2 institutions was expanded in the Netherlands, Belgium, Russia and Australia, and the regional
+service capability was remarkably enhanced.
+4
+(in USD millions)
+(in USD millions)
+Profit before tax
+Assets
+MAJOR INDICATORS FOR OVERSEAS INSTITUTIONS
+At the end At the end
+41
+Annual Report 2016
+As at the end of 2016, the Bank established 412 institutions in 42 countries and regions and indirectly covered
+20 African countries as a shareholder of Standard Bank Group. The Bank also established correspondent banking
+relationships with 1,507 overseas banking institutions in 143 countries and regions, making its service network
+covering six continents and important international financial centers around the world. The Bank maintained 127
+institutions in 18 countries and regions along the "Belt and Road".
+The Bank provided a full range of cross-border financial services for RMB asset allocation by overseas sovereign
+institution customers, and has gradually become the first choice for overseas sovereign institutions to access the
+Chinese market. It has aslo launched "ICBC Integrated Financial Solutions for Cross-border E-commerce", building a
+distinctive cross-border e-commerce brand. In 2016, the Bank's cross-border RMB business volume reached RMB3.89
+trillion.
+Bank ICBC (JSC) in Moscow was authorized by PBC as the RMB clearing bank, which is the seventh overseas RMB
+clearing bank of the Bank in the global market. This further improved the around-the-clock RMB clearing network of
+the Bank and further expanded the service coverage.
+Discussion and Analysis
+29,946
+13.0
+1,545,400
+2.06
+35,913
+13.4
+1,743,572
+Pearl River Delta
+1.72
+39,297
+2,409,725
+2,283,391
+1.47
+35,325
+18.4
+1.94
+Yangtze River Delta
+1.67
+9,053
+4.5
+541,087
+2.37
+13,758
+4.5
+19.1
+Bohai Rim
+16.8
+16.5
+581,084
+Northeastern China
+1.50
+32,472
+18.2
+2,171,273
+1.63
+37,623
+17.7
+2,313,507
+Western China
+2,156,022
+1.42
+14.0
+1,668,136
+28,575
+13.9
+1,819,143
+Central China
+1.52
+30,605
+2,007,028
+1.91
+41,097
+23,707
+1.57
+152,318
+(%)
+1,967
+2.8
+191,430
+1.25
+2,456
+2.9
+197,119
+Others
+2.38
+3,453
+2.1
+1.03
+145,175
+2,742
+1.8
+122,117
+Lodging and catering
+0.46
+575
+1.8
+124,542
+0.55
+675
+1.8
+2.25
+Total
+6,912,537
+100.0
+NPLs
+(%)
+Loan
+(%)
+NPLs
+(%)
+Loan
+Item
+NPL ratio
+At 31 December 2015
+Percentage
+NPL ratio
+Percentage
+At 31 December 2016
+In RMB millions, except for percentages
+DISTRIBUTION OF LOANS AND NPLS BY GEOGRAPHIC AREA
+In 2016, the Bank actively followed major national development strategies, and strove to satisfy the loan demand of
+investment projects in national key areas. The Bank prioritized the service to the sub-industries in traditional sector which
+satisfied the state policies and showed good prospect, and showed support to the leading industrial enterprises and their
+transformation and upgrading, so as to continuously adjust the industrial credit structure. Loans to the transportation,
+storage and postal services showed an increase of RMB86,392 million, which is an increase of 6.0%, and this was
+mainly used to support high-quality national transportation infrastructure construction projects. Loans to the leasing and
+commercial services also showed an increase of RMB83,965 million, which is an increase of 12.9%, and this was mainly due
+to the rapid growth of loans to investment and asset management and other commercial services. As a result of support
+for construction projects for infrastructure facilities, loans to water, environment and public utility management showed
+an increase of RMB56,000 million, which is an increase of 12.1%. Loans to the production and supply of electricity, heat,
+gas and water industry rose by RMB40,322 million, which is an increase of 5.2%, and this was mainly due the support to
+meeting the demand of loan in urban infrastructure construction, public utilities construction and the clean energy sector.
+The balance of NPLs of the wholesale and retail industry and the manufacturing industry had a relatively higher increase. The
+increase of NPLs in wholesale and retail was mainly caused by growing loan default of some wholesale and retail enterprises
+as a result of non-substantial improvement seen in the supply and demand structure of the trade market, the continued
+downward trend of goods circulation, import and export trades, year-by-year decrease of the total retail sales of consumer
+goods, and the impact of E-commerce platforms on the traditional retail industry. Increase in NPLs of the manufacturing
+industry was largely attributable to loan default of some manufacturing enterprises encountering difficulties in operation and
+lack of funding caused by over-supply in the industry and the lack of efficient market demand.
+Discussion and Analysis
+53
+Annual Report 2016
+1.88
+129,595
+100.0
+6,901,088
+2.20
+706,472
+Head Office
+5.4
+Impairment allowances transferred
+1.64
+522,052
+5.5
+719,993
+Including: Discounted bills
+12.6
+1,505,144
+12.3
+1,610,680
+Pledged loans
+21.1
+2,516,196
+4.4
+24.8
+Including: Residential mortgages
+46.1
+(%)
+Amount
+5,499,003
+45.9
+5,986,629
+Loans secured by mortgages
+(%)
+Amount
+Item
+Percentage
+3,237,427
+Guaranteed loans
+1,867,424
+14.3
+Science, education,
+% of total
+At 31 December 2015
+In RMB millions, except for percentages
+At 31 December 2016
+Total
+Over 3 years
+1 to 3 years
+3 months to 1 year
+Less than 3 months
+Overdue periods
+OVERDUE LOANS
+Loans secured by mortgages stood at RMB5,986,629 million, representing an increase of RMB487,626 million or 8.9% from
+the end of the previous year. Pledged loans amounted to RMB1,610,680 million, representing an increase of RMB105,536
+million or 7.0% from the end of the previous year. Guaranteed loans amounted to RMB1,867,424 million, representing an
+increase of RMB225,054 million or 13.7% from the end of the previous year. Unsecured loans amounted to RMB3,592,113
+million, representing an increase of RMB305,164 million or 9.3% from the end of the previous year.
+100.0
+11,933,466
+100.0
+13,056,846
+Total
+27.5
+3,286,949
+27.5
+3,592,113
+Unsecured loans
+13.8
+1,642,370
+Percentage
+11,571
+In RMB millions, except for percentages
+At 31 December 2015
+As at the end of 2016, the allowance for impairment losses on loans stood at RMB289,512 million, a year-on-year increase
+of RMB8,858 million. Allowance to NPL was 136.69%; allowance to total loans was 2.22%.
+Balance at the beginning of the year
+In RMB millions
+CHANGES IN ALLOWANCE FOR IMPAIRMENT LOSSES ON LOANS
+1.50
+179,518
+100.0
+11,933,466
+1.62
+211,801
+100.0
+13,056,846
+Charge for the year
+0.56
+8.8
+1,048,579
+0.60
+7,939
+10.2
+1,327,321
+Overseas and others
+Total
+1.27
+8,518
+5.6
+668,572
+5,920
+Including: Impairment allowances charged
+Individually
+assessed
+51,499
+83,966
+110,992
+865
+Collectively
+Discussion and Analysis
+ICBC
+54
+1,999
+289,512
+223,955
+65,557
+Balance at the end of the year
+(5,135)
+(74,144)
+(8,145)
+773
+1,226
+Recoveries of loans and advances previously written off
+(65,999)
+Write-offs
+(5,135)
+Accrued interest on impaired loans
+(176,431)
+(865)
+(148,540)
+(27,891)
+Reversal of impairment allowances
+86,138
+262,569
+151,577
+2,172
+Total
+280,654
+229,155
+assessed
+DISTRIBUTION OF LOANS BY COLLATERAL
+At 31 December 2016
+loans
+3,047
+Senior Executive
+Vice Presidents
+The Bank's organizational structure of risk management comprises the Board of Directors and its special committees, the
+Senior Management and its special committees, the Risk Management Department, the Internal Audit Department, etc. The
+risk management organizational structure is illustrated below:
+Enterprise risk management is a process where the Board of Directors, the Senior Management and other employees of the
+Bank perform their respective duties and responsibilities to take effective control of all the risks at various business levels
+in order to provide reasonable guarantee to the achievement of objectives of the Bank. The principles of risk management
+include matching return with risk, internal check and balance with consideration as to efficiency, risk diversification,
+combination of quantitative and qualitative analysis, dynamic adaptability adjustments and gradual improvement, etc.
+Enterprise Risk Management System
+Discussion and Analysis
+RISK MANAGEMENT
+50
+ICBC
+Discussion and Analysis
+The Bank strengthened risk management of the real estate industry. It adjusted and refined the city-specific management
+of real estate loans, and prudently granted new housing development loans to tier-3 and tier-4 cities with long de-stocking
+period and high risks, strictly controlled loans to commercial housing development, and steadily advanced loan granting for
+shantytown renovation as a part of the government's service procurement.
+The Bank strengthened risk management in relation to trade finance. It refined the trade finance product management rules,
+adjusted the structure of trade finance credit products and promoted the integration of trade finance and working capital
+loans. It also strengthened risk screening over key products and key regions and fortified the risk management of off line
+supply chain finance.
+The Bank strengthened credit risk management of small enterprises. It continued to improve the development model of
+financial business for small and micro enterprises, increased the number of small and micro enterprise banking centers and
+enabled the small and micro enterprise banking to be more intensive and professional. It also established independent rating
+and credit systems regarding small enterprises, strengthened associated credit line approval and access management of new
+small enterprises. Moreover, the Bank reinforced the tracking of risk trend, enhanced risk screening on existing loans and
+drew up risk mitigation and disposal plan for customers with potential risk. On the basis of effective risk control, the Bank
+actively used the existing policy to solve the credit need of small and micro enterprise customers with normal operation, and
+increased support to small and micro enterprises in real economy.
+◆ Credit Risk Management of Personal Loans
+The Bank improved its credit risk management system for personal loans, optimized review and approval process of personal
+loan, strengthened specialized management of partner institutions which granted personal loans, and strictly prevent the
+spreading of risk. It also strengthened the differentiated management of percentage area concerning personal residential
+mortgages with an eye to changes in the real estate market. A differentiated interest rate pricing mechanism for regions,
+projects and customers of personal residential mortgages was implemented and risk pricing capability of personal residential
+mortgage business was enhanced. The Bank strengthened the access management of real estate enterprises, mortgage
+projects, partner institutions and borrowers and stringently reviewed the authenticity of the down payment to prevent all
+forms of false mortgage, zero down payment and false trading fraud risk. Moreover, the Bank strictly selected cooperative
+projects of personal commercial housing loans, raised the down payment ratio of such loans, and strengthened phased
+guarantee management.
+◆ Credit Risk Management of Credit Card Business
+The Bank improved credit-extension system for credit card. It utilized the way of thinking and data of the Internet into
+building a multi-dimensional customer evaluation system, with special attention paid to precise credit extension of credit
+card customers, and strictly implemented the differentiating dynamic management of credit-extension. The Bank conducted
+active screening and investigation of potential risk customers, and reinforced the application of internal rating and scoring
+approach in potential risk identification. It continuously improved centralized approval control functions of the personal
+credit approval system, upgraded the functions of post-lending management system and improved the collection system.
+Efforts were made to strengthen the asset quality monitoring and notification of credit card loans, so as to timely identify
+potential risks and take differentiated control measures. Besides, the Bank actively carried out securitization of non-
+performance assets relating to credit card, and further expanded disposal channels of non-performing assets.
+◆ Credit Risk Management of Treasury Operations
+The Bank's treasury operations are exposed to credit risk mainly as a result of bonds investment and trading, interbank
+offering, bills with reverse repurchase agreements and RMB bonds borrowing. Credit risk management measures adopted
+by the Bank in relation to treasury operations mainly comprised defining customers' entry criteria, controlling credit limit,
+controlling investment limit (scale), strict margin management, rating management and controlling authorization limit for
+single transactions. The Bank has set financing limits for each interbank offering and adopted the principle of management
+for both credit and authorization.
+In 2016, the Bank continued to strengthen credit risk management of treasury operations. It further improved credit risk
+monitoring and analysis mechanism for treasury operations, proactively upgraded the structure of bond investment portfolio
+in line with current trends on domestic and international financial markets, continued to maintain investment in government
+bonds and high-quality unsecured bonds, shorten the term of unsecured bonds and other investment as appropriate,
+increase the R&D and investment in innovative products, and strive to mitigate the credit risk of bond investment portfolio.
+Annual Report 2016
+51
+Discussion and Analysis
+Credit Risk Analysis
+At the end of 2016, the Bank's maximum exposure to credit risk, without taking into account any collateral and other credit
+enhancements, was RMB26,237,544 million, showing an increase of RMB2,285,007 million when compared with the end
+of the previous year. Please refer to "Note 54. (a)(i) to the Financial Statements: Details of the Bank's Maximum Exposure
+to Credit Risk Without Taking Account of Any Collateral and Other Credit Enhancements". For mitigated risk exposures of
+credit risk asset portfolio of the Bank, please refer to "Credit Risk" of the 2016 Capital Adequacy Ratio Report of Industrial
+and Commercial Bank of China Limited.
+DISTRIBUTION OF LOANS BY FIVE-CATEGORY CLASSIFICATION
+Board of Directors
+President
+Credit and Investment
+Management Department
+Credit Risk
+The Bank strictly adheres to the guidance from CBRC regarding credit risk management and other regulatory requirements,
+diligently fulfills established strategies and objectives under the leadership of the Board of Directors and the Senior
+Management, and implements an independent, centralized and vertical credit risk management mode. The Board of
+Directors assumes the ultimate responsibility for the effectiveness of the implementation and monitoring of credit risk
+management. The Senior Management is responsible for executing the strategies, overall policy and system regarding credit
+risk management approved by the Board of Directors. The Credit Risk Management Committee of the Senior Management
+is the reviewing and decision-making organ of the Bank in respect of credit risk management, is responsible for reviewing
+material and important affairs of credit risk management, and performs its duty in accordance with the Working Regulations
+for the Credit Risk Management Committee. The credit risk management departments at different levels undertake the
+responsibility of coordinating credit risk management at respective levels, and the business departments play their roles in
+implementing credit risk management policies and standards in respective business areas.
+The Bank is primarily exposed to credit risk. Credit risk is the risk that loss is caused to banking business when the borrower
+or counterparty fails to meet its contractual obligations. The Bank's credit risks mainly originate from loans, treasury
+operations (including due from banks, placements with banks, reverse repurchase agreements, corporate bonds and financial
+bonds investment), receivables and off-balance sheet credit business (including guarantees, commitments and financial
+derivatives trading).
+Credit Risk Management
+Credit Risk
+Discussion and Analysis
+At the level of Board
+of Directors
+At the level of Head Office
+49
+Annual Report 2016
+122,294
+In 2016, the Bank further improved the enterprise risk management system, continuously upgraded risk management
+technologies and methods, enhanced the capacity of risk pre-judgment and dynamic control, so as to push the enterprise
+risk management to a new level. It also promoted the implementation of the latest international and domestic regulatory
+requirements, improved the basic policies for enterprise risk management and better managed related work of G-SIB. In
+addition, the Bank strengthened consolidated risk management in the Group, intensified the management of risk limits for
+non-banking subsidiaries, and organized the risk assessment of the subsidiaries. It advanced country risk management by
+strengthened monitoring analysis, reporting and limit management, and enhanced sovereign risk control capability. The Bank
+reinforced the management of the Group's market risk, strengthened the market risk management of overseas institutions
+and continued perfecting its product control. It further implemented the advanced capital management approaches, and
+continued to refine the measurement system concerning credit risk, market risk and operational risk and strengthen the
+monitoring, improvement, validation and management application of the risk measurement system.
+At the level of branches
+Item
+Note: Substantial risks including country risk and reputational risk have been incorporated into the enterprise risk management system.
+Risk Management
+Departments of Branches
+Management of Branches
+Liquidity Risk
+Asset & Liability
+Management Department
+Market Risk
+Risk Management
+Department
+Operational Risk
+Chief Risk Officer
+Asset & Liability
+Management Committee
+Risk Management
+Committee
+Risk Management Committee
+of the Board of Directors
+Internal Control &
+Compliance Department
+Primary reporting line
+Secondary reporting line.
+Pass
+Special mention
+NPLs
+60,512
+0.51
+19,862
+0.15
+14,201
+0.12
+13,056,846
+100.00
+11,933,466
+100.00
+Loan quality remained stable overall. As at the end of 2016, according to the five-category classification, pass loans
+amounted to RMB12,261,034 million, representing an increase of RMB1,027,578 million when compared with the end
+of the previous year and accounting for 93.91% of total loans. Special mention loans amounted to RMB584,011 million,
+representing an increase of RMB63,519 million and accounted for 4.47% of the total. NPLs amounted to RMB211,801
+million, showing an increase of RMB32,283 million, and the NPL ratio was 1.62%. Under the new normal where economic
+growth slows down, structural adjustment deepens and industrial transformation accelerates, some industries and
+enterprises suffered capital chain tension which led to worsening solvency of some enterprises. Hence, the Bank faced
+mounting pressure in controlling the credit asset quality.
+DISTRIBUTION OF LOANS AND NPLS BY BUSINESS LINE
+0.63
+In RMB millions, except for percentages
+At 31 December 2015
+Item
+Loan
+Percentage
+(%)
+NPL ratio
+NPLs
+(%)
+Loan
+Percentage
+(%)
+NPL ratio
+NPLs
+(%)
+At 31 December 2016
+The Bank's credit risk management has the following characteristics: (1) standardized credit management processes are
+implemented throughout the Bank; (2) the principles and processes of risk management focus on the entire process of credit
+business, covering customer investigation, credit rating, loan evaluation, loan review and approval, loan payment and post-
+lending monitoring; (3) special organization is set up to supervise the entire process of credit business; (4) the qualification
+of the employees who are responsible for credit review and approval is strictly reviewed; and (5) a series of information
+management systems are designed to reinforce monitoring on the risks.
+82,505
+104,805
+Substandard
+Doubtful
+Loss
+Total
+At 31 December 2016
+In RMB millions, except for percentages
+At 31 December 2015
+Percentage
+Percentage
+Amount
+(%)
+12,261,034
+0.87
+93.91
+(%)
+94.14
+584,011
+4.47
+520,492
+4.36
+211,801
+1.62
+179,518
+1.50
+109,434
+0.84
+Amount
+11,233,456
+According to the regulatory requirement on loan risk classification, the Bank implemented five-category classification
+management in relation to loan quality and classified loans into five categories: pass, special mention, substandard, doubtful
+and loss, based on the possibility of collecting the principal and interest of loans. In order to implement sophisticated
+management of credit asset quality and improve risk management, the Bank implemented the twelve-category internal
+classification system for corporate loans. The Bank applied five-category classification management to personal credit assets
+and ascertained the category of the loans based on the number of months for which the lender is in default, anticipated loss
+rate, credit rating, collaterals and other quantitative and qualitative factors.
+◆ Credit Risk Management of Corporate Loans
+The Bank continued to strengthen the formation of the credit rule framework and improve credit system. The Bank
+intensified the implementation of uniform credit extension and standardized cross-regional credit business management. It
+further standardized collateral management rules, reinforced guarantee and collateral management and elevated the access
+requirements for eligible guarantee. It also clarified the key areas of review, strengthened the capability of substantial risk
+mitigation of collateral, and put more efforts on preventing credit risk in guarantee services.
+In RMB millions, except for percentages
+% of total
+Borrower
+Borrower A
+Borrower B
+Borrower C
+Industry
+Transportation, storage and postal services
+Transportation, storage and postal services
+Amount
+loans
+96,995
+0.8
+32,453
+0.3
+Transportation, storage and postal services
+The total amount of loans granted by the Bank to the single largest customer and top ten single customers accounted for
+4.5% and 13.3% of the Bank's net capital respectively. The total amount of loans granted to the top ten single customers
+was RMB283,629 million, accounting for 2.2% of total loans. The table below shows the details of the loans granted to the
+top ten single borrowers of the Bank as at the end of 2016.
+32,301
+Borrower D
+Transportation, storage and postal services
+19,720
+0.2
+Borrower E
+Information transmission, software and information technology services
+18,600
+0.1
+Borrower F
+Borrower G
+Borrower H
+Borrower I
+Borrower J
+Total
+Transportation, storage and postal services
+Transportation, storage and postal services
+Transportation, storage and postal services
+Transportation, storage and postal services
+Transportation, storage and postal services
+17,650
+0.3
+0.1
+BORROWER CONCENTRATION
+55
+Amount
+151,115
+1.16
+169,902
+% of total
+loans
+1.42
+75,550
+0.58
+84,808
+0.71
+101,916
+0.78
+62,783
+Discussion and Analysis
+0.53
+0.13
+15,205
+0.13
+346,127
+2.65
+332,698
+2.79
+Note: Loans and advances to customers are deemed overdue when either the principal or interest is overdue. For loans and advances to
+customers repayable by installments, the total amount of loans is deemed overdue if part of the installments is overdue.
+Overdue loans stood at RMB346,127 million, representing an increase of RMB13,429 million from the end of the previous
+year. Among which, loans overdue for over 3 months amounted to RMB 195,012 million, representing an increase of
+RMB32,216 million.
+RENEGOTIATED LOANS
+Renegotiated loans and advances amounted to RMB5,541 million, representing an increase of RMB984 million as compared
+to the end of the previous year. Renegotiated loans and advances overdue for over three months amounted to RMB1,398
+million, representing a decrease of RMB172 million.
+Annual Report 2016
+17,546
+Corporate loans
+16,811
+16,470
+The Bank's objective of currency risk management is to control the impact of exchange rate fluctuations on the Bank's
+financial position and shareholders' equity within a tolerable extent. The Bank mitigates such risk principally by limit
+management and hedging of risks. The Bank carries out sensitivity analysis and stress test of currency risk on a quarterly
+basis, and submits currency risk reports to the Senior Management and the Market Risk Management Committee.
+Market Risk Management of the Trading Book
+The Bank continued to improve risk measurement and product control of the trading book by adopting multiple methods
+including Value at Risk (VAR), sensitivity analysis and exposure analysis to measure and manage products in the trading
+book. The Bank also optimized the market risk limit management system based on trading portfolios, improved the three-
+tier limit approval mechanism consisting of the Board of Directors, the Market Risk Management Committee and business
+departments. In addition, it optimized limit setting in a scientific manner and realized fast and flexible limit monitoring and
+dynamic adjustment relying on the Global Market Risk Management (GMRM) system. For VaR of the trading book of the
+Bank, please refer to "Note 54. (c)(i) to the Financial Statements: Value at Risk (VaR)".
+Market Risk Analysis
+♦ Interest Rate Risk Analysis
+In 2016, by proactively responding to interest rate liberalization, the Bank reasonably examined and studied the trend of
+macroeconomics and market interest rate trends, and moderately guided the term structure of assets and liabilities. Properly
+grasping the term structure of interest rates, it effectively controlled the duration gap of assets and liabilities and interest
+rate sensitivity gap to ensure the realization of interest rate risk management objectives.
+As at the end of 2016, the Bank had a negative cumulative interest rate sensitivity exposure within one year of RMB420,695
+million, representing a decrease of RMB527,731 million from the end of the previous year, mainly caused by the decrease of
+bond investment and due from banks and other financial institutions repriced or matured within one year and the increase
+of due to customers. Cumulative interest rate sensitivity positive exposure over one year stood at RMB2,018,815 million,
+representing an increase of RMB499,610 million, mainly due to the increase in bond investment matured over one year.
+INTEREST RATE RISK EXPOSURE
+At 31 December 2016
+At 31 December 2015
+In RMB millions
+Less than
+Currency risk is the risk of adverse movements of exchange rate resulting in losses on the foreign currency exposure, which
+is due to the currency structure's mismatch between foreign currency assets and liabilities.
+3 months
+3 months to
+1 year
+1,156,751
+1,588,520
+1 to 5 years
+487,380
+399,606
+Over 5 years
+1,531,435
+1,119,599
+Note: Please refer to "Note 54.(c)(ii) to the Financial Statements: Interest Rate Risk".
+For interest rate sensitivity analysis, please refer to "Note 54. (c)(ii) to the Financial Statements: Interest Rate Risk”.
+◆ Currency Risk Analysis
+In 2016, the Bank closely watched the changes in external market and internal funds, actively took a combination of
+management measures such as price leverage to adjust and optimize the aggregate amount and structure of foreign
+exchange assets and liabilities, and strengthened assets and liabilities currency structure management and capital fund
+preservation management of overseas institutions. The currency risk of the Bank was under control.
+58
+ICBC
+The Bank focused on serving the real economy and the supply-side structural reform, constantly adjusted and improved
+industrial credit policy in accordance with the macroeconomic policy, the prevailing trends of industrial policy and the
+characteristics of the operation of the industry as well as the important strategic initiatives of the country. Conforming
+to the industrial policy system of "18 segments + key sub-industries", the Bank strengthened the industrial investment
+layout, highlighted strategies of key areas and quality customers. While supporting leading industrial enterprises and their
+transformation and upgrading demands, it continuously improved and adjusted industrial credit structure, further stressed
+the strategic functions of credit policy, and promoted the guidance, practicality and operability of industrial credit policy.
+According to the national regional development strategic plan and the Bank's credit strategy orientation, the Bank supported
+the three "supporting belts" development strategy the Beijing-Tianjin-Hebei integration initiative, the Yangtze Economic
+Belt initiative, and the "Belt and Road" initiative, and backed the development strategies for such regions as the Pearl River
+Delta and the Northeastern China. It improved differentiating regional credit policies for business authorization, product
+policy and access standards, intensified differentiating instructions for regional credit markets and prioritized the support to
+key municipal branches to accelerate the expansion of urban functions and improve the field-leading credit markets.
+(1,577,446)
+(1,481,484)
+0.1
+◆ Currency Risk Management
+57
+0.1
+16,329
+0.1
+16,300
+0.1
+283,629
+2.2
+Risk Management of Financial Asset Service Business
+The sources of the Bank's risks in financial asset service business are mainly the credit risk of financing customers,
+management risk of partner institutions and market risk of price fluctuation of underlying assets. The Bank, as the service
+supplier, is entrusted by investors to manage their wealth and does not bear investment risk of investors. The Bank took
+more active risk management measures to provide better and more efficient financial asset services, including managing
+access according to different business natures and risk management requirements of financial asset services, and performing
+access approval process in terms of investment customers, financing customers, partner institutions, new businesses, new
+products and domestic and overseas affiliates of financial asset service businesses according to applicable access standards,
+incorporating business authorization into unified authorization management of the Bank, and establishing a risk limit
+management system.
+In 2016, the Bank continued to reinforce the risk management of financial asset service business. It continuously improved
+the basic management system for financial asset service business and optimize the management system regarding innovative
+products, upgraded the differentiating risk management system of agency investment and took the initiative to strengthen
+the credit risk management of non-standardized creditor's rights business, expanded the scope of investment products and
+built a differentiated management system in line with characteristics of market risk focusing on factors such as growth of
+underlying value for investment, bettered functions of the financial asset service business management system, enhanced the
+coverage and data quality of the non-standardized business system and elevated system management level.
+Market Risk
+Market risk is defined as the risk of loss to the Bank's on- and off-balance sheet activities caused by adverse movements in
+market rates (including interest rates, exchange rates, and stock price and commodity prices). The Bank is primarily exposed
+to interest rate risk and currency risk (including gold).
+Discussion and Analysis
+56
+Discussion and Analysis
+Market risk management is the process of identifying, measuring, monitoring, controlling and reporting market risk for
+the purposes of setting up and enhancing the market risk management system, specifying responsibilities and process,
+determining and standardizing the measurement approaches, limit management indicators and market risk reports,
+controlling and mitigating market risk and improving the level of market risk management. The objective of market risk
+management is to control market risk exposures within a tolerable level and maximize risk-adjusted return according to the
+Bank's risk appetite.
+The Bank strictly complies with the Guidelines on Market Risk Management of Commercial Banks issued by CBRC and
+other related regulatory requirements, implemented an independent, centralized and coordinated market risk management
+model, and formed a management organizational structure featuring the segregation of the front office, the middle office
+and the back office in the financial market business. The Board of Directors assumes the ultimate responsibility for the
+implementation and monitoring of market risk management. The Senior Management is responsible for executing the
+strategies, overall policy and system regarding market risk management approved by the Board of Directors. The Market
+Risk Management Committee of the Senior Management is the reviewing and decision-making organ of the Bank in
+respect of market risk management, and is responsible for reviewing important matters of market risk management, and
+performs its duty in accordance with the Working Regulations for the Market Risk Management Committee. The market
+risk management departments at different levels are responsible for coordinating the market risk management at respective
+levels, and the business departments play their roles in implementing market risk management policies and standards in
+respective business areas.
+In 2016, the Bank continued to strengthen consolidated management of market risk and persistently enhanced the
+management and measurement of market risk at the Group's level. It further improved the Group's market risk management
+rules and regulations, and implemented institution classified management and delicacy management of institutions. It
+strengthened management of the Group's market risk limit, optimized limit management plan and strengthened limit
+monitoring and analysis. It pushed forward the overseas expansion of the Global Market Risk Management (GMRM) system
+and pressed ahead with the core application of the system in risk measurement, limit monitoring and stress testing.
+Banking Book and Trading Book
+In order to take more effective market risk management measures and accurately measure regulatory capital arising from
+market risk, the Bank categorized all on- and off-balance sheet assets and liabilities into its trading book and banking book
+according to the nature and characteristics of different books. The trading book includes tradable financial instruments and
+commodity positions held by the Bank for the purposes of trading or hedging the risks of other items in the trading book,
+whereas all other positions are included in the banking book.
+Market Risk Management of the Banking Book
+♦ Interest Rate Risk Management
+Interest rate risk is defined as the risk of loss in the overall gain and economic value of the banking book arising from
+adverse movements in interest rate and term structure, etc. Interest rate risks mainly include repricing risk, yield curve risk,
+benchmark rate risk and option risk, of which, repricing risk and benchmark rate risk are the Bank's primary interest rate
+risks.
+The Bank's interest rate risk management is aimed at maximizing the risk-adjusted net interest income within the tolerable
+level of interest rate risk under its risk management and risk appetite. The Bank adheres to the prudence principle in interest
+rate risk management of the banking book. The department in charge of interest rate risk management of the banking
+book and business departments jointly monitor and forecast interest rate trends and manage the interest rate risk based on
+monitoring results, so as to maximize the risk-adjusted income.
+In 2016, the Bank focused on adopting steady and prudent interest rate risk appetite. It comprehensively utilized
+interest rate limit system management, term structure management, internal and external pricing management, hedging
+management and other instruments to effectively control the Group's interest rate risk, taking interest rate risk management
+strategies and the business development conditions into consideration.
+Annual Report 2016
+ICBC
+8,140,684
+62.4
+159,871
+Petroleum processing,
+coking and
+nuclear fuel
+53,706
+0.8
+1,296
+2.41
+52,127
+0.8
+240
+0.46
+Others
+2.51
+242,354
+13,641
+5.63
+268,917
+3.9
+12,196
+4.54
+Production and supply of
+electricity, heat,
+gas and water
+820,692
+11.9
+501
+3.5
+0.06
+1,756
+69,875
+1.09
+Iron and steel
+108,554
+1.6
+509
+0.47
+113,841
+1.6
+1,043
+0.92
+Transportation
+equipment
+1.0
+92,572
+4,080
+4.41
+Amount
+91,944
+1.3
+4,710
+5.12
+Non-metallic mineral
+65,051
+0.9
+2,455
+3.77
+1.3
+1,064
+780,370
+1,494
+0.06
+Real estate
+426,999
+6.2
+9,367
+2.19
+427,306
+6.2
+6,293
+1.47
+Mining
+225,505
+278
+3.3
+1.96
+246,541
+3.6
+3,722
+1.51
+Construction
+187,363
+2.7
+4,222
+2.25
+210,294
+3.0
+4,425
+11.3
+6.7
+0.25
+0.19
+Leasing and
+commercial service
+736,921
+10.7
+4,938
+0.67
+652,956
+9.5
+4,906
+0.75
+Wholesale and retail
+461,542
+625,488
+58,029
+9.28
+734,994
+10.7
+48,522
+6.60
+Water, environment
+and public utility
+management
+517,542
+7.5
+1,302
+9.0
+1.45
+1.4
+1.45
+179,518
+1.50
+Non-performing corporate loans stood at RMB159,871 million, increasing by RMB24,615 million from the end of the
+previous year, and the NPL ratio was 1.96%. This was mainly due to default of loan as some enterprises suffered from
+the lack of funding, and trade enterprises and SMEs in traditional industries encountered operating difficulties in the face
+of economic structural adjustment and industry transformation and upgrading. Non-performing personal loans stood at
+RMB51,332 million, increasing by RMB7,594 million, and the NPL ratio was 1.22%, which was mainly due to the increase in
+NPL amount of personal loans as a result of the decrease of operating income or the decrease of salaries of some borrowers.
+52
+ICBC
+Discussion and Analysis
+DISTRIBUTION OF CORPORATE LOANS AND NON-PERFORMING CORPORATE LOANS OF DOMESTIC BRANCHES BY
+INDUSTRY
+In RMB millions, except for percentages
+At 31 December 2016
+At 31 December 2015
+Percentage
+NPLratio
+100.0
+Percentage
+Item
+Loan
+(%)
+NPLs
+(%)
+Loan
+(%)
+NPLs
+(%)
+Transportation, storage
+and postal services
+1,516,089
+NPLratio
+21.8
+11,933,466
+211,801
+1.96
+7,869,552
+65.9
+135,256
+1.72
+Discounted bills
+719,993
+5.5
+598
+0.08
+522,052
+4.4
+1.62
+524
+Personal loans
+4,196,169
+32.1
+51,332
+1.22
+3,541,862
+29.7
+43,738
+1.23
+Total
+13,056,846
+100.0
+0.10
+97,733
+3,022
+1,429,697
+Metal processing
+154,493
+2.2
+9,635
+6.24
+171,065
+2.5
+7,138
+4.17
+Textiles and apparels
+124,729
+1.8
+3.39
+7,201
+140,369
+2.0
+6,644
+4.73
+Computer,
+telecommunications
+equipment, and
+other electronic
+equipment
+118,588
+1.7
+1,718
+5.77
+0.20
+7,996
+235,873
+20.7
+3,985
+0.28
+Manufacturing
+1,414,408
+20.4
+60,639
+4.29
+1,496,241
+21.6
+51,353
+3.43
+3.4
+Chemical industry
+3.5
+11,796
+4.88
+254,497
+3.7
+8,566
+3.37
+Machinery
+212,649
+3.1
+8,308
+3.91
+241,712
+culture and sanitation
+In 2016, the Bank continued to strengthen legal risk management, by improving the risk prevention and control capacity
+in legal risk management, ensuring the legal and compliant operation, healthy business development and overall business
+stability of the Group. The Bank improved both the vertical linkage and horizontal coordination mechanism between the
+Head Office and branches. By embedding legal risk prevention and control into business negotiations, product design,
+contract signing and other links, the Bank prevented legal risk in advance and made the legal risk prevention and control
+more prospective, initiative and targeted. The Bank further improved the cross-border coordination and management
+for legal work and strengthened the legal risk management of overseas institutions, actively responding to cross-border
+legal issues emerging in the development of international operations. It applied multiple legal means to improve debt
+efficiency. Moreover, the Bank pragmatically strengthened the risk management and control of lawsuit-related risks, thereby
+preventing and mitigating lawsuit-related risks and losses. It assisted with the online judicial inquiry and enforcement, which
+highly improved the efficiency of inquiries and enforcements. The Bank further standardized contract text management
+and reinforced authorization management, related party management, trademark management and intellectual property
+protection.
+ICBC
+Country Risk
+Country risk is the risk incurred to a bank arising from the inability or refusal by the borrower or debtor to repay bank
+debt, losses suffered by the Bank or its commercial presence in such country or region and other losses due to economic,
+political and social changes and events in a country or a region. Country risk may be triggered by deterioration of economic
+conditions, political and social turmoil, asset nationalization or expropriation, government's refusal to pay external debt,
+foreign exchange control or currency depreciation in a country or a region.
+The Bank strictly observes the Guidelines on the Management of Country Risk by Banking Financial Institutions and other
+regulatory requirements of CBRC. The Board of Directors assumes the ultimate responsibility for the effectiveness of country
+risk management. The Senior Management is responsible for executing the country risk management policies approved by
+the Board of Directors. The Risk Management Committee of the Head Office is responsible for reviewing matters regarding
+country risk management. The Bank manages and controls country risk through a series of management tools, including
+country risk assessment and rating, country risk limits for the entire group and continuous statistics, analysis and monitoring
+of country risk exposure, as well as country risk assessment using stress tests. The Bank reviews the country risk rating and
+limits at least once every year.
+In 2016, the Bank strictly abode by regulatory requirements and, with consideration of its business development needs,
+continued to strengthen country risk management. The Bank continuously improved country risk management policies, and
+optimized the management process, closely observed changes in country risk exposures, constantly tracked, monitored and
+reported country risk, and timely updated and adjusted the country risk rating and limits. It further strengthened forward-
+looking early warning mechanism for country risk, proactively conducted stress testing on country risk and effectively
+controlled country risk while pushing ahead with the internationalization strategy.
+64
+ICBC
+CAPITAL MANAGEMENT
+In 2016, the Bank continued to strengthen reputational risk management, proactively prevented reputational risk and
+enhanced the reputational risk management level and prevention ability across the Bank. According to the latest regulatory
+requirements, changes in external situation and the Bank's management practices, the Bank amended the measures
+for reputational risk management, improved the reputational risk management working mechanism, and launched the
+reputational risk management system. The Bank also carried out the identification, evaluation, monitoring, control,
+mitigation and assessment of reputational risk in an in-depth manner and strengthened the consolidated management of
+reputational risk. It conducted reputational risk assessment on new businesses and products, and investigated all potential
+reputational risk. It organized stress tests and emergency response drill on reputational risk and reinforced the prevention
+control and mitigation of reputational risk. It made active response to concerns from society and effectively communicated
+with the stakeholders and the public. During the reporting period, the Bank's reputational risk was controllable with no
+material reputational risk event occurred.
+Discussion and Analysis
+In 2016, the Bank reformed and improved capital management by further streamlining the capital management system
+and mechanism. It strove to promote the optimization of bank-wide capital utilization, intensified the rigid constraint of
+economic capital on risk-weighted assets across the Bank and continued to elevate the capital use efficiency and return on
+capital. The Bank attached importance to the supplementation of endogenous capital and further consolidated the bank-
+wide capital base to reinforce its capacity in supporting the real economy development. Moreover, the Bank coordinated,
+allocated and utilized various capital resources to satisfy capital supplement requirements of subsidiaries. In 2016, all capital
+indicators performed well, of which capital adequacy ratio was kept at a sound level, fully showing its good reputation of
+strong capital base and prudent and sustainable operation.
+Capital Adequacy Ratio and Leverage Ratio
+The Bank calculated its capital adequacy ratios in accordance with the Capital Regulation. According to the scope of
+implementing the advanced capital management approaches as approved by CBRC, the foundation internal ratings-based
+(IRB) approach was adopted for corporate credit risk, the IRB approach for retail credit risk, the internal model approach
+(IMA) for market risk, and the standardized approach for operational risk meeting regulatory requirements. The weighted
+approach was adopted for credit risk uncovered by the IRB approach and the standardized approach for market risk
+uncovered by the IMA approach.
+RESULTS OF CAPITAL ADEQUACY RATIO CALCULATION OF THE GROUP AND PARENT COMPANY
+In RMB millions, except for percentages
+At 31 December 2015
+Item
+Group
+The Bank implements a group-based capital management mechanism, and takes capital as the object and an instrument
+for its management activities, including planning, measurement, allocation, application and operation. The Bank's capital
+management aims at maintaining appropriate capital adequacy ratio and continuously meeting capital supervisory
+regulations and policies; ceaselessly consolidating and enhancing the bank-wide capital base and supporting business
+growth and implementation of strategic planning; establishing a value management system focusing on economic capital,
+reinforcing capital constraint and incentive mechanism and improving capital allocation efficiency; innovating and expanding
+capital replenishment channels, raising capital quality and optimizing capital structure. The Bank's capital management
+covers various operating entities in the Group, and its contents include capital adequacy ratio management, economic capital
+management, capital investment and financing management.
+At 31 December 2016
+As the highest decision-making body of the Bank's reputational risk management, the Board of Directors is responsible for
+formulating strategies and policies concerning reputational risk management that are in line with the strategic objective of
+the Bank. The Senior Management is responsible for implementing such strategies and policies established by the Board
+of Directors and leading reputational risk management of the Bank. The Bank has established a special reputational risk
+management team to take charge of the daily management of reputational risk.
+Reputational risk is defined as the risk of negative assessment or comments on a commercial bank from stakeholders as a
+result of its operation, management and other behaviors or external events. Reputational risk may arise in any part of the
+Bank's operation and management, and usually co-exists and correlates with credit risk, market risk, operational risk and
+liquidity risk.
+Operational risk is defined as the risk of loss resulting from insufficient or problematic internal processes, employees and
+IT systems or from external events, including legal risk, but excluding strategic and reputational risk. There are seven major
+types of operational risks faced by the Bank, including internal fraud, external fraud, employment system and workplace
+safety, customers, products and business activities, damage to physical assets, IT system, execution and delivery and process
+management. Among these, external fraud, execution and delivery and process management constitute major sources of
+operational risk losses of the Bank.
+Annual Report 2016
+61
+Discussion and Analysis
+The Bank strictly followed the requirements of the Guidance to the Operational Risk Management of Commercial Banks
+issued by CBRC. The Bank adopted the operational risk control mode of "integrated management, classified control". The
+Board of Directors assumes relevant responsibility for the effectiveness of the operational risk management according to the
+Articles of Association, and the Senior Management is responsible for implementing the strategy, overall policy and system
+for operational risk management approved by the Board of Directors. The Operational Risk Management Committee under
+the Senior Management, as the organizer and coordinator of operational risk management of the Bank, is responsible for
+reviewing and approving significant matters related to operational risk management according to the Working Regulations
+for the Operational Risk Management Committee. Marketing and product departments at all levels form the first line of
+defense of operational risk management, which assume direct responsibility for operational risk management in each
+business line. Internal control and compliance departments at various levels are comprehensive management departments for
+operational risk in institutions at various levels and assume the duty of operating the second line of defense of operational
+risk management, which are responsible for the overall management of operational risks of institutions at various levels
+and for the arrangement and organization for the establishment and implementation of operational risk management
+system at each level; discipline enforcement, security, human resources, IT, finance and accounting, legal affairs, operation
+management, credit management and risk management departments at all levels are classification control departments
+for operational risk in institutions at various levels, which are responsible for management and control on specific types
+of operational risk. These departments, together with comprehensive management departments, form the second line
+of defense of operational risk management. The internal audit departments at all levels are responsible for auditing and
+evaluating the operation of the operational risk management system, and form the third line of defense.
+In 2016, in accordance with latest regulatory requirements for banks concerning operational risk and the trends of
+operational risk, the Bank effectively conducted the refined and scientific management of operational risk, and further
+enhanced the operational risk management of the Group. The Bank rolled out the special risk governance campaign
+regarding ten key areas and links orderly starting from institution, process, system, mechanism, and employee management.
+It strengthened the IT risk control and external fraud risk management, launched the Group's anti-fraud platform to
+have full-process control covering ex-ante warning, in-process intervention and post-event monitoring, and enhanced
+the capability to withstand external risk. The Bank also took the initiative to focus on and effectively reveal business risk,
+strengthening risk control in credit, bills, interbank business and other areas. Annual case-based risk investigation was
+carried out to improve the case prevention mechanism. The Bank improved the regulations on managing the use of labor
+and abnormal employee behaviors, and optimized the management procedure for business outsourcing. It upgraded the
+operational risk loss event management system, and continued to enhance the application of operational risk management
+instruments and control over data quality. It applied the operational risk limit management, monitored key operational
+risk indicators, and completed the self-assessment of operational risk and control. In addition, the Bank strengthened the
+management and control over operational risk of overseas institutions and subsidiaries, and pushed forward the function
+extension and application of the operational risk measurement system. During the reporting period, the operational risk
+management system of the Bank operated smoothly and the operational risk was controllable on the whole.
+Legal Risk
+Reputational risk management of the Bank refers to the process and method for ensuring the achievement of the overall
+objective of reputational risk management based on the objective and planning for reputational risk management, including
+the establishment and improvement of the reputational risk management system through the identification, assessment,
+monitoring and handling of reputational risk factors and reputational events. The Bank adheres to the prevention oriented
+principle and incorporates reputational risk management into each aspect of operational management of the Bank and
+every customer service process, with a view to controlling and mitigating reputational risk at its source and minimizing the
+possibility of occurrence of and influence from reputational events.
+Legal risk is the risk of incurring legal sanctions, regulatory penalties, financial losses, reputational losses or other negative
+consequences that arises out of or in connection with the failure of the Bank to comply with relevant laws, regulations,
+administrative rules, regulatory provisions and requirements of other relevant rules during the Bank's operation; the
+unfavorable legal defects that exist in products, services or information provided to clients, transactions engaged in, and
+contracts, agreements or other documents executed by the Bank; legal disputes (litigation or arbitration proceedings)
+between the Bank and its clients, counterparties and stakeholders; important changes in relevant laws and regulations,
+administrative rules, regulatory provisions and other relevant rules; and other relevant legal events that occur internally and
+externally.
+ICBC
+Discussion and Analysis
+Adhering to the anti-money laundering management model of "centralized, specialized and systematic management", the
+Bank constantly pushed forward anti-money laundering processing to be more intensive and professional. It deepened the
+construction of an Anti-money Laundering Center at the Head Office level, adjusted the anti-money laundering management
+organization structure and enhanced the allocation of anti-money laundering resources. Special attention was given to
+strengthening the anti-money laundering management of overseas institutions, optimizing their anti-money laundering
+information system, and simultaneously enriching the reserves of anti-money laundering personnel in overseas institutions,
+hence comprehensively enhancing the IT application, specialization and delicacy management of the Group's anti-money
+laundering work. The Bank focused on conducting customer identification and due diligence, and continued to improve
+the quality and efficiency of suspicious transaction reporting. It stepped up efforts in assessing money-laundering risk of
+products and customers, strengthened money laundering risk prevention and control concerning key business areas. Taking
+the opportunity of the tenth anniversary of the implementation of the Anti-Money Laundering Law of the People's Republic
+of China, the Bank launched extensive anti-money laundering publicity, strengthened the cultivation and qualification
+certification of anti-money laundering talents, and improved the compliance awareness, professional competence and
+performance capability of anti-money laundering personnel. The Bank was ranked top in the 2016 comprehensive evaluation
+of anti-money laundering conducted by PBC.
+Annual Report 2016
+63
+Discussion and Analysis
+Reputational Risk
+62
+Parent
+Company
+Group
+Parent
+Company
+Tier 1 capital adequacy ratio
+13.42%
+13.49%
+13.48%
+13.53%
+Capital adequacy ratio
+14.61%
+12.88%
+14.67%
+15.32%
+Calculated in accordance with the Regulation Governing Capital Adequacy of Commercial Banks and related
+regulations:
+Core capital adequacy ratio
+11.71%
+11.96%
+11.83%
+15.22%
+12.87%
+12.90%
+12.87%
+Calculated in accordance with the Capital Regulation:
+Net core tier 1 capital
+1,874,976
+1,723,839
+1,701,495
+1,571,403
+Net tier 1 capital
+1,954,770
+1,803,214
+1,781,062
+1,650,778
+Net capital base
+2,127,462
+1,960,840
+2,012,103
+1,869,237
+Core tier 1 capital adequacy ratio
+Operational Risk Management
+12.09%
+Operational Risk
+1,800,519
+exchange items, net
+Total foreign exchange exposure, net
+(177,415)
+166,889
+(25,535)
+(36,322)
+(5,593)
+24,019
+Exposure of off-balance sheet foreign
+153,434
+Liquidity Risk
+Liquidity risk is the risk that the Bank is unable to raise funds on a timely basis or at a reasonable cost to settle liabilities
+as they fall due, perform other payment obligations and satisfy other funding demands of normal business development.
+Liquidity risk may arise from the following events or factors: withdrawal of customers' deposits, drawing of loans by
+customers, overdue payment of debtors, mismatch between assets and liabilities, difficulties in assets realization, operating
+losses, derivatives trading risk and risk associated with its affiliates.
+Liquidity Risk Management
+In 2016, the Bank constantly improved its liquidity risk management system following changes in the macroeconomic
+environment and financial regulatory requirements, and upgraded liquidity risk management mechanism, thus effectively
+enhancing the liquidity risk management quality of the Group. The Bank continued to implement steady and prudent
+liquidity management, kept a close eye on impact arising from internal and external factors on the Bank's liquidity, and
+better and timely arranged the Group's consolidated management strategy in line with liquidity risk characteristics of items
+on and off balance sheet, in both domestic and overseas institutions, and in local and foreign currencies. The Bank furthered
+the overall management of the Group's assets and liabilities, highlighting market liberalization, and optimized the limit
+management plan of overseas institutions. It strengthened the management of overseas debt capital market instruments
+and improved financing capacity. The Bank actively implemented relevant regulatory requirements concerning the degree of
+dependence on the Group's debts and strengthened the management of fund transactions within the Group.
+Liquidity Risk Management System and Governance Structure
+The Bank's liquidity risk management system conforms to the overall development strategy and the entire risk management
+system of the Bank, and is commensurate with the business scale, business nature, complexity and other aspects of
+the Bank. The system includes the following fundamental elements: effective governance structure for liquidity risk
+management; sound strategy, policy and procedures for liquidity risk management; effective identification, measurement,
+monitoring and control procedures for liquidity risk and a complete management information system.
+In respect of liquidity risk management, the Bank's governance structure embodies the decision-making system comprising
+the Board of Directors and its special committees as well as the Asset and Liability Management Committee and the Risk
+Management Committee of the Head Office; the supervision system comprising the Board of Supervisors, the Internal Audit
+Bureau and the Internal Control and Compliance Department; and the execution system comprising the Asset and Liability
+Management Department, leading management departments of on and off-balance sheet businesses, the Information
+Technology Department, operation management departments of the Head Office and relevant departments of branches.
+Each of these systems performs corresponding decision making, supervision and execution functions according to division of
+responsibilities.
+23,629
+Annual Report 2016
+29,222
+49,554
+Anti-Money Laundering
+In strict compliance with applicable laws and regulations concerning anti-money laundering, the Bank sincerely implemented
+the "risk-based" regulatory requirements in respect of anti-money laundering, steadily fulfilled the legal obligations and
+social duties concerning anti-money laundering, and kept enhancing the Group's management level regarding anti-money
+laundering and anti-terrorist financing.
+FOREIGN EXCHANGE EXPOSURE
+Discussion and Analysis
+In RMB (USD) millions
+At 31 December 2016
+At 31 December 2015
+189,756
+USD
+RMB
+equivalent
+RMB
+USD
+equivalent
+Exposure of on-balance sheet foreign
+exchange items, net
+344,304
+Item
+59
+Discussion and Analysis
+Objective, Strategy and Important Policy of Liquidity Risk Management
+Less than
+1 month
+1 to 3 3 months to
+months
+1 year
+At 31 December 2016 (10,391,326)
+At 31 December 2015
+(9,385,821)
+43,004
+322,595
+(490,413)
+demand
+(378,127)
+Over 5
+(540,886)
+26,247
+3,197,027
+years
+6,499,529
+5,136,733
+Undated
+3,334,636
+3,044,624
+Total
+1,981,163
+1 to 5
+years
+3,363,860
+on
+Overdue/
+repayable
+In RMB millions
+Objective of liquidity risk management: By establishing and improving the liquidity risk management system, the Bank aims
+at realizing complete identification, accurate measurement, continuous monitoring and effective control of the liquidity
+risk at the Group level, the Bank, the branches and the business lines, and ensuring the liquidity demand is satisfied at a
+reasonable cost in time under the normal business scenario and the stress scenario.
+Formulated taking into account the liquidity risk appetite, the liquidity risk management strategy, policy and procedure cover
+all businesses on and off the balance sheet, all domestic and overseas business departments and branches that are likely to
+deliver a material impact on the liquidity risk, and contain the liquidity risk management under normal and stress scenarios.
+The liquidity risk management strategy specifies the overall objective and management mode of liquidity risk management
+and lists major policies and procedures for liquidity risk management. Important policies for liquidity risk management are
+formulated in accordance with external and macro operating environments and business development of the Bank, with a
+view to striking an effective balance among security, liquidity and profitability.
+Liquidity Risk Management Mode
+The mode of liquidity risk management of the Bank is consolidated liquidity risk management based on management
+of liquidity risk at the bank level. The Head Office manages the liquidity risk of the Bank in a unified and centralized
+manner and ensures liquidity security of the Bank through dynamic adjustment of the aggregate and structure of assets
+and liabilities, whereas the affiliates assume primary responsibilities concerning liquidity risk management of respective
+institution, and undertake corresponding responsibilities as required by the leading liquidity risk management departments
+of the Head Office.
+◆ Stress Test
+Following the prudence principle, the Bank employs the scenario analysis and the sensitivity analysis to perform stress test on
+liquidity risk. The Bank has taken full consideration of various macroscopic and microscopic factors that may influence the
+Bank's liquidity status to set stress scenarios against those products, businesses and institutions with concentrated liquidity
+risk in line with the characteristics and complexity of the Bank's businesses. The Bank performs stress tests on a quarterly
+basis. Where necessary, the Bank may carry out temporary and special stress tests at a particular time in light of changes in
+the external operating environment and regulatory requirements.
+Liquidity Risk Analysis
+In 2016, the Bank paid close attention to changes in the macroeconomic and monetary policy, dynamically adjusted its
+RMB fund operation strategy in accordance with the Bank's assets and liabilities development and fund management
+characteristics in different periods, and took various measures to ensure a safe and stable liquidity level. The Bank further
+consolidated the deposit business, optimized deposit structure, and promoted the steady and balanced growth of each
+type of deposits, which effectively enhanced the stability of liabilities. It also intensified the efforts in treasury business
+term structure management, taking funds liquidity, security and profitability into consideration. In addition, the Bank
+strengthened the development of its liquidity risk management mechanism and managed liquidity on and off balance sheet
+and of domestic and overseas institutions in a coordinated way, which further raised funds operation and liquidity risk
+prevention and control capability of the Group.
+In respect of foreign currencies, the Bank closely observed the changes in external markets and funds, adjusted foreign
+currency liquidity management strategy and internal and external fund prices in a flexible manner and maintained the
+coordinated development of foreign currency assets and liabilities business while ensuring a safe liquidity level.
+The deposit and loan businesses of the Bank maintained coordinating development, and liquidity risk management ability
+was further strengthened. As at the end of 2016, RMB liquidity ratio and foreign currency liquidity ratio of the Bank were
+35.7% and 82.3%, respectively, meeting the regulatory requirements. Loan-to-deposit ratio was 70.9%. Please refer to
+"Discussion and Analysis - Other Information Disclosed Pursuant to Regulatory Requirements" for details.
+_
+60
+ICBC
+Discussion and Analysis
+Liquidity coverage ratio at the end of each month in the fourth quarter of 2016 attained an average of 139.75%, 6.61
+percentage points higher than the previous quarter. This was because high-quality liquid assets (HQLA) maintained rapid
+growth, medium-term and short-term asset reserves were moderately increased and fund inflow due less than one month
+also climbed up. HQLA cover cash, available central bank reserve under stress and primary and secondary bond assets
+that can be included in the liquidity coverage ratio under the regulatory requirements. For the quantitative information
+for liquidity coverage ratio based on the Administrative Measures for Liquidity Coverage Ratio of Commercial Banks
+promulgated by CBRC, please refer to "Unaudited Supplementary Financial Information".
+The Bank also assessed the liquidity risk status by using liquidity exposure analysis. As at the end of 2016, the positive
+liquidity exposure for the less than 1 month category decreased, which was mainly due to the decrease of due from and
+placements with banks and other financial institutions and the increase of due to and placements from banks and other
+financial institutions with corresponding term. The liquidity exposure for the 3 months to 1 year category turned from
+positive to negative, mainly due to the decrease in investments in bonds with corresponding term, and loans and advances
+to customers as well as the increase in customer deposits. The positive liquidity exposure for the 1 to 5 years and over 5
+years categories edged, which was mainly due to increase in investments in bonds with corresponding term and loans and
+advances to customers. Deposits maintained steady growth with a high deposition rate, and at the same time the Bank
+made major investment in central bank bills, treasury bonds and other high-liquidity assets, and possessed sufficient liquidity
+reserves. Therefore, the overall liquidity of the Bank maintained at a safe level.
+LIQUIDITY EXPOSURE ANALYSIS
+Note: Please refer to "Note 54. (b) to the Financial Statements: Liquidity Risk".
+Capital adequacy ratio
+Please refer to "Note 54. (c)(iii) to the Financial Statements: Currency Risk" for the exchange rate sensitivity analysis.
+14.26%
+Refers to risk-weighted assets after capital floor and adjustments.
+66
+ICBC
+Discussion and Analysis
+Please refer to the 2016 Capital Adequacy Ratio Report of Industrial and Commercial Bank of China Limited issued by the
+Bank for further information on capital measurement.
+At the end of 2016, the leverage ratio which was calculated according to the Administrative Measures for Leverage Ratio of
+Commercial Banks (Revised) promulgated by CBRC in 2015 was 7.55%, a slight increase of 0.07 percentage point from the
+end of the previous year, meeting the regulatory requirement.
+LEVERAGE RATIO
+(2)
+Item
+31 December
+2016
+1,954,770
+In RMB millions, except for percentages
+At
+At
+At
+At
+At
+Notes: (1) Please refer to "Note 54.(d) to the Financial Statements: Capital management".
+14.61%
+Based on the objective to ensure legal and compliant operation, the Bank always attaches great importance to establishing
+a sound legal risk management system, forming a full-process legal risk prevention and control mechanism to support
+and secure business innovation and market competition, and to prevent and eliminate various potential or practical legal
+risks. The Board of Directors is responsible for reviewing and determining the strategy and policy relating to legal risk
+management, and assumes the ultimate responsibility of legal risk management. The Senior Management is responsible for
+executing the strategy and policy relating to legal risk management, examining and approving relevant important affairs. The
+Legal Affairs Department of the Head Office is in charge of legal risk management across the Group, with relevant business
+departments providing related support and assistance on legal risk prevention and control. The affiliates, domestic and
+overseas branches undertakes the responsibility of legal risk management of their respective institutions.
+5,600
+13,600
+Net capital base
+2,127,462
+2,012,103
+Risk-weighted assets (2)
+15.22%
+14,564,617
+Core tier 1 capital adequacy ratio
+12.87%
+12.87%
+Tier 1 capital adequacy ratio
+Capital adequacy ratio
+13.42%
+13.48%
+13,216,687
+30 September
+30 June
+2016
+The Bank proactively carried out external capital replenishment and constantly promoted the issuance of new capital
+instruments on the basis of achieving capital replenishment by retained profits. The Board of Directors of the Bank convened
+a meeting in March 2016 to review and approve the proposal on the new issuance of write-down eligible tier 2 capital
+instruments up to RMB88.0 billion equivalent by the end of 2017. The same resolution was proposed and passed in the
+Shareholders' General Meeting in June 2016. Please refer to the announcements published by the Bank on the websites of
+SEHK and SSE.
+For details on relevant fundraising activities, please refer to "Details of Changes in Share Capital and Shareholding of
+Substantial Shareholders - Details of Securities Issuance and Listing".
+_
+Allocation and Management of Economic Capital
+Economic capital management of the Bank includes three major aspects: measurement, allocation and application. Economic
+capital indicators include Economic Capital (EC), Risk-Adjusted Return on Capital (RAROC) and Economic Value-added
+(EVA). All of the above are applied in credit resource allocation, quota management, performance assessment, expenditure
+allocation, product pricing and customer management, etc.
+In 2016, the Bank further improved its economic capital management in terms of measurement, allocation and assessment,
+intensified the capital constraint mechanism, and strictly implemented the measures for quota management to enhance the
+capital management efficiency and vigorously pushed forward operational management and business front-line application
+of economic capital. The Bank constantly carried out the optimization of economic capital, collated and analyzed the
+high occupation of capital, inefficient utilization of capital and waste of capital in all products, prepared the schemes for
+optimization and enhancement, promoted and explored the capital-intensive development mode. The Bank further improved
+its economic capital measurement policy and optimized its economic capital measurement standards and system. Moreover,
+the Bank upgraded the economic capital measurement and appraisal policy of credit business and proactively facilitated the
+adjustment of its credit structure.
+Annual Report 2016
+Note: Please refer to "Unaudited Supplementary Financial Information" for details on disclosed leverage ratio information.
+67
+OUTLOOK
+In 2017, global economy will maintain the overall trend of downturn, weakness, differentiation and turbulence. China's
+economy will improve steadily at a slower pace. Driven by economic restructuring and upgrading as well as replacement of
+old drivers of growth with new ones, the quality and efficiency of economic development is expected to improve steadily.
+The Bank will embrace the following opportunities. First, the supply-side structural reform will stimulate the endogenous
+driving force for China's economic growth, unleash market vitality and innovative power, and play a stronger role in
+boosting economic development, thus creating a healthier, more efficient and more sustainable operating environment
+for the banking sector. Second, the new urbanization, made in China 2025, consumption upgrade, "Internet plus" and
+other major strategic projects will be deployed and implemented in an all-around manner, which will generate a huge
+demand for financial services in different areas such as people's livelihood, new energy, new technology, Internet of things,
+energy saving and environmental protection, culture and tourism, hence providing certain room for banks' credit layout
+and business transformation. Third, the implementation of the government's cross-regional systematic projects including
+the "Belt and Road" initiative, coordinated development of Beijing-Tianjin-Hebei region and Yangtze River Economic
+Zone will produce a large number of high-quality investment opportunities, and create sizable demands for cross-regional
+interconnected financial services, which will provide favorable business development opportunities for the banking sector.
+Fourth, the new wave of technological revolution in the economic and financial fields has offered an opportunity for banks
+to build online business channels, innovate the internet-based financial services and establish new business relationships with
+customers, thus the consequent individualization and diversification of customer demand will bring enormous potentials for
+financial innovation.
+The Bank will also face the following major challenges: First, potential financial risks will increase, with frequent occurrence
+and intertwined evolution of primary, imported and cross-cutting risks, thus further testing banks' capabilities in risk
+prevention and control and quality management. Second, the tightening capital constraints will not only impose pressure
+on business development cost of banks, but also put forward higher requirements for building a capital intensive business
+model. Third, the reform of interest rate liberalization will enter into a deepening period with the establishment of a market-
+oriented interest rate formation and control mechanism, narrowing banks' interest spread. In response, banks must further
+promote the optimization and adjustment of business structure, and speed up the construction of a new profit growth
+pattern with a variety of supporting points and different sources of driving forces. Fourth, the development of FinTech will
+change the traditional competitive landscape of banks, and promote banks to optimize operational quality and pattern and
+rebuild their service models.
+2017 is a critical year for China's implementation of the "13th Five-Year Plan" and the final year of the Bank's fourth
+Three-Year Plan. The Bank will, based on the changes in external environment, adhere to strategic heritage, transformation
+and innovation, and focus on stabilization of quality, adjustment of structure and pursuit of innovation, to ensure that
+enhancement of quality and efficiency can be achieved in a sustainable manner.
++ Focus on the origin of real economy and enhance the quality and level of financial services. In connection
+with the "13th Five-Year Plan", the Bank will actively support the implementation of major national strategies such as
+the "four regions" and the "three supporting belts" and key construction projects, and enhance the cooperation with
+green industries, strategic emerging industries, modern service industry and the internet sector, with the optimization
+of asset allocation structure; by focusing on major arrangements including the five tasks of "cutting overcapacity,
+destocking, deleveraging, reducing costs and identifying growth areas" and the mixed ownership reform. The Bank
+will rely on the cross-market and integrated operating platforms to provide enterprises with more flexible and diverse
+financial service options. Besides, it will exert the advantages in global integrated services and the linkage function at
+home and aboard, serve the "Going Global" drive of enterprises by closely following the construction of "Belt and
+Road" initiative, and expand the cooperation on international production capacity and equipment manufacturing.
+68
+14.29%
+Discussion and Analysis
+7.48%
+7.54%
+23,813,992
+2016
+31 March
+2016
+31 December
+2015
+1,919,729
+1,847,634
+1,854,320
+1,781,062
+Net tier 1 capital
+Balance of adjusted on- and
+off-balance sheet assets
+25,904,533
+25,357,448
+Leverage ratio
+7.55%
+7.57%
+25,309,554
+7.30%
+24,599,374
+by financial institutions that are not subject to consolidation
+Significant minority investments in tier 2 capital instruments issued
+Capital Financing Management
+5,600
+1,713,160
+356,407
+356,407
+151,998
+151,963
+205,021
+178,040
+1,886,536
+251,349
+940,237
+781,853
+3,164
+4,340
+(21,640)
+(5,799)
+11,560
+246,356
+In RMB millions, except for percentages
+At 31 December
+2015
+2016
+Core tier 1 capital deductions
+14.75%
+13,600
+14.67%
+Annual Report 2016
+65
+Discussion and Analysis
+As at the end of 2016, the core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio
+calculated by the Bank in accordance with the Capital Regulation stood at 12.87%, 13.42% and 14.61%, respectively,
+complying with regulatory requirements.
+CAPITAL ADEQUACY RATIO
+At 31 December
+Item
+Paid-in capital
+Valid portion of capital reserve
+Surplus reserve
+General reserve
+Retained profits
+Valid portion of minority interests
+Others
+11,665
+Goodwill
+Core tier 1 capital
+8,478
+192
+Net tier 1 capital
+1,954,770
+1,781,062
+Tier 2 capital
+178,292
+244,641
+Valid portion of tier 2 capital instruments and related premium
+154,861
+180,242
+19,195
+63,398
+Valid portion of minority interests
+4,236
+Tier 2 capital deductions
+9,001
+1,001
+419
+Valid portion of minority interests
+Surplus provision for loan impairment
+79,567
+1,356
+79,375
+Cash flow hedge reserves that relate to the hedging of items
+that are not fair valued on the balance sheet
+(3,869)
+Investments in core tier 1 capital instruments issued by financial
+institutions that are under control but not subject to consolidation
+Other intangible assets other than land use rights
+5,700
+(4,618)
+5,700
+79,794
+79,375
+Additional tier 1 capital instruments and related premium
+Additional tier 1 capital
+1,477
+1,874,976
+Net core tier 1 capital
+1,701,495
+73
+Number of beneficiaries
+Including: Number of registered poor people
+Awards
+Including poverty relief village infrastructure construction
+and conducting planting & breeding and poor households
+aiding programs
+"Annual Poverty Alleviation Award" of the 11th People
+Enterprise Social Responsibility of people.com.cn
+Note: The "targeted poverty relief" refers to the poverty alleviation efforts in Tongjiang County, Nanjiang County, Jinyang County
+and Wanyuan City in Sichuan Province.
+2,626.75
+Subsequent targeted poverty relief plan
+In terms of credit support, the Bank will further increase credit resources for poverty relief and prioritize the financing
+need for poverty reduction through the loan program management. In terms of financing policies, the Bank will
+balance the commercial needs against the social needs and focus on meeting the financing demand of the registered
+poor households, and enterprises or key projects which could assist with or serve the registered poor households. In
+terms of product innovation, the Bank will support local institutions to innovate financing products based on local
+conditions so as to meet the specific need of poverty reduction finance. In terms of service channel, the Bank will
+optimize outlet layout in poor areas, increase the number of self-service facilities, promote system interconnection
+with financial institutions in those areas, and extend financial service networks and payment and settlement services to
+them.
+For more details on the Bank's social responsibilities, please refer to the ICBC Corporate Social Responsibility Report 2016
+(Environment, Society and Governance) published on its official website.
+Annual Report 2016
+253,036
+34,752
+I. Shares subject to
+Changes in Ordinary Shares
+DETAILS OF CHANGES IN SHARE CAPITAL
+At 31 December 2015
+Number of shares
+Percentage
+(%)
+restrictions on sales
+II.
+Shares not subject to
+356,406,257,089
+100.00
+4,975
+RMB-denominated
+restrictions on sales
+1.
+Details of Changes in Share Capital and Shareholding of
+Substantial Shareholders
+23,217
+Poverty relief through healthcare
+570.50
+◆ Poverty relief through education. The Bank enhanced local education levels and the self-development
+capability of local people by means of charitable donations, rewards to teachers, financial assistance to students and
+paired-up assistance.
+◆ Poverty relief through healthcare. The Bank improved the medical services for local people and public
+hygence and reduced the cases of local residents falling below the poverty line or returning to poverty due to illnesses,
+by offering free medical assistance and providing medical and health facilities.
+269,612,212,539
+ICBC
+Social Responsibility
+Targeted Poverty Relief Achievements
+Finance-backed targeted poverty relief
+Balance of loans
+Including: Loan of industry targeted poverty relief
+Loan of project targeted poverty relief
+Including: Rural transport facilities
+Upgrading of rural power network
+Rural water conservancy facilities
+Rural education loan
+Amount of targeted poverty relief input
+Poverty relief through industry development
+160.00
+Poverty relief through education
+Including: Number of registered poor people
+The Group poverty relief donations apart from targeted poverty relief
+Amount of donations
+Projects
+In RMB10,000
+9,300,978.68
+1,601,312.28
+6,099,917.36
+3,689,888.85
+162,007.38
+529,256.83
+148,003.00
+2,000.00
+1,269.50
+Number of beneficiaries of targeted poverty relief
+75.65
+Shareholding
+percentage
+(%)
+2. Foreign shares listed
+Nature of
+shareholder
+Class of
+shares
+Number of
+decrease of
+shares during
+Total number of
+Huijin
+State-owned A share
+34.71
+shares held
+123,717,852,951
+pledged or
+locked-up shares
+the reporting
+period
+None
+MOF
+State-owned A share
+34.60
+123,316,451,864
+None
+HKSCC Nominees Limited/
+Hong Kong Securities
+Clearing Company Limited (3)
+H share
+24.14
+Foreign legal
+person
+86,051,725,196
+Unknown
+-7,832,417
+A share
+0.13
+◆ Poverty relief through green industries. By supporting local governments and the public to explore ways
+of developing green and cyclic economy, the Bank led to the development of characteristic industries including green
+planting and breeding, forestry, traditional handicraft industry and village tourism, and combined ecological protection
+with increasing the income of local people.
+464,460,581
+Name of shareholder
+Increase/
+Unit: Share
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 ORDINARY SHAREHOLDERS OF THE BANK (The following data are
+based on the register of shareholders as at 31 December 2016)
+86,794,044,550
+24.35
+overseas
+III. Total number of shares
+356,406,257,089
+100.00
+Increase/decrease
+during the
+reporting period
+Unit: Share
+At 31 December 2016
+Number of shares
+Percentage
+(%)
+356,406,257,089
+100.00
+269,612,212,539
+ordinary shares
+75.65
+24.35
+356,406,257,089
+100.00
+Note: "Foreign shares listed overseas", namely H shares, are within the same meaning as defined in the "No. 5 Standards on the Content
+and Format of Information Disclosure of Companies with Public Offerings Content and Format of the Report of Change in
+Corporate Shareholding" (Revision 2007) of CSRC.
+Details of Securities Issuance and Listing
+The Bank did not conduct any rights issue or issue any convertible bonds during the reporting period.
+For details on the issuance of preference shares of the Bank, please refer to "Details of Changes in Share Capital and
+Shareholding of Substantial Shareholders- -Particulars of Preference Shares".
+For information on other securities issued by the Bank and its subsidiaries, please refer to "Note 38. to the Financial
+Statements: Debt Securities Issued; Note 41. To the Financial Statements: Other Equity Instruments" for details.
+The Bank did not have any employee shares.
+Number of Shareholders and Particulars of Shareholding
+As at the end of the reporting period, the Bank had a total number of 573,596 ordinary shareholders and no holders of
+preference shares with voting rights restored, including 133,081 holders of H shares and 440,515 holders of A shares. As
+at the end of the month immediate before the release day of the Annual Report (28 February 2017), the Bank had a total
+number of 553,187 ordinary shareholders and no holders of preference shares with voting rights restored.
+74
+ICBC
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+86,794,044,550
+◆ Poverty relief through finance. The Bank supported local enterprises and infrastructure construction through
+credit funds, concessional loans, and agriculture-oriented credit products, and by improving the payment service and
+the credit system. It also developed inclusive finance and improved financial services to precisely meet the diverse
+financing needs of poor areas.
+17.2
+◆ Poverty relief planning and objective. The Bank will increase credit support to poor areas, carry out
+targeted poverty alleviation programs to integrate resources at poor areas, and assist the poor in improving production
+and living conditions by means of education, healthcare, industry and disaster relief, supporting them to achieve
+poverty reduction goals on time.
+Percentage of loans to single largest
+customer (%)
+Percentage of loans to top 10
+customers (%)
+Loan migration ratio (%)
+Pass
+Special mention
+Substandard
+Doubtful
+<=10.0
+4.5
+4.2
+4.8
+13.3
+13.3
+14.9
+3.4
+4.4
+2.7
+23.5
+29.6
+36.8
+38.9
+37.4
+7.4
+10.5
+5.2
+Notes: (1) The regulatory indicators in the table are calculated in accordance with related regulatory requirements, definitions and
+accounting standards applicable to the current period. The comparative figures are not adjusted and restated.
+(2)
+CBRC adjusted the loan-to-deposit ratio from a regulatory indicator to a monitoring indicator in 2015.
+(3) Please refer to the section headed "Discussion and Analysis ― Risk Management" for liquidity coverage ratio indicator
+information.
+68.4
+Reconciliation of Differences between the Financial Statements Prepared under PRC
+GAAP and those under IFRSS
+71.4
+currency
+None
+Discussion and Analysis
++
+Enhance risk prevention and mitigation capability and consolidate the development foundation. The
+Bank will improve its risk monitoring and early warning system by relying on the big data technology, speed up the
+reduction of overdue and at-risk loans based on strict quality control for newly granted loans, intensify the collection
+and disposal of non-performing loans, and strengthen the risk control for agency investment, bond underwriting
+and bond investment, to reduce credit risk and prevent loan quality from deteriorating. It will also coordinate the
+management of operational risk, liquidity risk, cross-sector and cross-market risk and overseas compliance risk, to
+prevent cross-infection and superimposed resonance of various risks. In addition, the Bank will always keep a close
+eye on case prevention by fortifying the rectification in key areas and processes, strengthening internal control and
+building firm lines of defense.
+Accelerate innovation and reform and build new advantages in competitive development. The Bank will
+actively promote a series of reforms such as the strategies of mega retail, mega asset management, big data and
+information technology as well as credit system, enhancement of competitiveness of key city branches and adjustment
+of personnel structure, and build a business operation system that will be conducive to the elevation of development
+quality and efficiency, improvement of resource allocation efficiency and stimulation of innovative vitality. With a focus
+on the integration of finance and technology, the Bank will deepen the development of internet-based finance and
+keep strengthening the Bank's three major platforms (i.e. ICBC Mall, ICBC Mobile and ICBC Link) and three product
+lines (i.e. internet payment, financing and investment & wealth management) to consolidate the Bank's leading
+position among its peers in the sector of internet-based finance. Besides, it will actively promote the application of
+FinTech in the business management, develop highly-integrated and customer-oriented information systems, and
+build a new service marketing model which integrates online and offline channels to push forward the business model
+reform and service upgrading on all fronts.
+Annual Report 2016
+69
+Discussion and Analysis
+OTHER INFORMATION DISCLOSED PURSUANT TO
+REGULATORY REQUIREMENTS
+Major Regulatory Indicators
+Regulatory
+Item
+criteria
+2016
+2015
+2014
+Liquidity ratio (%)
+RMB
+>=25.0
+35.7
+35.5
+33.2
+Foreign currency
+>=25.0
+82.3
+98.1
+91.1
+Loan-to-deposit ratio (%) (2)
+RMB and foreign
+70.9
+In respect of the financial statements of the Bank prepared under PRC GAAP and those under IFRSS, net profit attributable to
+equity holders of the parent company for the year ended 31 December 2016 and equity attributable to equity holders of the
+parent company as at the end of the reporting period have no differences.
+Corporate Bonds
+The Bank did not issue any corporate bonds that were offered at the stock exchanges.
+159,550
+188,566
+1,489,643
+1,222,353
+1,577,428
+1,260,948
+70
+ICBC
+Social Responsibility
+Taking the social responsibility objective of "Excellence for You Excellent services to clients, Maximum returns to
+shareholders, Real success for our people, Great contribution to society", the Bank is committed to serving the common
+interests of various stakeholders in economic and social development and promoting sustainable economic development and
+social progress. Thanks to these efforts, the Bank won wide recognition from various social sectors and such awards as the
+"Best Social Responsibility Financial Institution Award", the "Annual Poverty Alleviation Award", and "The 1st place in the
+List of Chinese State-owned Listed Companies on Corporate Social Responsibilities" and the "Most Responsible Enterprise".
+Serving the Real Economy, Becoming Value Creator
+To meet the diversified needs for financial services amid the supply-side structural reform and the shift of impetus for
+economic growth, the Bank channeled credit to where it was needed, strictly controlled asset quality, accelerated financial
+innovation and improved service efficiency. It supported the development of the real economy, pushed ahead with industry
+restructuring and facilitated a more balanced regional structure. It stepped up efforts to support small and micro enterprises
+and agriculture, rural areas and farmers, contributed to improving people's livelihood, and endeavored to realize inclusive
+finance.
+Making Contributions to the Society, Building up a Brand Bank
+The Bank accelerated to promote the building of a "bank of customer satisfaction", innovated in services. It focused
+on improvements in the customer experience regarding onsite service, multi-channel service and the meeting of service
+demands to comprehensively lift service quality and innovate the forms and contents of financial services. It actively
+implemented the "Belt and Road" initiative, refined the strategic layout of overseas business, and sharpened its ability and
+competitiveness in delivering global financial services.
+Being Environment-friendly, Building up a Green Bank
+The Bank stayed committed to green finance. Upholding the principle of controllable risk and business sustainability, it
+proactively promoted green, recycling and low-carbon development, made green finance a key topic of B20 summit and
+promoted green finance development. Besides, it continued to launch new products and services on internet banking,
+mobile banking and telephone banking at a faster pace and advance information-based construction to innovate emission
+reduction and beautify the homeland environment with concrete acts.
+Building up an Honorable Bank with Internal and External Safeguard
+Through educating the public about financial knowledge, managing the pricing of services, and protecting customers'
+rights, the Bank actively built a long-standing and stable mechanism for consumer protection. It complied with laws and
+regulations, enhanced self-discipline in the Bank, proactively participated in the building and refinement of a society of
+integrity and punishment against dishonesty. The Bank increased public's awareness of AML-related crimes, and practically
+safeguarded financial security.
+Annual Report 2016
+71
+Social Responsibility
+Managing with Love, Building a Harmonious Bank
+Committed to a "People-oriented" concept, the Bank strove to protect employee's legitimate rights and interests, improved
+career development paths for employees. It called on a committed performance culture with employees highly involved,
+deeply explored the building of "ICBC University", facilitated the common growth of employees and the Bank, and
+promoted the integration of diversified cultures. Besides, the Bank valued employee's health and safety. It offered health
+checks to employees on a regular basis, organized various recreational and sport activities, and promoted healthy lifestyles.
+Advocating Public Undertakings, Building a Charitable Brand
+The Bank strikes the balance between economic benefits and social benefits. In addition to creating value for shareholders,
+customers and employees, the Bank made continuous efforts to create a corporate culture that attaches great importance to
+public welfare and develop ICBC into a brand known for its humanitarian efforts. It led its staff to participate in charitable
+activities tailored to local needs, and take actions and perform social duties across the world.
+72
+Targeted Poverty Relief
+The Bank continues to be dedicated to poverty relief and has improved its working mechanism and supporting
+policies. Based on the principle of business sustainability, it has fully utilized its characteristic advantages as a
+commercial bank, and actively performed its social responsibilities of a large state-owned bank.
+Targeted Poverty Relief Planning
+Cross-jurisdictional liabilities
+Cross-jurisdictional claims
+Level 3 assets
+475,562
+Global Systemically Importance Assessment Indicators of Commercial Banks
+In RMB millions
+2015
+23,813,992
+Indicator
+2016
+Balance of adjusted on- and off-balance sheet assets
+25,904,533
+Intra-financial system assets
+1,602,223
+1,453,661
+Intra-financial system liabilities
+2,131,194
+2,368,335
+◆ Mechanism for poverty relief. The Bank established a working group for poverty relief headed by Chairman
+Yi Huiman with several bank officials as deputy heads and 14 business departments as members. The group is
+responsible for coordinating and improving poverty alleviation work mechanism. The Bank also stipulated guideline
+documents for poverty alleviation, such as the Opinion on Comprehensively Advancing Finance-backed Poverty
+Alleviation Work and the Targeted Poverty Alleviation Work Plan of ICBC, to urge the efforts in this respect.
+Summary of targeted poverty relief in 2016
+Securities and other financing instruments issued
+2,338,163
+Payments settled via payment systems or correspondent banks
+Assets under custody
+374,432,043
+345,214,765
+14,061,641
+11,507,109
+Underwritten transactions in debt and equity markets
+1,649,713
+1,192,434
+Notional amount of over-the-counter (OTC) derivatives
+4,970,872
+4,049,645
+Trading and available-for-sale securities
+442,830
+2,719,376
+156,136,404
+005L-CT001 Hu Other entities A share
+State-owned
+legal person
+Percentage of A
+shares (%)
+118,006,174,032
+Long
+position
+43.77
+Huijin (2)
+Beneficial owner
+124,731,774,651
+Long
+position
+46.26
+Percentage of
+total ordinary
+shares (%)
+33.11
+Nature of
+interests
+35.00
+HOLDERS OF H SHARES
+Number of
+Name of substantial
+shareholder
+Temasek Holdings
+(Private) Limited
+Capacity
+H shares held
+(share)
+Nature of
+interests
+Percentage of
+H shares (%)
+Percentage of
+total ordinary
+shares (%)
+Interest of
+Notes: (1) According to the register of shareholders of the Bank as at 31 December 2016, MOF held 123,316,451,864 shares in the Bank.
+(2) According to the register of shareholders of the Bank as at 31 December 2016, Huijin held 123,717,852,951 shares in the Bank,
+while Central Huijin Asset Management Co., Ltd., a subsidiary of Huijin, held 1,013,921,700 shares in the Bank.
+Number of A
+shares held
+(share)
+Capacity
+Beneficial owner
+MOF(1)
+100.00
+17
+Jiantou CITIC Asset Management Co., Ltd.
+70.00
+18
+Guotai Junan Investment Management Co., Ltd.
+14.54
+Notes: (1) A represents A share listed company, while H represents H share listed company.
+(2)
+On 4 November 2016, Huijin and CICC entered into a share transfer agreement. According to the agreement, CICC would carry
+out a rights issue to Huijin in order to purchase all the shares of China Investment Securities. As at the end of 2016, relevant
+procedures were being handled. After the completion of the above-mentioned transaction, Huijin will hold a 58.58% stake
+directly in CICC and China Investment Securities will be wholly owned by CICC.
+(3) China Securities exercised an over-allotment option on 30 December 2016 and the share transfer was wrapped up on 5 January
+2017. Afterwards, the direct holding of Huijin in China Securities was changed to 32.93%.
+(4) Except the above-mentioned controlling or equity participating enterprises, Huijin also has a wholly-owned subsidiary - Central
+Huijin Asset Management Co., Ltd. Central Huijin Asset Management Co., Ltd. was incorporated in November 2015 in Beijing.
+With a registered capital of RMB5 billion, the company runs an asset management business.
+The second single largest shareholder of the Bank is MOF, which held approximately 34.60% shares of the Bank as at 31
+December 2016. MOF is a department under the State Council, and is responsible for overseeing the State's fiscal revenue
+and expenditure, formulating the financial and taxation policies, and supervising State finance at a macro level.
+76
+ICBC
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+◆ Particulars of Other Corporate Shareholders Holding 10% Shares or More (Excluding HKSCC Nominees
+Limited)
+None.
+◆ Particulars of the De Facto Controller
+None.
+Interests and Short Positions Held by Substantial Shareholders and Other Persons
+Substantial Shareholders and Persons Having Notifiable Interests or Short Positions
+Pursuant to Divisions 2 and 3 of Part XV of the Securities and Futures Ordinance of Hong
+Kong
+As at 31 December 2016, the Bank received notices from the following persons about their interests or short positions held
+in the Bank's shares and underlying shares, which were recorded in the register pursuant to Section 336 of the Securities
+and Futures Ordinance of Hong Kong as follows:
+Interests or short positions of ordinary shares of the Bank:
+HOLDERS OF A SHARES
+Name of substantial
+shareholder
+8,682,954,081
+National Council for
+Social Security Fund
+BlackRock, Inc.
+controlled
+corporations
+Beneficial owner
+Long
+position
+6%
+USD2,940,000,000
+USD20
+147,000,000
+EUR preference
+shares
+4604
+6%
+EUR600,000,000
+EUR15
+40,000,000
+RMB preference
+shares
+84602
+6%
+RMB12,000,000,000
+RMB100
+120,000,000
+The Bank privately issued 450 million preference shares in domestic market on 18 November 2015 upon the approval by
+CBRC pursuant to Yin Jian Fu [2015] No. 189 and by CSRC pursuant to Zheng Jian Xu Ke [2015] No. 1023. Each domestic
+preference share had a nominal value of RMB100 and was issued at nominal value. The coupon rate, as determined by
+benchmark rate plus a fixed spread, shall remain unchanged for the first 5 years commencing from the issuance date.
+Subsequently, the benchmark rate shall be readjusted once every 5 years during which the coupon rate shall remain
+unchanged. The coupon rate for the Domestic Preference Shares is determined at 4.50% through price discovery. Upon
+approval by SSE pursuant to Shang Zheng Han [2015] No. 2391, the domestic preference shares were listed on the
+integrated trading platform of SSE for transfer as of 11 December 2015 (stock name: ICBC Preference Share 1, stock code:
+360011). Total proceeds from the issuance amounted to RMB45.0 billion, net proceeds from the issuance amounted to
+around RMB44.95 billion. All proceeds after deduction of the expenses relating to the issuance will be used to replenish
+additional tier 1 capital.
+For particulars of the Bank's issue of domestic and offshore preference shares, please refer to the announcements of the
+Bank on the websites of SSE, SEHK and the Bank.
+Changes in Preference Shares
+As at the end of the reporting period, the Bank had 28 preference shareholders (or proxies), including two offshore
+preference shareholders (or proxies) and 26 domestic preference shareholders. As at the end of the month immediate before
+the release day of the Annual Report (28 February 2017), the Bank had 28 preference shareholders (or proxies), including
+two offshore preference shareholders (or proxies) and 26 domestic preference shareholders.
+78
+ICBC
+China Securities Finance Co., Ltd.
+4603
+China Investment Securities Co., Ltd.
+shares
+Number of
+issued shares
+10.00
+2.44
+8,663,703,234
+Long
+position
+9.98
+2.43
+Interest of
+controlled
+5,152,636,652
+Long
+position
+5.94
+corporations
+Annual Report 2016
+77
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+Preference Shares
+◆ Issuance and Listing of Preference Shares in Latest Three Years
+Upon approval by CBRC pursuant to Yin Jian Fu [2014] No. 801 and by CSRC pursuant to Zheng Jian Xu Ke [2014] No.
+1229, the Bank privately offered non-cumulative, non-participating and perpetual offshore preference shares in U.S. dollar,
+Euro and Renminbi on 10 December 2014 (please see the table below for details). The offshore preference shares issued by
+the Bank were listed on SEHK on 11 December 2014. Each offshore preference share had a nominal value of RMB100. The
+USD offshore preference shares, EUR offshore preference shares and RMB offshore preference shares were fully paid and
+issued in U.S. dollar, Euro and Renminbi. The offshore preference shares had no maturity. They had no less than six qualified
+placees. They were offered to professional investors only rather than retail investors and transferred privately in the OTC
+market only.
+In accordance with the reference price of RMB exchange rate on 10 December 2014 published by the China Foreign
+Exchange Trade System, total proceeds from the issuance of offshore preference shares amounted to approximately
+RMB34.55 billion. After deduction of commissions and offering expenses, net proceeds from the issuance amounted to
+around RMB34.43 billion. All proceeds, after deduction of the expenses relating to the issuance will be used to replenish
+additional tier 1 capital and increase capital adequacy ratio.
+Type of offshore
+preference share
+Dividend
+Full amount of
+proceeds per
+Stock code
+rate
+Total amount
+share
+USD preference
+16
+1.45
+China Securities Co., Ltd. (H)
+390,487,231
+None
+China Life Insurance Company
+Limited
+Traditional
+- Ordinary insurance
+products
+0.09
+317,038,927
+None
+100
+0.11
+Guotai Junan
+State-owned
+Co., Ltd.
+legal person
+A share
+0.07
+247,694,769
+None
+-2,091,100
+Notes: (1)
+Particulars of shareholding of H shareholders were based on the number of shares set out in the Bank's register of shareholders
+maintained at the H share registrar.
+(2)
+Investment Management
+Other entities A share
+- Conservative investment
+portfolio
+Anbang Life Insurance Co., Ltd.
+A share
+33.29
+1.28
+4,562,235,995
+None
+187,975,909
+Ping An Life Insurance Company
+of China, Ltd. Traditional
+-Ordinary insurance products Other entities A share
+Sycamore Investment Platform
+1.21
+4,322,828,137
+None
+State-owned
+Co., Ltd.
+legal person
+A share
+0.40
+1,420,781,042
+None
+Central Huijin Asset Management State-owned
+Co., Ltd. (4)
+legal person
+A share
+1,013,921,700
+None
+The Bank had no shares subject to restrictions on sales.
+(3) HKSCC Nominees Limited held 86,051,725,196 H shares and Hong Kong Securities Clearing Company Limited held 464,460,581
+A shares.
+0.28
+Particulars of Substantial Shareholders
+7
+China Everbright Bank Company Limited (A; H)
+21.96
+8
+China Export & Credit Insurance Corporation
+73.63
+9
+China Reinsurance (Group) Corporation (H)
+71.56
+10
+New China Life Insurance Company Limited (A; H)
+11
+China Jianyin Investment Limited
+100.00
+12
+China Galaxy Financial Holdings Company Limited
+78.57
+13
+Shenwan Hongyuan Group Co., Ltd. (A)
+25.03
+14
+China International Capital Corporation Limited (H)
+(4) Central Huijin Asset Management Co., Ltd. is a wholly-owned subsidiary of Huijin. Save as disclosed above, the Bank is not aware
+of any connected relations or concert party action among the afore-mentioned shareholders.
+28.45
+15
+55.67
+China Everbright Group Ltd.
+31.34
+57.11
+75
+6
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+◆ Controlling shareholders
+The largest single shareholder of the Bank is Huijin, whose full name is Central Huijin Investment Ltd. Huijin is a state-owned
+company founded by the State according to the Company Law on 16 December 2003. Its registered capital is equal to its
+paid-in capital at RMB828,209 million. Its registered address is New Poly Plaza, 1 Chaoyangmen North Street, Dongcheng
+District, Beijing, its unified social credit code is 911000007109329615, and its legal representative is Ding Xuedong. Huijin
+is a wholly-owned subsidiary of China Investment Corporation. It, in accordance with authorization by the State Council,
+makes equity investments in major state-owned financial enterprises, and shall, to the extent of its capital contribution,
+exercise the rights and perform the obligations as an investor on behalf of the State in accordance with applicable laws, to
+achieve the goal of preserving and enhancing the value of state-owned financial assets. Huijin does not engage in any other
+business activities, and does not intervene in the day-to-day business operations of the key state-owned financial institutions
+it controls.
+As at 31 December 2016, Huijin held approximately 34.71% shares of the Bank. It held shares directly in the institutions
+listed below:
+No.
+2
+Company name
+China Development Bank Corporation
+Industrial and Commercial Bank of China Limited (A; H)
+During the reporting period, the Bank's controlling shareholders and de facto controller remained unchanged.
+1
+34.68
+China Construction Bank Corporation (A; H)
+5
+Huijin's shareholding
+percentage (%)
+64.02
+Bank of China Limited (A; H)
+4
+Annual Report 2016
+Agricultural Bank of China Limited (A; H)
+3
+40.03
+34.71
+Yang Siu Shun
+Independent Non-executive Director
+Male
+61
+April 2016-April 2019
+Sheila Colleen Bair
+Independent Non-executive Director
+Female
+March 2017–March 2020
+Male
+Hui Ping
+Huang Li
+Qu Qiang
+Shareholder Supervisor
+54
+62
+Zhang Wei
+Hong Yongmiao
+70
+Independent Non-executive Director
+Or Ching Fai
+June 2016-June 2019
+March 2015-March 2018
+Male
+67
+April 2015-April 2018
+May 2012-June 2018
+Male
+52
+August 2012-December 2018
+Anthony Francis Neoh
+Independent Non-executive Director
+Male
+Independent Non-executive Director
+Employee Supervisor
+Male
+56
+July 2015-
+Hu Hao
+Li Yunze
+Tan Jiong
+Senior Executive Vice President
+54
+51
+November 2015-
+Male
+46
+October 2016-
+57
+Senior Executive Vice President
+Male
+Senior Executive Vice President
+Male
+Male
+Wang Lin
+September 2015-September 2018
+Employee Supervisor
+Male
+52
+June 2016-June 2019
+External Supervisor
+Secretary of Party Discipline Committee
+Male
+December 2015-December 2018
+Shen Bingxi
+External Supervisor
+Male
+64
+June 2016-June 2019
+50
+Male
+Annual Report 2016
+Cheng Fengchao
+Basic Information on Directors, Supervisors and Senior Management
+Name
+Position
+Gender
+Age
+Tenure
+Directors, Supervisors, Senior Management, Employees and
+Institutions
+Yi Huiman
+Male
+52 July 2013-June 2019
+Gu Shu
+Vice Chairman, Executive Director,
+President
+Male
+49
+Chairman of the Board of Directors,
+Executive Director
+December 2016-December 2019
+81
+_
+50
+2,025
+4.5%
+Offshore preference shares
+6.0%
+2,425
+According to the Accounting Standard for Business Enterprises No. 22 Recognition and Measurement of Financial
+Instruments, the Accounting Standard for Business Enterprises No. 37 Presentation of Financial Instruments and the
+Rules for Distinguishing Financial Liabilities and Equity Instruments and Relevant Accounting Treatment (Cai Kuai [2014]
+No. 13) promulgated by MOF as well as the International Accounting Standard 39 - Financial Instruments: Recognition
+and Measurement and the International Accounting Standard 32 - Financial Instruments: Presentation promulgated
+by International Accounting Standards Board and other accounting standards and main issuance clauses of the Bank's
+preference shares, issued and existing preference shares of the Bank excluded contractual obligations of cash on delivery
+or other financial assets and contractual obligations of settlement by delivering variable equity instruments, and shall be
+calculated as other equity instruments.
+6.0%
+◆ Redemption or Conversion of Preference Shares
+During the reporting period, the Bank did not redeem or convert any preference share.
+◆ Restoration of Voting Rights of Preference Shares
+During the reporting period, the Bank did not restore any voting right of preference share.
+◆ Accounting Policy Adopted for Preference Shares and Rationale
+-
+2,331
+Non-executive Director
+Qian Wenhui
+Male
+Ge Rongrong
+Non-executive Director
+Female
+48
+January 2012-January 2018
+Zheng Fuqing
+Fei Zhoulin
+January 2012-January 2018
+Non-executive Director
+53
+February 2015-February 2018
+Non-executive Director
+Male
+58
+March 2015-March 2018
+Male
+Chairman of the Board of Supervisors
+52
+Non-executive Director
+54
+June 2015-June 2018
+Zhang Hongli
+Wang Jingdong
+Executive Director,
+Male
+51
+Female
+June 2015-June 2018
+Executive Director,
+Male
+54
+December 2016–December 2019
+Senior Executive Vice President
+Wang Xiaoya
+Senior Executive Vice President
+January 2017-
+Tan Jiong, Senior Executive Vice President
+Chief Risk Officer
+88
+launched by the Ministry of Education, an honorary professor of the School of Economics and Management at University of
+Chinese Academy of Sciences and a senior editor in economics for the Journal of Management Science and Engineering, an
+English magazine published by the National Natural Science Foundation of China. He is also an editorial board member of
+Economic Research Journal of the Chinese Academy of Social Sciences and an academic board member of China Economic
+Quarterly published by Peking University. He acts as Independent Non-Executive Director of Xiamen Bank Co., Ltd. as well.
+Mr. Hong graduated from Xiamen University with a Bachelor of Science degree and a Master's degree in Economics, and
+obtained his Doctorate degree in Economics from the University of California San Diego.
+Directors, Supervisors, Senior Management, Employees and Institutions
+85
+Annual Report 2016
+Mr. Hong has served as Independent Non-executive Director of Industrial and Commercial Bank of China Limited since
+August 2012. Mr. Hong was previously in charge of the National Science Fund for Distinguished Overseas Young Scholars
+supported by the National Natural Science Foundation of China, and acted as President of the Chinese Economists Society
+in North America. He is currently an academician of the Academy of Sciences for the Developing World and a professor
+of Economics and International Studies at Cornell University in the United States. He has been enrolled as one of the first
+participants of the "Thousand Talents Plan" and serves as Vice Chairman of the Steering Committee of Economics Teaching
+at Institutions of Higher Learning under the Ministry of Education and Director of the Wang Yanan Institute for Studies
+in Economics and the School of Economics at Xiamen University. He is a lecture professor of the "Changjiang Scholars"
+Hong Yongmiao, Independent Non-executive Director
+Mr. Or has served as Independent Non-executive Director of Industrial and Commercial Bank of China Limited since May
+2012. Mr. Or previously served as General Manager and Director of The Hongkong and Shanghai Banking Corporation
+Limited, Chairman of HSBC Insurance Limited, Chief Executive and Vice Chairman of Hang Seng Bank Limited, Chairman
+of Hang Seng Insurance Company Limited and Hang Seng Bank (China) Limited, Director of Cathay Pacific Airways Limited,
+and Director of Hutchison Whampoa Limited. He was Chairman of the Hong Kong Association of Banks, Vice President and
+a Council Member of the Hong Kong Institute of Bankers, Chairman of the Financial Services Advisory Committee and a
+member of the Services Promotion Program Committee of the Hong Kong Trade Development Council, a member of the
+Risk Management Committee of the Hong Kong Exchanges and Clearing Limited, a member of the Aviation Development
+Advisory Committee, Chairman of Executive and Campaign Committee of the Community Chest of Hong Kong, Acting
+Chairman of the Council of City University of Hong Kong, a Council Member of The University of Hong Kong, and an
+Adviser of the Employers' Federation of Hong Kong. Mr. Or currently acts as Chairman, CEO and Executive Director of China
+Strategic Holdings Limited, Chairman and Independent Non-executive Director of Esprit Holdings Limited, Vice Chairman
+and Independent Non-executive Director of G-Resources Group Limited, Vice Chairman and Non-executive Director of Aquis
+Entertainment Limited, Independent Non-executive Director of Chow Tai Fook Jewellery Group Limited, Television Broadcasts
+Limited and Regina Miracle International Ltd., and Vice Patron of the Board of the Community Chest of Hong Kong. Mr.
+Or graduated from The University of Hong Kong with a Bachelor's degree in Economics and Psychology. He is an Honorary
+Doctorate of Social Science of City University of Hong Kong. Mr. Or was awarded a Silver Bauhinia Star from the Hong Kong
+Special Administrative Region and Honorary University Fellowships from The University of Hong Kong in 2009. He is a Justice
+of the Peace.
+Or Ching Fai, Independent Non-executive Director
+Mr. Cheng has served as Non-executive Director of Industrial and Commercial Bank of China Limited since March 2015.
+He joined Huijin in 2009, and served as Deputy Director of Finance Bureau of Pingquan County in Hebei Province, Deputy
+Director of Finance Office of Hebei Province, Head of Hebei Certified Public Accountants, Vice Chairman and Secretary
+of Hebei Institute of Certified Public Accountants, Deputy General Manager of Shijiazhuang Office, General Manager of
+Evaluation Management Department, General Manager of Tianjin Office and General Manager of Development Research
+Department of China Great Wall Asset Management Corporation, and Non-executive Director of Agricultural Bank of China
+Limited. Currently, he acts as guest professor of Peking University HSBC Business School, tutor to PhD students of Hunan
+University, graduate supervisor for Graduate School of Chinese Academy of Social Sciences, Central University of Finance and
+Economics and Capital University of Economics and Business, and member of the Expert Advisory Committee for Mergers,
+Acquisitions and Restructurings of CSRC. He obtained Doctorate degree in management from Hunan University. Currently,
+he is a researcher in financial science, senior accountant, PRC Certified Public Accountant and China's Certified Public
+Valuer.
+Cheng Fengchao, Non-executive Director
+Mr. Fei has served as Non-executive Director of Industrial and Commercial Bank of China Limited since March 2015. He
+joined MOF in 1995, and served as Deputy Head of General Division and Head of Business Division II of Shaanxi Finance
+Ombudsman Office, Assistant Ombudsman and Vice Ombudsman of Shaanxi Finance Ombudsman Office, and Ombudsman
+of Ningxia Finance Ombudsman Office. Mr. Fei graduated from the Correspondence Institute of the Party School of the
+Central Committee of C.P.C. in economic management.
+Fei Zhoulin, Non-executive Director
+Directors, Supervisors, Senior Management, Employees and Institutions
+ICBC
+84
+Mr. Zheng has served as Non-executive Director of Industrial and Commercial Bank of China Limited since February 2015. He
+joined MOF in 1989, and served as Deputy Head and Head of Shanxi Finance Ombudsman Office, and Assistant Ombudsman
+and Associate Counsel of Shanxi Finance Ombudsman Office. Mr. Zheng graduated from the Party School of the Central
+Committee of C.P.C. majoring in law theory. He is an economist.
+Qian Wenhui, Chairman of the Board of Supervisors
+Mr. Qian has served as Chairman of the Board of Supervisors of Industrial and Commercial Bank of China Limited since
+June 2015. He was appointed as Executive Vice President of Bank of Communications Co., Ltd. (BOCOM) in October 2004
+and became Executive Director and Executive Vice President of BOCOM as of August 2007. During his tenure at China
+Construction Bank, he served as Deputy Head of Shanghai Branch, General Manager of the Asset and Liability Management
+Department and Director of the Restructuring and Reform Office. Besides, Mr. Qian has served in several other positions, e.g.
+Senior Vice President of BOCOM and concurrently Head of BOCOM Shanghai Branch, Chairman of BOCOM Life Insurance
+Company and Chairman of BOCOM Schroder Fund Management Co., Ltd. He graduated from Shanghai University of
+Finance and Economics with an MBA degree. He is a senior economist.
+Annual Report 2016
+83
+Directors, Supervisors, Senior Management, Employees and Institutions
+Zhang Hongli, Executive Director, Senior Executive Vice President
+None of the directors, supervisors and Senior Management members of the Bank, whether they are incumbent or have left
+office during the reporting period, have been punished by the securities regulator in the past three years.
+Mr. Zhang has served as Executive Director of Industrial and Commercial Bank of China Limited since June 2015, and Senior
+Executive Vice President since May 2010. He worked as Financial Manager at the headquarters of Hewlett-Packard, Director
+and Head of the China operations of Schroders PLC, Executive Director of Goldman Sachs Asia and Chief Representative of
+Goldman Sachs (China) LLC Beijing Representative Office, and Head of Deutsche Bank Investment Banking Greater China,
+Vice Chairman of Deutsche Bank Asia and Chairman of Deutsche Bank China, member of the Global Banking Management
+Committee and Head of Asia - Pacific of Deutsche Bank Global Banking and Chairman of Deutsche Bank (China) Co.,
+Ltd. He was concurrently Chairman of ICBC International Holdings Limited and Chairman of Industrial and Commercial
+Bank of China (Brasil) S.A., and once served as Vice Chairman of Standard Bank Group Limited and Chairman of Industrial
+and Commercial Bank of China (USA) NA. Mr. Zhang received a Bachelor's degree from Heilongjiang Bayi Agricultural
+University and a Master's degree in Genetics from the University of Alberta, Canada, as well as a Master's degree in Business
+Administration (MBA) from the Santa Clara University in California, USA, and a Doctorate degree in Management Science
+and Engineering from the Chinese Academy of Social Sciences.
+Mr. Wang has served as Executive Director of Industrial and Commercial Bank of China Limited since December 2016, and
+Senior Executive Vice President since December 2013. He joined China Development Bank in 1994 and served as Deputy
+Head of Heilongjiang Branch, Deputy Director of the Human Resources Department of the Head Office, Head of Project
+Appraisal Department III of the Head Office, Head of Beijing Branch and Head of Human Resources Department of the Head
+Office. Mr. Wang graduated from Huazhong Agricultural University with a Bachelor's degree in Agronomy. He is a senior
+engineer.
+Wang Xiaoya, Non-executive Director
+Ms. Wang has served as Non-executive Director of Industrial and Commercial Bank of China Limited since January 2012.
+She has joined Central Huijin Investment Ltd. since 2012. She joined the Research Bureau of the People's Bank of China
+in 1997 where she served as Deputy Chief of division, Chief of division and Deputy Director and served as Deputy Mayor
+of Tongliao City in Inner Mongolia Autonomous Region at the same time. Ms. Wang was a researcher and a Member of
+the Post Doctoral Academic Committee and a Post-Doctoral Co-mentor at the People's Bank of China Research Institute of
+Finance. Currently, she is a member of the Academic Committee of the China Institute for Rural Studies, Tsinghua University,
+a mentor at the Tsinghua PBC School of Finance and an invited professor at the Graduate School of Chinese Academy of
+Social Sciences. Ms. Wang graduated from the Graduate School of Chinese Academy of Social Sciences and received a
+Doctorate degree in Economics.
+Ge Rongrong, Non-executive Director
+Ms. Ge has served as Non-executive Director of Industrial and Commercial Bank of China Limited since January 2012. She
+has worked at Huijin since 2005 and is now Deputy Officer of Banking Institutions Department I of Huijin. Previously she
+served as Deputy Officer and Officer of CCB Share Management Division of the Banking Department and an Employee
+Supervisor of Huijin. Ms. Ge previously served as Lecturer at the Economics Management College of Beijing University of
+Industry in 1994, and subsequently served as Assistant Researcher at China Eagle Securities Company and staff member
+of the Department of Public Offering and Supervision at China Securities Regulatory Commission. Ms. Ge graduated from
+China University of Technology and received a Doctorate degree in Management. Ms. Ge also received a Bachelor's degree
+in Engineering from Zhejiang University and a Master's degree in Economics from Beijing Normal University. She is a senior
+economist.
+Zheng Fuqing, Non-executive Director
+Wang Jingdong, Executive Director, Senior Executive Vice President
+Ms. Wang Xiaoya, Ms. Ge Rongrong, Mr. Zheng Fuqing, Mr. Fei Zhoulin and Mr. Cheng Fengchao were recommended by
+Huijin to serve as Non-executive Directors of the Bank. Huijin holds interests in shares of the Bank. Please refer to the section
+headed "Details of Changes in Share Capital and Shareholding of Substantial Shareholders Interests and Short Positions
+Held by Substantial Shareholders and Other Persons" for further details.
+Mr. Guan has served as Board Secretary of Industrial and Commercial Bank of China Limited since July 2016. He joined
+ICBC in 1984 and served as Head of Suining Branch in Sichuan, Representative of Frankfurt Representative Office and
+Deputy General Manager of Frankfurt Branch, Deputy Head of Sichuan Branch, Deputy Head of Sichuan Branch and General
+Manager of Banking Department of Sichuan Branch, and Head of Hubei Branch and Sichuan Branch. Previously Mr. Guan
+was also General Manager of Corporate Strategy and Investor Relations Department of Industrial and Commercial Bank of
+China Limited. He graduated from the Southwestern University of Finance and Economics and obtained a Doctorate degree
+in Economics. He is a senior economist.
+Guan Xueqing, Board Secretary
+Mr. Hui has served as Employee Supervisor of Industrial and Commercial Bank of China Limited since September 2015. He
+joined ICBC in 1984 and has served as Deputy Secretary of the Party Discipline Committee and concurrently as Director of
+the Discipline Enforcement Department since 2015. He was Deputy Head and Head of Shaanxi Branch and General Manager
+of the Internal Control and Compliance Department of ICBC. Mr. Hui graduated from Xiamen University and received a
+Doctorate degree in Finance. He is a senior economist.
+Hui Ping, Employee Supervisor
+Mr. Zhang has concurrently served as Shareholder Supervisor and Director of the Board of Supervisors' Office of Industrial
+and Commercial Bank of China Limited since June 2016. He joined ICBC in 1994, and has served as Employee Supervisor
+of the Board of Supervisors, General Manager of the Legal Affairs Department and Chief of Consumer Protection Office of
+ICBC. He graduated from Peking University with a Doctorate degree in Law and is a research fellow.
+Zhang Wei, Shareholder Supervisor
+Directors, Supervisors, Senior Management, Employees and Institutions
+ICBC
+Huang Li, Employee Supervisor
+86
+Sheila Colleen Bair, Independent Non-executive Director
+Mr. Yang has served as Independent Non-executive Director of Industrial and Commercial Bank of China Limited since April
+2016. He previously served as Chairman and Principal Partner of PricewaterhouseCoopers Hong Kong, Executive Chairman
+and Principal Partner of PricewaterhouseCoopers Chinese Mainland and Hong Kong, member of five-people leading group
+of global leadership committee of PricewaterhouseCoopers and Chairman of PricewaterhouseCoopers Asia-Pacific region.
+Mr. Yang currently serves as a member of the 12th National Committee of the Chinese People's Political Consultative
+Conference, a member of the Exchange Fund Advisory Committee of Hong Kong Monetary Authority, a member of the
+board of directors of the Hong Kong Jockey Club, Vice Chairman of the Council of the Open University of Hong Kong,
+director and chairman of Audit Committee of Hang Seng Management College, and an independent non-executive director
+of the Tencent Holdings Limited. Mr. Yang graduated from the London School of Economics and Political Science. He holds
+the qualification of the Association of Chartered Certified Accountants, and is a senior member of the Institute of Chartered
+Accountants in England and Wales, the Hong Kong Institute of Certified Public Accountants and the Chartered Institute of
+Management Accountants.
+Yang Siu Shun, Independent Non-executive Director
+Mr. Neoh has served as Independent Non-executive Director of Industrial and Commercial Bank of China Limited since April
+2015. He previously served as Chief Advisor to CSRC, a member of the International Consultation Committee of CSRC,
+a member of the Basic Law Committee of the Hong Kong Special Administrative Region under the Standing Committee
+of the National People's Congress of People's Republic of China, and Chairman of the Hong Kong Securities and Futures
+Commission. He was Chairman of the Technical Committee of the International Organization of Securities Commissions, a
+Non-executive Director of Global Digital Creations Holdings Limited. He was an Independent Non-executive Director of Link
+Management Limited, which is the Manager of Link Real Estate Investment Trust. He was also an Independent Non-executive
+Director of China Shenhua Energy Company Limited, Bank of China Limited and China Life Insurance Company Limited. Mr.
+Neoh currently serves as an Independent Non-executive Director of CITIC Limited and New China Life Insurance Company
+Limited. He graduated from the University of London with a Bachelor's degree in Law. He is Honorary Doctorate of Law of
+Chinese University of Hong Kong and Open University of Hong Kong and Honorary Doctorate of Social Sciences of Lingnan
+University. He was elected Honorary Fellow of the Hong Kong Securities Institute and Academician of the International Euro-
+Asian Academy of Sciences. Mr. Neoh was appointed as Senior Counsel in Hong Kong. He is a barrister of England and
+Wales. He was admitted to the State Bar of California.
+Anthony Francis Neoh, Independent Non-executive Director
+4.5%
+Ms. Bair has served as Independent Non-executive Director of Industrial and Commercial Bank of China Limited since March
+2017. Previously, she served as the Research Director, Deputy Counsel and Counsel to Robert Dole. She was a Commissioner
+of the Commodity Futures Trading Commission, later served as a senior vice president for government relations at the New
+York Stock Exchange, and then as Assistant Secretary for Financial Institutions at the U.S. Department of the Treasury. She
+was the Dean's Professor of Financial Regulatory Policy at the University of Massachusetts-Amherst, Chair of the Federal
+Deposit Insurance Corporation, Senior Advisor to The Pew Charitable Trusts, and Director of Paros Trust Company. She
+is the current President of Washington College and Chair Emeritus of the Systemic Risk Council. She is a founding board
+member of The Volcker Alliance, a non-profit organization. She is a director of Thomson Reuters Corp., Host Hotels & Resort
+Inc. and Avant Inc. She also serves on the International Advisory Council to China Banking Regulatory Commission and the
+International Advisory Board for Santander. She received a Bachelor's Degree in philosophy from the University of Kansas,
+and a juris doctorate from the University of Kansas School of Law. She holds honorary doctorates from Amherst College,
+Drexel University, the University of Kansas, and the University of Massachusetts.
+Mr. Gu has served as Vice Chairman and Executive Director of Industrial and Commercial Bank of China Limited since
+December 2016, and President since October 2016. He joined ICBC in 1998, where he served as Deputy General Manager
+of Accounting and Settlement Department, Deputy General Manager of the Planning and Finance Department, and General
+Manager of Finance and Accounting Department. Since July 2008, he had served as Board Secretary and General Manager
+of Corporate Strategy and Investor Relations Department, Head of Shandong Branch and Senior Executive Vice President of
+Industrial and Commercial Bank of China Limited. He is now concurrently Vice Chairman of Standard Bank Group Limited,
+Chairman of ICBC (London) PLC and Chairman of Industrial and Commercial Bank of China (Argentina) S.A. Mr. Gu obtained
+a Doctorate degree in Economics from Shanghai University of Finance and Economics, Master's degree in Economics from
+Dongbei University of Finance and Economics and Bachelor's degree in Engineering from Shanghai Jiao Tong University. He is
+a senior accountant.
+Mr. Huang has served as Employee Supervisor of Industrial and Commercial Bank of China Limited since June 2016. He
+joined ICBC in 1994 and is currently the General Manager of Internal Audit Bureau of ICBC. He served as Deputy General
+Manager and General Manager of the Banking Department as well as Deputy Head and Head of Guizhou Branch of ICBC
+from December 1998 to June 2015. Mr. Huang graduated from The University of Hong Kong with an MBA degree. He is a
+senior economist.
+Mr. Qu has served as External Supervisor of Industrial and Commercial Bank of China Limited since December 2015.
+Currently, he is a professor and tutor for PhD students of Renmin University of China, Director of China Fiscal and Financial
+Policy Research Center (a key research center of humanities and social sciences of the Ministry of Education), Deputy Director
+of Financial and Securities Institute of Renmin University of China, a council member of China Finance Society, a member of
+China Finance 40 Forum and External Expert of China Development Bank. He was Head of the Applied Finance Department
+of the School of Finance, Renmin University of China. Currently, he is also External Supervisor of Bank of Beijing. Mr. Qu
+graduated from Renmin University of China, and received a Doctorate degree in Economics.
+Mr. Wang has served as Chief Risk Officer of Industrial and Commercial Bank of China Limited since July 2016. He began
+his career in 1986. He joined ICBC in 1991 and previously served as Assistant to Head of Zhejiang Branch and Head of
+Shaoxing Branch, Deputy Head of Zhejiang Branch and General Manager of the Banking Department of Zhejiang Branch,
+and Deputy Head (person in charge) and Head of Chongqing Branch. Mr. Wang graduated from the Party School of the
+Central Committee of C.P.C. and obtained a Master's degree in Economics. He is a senior economist.
+Wang Bairong, Chief Risk Officer
+Mr. Tan has served as Senior Executive Vice President of Industrial and Commercial Bank of China Limited since January
+2017. He joined Bank of China (BOC) in June 1988. He previously served as Deputy General Manager (person in charge) and
+General Manager of Tibet Branch, and General Manager of Yunnan Branch of BOC, Chairman of Bank of China Investment
+Management Co., Ltd. and General Manager of Guangdong Branch of BOC. Mr. Tan graduated from Wuhan University and
+obtained a Doctorate degree in Economics. He is a senior economist.
+Mr. Li has served as Senior Executive Vice President of Industrial and Commercial Bank of China Limited since October
+2016. He joined China Construction Bank in 1993 and held several positions including Deputy General Manager of Tianjin
+Branch, Deputy General Manager of Planning and Finance Department and General Manager of Strategic Planning &
+Equity Investment Department of the Head Office, and General Manager of Chongqing Branch. Mr. Li graduated from
+Tianjin University. He obtained a Master's degree in Executive Business Administration from Peking University. He is a senior
+economist.
+Li Yunze, Senior Executive Vice President
+Mr. Hu has served as Senior Executive Vice President of Industrial and Commercial Bank of China Limited since November
+2015. Mr. Hu joined ICBC in 1984, serving successively as Deputy General Manager of the Industrial and Commercial
+Credit Department, Deputy General Manager of the Credit Management Department, General Manager of the Institutional
+Banking Department, General Manager of the International Banking Department, President of Chinese Mercantile Bank and
+Chairman of Industrial and Commercial Bank of China Luxembourg S.A. Besides, he once served as Deputy Director-General
+of Construction and Administration Bureau of South-to-North Water Diversion Middle Route Project, a Director of Taiping
+General Insurance Company Limited, Taiping Life Insurance Co., Ltd. and Xiamen International Bank, General Manager of
+Corporate Strategy and Investor Relations Department and Board Secretary of Industrial and Commercial Bank of China
+Limited. Mr. Hu graduated from Hunan University, and received a Doctorate degree in Economics from the Graduate School
+of the Chinese Academy of Social Sciences. He is a senior economist.
+Qu Qiang, External Supervisor
+Hu Hao, Senior Executive Vice President
+87
+Annual Report 2016
+Mr. Wang has served as Secretary of Party Discipline Committee of Industrial and Commercial Bank of China Limited since
+July 2015. He began his career in 1987. Prior to joining ICBC, he once served as Director of Fund Supervision Department
+and Director of Securities and Fund Institution Supervision Department of CSRC. Mr. Wang graduated from Tsinghua
+University, and received a Doctorate degree in Management.
+Wang Lin, Secretary of Party Discipline Committee
+Mr. Shen has served as External Supervisor of Industrial and Commercial Bank of China Limited since June 2016. He
+previously served as the Vice Chief of the Financial Market Division of the Financial System Reform Department, Chief of
+the System Reform Division of the Policy Study Office, and Chief of the Monetary Policy Research Division of the Research
+Bureau of the PBC, Chief Representative of the PBC Representative Office in Tokyo, Deputy Director-general and Director-
+level Inspector of Financial Market Department of the PBC, and Non-executive Director of Agricultural Bank of China. Mr.
+Shen is currently guest professor of Tsinghua University and Zhejiang University. Mr. Shen graduated from Renmin University
+of China, and received a Doctorate degree in Economics. He is a research fellow.
+Shen Bingxi, External Supervisor
+Directors, Supervisors, Senior Management, Employees and Institutions
+Gu Shu, Vice Chairman, Executive Director, President
+Mr. Yi has served as Chairman of the Board of Directors and Executive Director of Industrial and Commercial Bank of China
+Limited since June 2016. He joined ICBC in 1985, and had previously served in several positions including Deputy Head of
+ICBC Zhejiang Branch, and Head of ICBC Jiangsu Branch and ICBC Beijing Branch. Mr. Yi has served as a member of Senior
+Management, Senior Executive Vice President, President, Vice Chairman and Executive Director of Industrial and Commercial
+Bank of China Limited since October 2005. He obtained a Master's degree in Executive Business Administration from
+Guanghua School of Management of Peking University.
+Yi Huiman, Chairman, Executive Director
+56
+June 2015-July 2016
+Senior Executive Vice President
+Fu Zhongjun
+Non-executive Director
+Male
+Male
+59
+Malcolm Christopher
+Independent Non-executive Director
+Male
+72
+December 2009-October 2016
+McCarthy
+December 2013-January 2017
+Kenneth Patrick Chung
+Executive Director,
+Executive Director
+Male
+54
+July 2016-
+Guan Xueqing
+Board Secretary
+Male
+Wang Xiquan
+53
+Directors, Supervisors and Senior Management Leaving Office
+Jiang Jianqing
+Chairman of the Board of Directors,
+Male
+63
+October 2005-May 2016
+July 2016-
+Wang Bairong
+Independent Non-executive Director
+59
+May 2009-June 2016
+61
+August 2006-July 2016
+82
+ICBC
+Directors, Supervisors, Senior Management, Employees and Institutions
+64
+Notes: (1) Please refer to the section headed "Directors, Supervisors, Senior Management, Employees and Institutions - Appointment and
+Removal".
+(3)
+Mr. Hu Hao ceased to act as Board Secretary of the Bank concurrently from July 2016; Mr. Zhang Wei ceased to act as Employee
+Supervisor of the Bank from June 2016.
+(4) According to the Articles of Association, before the newly elected directors take office, the current directors shall continue to act
+as directors.
+(5) According to the regulations of CSRC, the day of first appointment of a re-elected director shall be the commencement date of
+his/her tenure as indicated in the above table.
+(6) During the reporting period, the Bank did not implement any share incentives. None of the existing directors of the Bank or those
+who left office during the reporting period, except Mr. Zhang Hongli who held 2,000 H shares of the Bank, held shares or share
+options or were granted restricted shares of the Bank, and there was no change during the reporting period.
+Biographies of Directors, Supervisors and Senior Management
+(2) The current terms of Mr. Yi Huiman, Mr. Gu Shu, Mr. Zhang Hongli and Mr. Wang Jingdong as Executive Directors of the Bank
+are set out in the above table and their terms as Senior Management members of the Bank are specified in the section headed
+"Directors, Supervisors, Senior Management, Employees and Institutions Biographies of Directors, Supervisors and Senior
+Management". Mr. Yi Huiman has served as Chairman of the Board of Directors of the Bank since June 2016.
+Male
+Female
+Male
+Wei Guoxiong
+ICBC
+December 2009-March 2017
+Yi Xiqun
+Independent Non-executive Director
+Male
+69
+Chief Risk Officer
+December 2013-April 2016
+Shareholder Supervisor
+Female
+61
+October 2005-June 2016
+Dong Juan
+External Supervisor
+Wang Chixi
+Domestic preference shares
+preference shares
+30,000,000
+None
+China Life Insurance
+Company Limited
+State-owned legal
+Domestic
+person
+preference shares
+35,000,000
+7.8
+None
+Ping An Life Insurance
+Domestic non-state-
+Domestic
+Company of China, Ltd.
+11.1
+owned legal person
+6.7
+None
+CCB Trust Co., Ltd.
+State-owned legal
+Domestic
+person
+preference shares
+15,000,000
+3.3
+None
+BOCOM Schroders Asset
+Management Co., Ltd.
+China Resources
+Domestic non-state-
+Domestic
+preference shares
+50,000,000
+Domestic
+preference shares
+Other entities
+79
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 DOMESTIC PREFERENCE SHAREHOLDERS OF THE BANK (The
+following data are based on the register of domestic preference shareholders as at 31 December 2016)
+Unit: Share
+Name of shareholder
+Nature of
+shareholder
+Increase/
+decrease
+during the
+reporting
+Number
+of shares
+Number of
+Shares held
+Shareholding
+subject to
+pledged or
+Class of shares
+period
+at the end of
+the period
+percentage
+restrictions
+(%)
+on sales
+locked-up
+shares
+China Mobile Communications
+Corporation
+Other entities
+Domestic
+preference shares
+200,000,000
+44.4
+None
+China National Tobacco
+Corporation
+owned legal person
+(4) "Shareholding percentage" refers to the percentage of offshore preference shares held by preference shareholders in total
+number of offshore preference shares.
+15,000,000
+None
+10,000,000
+2.2
+None
+Notes: (1) Particulars of shareholding of preference shareholders were based on the number of shares set out in the Bank's register of
+preference shareholders maintained.
+(2) China National Tobacco Corporation Shandong Branch and China National Tobacco Corporation Heilongjiang Branch are both
+wholly-owned subsidiaries of China National Tobacco Corporation. Save as disclosed above, the Bank is not aware of any
+connected relations or concert party action among the afore-mentioned preference shareholders and among the aforementioned
+preference shareholders and top 10 ordinary shareholders.
+(3) "Shareholding percentage" refers to the percentage of domestic preference shares held by preference shareholders in total
+number of domestic preference shares.
+◆ Dividend Distribution of Preference Shares
+As per the resolution and authorization of the General Meeting, the Bank reviewed and approved the Proposal on
+Distribution of Dividends for Preference Shares at the meeting of its Board of Directors on 28 October 2016, permitting the
+Bank to distribute the dividends on the Bank's domestic preference shares for the first time on 23 November 2016 and on
+the offshore preference shares on 12 December 2016.
+80
+ICBC
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+Dividends on the Bank's domestic preference shares are paid annually in cash, and calculated based on the aggregate
+value of the issued domestic preference shares. Dividends on the Bank's domestic preference shares are non-cumulative.
+Holders of domestic preference shares are only entitled to dividends at the prescribed coupon rate, but are not entitled
+to any distribution of residual profits of the Bank together with the holders of ordinary shares. According to the dividend
+distribution plan in the domestic preference share issuance proposal, the Bank distributed a dividend of RMB2,025,000,000
+on the domestic preference shares (tax-inclusive) at the coupon rate of 4.5%
+Dividends on the Bank's offshore preference shares are paid annually in cash, and calculated based on the aggregate
+value of the offshore preference shares. Dividends on the Bank's offshore preference shares are non-cumulative. Holders
+of offshore preference shares are only entitled to dividends at the prescribed dividend rate, but are not entitled to any
+distribution of residual profits of the Bank together with the holders of ordinary shares. According to the dividend
+distribution plan in the offshore preference share issuance proposal, the Bank distributed a dividend of USD196,000,000,
+EUR40,000,000 and RMB800,000,000 on the offshore preference shares (tax-inclusive), aggregating to RMB2,425 million
+at the rate on dividend declared date. In practice, the dividend was distributed in the currency of the preference share.
+According to relevant laws, when the Bank distributes dividends for offshore preference shares, the enterprise income tax
+shall be withheld by the Bank at a rate of 10%. According to the requirements of the terms and conditions of the offshore
+preference shares, the Bank will pay the relevant taxes, in addition to the dividends for offshore preference shares.
+preference shares
+The above-mentioned preference share dividend distribution plans have been fulfilled. For particulars of the Bank's
+distribution of dividends on preference shares, please refer to the announcements of the Bank on the websites of SSE, SEHK
+and the Bank.
+2016
+2015
+Dividend
+distributed
+Dividend
+distributed
+Dividend
+Type of preference shares
+rate
+(pre-tax,
+in RMB
+millions)
+(pre-tax,
+Dividend
+in RMB
+rate
+millions)
+Recent distribution of dividends on preference shares by the Bank is shown as follows:
+Domestic
+Domestic non-state-
+owned legal person
+Company of China Ltd.
+State-owned legal
+Domestic
+SZITIC Trust Co., Ltd.
+BOC International (China)
+Limited
+person
+preference shares
+15,000,000
+3.3
+None
+Domestic non-state-
+Domestic
+owned legal person
+preference shares
+15,000,000
+3.3
+None
+China National Tobacco
+Corporation
+Shandong Branch
+China National Tobacco
+Corporation
+Heilongjiang Branch
+Ping An Property &
+Casualty Insurance
+Domestic
+Other entities
+preference shares
+10,000,000
+2.2
+None
+Other entities
+Domestic
+preference shares
+10,000,000
+2.2
+None
+3.3
+As the issuance was private offering, the register of preference shareholders presented the information on proxies of placees.
+(3) The Bank is not aware of any connected relations or concert party action among the aforementioned preference shareholders
+and among the afore-mentioned preference shareholders and top 10 ordinary shareholders.
+Annual Report 2016
+Notes: (1) Particulars of shareholding of preference shareholders were based on the number of shares set out in the Bank's register of
+preference shareholders maintained.
+the period
+period
+Class of shares
+restrictions
+pledged or
+subject to
+Shareholding
+percentage
+at the end of
+Number of
+Number
+of shares
+Increase/
+decrease
+during the
+reporting
+Nature of
+shareholder
+Name of shareholder
+Unit: Share
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 OFFSHORE PREFERENCE SHAREHOLDERS (OR PROXIES) OF THE
+BANK (The following data are based on the register of offshore preference shareholders as at 31 December 2016)
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+(2)
+(%)
+on sales
+Shares held
+Cede & Co.
+Unknown
+locked-up
+shares
+13.0
+40,000,000
+EUR offshore
+preference shares
+Unknown
+39.1
+120,000,000
+Foreign legal person-
+RMB offshore
+preference shares
+Depository (Nominees) Limited
+The Bank of New York
+Unknown
+47.9
+147,000,000
+USD offshore
+preference shares
+Foreign legal person
+Diluted earnings per share
+0.78
+0.77
+0.79
+Basic earnings per share
+0.82
+0.82
+0.77
+0.79
+A
+0.77
+0.78
+Credit rating
+S&P(4)
+Moody's (4)
+A
+A1
+A1
+A
+4.23
+0.77
+4.80
+1,530,859
+5.73
+20.67
+20.04
+Ratio of net fee and commission income
+1,954,770
+A
+1,521,233
+Net capital base(2)
+2,644,885
+2,406,920
+2,127,462
+2,012,103
+1,812,137
+Risk-weighted assets (2)
+17,190,992
+15,902,801
+14,564,617
+13,216,687
+12,475,939
+Per share data (in RMB yuan)
+Net asset value per share(3)
+6.30
+5.29
+A1
+1.11
+A
+19.96
+Net interest spread(3)
+2.16
+2.10
+2.02
+2.30
+2.26
+2.46
+Net interest margin (4)
+17.10
+2.30
+2.16
+2.47
+2.66
+Return on risk-weighted assets (5)
+1.81
+1.89
+2.01
+2.16
+22.59
+2.22
+15.24
+14.35
+13.79
+A1
+Notes: (1) Calculated by adding impairment losses of loans and advances to customers measured at amortised cost with impairment losses of
+loans and advances to customers measured at fair value through other comprehensive income.
+Calculated in accordance with the Capital Regulation.
+6
+(2)
+(3) Calculated by dividing equity attributable to equity holders of the parent company after deduction of other equity instruments at
+the end of the reporting period by the total number of ordinary shares at the end of the reporting period.
+(4) The rating results are in the form of "long-term foreign currency deposits rating".
+ICBC
+Financial Indicators
+Financial Highlights
+2018
+2017
+2016
+2015
+2014
+Profitability (%)
+Return on average total assets(1)
+1.14
+1.20
+1.30
+1.40
+Return on weighted average equity(2)
+A1
+21.44
+1,789,474
+to operating income
+12.77
+12.87
+12.87
+11.92
+Tier 1 capital adequacy ratio (10)
+13.45
+13.27
+13.42
+13.48
+12.98
+12.19
+15.39
+15.14
+14.61
+15.22
+14.53
+Total equity to total assets ratio
+8.47
+8.21
+8.21
+Capital adequacy ratio (10)
+Core tier 1 capital adequacy ratio (10)
+Capital adequacy (%)
+2.34
+27.40
+26.69
+27.93
+Asset quality (%)
+Non-performing loans ("NPLs") ratio (7)
+1.52
+1.55
+1.62
+1.50
+1.13
+Allowance to NPLs (8)
+175.76
+154.07
+136.69
+156.34
+206.90
+Allowance to total loans ratio (9)
+2.68
+2.39
+2.22
+2.35
+8.11
+20.87
+7.46
+62.06
+Q3
+Q4
+178,117
+178,578 185,241
+168,186
+168,553 169,526 169,389
+75,786 77,209 75,004 58,050
+Net profit attributable to equity 78,802 81,640 79,185 58,049
+holders of the parent
+company
+Net cash flows from operating
+activities
+Q2
+62,160
+Annual Report 2018
+7
+President's Statement
+President Gu Shu
+ICBC
+2,110,060
+26.45
+25.71
+Cost-to-income ratio (6)
+124,372 696,370 (158,769) 109,306 237,236 370,254 54,068
+Q1
+Q4
+Q3
+60.96
+60.34
+59.51
+60.53
+ratio
+Notes: (1)
+(2)
+Calculated by dividing net profit by the average balance of total assets at the beginning and at the end of the reporting period.
+Calculated in accordance with the Rules for the Compilation and Submission of Information Disclosure by Companies that Offer
+Securities to the Public No. 9 - Calculation and Disclosure of Return on Net Assets and Earnings per Share (Revision 2010)
+issued by CSRC.
+(3) Calculated by the spread between yield on average balance of interest-generating assets and cost on average balance of
+interest-bearing liabilities.
+(4) Calculated by dividing net interest income by the average balance of interest-generating assets.
+(5) Calculated by dividing net profit by the average balance of risk-weighted assets at the beginning and at the end of the
+reporting period.
+(6) Calculated by dividing operating expenses (less taxes and surcharges) by operating income.
+(7) Calculated by dividing the balance of NPLs by total balance of loans and advances to customers.
+(8) Calculated by dividing allowance for impairment losses on loans by total balance of NPLs.
+(9) Calculated by dividing allowance for impairment losses on loans by total balance of loans and advances to customers.
+(10) Calculated in accordance with the Capital Regulation.
+Quarterly Financial Data
+(In RMB millions)
+Operating income
+2018
+2017
+Q1
+183,185
+Q2
+Risk-weighted assets to total assets
+2,312,143
+1,781,062
+1,486,733
+Domestic Preference Share
+Stock code: 84602
+Stock name: ICBC CNHPREF1-R
+Stock name: ICBC EURPREF1
+Stock code: 4604
+Stock code: 4603
+The Stock Exchange of Hong Kong Limited
+Stock name: ICBC USDPREF1
+Offshore Preference Share
+Stock code: 1398
+Shanghai Stock Exchange
+Stock name: I
+The Stock Exchange of Hong Kong Limited
+Stock name: ICBC
+Stock code: 601398
+Stock name: 工商銀行
+Shanghai Stock Exchange
+A Share
+Place where shares are listed, and their names and
+codes
+Board of Directors' Office of the Bank
+Location where copies of this annual report are kept
+Facsimile: 852-28650990
+H Share
+Stock code: 360011
+Name and office address of auditors
+Domestic auditors
+Net interest income
+Annual operating results (in RMB millions)
+2014
+2015
+2016
+2017
+2018
+Financial Data
+(Financial data and indicators in this annual report are prepared in accordance with IFRSS and, unless otherwise specified, are
+consolidated amounts of the Bank and its subsidiaries and denominated in Renminbi.)
+Financial Highlights
+5
+Annual Report 2018
+8/F, Prince's Building, 10 Chater Road, Central, Hong Kong
+KPMG
+International auditors
+CPAs (Practicing): Li Li and He Qi
+District, Beijing, China
+8/F, Tower E2, Oriental Plaza, 1 East Chang'an Avenue, Dongcheng
+KPMG Huazhen LLP
+Telephone: 852-28628555
+17M Floor, Hopewell Center, 183 Queen's Road East, Wanchai,
+Hong Kong
+Computershare Hong Kong Investor Services Limited
+H Share
+E-mail: ir@icbc.com.cn
+Facsimile: 86-10-66107571
+Telephone: 86-10-66108608
+Address: 55 Fuxingmennei Avenue, Xicheng District, Beijing, China
+Guan Xueqing
+Board Secretary and Company Secretary
+Gu Shu and Guan Xueqing
+Authorized representatives
+33/F, ICBC Tower, 3 Garden Road, Central, Hong Kong
+Principal place of business in Hong Kong
+Website: www.icbc.com.cn, www.icbc-ltd.com
+Business enquiry and complaint hotline: 86-95588
+Telephone: 86-10-66106114
+55 Fuxingmennei Avenue, Xicheng District, Beijing, China
+Postal code: 100140
+Registered address and office address
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED ("ICBC")
+Legal name in English
+Net tier 1 capital (2)
+Legal name in Chinese
+Selected media for information disclosure
+572,518
+China Securities Journal, Shanghai Securities News, Securities Times,
+Securities Daily
+the annual report in respect of A shares
+Telephone: 86-4008058058
+Pudong New Area, Shanghai, China
+3/F China Insurance Building, 166 Lujiazui Dong Road,
+China Securities Depository and Clearing Corporation Limited,
+Shanghai Branch
+A Share
+Share Registrars
+10/F, Alexandra House, Chater Road, Central, Hong Kong
+Linklaters
+9/F, Three Exchange Square, Central, Hong Kong
+Allen & Overy
+Hong Kong, China
+20/F, Fortune Financial Center, 5 East 3rd Ring Middle Road,
+Chaoyang District, Beijing, China
+Haiwen & Partners
+17-18/F, East Tower, World Financial Center, 1 East 3rd Ring
+Middle Road, Chaoyang District, Beijing, China
+King & Wood Mallesons
+Mainland China
+Legal advisors
+The "HKEXnews" website of SEHK for publication of
+the annual report in respect of H shares
+www.hkexnews.hk
+www.sse.com.cn
+Website designated by CSRC for publication of
+Corporate Information
+522,078
+507,867
+24,137,265
+13,056,846
+289,512
+26,087,043
+14,233,448
+340,482
+15,419,905
+413,177
+Allowance for impairment losses
+Total loans and advances to customers
+27,699,540
+Total assets
+As at the end of reporting period (in RMB millions)
+22,209,780 20,609,953
+11,933,466
+201,457
+239,221
+770,864
+724,133
+Net cash flows from operating activities
+of the parent company
+275,811
+277,131
+278,249
+1,131,764
+11,026,331
+280,654
+257,581
+1,969,751
+2,127,491
+2,330,001
+Equity attributable to equity holders
+1,539,239
+2,265,860
+2,016,799
+16,086,368
+16,514,992
+19,072,649
+20,409,261
+4,433,237
+5,009,963
+6,754,692 5,756,704 5,481,174
+25,354,657 23,945,987 22,156,102
+21,408,934 19,562,936 18,113,931
+1,814,495 1,706,549
+Due to banks and other financial
+institutions
+Due to customers
+Total liabilities
+Investment
+on loans (1)
+286,049
+297,676
+Net profit attributable to equity holders
+276,286
+220,835
+193,112
+186,194
+194,203
+Impairment losses
+Operating expenses
+634,858
+668,733
+641,681
+675,654
+725,121
+Operating income
+132,497
+143,391
+144,973
+139,625
+145,301
+Net fee and commission income
+493,522
+218,674
+471,846
+161,594
+87,894
+277,720
+279,106
+287,451
+298,723
+Net profit
+361,612
+363,235
+363,279
+364,641
+372,413
+Profit before taxation
+359,455
+360,905
+360,675
+361,691
+369,324
+Operating profit
+56,729
+86,993
+127,769
+4
+中國工商銀行股份有限公司(“中國工商銀行")
+(This report is prepared in both Chinese and English. In the case of discrepancy between the two versions, the Chinese
+version shall prevail.)
+Significant Events
+112
+Report of the Board of Supervisors
+108
+Report of the Board of Directors
+91
+Corporate Governance Report
+82
+115
+Employees and Institutions
+74
+Shareholding of Substantial Shareholders
+Details of Changes in Share Capital and
+70
+Social Responsibility
+68
+· Other Information Disclosed Pursuant to
+Regulatory Requirements
+67
+Directors, Supervisors, Senior Management,
+Organizational Chart
+118
+Auditor's Report and Financial Statements
+Huijin
+ICBC
+Global Systemically Important Banks
+Former CBRC
+CSRC
+Company Law
+CIC
+CBIRC
+Capital Regulation
+Bank ICBC (JSC)
+Articles of Association
+In this report, unless the context otherwise requires, the following terms shall have the meanings set out below:
+Definitions
+323
+Overseas Branches and Offices
+List of Domestic and
+319
+2018 Ranking and Awards
+120
+Outlook
+64
+― Capital Management
+47
+EUR Preference Shares Stock Code: 4604
+RMB Preference Shares Stock Code: 84602
+USD Preference Shares Stock Code: 4603
+Stock Code: 1398
+(A joint stock limited company incorporated in the People's Republic of China with limited liability)
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED
+H
+ICBC (E
+of the parent company
+Share capital
+356,407
+356,407
+356,407
+356,407
+353,495
+Net core tier 1 capital (2)
+2,232,033
+2,030,108
+1,874,976
+1,701,495
+Annual Report 2018
+ICBC (Almaty)
+Company Profile
+Through its continuous endeavor and stable
+development, the Bank has developed into the leading
+bank in the world, possessing an excellent customer
+base, a diversified business structure, strong innovation
+capabilities and market competitiveness. The Bank
+regards service as the very foundation to seek further
+development and adheres to creating value through
+services while providing a comprehensive range of
+financial products and services to 7,033 thousand
+corporate customers and 607 million personal
+customers. The Bank has been consciously integrating
+the social responsibilities with its development strategy
+and operation and management activities, and gaining
+wide recognition in the aspects of promoting inclusive
+finance, supporting targeted poverty relief, protecting
+environment and resources and participating in public
+welfare undertakings.
+Risk Management
+27
+Business Overview
+12
+― Financial Statements Analysis
+11
+Regulatory Environments
+Economic, Financial and
+11
+Discussion and Analysis
+President's Statement
+245600 =
+8
+Corporate Information
+Financial Highlights
+Important Notice
+Definitions
+CONTENTS
+The Bank was ranked the 1st place among the Top 1000
+World Banks by The Banker, ranked 1st place in the
+Global 2000 listed by Forbes and topped the sub-list of
+commercial banks of the Global 500 in Fortune for the
+sixth consecutive year, and took the 1st place among
+the Top 500 Banking Brands of Brand Finance for the
+third consecutive year.
+The Bank always keeps in mind its underlying mission
+of serving the real economy with its principal business,
+and along with the real economy it prospers, suffers
+and grows. Taking a risk-based approach and never
+overstepping the bottom line, it constantly enhances its
+capability of controlling and mitigating risks. Besides,
+the Bank remains steadfast in understanding and
+following the business rules of commercial banks to
+strive to be a century-old bank. It also stays committed
+to seeking progress with innovation while maintaining
+stability, continuously enhances the strategy of mega
+retail, mega asset management, mega investment
+banking as well as international and comprehensive
+development, and actively embraces the internet. The
+Bank unswervingly delivers specialized services, and
+pioneers a specialized business model, thus making it
+"a craftsman in large banking".
+Industrial and Commercial Bank of China was
+established on 1 January 1984. On 28 October 2005,
+the Bank was wholly restructured to a joint-stock
+limited company. On 27 October 2006, the Bank was
+successfully listed on both Shanghai Stock Exchange
+and The Stock Exchange of Hong Kong Limited.
+ICBC (Argentina)
+Hong Kong Listing Rules
+The Articles of Association of Industrial and Commercial Bank of China Limited
+Bank ICBC (Joint stock company)
+Standard Bank
+SSE
+SEHK
+Securities and Futures Ordinance of
+Hong Kong
+PRC GAAP
+PBC
+New Rules on Asset Management
+Definitions
+International Financial Reporting Standard 9 Financial Instruments that was
+promulgated by International Accounting Standards Board and became
+effective on 1 January 2018 as well as Accounting Standard for Business
+Enterprises No. 22 Recognition and Measurement of Financial Instruments,
+Accounting Standard for Business Enterprises No. 23 Transfer of Financial
+Assets, Accounting Standard for Business Enterprises No. 24 - Hedging and
+Accounting Standard for Business Enterprises No. 37 — Presentation of Financial
+Instruments that were promulgated by MOF and became effective on
+1 January 2018
+Ministry of Finance of the People's Republic of China
+The International Financial Reporting Standards promulgated by the International
+Accounting Standards Board, which comprise the International Accounting
+Standards
+Industrial and Commercial Bank of China Financial Services LLC
+ICBC-AXA Assurance Co., Ltd.
+ICBC Standard Bank PLC
+ICBC Financial Leasing Co., Ltd.
+ICBC Financial Asset Investment Co., Limited
+ICBC (Asia)
+ICBC Credit Suisse Asset Management Co., Ltd.
+Industrial and Commercial Bank of China (USA) NA
+State Council
+ICBC Turkey Bank Anonim Şirketi
+The Bank/The Group
+The People's Bank of China
+The Bank is primarily exposed to credit risk, market risk, interest rate risk in the banking book, liquidity risk, operational
+risk, reputational risk and country risk. The Bank has actively adopted measures to effectively manage various types of
+risks. Please refer to the section headed "Discussion and Analysis - Risk Management" for detailed information.
+The report contains forward-looking statements on the Bank's financial position, business performance and development.
+The statements are based on existing plans, estimates and forecasts, and bear upon future external events or the
+Group's future finance, business or performance in other aspects, and may involve future plans which do not constitute
+substantive commitment to investors. Hence, investors and persons concerned shall be fully aware of the risks and
+understand the difference between plans, estimates and commitments.
+Mr. Gu Shu, Vice Chairman, President and President in charge of finance of the Bank, and Mr. Zhang Wenwu, General
+Manager of the Finance and Accounting Department of the Bank, hereby represent and warrant that the financial
+statements contained in the Annual Report are authentic, accurate and complete.
+28 March 2019
+The Board of Directors of Industrial and Commercial Bank of China Limited
+The Board of Directors of the Bank proposed distributing cash dividends for ordinary shares of RMB2.506 (pre-tax) for each
+ten shares for 2018. The distribution plan will be submitted for approval to the Annual General Meeting for the Year 2018.
+The Bank did not convert capital reserve to share capital.
+The 2018 financial statements prepared by the Bank in accordance with PRC GAAP and IFRSS have been audited by KPMG
+Huazhen LLP and KPMG in accordance with Chinese and International Standards on Audit respectively, with standard
+unqualified auditors' reports being issued.
+The 2018 Annual Report of the Bank and its abstract have been considered and approved at the meeting of the Board of
+Directors of the Bank held on 28 March 2019. All directors of the Bank attended the meeting.
+The Board of Directors, the Board of Supervisors, Directors, Supervisors and Senior Management members of Industrial
+and Commercial Bank of China Limited undertake that the information in this report contains no false record, misleading
+statement or material omission, and assume individual and joint and several liability for the authenticity, accuracy and
+completeness of the information in this report.
+Important Notice
+3
+Annual Report 2018
+Industrial and Commercial Bank of China Limited; or Industrial and Commercial
+Bank of China Limited and its subsidiaries
+The State Council of the People's Republic of China
+Standard Bank Group Limited
+Shanghai Stock Exchange
+The Stock Exchange of Hong Kong Limited
+Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)
+Accounting Standards for Business Enterprises promulgated by MOF
+The Guiding Opinions on Regulating the Asset Management Business of Financial
+Institutions jointly promulgated by PBC, CBIRC, CSRC and State Administration
+of Foreign Exchange in 2018 and relevant rules
+Industrial and Commercial Bank of China (Thai) Public Company Limited
+ICBC International Holdings Limited
+Industrial and Commercial Bank of China (New Zealand) Limited
+ICBC (Mexico)
+ICBC (Malaysia)
+ICBC PERU BANK
+ICBC (London)
+ICBC (Europe)
+ICBC (Indonesia)
+ICBC (Canada)
+ICBC (Brasil)
+ICBC (Austria)
+Industrial and Commercial Bank of China (Asia) Limited
+Industrial and Commercial Bank of China (Argentina) S.A.
+Industrial and Commercial Bank of China (Almaty) Joint Stock Company
+Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited
+Central Huijin Investment Ltd.
+Banks undertaking key functions with global features in the financial markets as
+released by the Financial Stability Board
+Former China Banking Regulatory Commission
+China Securities Regulatory Commission
+Company Law of the People's Republic of China
+China Investment Corporation
+China Banking and Insurance Regulatory Commission
+Regulation Governing Capital of Commercial Banks (Provisional) promulgated by
+the former CBRC in June 2012
+ICBC (New Zealand)
+ICBC (Peru)
+ICBC (Macau)
+Industrial and Commercial Bank of China (Brasil) S.A.
+Industrial and Commercial Bank of China (Canada)
+Industrial and Commercial Bank of China (Europe) S.A.
+PT. Bank ICBC Indonesia
+Industrial and Commercial Bank of China Mexico S.A.
+Industrial and Commercial Bank of China (Malaysia) Berhad
+ICBC
+2
+New Financial Instrument Standards
+ICBC Austria Bank GmbH
+IFRSS
+ICBCFS
+ICBC-AXA
+MOF
+ICBC Leasing
+ICBC Investment
+ICBC International
+ICBC Credit Suisse Asset Management
+ICBC (USA)
+ICBC (Turkey)
+ICBC (Thai)
+Industrial and Commercial Bank of China (Macau) Limited
+ICBC (London) PLC
+ICBC Standard Bank
+◆ Audit Committee
+The Audit Committee is mainly responsible for constantly overseeing the Bank's internal control system, and supervising,
+inspecting and evaluating financial information and internal audit of the Bank and assessing mechanisms for the Bank's
+staff to report misconducts in financial statements, internal control, etc., and assessing the mechanism for the Bank to
+conduct independent and fair investigations and take appropriate actions in relation to the reported matters. As at the
+disclosure date of the results, the Audit Committee consisted of seven directors, including Independent Non-executive
+Directors Mr. Shen Si, Mr. Hong Yongmiao, Mr. Anthony Francis Neoh, Mr. Yang Siu Shun and Mr. Nout Wellink;
+Non-executive Directors Mr. Cheng Fengchao and Mr. Ye Donghai. Independent Non-executive Director Mr. Shen Si was
+Chairman of the Committee.
+Performance of the Audit Committee During the reporting period, the Audit Committee held six meetings,
+considered 11 proposals including the proposals on the Bank's periodic reports and the Plan for Internal Audit Projects in
+2018, and heard 14 reports including the 2017 Internal Audit Report and the report on internal control audit results. The
+Audit Committee put forward comments or suggestions on matters including the arrangement of internal and external
+audits and development plan, impact of the implementation of new accounting standards, and construction of internal audit
+system and mechanism.
+Performance of the Strategy Committee During the reporting period, the Strategy Committee of the Board of Directors
+held seven meetings, considered 19 proposals including the proposals on the 2018-2020 Strategic Development Plan
+and the 2018-2020 Capital Plan, and heard reports on topics including the capital replenishment of the domestic and
+overseas institutions in 2018, merger and acquisition and equity investment and capital injection plan for institutions to be
+established. The Strategy Committee put forward comments or suggestions on matters including Strategic Development
+Plan, capital management, annual final accounts, assessment plan of the Inclusive Finance Department and consumer
+protection policy.
+The Audit Committee periodically reviewed the financial reports of the Bank. It had reviewed and submitted to the Board
+of Directors to approve the annual report, interim report and quarterly reports of the Bank. It also organized and conducted
+an internal control assessment of the Group for 2017 and engaged external auditors to audit the assessment report and
+procedures of the Bank in accordance with the relevant regulatory requirements. Additionally, it enhanced communication
+with external auditors, attached importance to the supervision of external auditors and heard several reports of external
+auditors concerning audit plan, audit results, and management proposals. The Audit Committee also concerned with the
+compliant development of overseas institutions and heard related branches' reports on internal audit work. It strengthened
+field surveys by investigating credit asset quality, credit mechanism and cultural development at branches.
+98
+ICBC
+Reviewing periodic reports
+The Strategy Committee is mainly responsible for considering the Bank's strategic development plan, risk events that bear
+material influence on the overall situation, business and institutional development plan, major investment and financing
+plan, green credit strategy, consumer protection strategy, fulfillment of social responsibilities in terms of environment,
+community and governance and other aspects, and other major matters critical to the Bank's development, making
+recommendations to the Board of Directors, and examining and assessing the soundness of the corporate governance
+framework to ensure financial reporting, risk management and internal control are compliant with corporate governance
+criteria of the Bank. As at the disclosure date of the results, the Strategy Committee consisted of nine directors, including
+Executive Director Mr. Gu Shu; Independent Non-executive Directors Ms. Sheila Colleen Bair, Mr. Hong Yongmiao,
+Mr. Anthony Francis Neoh and Mr. Nout Wellink; Non-executive Directors Mr. Zheng Fuqing, Ms. Mei Yingchun, Mr.
+Dong Shi and Mr. Ye Donghai. Independent Non-executive Director Ms. Sheila Colleen Bair was Vice Chairman of the
+Committee.
+Committee
+Corporate Governance Report
+(6,856,032)
+Eliminated and
+5.0
+22,347
+3.3
+556
+13.3
+3,695,699
+(24.8)
+Overseas and others
+46,898
+9.9
+1,663
+4.0
+1,120,364
+Northeastern China
+20.4
+91,609
+10.4
+undistributed assets
+Total
+27,699,540
+Secondary reporting line
+Primary reporting line
+Senior
+Departments
+Marketing
+Management
+Risk Management
+Strategy
+Committee
+Board of
+Directors
+Shareholders'
+General Meeting
+Corporate Governance Framework
+Corporate Governance Report
+ICBC
+90
+Note: Overseas and other assets include investments in associates and joint ventures.
+100.0
+449,296
+100.0
+16,820
+100.0
+22.3
+3,758
+12.7
+3,530,531
+61,834
+15.0
+2,519
+21.2
+5,860,977
+Yangtze River Delta
+3.8
+17,047
+0.2
+30
+35.4
+9,803,222
+Head Office
+(%)
+Percentage
+Number of
+employees
+(%)
+Percentage
+Number of
+(%) institutions
+13.8
+Board of
+Supervisors
+Pearl River Delta
+3,700,969
+Western China
+19.9
+89,233
+21.0
+3,530
+10.0
+2,758,294
+Central China
+15.7
+70,780
+16.2
+2,727
+14.8
+4,085,516
+11.0
+49,548
+12.1
+2,037
+13.4
+Bohai Rim
+(in RMB millions)
+Nomination
+Committee
+Related Party
+Transactions Control
+Committee
+Shareholders' Rights
+During the reporting period, the Bank fully complied with the principles, code provisions and recommended best practices
+stipulated in the Corporate Governance Code (Appendix 14 to the Hong Kong Listing Rules).
+Compliance with the Corporate Governance Code
+During the reporting period, the Bank revised the Plan on Authorization of the Shareholders' General Meeting to the
+Board of Directors of ICBC and the Plan on Authorization of the Board of Directors to the President of ICBC, providing an
+institutional guarantee for strengthening asset quality, gaining efficiency in asset write-off and disposal, and increasing
+donations for fighting against poverty.
+Development of Corporate Governance Regulations
+Corporate Governance Report
+93
+Annual Report 2018
+Proposing the convening of an extraordinary general meeting
+The Bank continuously increased the level of transparency across the Group. It disclosed information in a legal and compliant
+manner, and conducted voluntary information disclosure in an orderly manner. Besides, it earnestly protected the right to
+information of investors and other stakeholders. It also actively improved the group-wide significant information transmission
+mechanism, and strengthened the building of teams of professional talents constantly. All of these efforts led to increasingly
+better management of the Group over information disclosure.
+The Bank put the supervisory function of the Board of Supervisors into good use. The Board of Supervisors continuously
+improved its working mechanism in accordance with the priorities of the Bank, deepened the contents and methods of its
+supervision over performance of the Board of Directors and the Senior Management and earnestly conducted the annual
+performance assessment. Financial supervision and supervision over risk management and internal control of the Bank were
+enhanced. The Board of Supervisors effectively fulfilled its important role to corporate governance and promoted the legal
+and compliant operation and sustainable and stable development of the Bank.
+The Bank put into good use the key role of the Board of Directors in strategic decision-making and corporate governance.
+Centering on the objectives of driving sustainable growth in corporate value and creating value for customers and
+shareholders, the Board of Directors forged ahead as guided by strategies, sought progress without compromising stability
+and inherited and innovated in development philosophy, strengthened the enterprise risk management and internal control,
+actively promoted the operational transformation and structural adjustment, kept track of how the strategies, plans and
+decisions were implemented continuously, and made sure the robust operation and healthy development of the Group.
+Supporting rules and regulations for performance standards of the Board of Directors were established and improved to
+ensure the Board of Directors fulfill its duties in accordance with relevant laws and regulations.
+Construction of the Corporate Governance Mechanism
+During the reporting period, the Bank appointed and re-appointed some directors and changed the chairman and members
+of some special committees of the Board of Directors to ensure the Bank operated in compliance with laws and regulations.
+The Bank continued to improve the structure of the Board of Directors and further promoted the role of the special
+committees of the Board of Directors in supporting decision-making. Besides, the Bank stepped up efforts in the Group's
+corporate governance, and kept refining the management and control and collaboration mechanism of the Group as well as
+the corporate governance framework, institutional system and working mechanism of its subsidiaries.
+Construction of the Organizational Framework of Corporate Governance
+During the reporting period, the Bank took improving corporate governance as a primary measure to enhance its core
+competitiveness, continued to optimize its modern corporate governance framework, mechanism and culture, and brought
+the corporate governance and risk management capacities of the Group to a higher level. There is neither any material
+divergence between actual corporate governance of the Bank and applicable regulatory documents regarding corporate
+governance issued by CSRC, nor any problem identified by regulatory authorities but remain unresolved in respect of
+corporate governance. During the reporting period, the Bank actively took part in the corporate governance award selection
+activities at home and abroad, and received a series of corporate governance awards from many Chinese and foreign
+authoritative institutions and news media, including the "2018 CCTV China's Top 10 Listed Companies Award" from the
+2018 CCTV Financial Forum & Chinese Listed Companies Summit, the "Golden Round Table Awards Enterprise Excellent
+in Corporate Governance" from the magazine Directors & Boards and the "Corporate Award - Platinum Award" from the
+Hong Kong magazine The Asset.
+Corporate Governance Report
+ICBC
+The Bank strengthened enterprise risk management and capital management, and intensified internal control, audit and
+supervision. It continued to improve the enterprise risk management policies, and took multiple measures to enhance
+the Group's risk management capacity; stepped up the capital management, liquidity management and interest rate
+management, with the capital adequacy ratio (CAR) remained stabilized overall; and reinforced the group-wide compliance
+management, kept optimizing the internal control environment, and continued enhancing the auditing service capacity and
+the related supervision and inspection standards.
+An extraordinary general meeting should be convened within two (2) months from the date when shareholders holding
+more than ten percent (10%) of the voting shares of the Bank, either individually or jointly, request to convene in writing.
+Proposing shareholders shall have the right to request the Board of Directors in writing to convene an extraordinary general
+meeting. The Board of Directors shall make a written response as to whether or not it agrees to convene such a meeting
+within ten (10) days upon receipt of the request in accordance with laws, administrative regulations, rules and the Articles
+of Association of the Bank. Reasonable expenses incurred from the case where shareholders convene the meeting by
+themselves due to the failure of the Board of Directors to convene the meeting shall be borne by the Bank, and deducted
+from the payment to those negligent directors.
+Submitting interim proposals for the Shareholders' General Meeting
+Shareholders who hold more than three percent (3%) of shares of the Bank, either individually or jointly, may prepare
+an interim proposal and submit it in writing to the Board of Directors ten (10) days before the Shareholders' General
+Meetings convened. The Board of Directors shall issue a supplementary notice for the Shareholders' General Meeting within
+two (2) days upon receipt of the proposal and submit such proposal to the Shareholders' General Meeting for approval.
+Corporate Governance Report
+95
+Annual Report 2018
+If an ordinary shareholder wishes to enquire about share transfer, changes in name or address, reporting loss of share
+certificates and dividend notes or any other information relating to his/her shares, please contact the Share Registrars of the
+Bank. For contact details, please refer to the section headed "Corporate Information".
+Pursuant to relevant laws and regulations as well as the Articles of Association of the Bank, shareholders can put forward
+suggestions and inquiries through participating in activities including the Shareholders' General Meetings, press conferences
+in relation to periodic results and road shows of the Bank or by means of platforms including investor interactive platform of
+SSE, investor relations column on the website of the Group, investor hotline and investor email and hotline, fax and email of
+the Shareholders' General Meetings of the Bank as well. For contact details, please refer to the section headed "Corporate
+Governance Report - Investor Relations".
+Contacts
+The Bank actively strengthened the information disclosure management, continued to improve the group-wide information
+transmission mechanism, and fulfilled the information disclosure obligations in compliance with the applicable laws and
+regulations. On the basis, in order to meet the information needs of investors and other stakeholders, the Bank steadily
+promoted the voluntary information disclosure, continued to expand the width and depth of information disclosure,
+improved the Bank's level of transparency, thereby effectively safeguarding the right to information of the stakeholders.
+The Bank improved various communication channels for investors through organizing press conferences in relation to
+periodic results, domestic and overseas road shows and reverse road shows, and attending famous investment forums at
+home and abroad during the reporting period. The Bank took full advantage of the communication platforms including the
+investor interactive platform of SSE, investor relations column on the website of the Group, investor hotline and investor
+email of the Bank, to understand investors' needs and provide sufficient information feedback in a timely manner.
+During the reporting period, convening, holding, notices, announcements, proposals, voting and other procedures of the
+Shareholders' General Meetings of the Bank strictly complied with the relevant provisions of the Company Law and the
+Articles of Association of the Bank, ensuring that shareholders could exercise their right of participation in the Shareholders'
+General Meetings smoothly. Since it was listed, in order to treat A and H minority shareholders fairly, the Bank has held
+the Annual General Meeting in Beijing and Hong Kong concurrently by satellite and set up registration offices of A and
+H shareholders both in Beijing and Hong Kong to facilitate the voting of shareholders. The number of shareholders who
+participated in voting at the Annual General Meeting for the Year 2017 amounted to 3,462.
+The Bank has strictly complied with laws, regulations, regulatory requirements and fundamental regulations of corporate
+governance, and has taken various measures such as improving information disclosure management, strengthening investor
+relations management and optimizing the operations mechanism of the Shareholders' General Meeting, with a view to
+safeguarding the rights of all shareholders, especially minority investors, and increasing communication and exchange
+among shareholders.
+Effective Communication with Shareholders
+Ordinary shareholders of the Bank have the right to collect dividends and other forms of benefits distributed on the basis of
+the number of shares held by them; preference shareholders shall be entitled to rights to dividends in priority to payment of
+dividends to ordinary shareholders. Shareholders have other rights conferred by laws, administrative regulations, rules and
+the Articles of Association of the Bank.
+Other rights
+In the event that the Bank failed to pay the agreed dividend to preference shareholders for three years in aggregate or for
+two consecutive years, from the next day following the date of approval of the proposal not paying the agreed dividend
+for the current year by the Shareholders' General Meeting, preference shareholders shall be entitled to attend and vote
+(together with ordinary shareholders) at the Shareholders' General Meeting. For preference shares the dividend of which is
+non-cumulative, the voting rights shall be temporarily restored until the full payment of the agreed dividend for the current
+year by the Bank.
+Corporate Governance Report
+ICBC
+94
+In the following circumstances, preference shareholders of the Bank have the right to attend the Shareholders' General
+Meeting and exercise voting rights: (1) amendments to the Articles of Association which relate to preference shares; (2) the
+reduction of the registered capital of the Bank by more than 10% (either separately or in aggregate); (3) merger, division
+and dissolution or change of corporate form of the Bank; (4) issuance of preference shares; and (5) other events specified
+in the Articles of Association that will change or abrogate the rights of preference shareholders. If any of the above
+circumstances occurs, the notice of a Shareholders' General Meeting shall be given to preference shareholders in accordance
+with the notification procedures applicable to ordinary shareholders as specified in the Articles of Association.
+Special provisions on rights of preference shareholders
+Shareholders are entitled to supervise business operation of the Bank and put forward suggestions or inquiries accordingly.
+Shareholders are entitled to review the information of the Bank such as the Articles of Association, the register of
+shareholders, documents on status of share capital and minutes of Shareholders' General Meetings, etc.
+Putting forward suggestions and reviewing documents
+92
+As the executive organ of the Bank, the Senior Management is accountable to the Board of Directors. The Senior
+Management is responsible for, among others, the operation and management of the Bank; organizing the implementation
+of operation and investment plans approved by the Board of Directors; formulating specific rules and regulations of the
+Bank; determining plans for compensation distribution and performances evaluation of persons in charge of internal
+departments and branches of the Bank (except the internal audit department); truthfully reporting to the Board of Directors
+or the Board of Supervisors on the business performance; drafting the annual financial budget plan, final account plan, profit
+distribution plan and loss make-up plan, plans for increase or reduction of the registered capital, the issuance of bonds or
+other securities and listing, and making suggestions in that respect to the Board of Directors.
+Responsibilities of the Senior Management
+As the supervisory organ of the Bank, the Board of Supervisors is accountable to, and shall report its work to, the
+Shareholders' General Meeting. The Board of Supervisors is responsible for, among others, supervising the performance
+and due diligence of Directors and Senior Management members; supervising the performance of duties by the Board
+of Directors and the Senior Management; conducting exit audits on Directors and Senior Management members when
+necessary; inspecting and supervising financial activities of the Bank; examining financial information such as financial report,
+business report and profit distribution plan to be submitted to the Shareholders' General Meeting by the Board of Directors;
+inspecting and supervising the business decision-making, risk management and internal control of the Bank and guiding
+the internal audit department of the Bank; supervising the engagement, dismissal, reengagement and audit of the external
+auditor as well as the audit work progress of the Bank; formulating the remuneration plans and performance evaluation
+measures of supervisors, conducting the performance evaluation on supervisors, and reporting to the Shareholders' General
+Meeting for approval; presenting proposals to the Shareholders' General Meeting; proposing to convene an extraordinary
+general meeting, and convening and presiding over the extraordinary general meeting in case the Board of Directors fails
+to perform its duty of convening Shareholders' General Meeting; proposing to convene an interim meeting of the Board of
+Directors.
+Internet Finance
+Risk
+Management
+Committee
+Committee
+Asset & Liability
+Management
+Financial
+Assets Service
+Management
+Committee
+Promotion
+Committee
+Banking
+Investment
+Promotion
+Committee
+Banking
+Institutional
+Promotion
+Committee
+Retail Banking
+Committee
+Promotion
+Banking
+Corporate
+Management
+Audit Committee
+Promotion
+Committee
+Compensation
+Committee
+Financial
+Technology
+Development
+Committee
+Finance
+Promotion
+Committee
+Responsibilities of the Board of Supervisors
+As the decision-making organ of the Bank, the Board of Directors of the Bank is accountable to, and shall report its
+work to, the Shareholders' General Meeting. The Board of Directors is responsible for, among others, convening the
+Shareholders' General Meeting; implementing the resolutions of the Shareholders' General Meeting; deciding on the
+business plans, investment proposals and development strategies of the Bank; formulating annual financial budget and
+final accounts of the Bank; formulating plans for profit distribution and loss recovery of the Bank; formulating plans for
+the increase or decrease of the Bank's registered capital, capital replenishment and financial restructuring of the Bank;
+formulating basic management systems of the Bank such as risk management system and internal control system, and
+supervising the implementation of such systems; appointing or removing President and the Board Secretary, and appointing
+or removing Senior Executive Vice Presidents and other senior management members (except the Board Secretary) who
+shall be appointed or removed by the Board of Directors under relevant laws according to the nomination of the President
+and deciding on their compensation, bonus and penalty matters; deciding on or authorizing the President to decide on
+the establishment of relevant offices of the Bank; regularly evaluating and improving corporate governance of the Bank;
+managing information disclosure of the Bank; and supervising and ensuring the President and other Senior Management
+members to perform their management duties effectively.
+Responsibilities of the Board of Directors
+Corporate Governance Report
+91
+Annual Report 2018
+As the organ of power of the Bank, the Shareholders' General Meeting involves all shareholders. The Shareholders' General
+Meeting is responsible for, among others, deciding on business policies and significant investment plans of the Bank;
+examining and approving the Bank's annual financial budget, final account proposals, plans for profit distribution and
+loss make-up; electing and replacing directors, supervisors appointed from the shareholder representatives and external
+supervisors; examining and approving work report of the Board of Directors and work report of the Board of Supervisors;
+adopting resolutions on merger, division, dissolution, liquidation, change of corporate form, increase or decrease of the
+Bank's registered capital, issuance of corporate bonds or other securities and public listing, repurchase of the shares and
+issuance of preference shares; and amending the Articles of Association of the Bank.
+Responsibilities of the Shareholders' General Meeting
+The Bank has made constant efforts to improve the corporate governance and checks and balances mechanism comprising
+the Shareholders' General Meeting, the Board of Directors, the Board of Supervisors and the Senior Management featuring
+clearly-defined responsibilities and accountability, coordination and effective checks and balances, and to optimize
+responsibilities of the authority organ, decision-making organ, supervisory organ and executive organ. As a result, the
+corporate governance operation mechanism with scientific decision-making process, effective supervision and steady
+operation has been in place.
+Note: The above is the corporate governance framework chart as of the end of 2018.
+Overseas
+Institutions
+Domestic
+Institutions
+Directly
+Controlled
+Institutions
+Supporting
+Departments
+Comprehensive
+Administration
+Departments
+Internal Audit
+Sub-bureau
+Internal Audit
+Bureau
+Risk
+Management
+Department
+Profitability
+Units
+Inclusive
+Item
+Percentage
+Assets
+2.50
+2.50
+Yes
+41.33
+41.33
+Nout Wellink
+Shen Si
+Yes
+No
+36.50
+Yes
+44.00
+44.00
+Yes
+44.00
+44.00
+Yes
+47.00
+36.50
+Zhang Wei
+87.99
+20.35
+5.00
+5.00
+22.65
+92.19
+Guan Xueqing
+21.37
+92.19
+Wang Bairong
+12.69
+49.14
+Tan Jiong
+12.69
+49.14
+Hu Hao
+Shen Bingxi
+Qu Qiang
+Hui Ping
+Huang Li
+No
+108.34
+47.00
+Yes
+Yes
+Sheila Colleen Bair
+income
+Fees
+insurances
+Other
+monetary
+Obtain
+allowance,
+annuities, and
+additional medical
+insurance, housing
+Unit: RMB10,000
+employer to social
+Contribution by the
+Remuneration from the Bank
+54.60
+(1)
+paid
+(before tax)
+Remuneration
+Name
+Annual Remuneration
+Directors, Supervisors, Senior Management, Employees and Institutions
+◆ Strategy Committee
+Total
+remuneration
+before tax
+No
+remuneration from
+shareholder entities
+parties or not
+Yang Siu Shun
+Anthony Francis Neoh
+Hong Yongmiao
+Ye Donghai
+Dong Shi
+Yes
+Mei Yingchun
+Yes
+Zheng Fuqing
+Yes
+Cheng Fengchao
+Gu Shu
+No
+67.29
+12.69
+(5)=(1)+(2)+(3)+(4)
+(4)
+(3)
+(2)
+or other related
+5.00
+5.00
+No
+54.6%
+Bachelor
+management
+operations and operational
+41.5%
+14.8%
+Finance, accounting, treasury
+Personal banking
+Educational Background of Employees
+Employee Specialization
+As at the end of 2018, the Bank had a total of 449,296 employees, representing a decrease of 3,752 as compared with
+the end of the previous year. Among them, 6,660 were employees in domestic subsidiaries and 15,687 were employees in
+overseas institutions.
+Basic Information on Employees and Institutions
+Directors, Supervisors, Senior Management, Employees and Institutions
+89
+Annual Report 2018
+(6) For the change of the Bank's Directors, Supervisors and Senior Management, please refer to the section headed "Appointment
+and Removal".
+(5) As the Bank's Independent Non-executive Directors served as directors or senior management of other legal persons or
+organizations other than the Bank or the controlled subsidiaries of the Bank, such legal persons or organizations became related
+parties of the Bank. During the reporting period, the Bank's Independent Non-executive Directors obtained remuneration from
+such related parties. Except to the extent of the afore-mentioned circumstances, none of the Bank's Directors, Supervisors and
+Senior Management was paid by the Bank's related parties during the reporting period.
+(4) Fees of Mr. Hui Ping and Mr. Huang Li are their allowances obtained as Employee Supervisors of the Bank, excluding their
+remuneration with the Bank in accordance with the employee remuneration system.
+(3) Mr. Cheng Fengchao, Mr. Zheng Fuqing, Ms. Mei Yingchun, Mr. Dong Shi, Mr. Ye Donghai and Mr. Fei Zhoulin were
+recommended by Huijin to serve as Non-executive Directors of the Bank and were paid by Huijin during the reporting period.
+(2) According to the requirements of relevant government authorities, the total final remuneration payable to the Chairman of the
+Board of Directors, the President, the Chairman of the Board of Supervisors, Executive Directors, Shareholder Supervisors and
+other Senior Management members is still subject to final confirmation by relevant government authorities. Additional details of
+remuneration will be disclosed when they have been determined.
+Corporate banking
+Notes: (1) Since January 2015, the remuneration to the Chairman of the Board of Directors, the President, the Chairman of the Board of
+Supervisors and other executives of the Bank has followed the State's policies relating to the remuneration reform on executives
+of central enterprises.
+11.5%
+27.9%
+GEOGRAPHIC DISTRIBUTION OF ASSETS, INSTITUTIONS AND EMPLOYEES
+As at the end of 2018, the Bank had a total of 16,820 institutions, representing a decrease of 68 as compared with the
+end of the previous year. Among them, there were 16,394 domestic institutions and 426 overseas institutions. Domestic
+institutions included the Head Office, 36 tier-one branches and branches directly managed by the Head Office, 446 branches
+in capital cities and tier-two branches, 15,752 outlets, 29 Head Office-level profitability units along with their directly
+managed institutions and branches, and 130 subsidiaries and their branches.
+12.5%
+1.1%
+Non-banking business
+Others
+3.4%
+Other financial businesses
+7.1%
+0.2%
+Doctorate
+3.4%
+IT
+management
+Master
+5.7%
+Risk and compliance
+10.2%
+Below associate
+6.1%
+Management
+Associate
+Shareholders' General Meeting
+No
+Yes
+4.55
+Qian Wenhui
+12.69
+54.60
+Yi Huiman
+Directors, Supervisors and Senior Management Leaving Office
+No
+No
+No
+No
+No
+22222
+114.84
+61.83
+113.56
+61.83
+-
+No
+25.00
+25.00
+1.22
+46.28
+Zhang Hongli
+6.16
+39.17
+Yes
+No
+41.10
+No
+30.73
+No
+5.77
+No
+67.29
+9.42
+39.17
+36.86
+Li Yunze
+Or Ching Fai
+Fei Zhoulin
+8.34
+32.76
+Wang Jingdong
+24.57
+During the reporting period, the Bank convened the 2017 Annual General Meeting on 26 June 2018 and the First
+Extraordinary General Meeting of 2018 on 21 November 2018. The afore-mentioned Shareholders' General Meetings were
+convened and held in strict compliance with relevant laws and regulations and the Articles of Association of the Bank. The
+Bank made announcements on the resolutions and disclosed legal opinions in a timely manner in accordance with regulatory
+requirements. For details of the above meetings, please refer to the announcements of the Bank dated 26 June 2018 and
+21 November 2018 respectively on the websites of SSE and SEHK, or the website of the Bank.
+Overview of Corporate Governance
+Annual Report 2018
+8/8
+Zheng Fuqing
+2/2
+10/10
+7/7
+8/8
+Mei Yingchun
+2/2
+9/10
+717 -- -2/3 -
+Dong Shi
+2/2
+10/10
+6/6
+7/7
+2/2
+9/10
+5/6
+ཚ་།།
+7/8
+5/6
+3/3
+Independent Non-executive Directors
+Hong Yongmiao
+2/2
+10/10
+7/7
+6/6
+Ye Donghai
+-
+9/10
+2/2
+97
+Implementation of Resolutions of the Shareholders' General Meeting by the Board
+of Directors
+The Board of Directors of the Bank earnestly and fully implemented the resolutions adopted by the Shareholders' General
+Meeting during the reporting period.
+Board of Directors and Special Committees
+Composition of the Board of Directors
+The Bank formulated relatively complete procedures for nominating and electing Directors. With diversified backgrounds,
+the Directors complemented each other on one hand with regard to their expertise, professional competence and experience
+and expressed professional and diversified perspectives and views, which ensured scientific decision-making of the Board of
+Directors. As at the disclosure date of the results, the Board of Directors of the Bank consisted of 12 directors, including one
+Executive Director: Mr. Gu Shu; five Non-executive Directors: Mr. Cheng Fengchao, Mr. Zheng Fuqing, Ms. Mei Yingchun,
+Mr. Dong Shi and Mr. Ye Donghai; and six Independent Non-executive Directors: Mr. Hong Yongmiao, Mr. Anthony Francis
+Neoh, Mr. Yang Siu Shun, Ms. Sheila Colleen Bair, Mr. Shen Si and Mr. Nout Wellink. Mr. Gu Shu was Vice Chairman of the
+Board of Directors. The Executive Director has worked in the areas of banking and management for a long time, possesses
+extensive professional expertise and experience in those areas and is familiar with operation and management of the
+Bank. Non-executive Directors have worked in the fiscal, economic and financial sectors for many years, and they have rich
+practical experience and relatively high level of understanding of policies and theories. All of the Independent Non-executive
+Directors are prestigious Chinese or foreign experts in their respective areas, e.g. economy, finance, audit and law, and they
+are familiar with Chinese and foreign regulatory rules and have a good knowledge of corporate governance, finance and
+bank management. The number of Independent Non-executive Directors of the Bank accounted for more than one third of
+the total members of the Board of Directors, complying with relevant regulatory requirements.
+Meetings of the Board of Directors
+During the reporting period, the Board of Directors of the Bank held ten meetings, considered 79 proposals including the
+proposals on the 2017 Work Report of the Board of Directors, amendment of the Plan on Authorization of the Shareholders'
+General Meeting to the Board of Directors and the Plan on Authorization of the Board of Directors to the President,
+nomination of candidates for Directors, and issuance of domestic and offshore preference shares, and heard 34 reports
+including the reports on the 2018 Work Plan of the Board of Directors, the Directors' performance assessment by the Board
+of Directors for 2017, the details on internal audits, and the summary of external audits. For major proposals reviewed by
+the Board of Directors, please refer to the announcements of the Bank on the websites of SSE and SEHK or the website of
+the Bank. In addition, the Board of Directors held an Analytical Meeting on Implementing the Strategic Development Plan for
+2018-2020. At the meeting, Directors studied and discussed the implementation of the Plan in 2018 and deliberated on the
+next-step measures for optimization.
+ICBC
+Corporate Governance Report
+The attendance of each of the Directors in Shareholders' General Meetings and meetings of the Board of Directors and the
+special committees of the Board of Directors during the reporting period is set out below:
+Attendances in person/Number of meetings that should be attended
+Special Committees of the Board of Directors:
+Shareholders'
+Risk
+Related Party
+Transactions
+Directors
+General
+Meeting
+Board of
+Directors
+Strategy
+Committee
+Audit Management
+Committee Committee
+Nomination Compensation
+Committee Committee
+Control
+Committee
+Executive Directors
+Gu Shu
+2/2
+10/10 717 - 6/6 3/3 -
+Non-executive Directors
+Cheng Fengchao
+8/8
+6/6
+96
+Anthony Francis Neoh
+4/5
+5 --3/5 -
+Wang Jingdong
+1/1
+6/7
+2/2
+Fei Zhoulin
+1/1
+7/7
+5/5
+7/7
+5/5
+Or Ching Fai
+1/1
+8/8
+7/7
+6/6
+5/5
+3/3
+3/3
+Notes: (1)
+"Attendances in person" refers to attending meetings in person or on telephone or by video conference.
+(2)
+(3)
+Directors who did not attend the meetings of the Board of Directors and its special committees in person appointed other
+directors to attend the meetings and exercise the voting right on their behalf.
+For the change of directors, please refer to the section headed "Directors, Supervisors, Senior Management, Employees and
+Institutions Appointment and Removal".
+(4) Mr. Nout Wellink was appointed as Independent Non-executive Director of the Bank in December 2018.
+3/3
+Special Committees of the Board of Directors
+1/1
+Zhang Hongli
+The Board of Directors of the Bank has established six special committees, namely, the Strategy Committee, the Audit
+Committee, the Risk Management Committee, the Nomination Committee, the Compensation Committee and the
+Related Party Transactions Control Committee. Except the Strategy Committee, chairmen of all the other committees were
+assumed by Independent Non-executive Directors. More than half of the members of the Audit Committee, the Nomination
+Committee, the Compensation Committee and the Related Party Transactions Control Committee were Independent
+Non-executive Directors. During the reporting period, the performance of duties by the special committees of the Board of
+Directors is set out below:
+10/10
+2/2
+5/7
+5/6
+10/10
+5/6
+2/3
+Yang Siu Shun
+2/2
+10/10
+5/6
+5/6
+2/3
+2/3
+Sheila Colleen Bair
+8/8
+9/10
+2/2
+2/2
+Yi Huiman
+0/1
+Nout Wellink
+3/3
+8/8
+Directors Leaving Office
+10/10
+2/2
+Shen Si
+7/8
+6/6
+7/7
+30.5
+Percentage of cash dividends (1) (%)
+Note: (1) Calculated by dividing cash dividends on ordinary shares (pre-tax) by net profit attributable to ordinary shareholders of the parent
+company for the period.
+For details on the distribution of dividends on preference shares of the Bank, please refer to the section headed "Details of
+Changes in Share Capital and Shareholding of Substantial Shareholders - Preference Shares".
+The Articles of Association of the Bank explicitly stipulates that the Bank's profit distribution policy shall maintain its
+continuity and stability and meanwhile have regard to the long-term interest of the Bank, the overall interests of all
+shareholders and the sustainable development of the Bank. It emphasizes the priority to adopt cash dividend as the profit
+distribution method and provides that the Bank's adjustment to the profit distribution policy shall be discussed by the Board
+of Directors as a special proposal and the grounds for adjustment shall be substantiated and proved in detail and presented
+in a written substantiating report for Independent Non-executive Directors to issue their opinions, and then the report will be
+submitted to the Shareholders' General Meeting for approval as a special resolution.
+108
+ICBC
+―
+Corporate Governance Report
+Formulation and Implementation of Cash Dividend Policy
+30.5
+2.408
+83,506
+85,823
+89,315
+2.343
+2016
+2017
+2018
+2.506
+Cash dividends (pre-tax, in RMB millions)
+Dividend per ten shares (pre-tax, in RMB yuan)
+Item
+The Bank had no plan for converting capital reserve to share capital in the last three years. The table below sets out the
+dividend distribution of ordinary shares of the Bank for the last three years:
+30.5
+During the preparation and audit of the 2018 financial statements, the Audit Committee discussed and agreed with the
+external auditors matters such as audit schedule and progress arrangement, followed the status of external audit and
+conducted supervision over relevant work at appropriate time by means of hearing reports and holding informal discussions,
+and reviewed the unaudited and preliminarily audited annual financial statements respectively. The Audit Committee held a
+meeting on 27 March 2019, and considered that the annual financial statements truly, accurately and completely reflected
+the financial position of the Bank. The Audit Committee reviewed the summary of audit work performed by external auditors
+during the year and made an overall and objective assessment on its performance and quality of practice. It also approved
+the renewal of the engagement of KPMG Huazhen LLP and KPMG as the external auditors of the Bank for 2019 and the
+engagement of KPMG Huazhen LLP as the internal control auditors of the Bank for 2019, and presented the proposals to the
+Board of Directors for consideration.
+The Risk Management Committee is responsible for constantly monitoring and examining the risk management system of
+the Bank, and examining the effectiveness of the system at least on an annual basis. Under the enterprise risk management
+system structure of the Bank, the Risk Management Committee performed its function of examining the Bank's risk
+management system through reviewing and revising the risk strategy, risk management policy, risk appetite and the
+enterprise risk management structure, monitoring and evaluating the setup, mode of organization, work procedures and
+results of risk management departments, regularly assessing the risk policy, risk appetite and enterprise risk management
+status, supervising and assessing risk control activities conducted by the Senior Management members in terms of credit
+risk, market risk, operational risk, liquidity risk, compliance risk, reputational risk and other risks. In accordance with the
+relevant requirements in the Enhanced Prudential Standards for Bank Holding Companies and Foreign Banking Organisation
+established by the Federal Reserve Board, the Risk Management Committee supervised the implementation of the
+US business-related risk management framework and relevant policies. The Board of Directors and the Risk Management
+Committee heard the report made by the Management on the Group's risk management every half year and examined the
+Bank's risk management and internal control system. For details of the risk management, please refer to the section headed
+"Discussion and Analysis Risk Management".
+The Audit Committee is responsible for constantly monitoring and examining the internal control system of the Bank,
+and examining the effectiveness of the system at least on an annual basis. The Audit Committee performed its function
+of examining the Bank's internal control system through reviewing the administrative rules and regulations and their
+implementation, and examined and assessed the compliance and effectiveness of major operating activities of the Bank.
+The Board of Directors of the Bank is responsible for establishing, improving and effectively implementing internal control
+and truthfully disclosing internal control assessment reports according to the standard system for enterprise internal control.
+The objective of the internal control of the Bank is to reasonably assure the compliance of its operation and management
+with relevant laws, safety of its assets, as well as the authenticity and completeness of its financial reports and relevant
+information, in order to enhance operation efficiency and results, and to facilitate the realization of its development strategy.
+Due to inherent limitation of internal control, only reasonable assurance can be provided for the afore-mentioned objectives.
+The Board of Directors and the Audit Committee have reviewed and approved the 2018 Internal Control Assessment Report
+of the Bank. For details of the Bank's internal control, please refer to the section headed "Corporate Governance Report -
+Internal Control".
+The Related Party Transactions Control Committee is mainly responsible for developing the basic policies governing the
+management of related party transactions, identifying the Bank's related parties, approving related party transactions and
+other related matters within the authority granted by the Board, receiving related party transaction statistics for filing purpose,
+reviewing the related party transactions that are subject to the approval of the Board of Directors or the Shareholders'
+General Meeting, and reporting to the Board of Directors on the implementation of the related party transaction management
+policies as well as the conditions on these transactions. As at the disclosure date of the results, the Related Party Transactions
+Control Committee consisted of four directors, including Independent Non-executive Directors Mr. Yang Siu Shun,
+Mr. Hong Yongmiao, Mr. Shen Si and Mr. Nout Wellink. Independent Non-executive Director Mr. Yang Siu Shun was Chairman
+of the Committee.
+◆Related Party Transactions Control Committee
+The Compensation Committee organized the performance assessment of directors, and put forth proposal on remuneration
+distribution for directors and submitted the same to the Shareholders' General Meeting after the approval of the Board
+of Directors. It also formulated and reviewed the assessment measures and compensation plans for Senior Management
+members of the Bank and evaluated the performance and behaviors of Senior Management members, results of which
+were submitted to the Board of Directors or the Shareholders' General Meeting, if falling into the responsibilities of
+the Shareholders' General Meeting, for approval. According to applicable regulations including the Measures on the
+Assessment of Performance of Duties of Directors in Commercial Banks (Trial), the Articles of Association and the Rules
+on the Assessment of Performance of Duties of Directors by the Board of Directors (Revision in 2016) of the Bank, the
+Compensation Committee organized the performance assessment of Directors by the Board of Directors for 2017.
+Performance of the Compensation Committee During the reporting period, the Compensation Committee held three
+meetings, considered three proposals including the proposals on the payment of remuneration to Directors and Senior
+Management members for 2017 and the Senior Management performance evaluation plan for 2018, and heard the 2017
+assessment report on the performance of duties of Directors by the Board of Directors. The Compensation Committee put
+forward comments or suggestions on matters including improvement of the compensation incentive mechanism.
+The Compensation Committee is mainly responsible for formulating assessment measures on the performance of duties
+and compensation plans for Directors, organizing the assessment on the performance of duties of Directors, putting forth
+proposal on remuneration distribution for Directors, formulating and reviewing the assessment measures and compensation
+plans for Senior Management members of the Bank and evaluating the performance and behaviors of Senior Management
+members. As at the disclosure date of the results, the Compensation Committee consisted of seven directors, including
+Executive Director Mr. Gu Shu; Independent Non-executive Directors Mr. Nout Wellink, Mr. Anthony Francis Neoh,
+Ms. Sheila Colleen Bair and Mr. Shen Si; Non-executive Directors Ms. Mei Yingchun and Mr. Dong Shi. Independent
+Non-executive Director Mr. Nout Wellink was Chairman of the Committee.
+◆ Compensation Committee
+Performance of the Nomination Committee During the reporting period, the Nomination Committee held six meetings,
+considered eight proposals including the proposals on the nomination of Mr. Cheng Fengchao, Mr. Zheng Fuqing,
+Mr. Nout Wellink, Mr. Fred Zuliu Hu, Mr. Hu Hao and Mr. Tan Jiong as candidates for Directors of the Bank, and heard
+the report on the framework of the Board of Directors in 2017. The Nomination Committee put forward comments or
+suggestions on matters including the recommendation and nomination of candidates for Directors, the assessment of the
+framework of the Board of Directors and the candidates for chairmen and members of special committees under the Board
+of Directors.
+Nomination Committee assesses the improvement of diversified composition of the Board of Directors during the course
+of its yearly assessment on the framework, number of Directors and composition of the Board of the Directors, and
+discusses and designs measurable goals according to actual conditions. As at the disclosure date of the results, there were
+six Independent Non-executive Directors, accounting for more than one third of the total members of the Board of Directors;
+and there were two female Directors. The Bank attached importance to diversified sources and backgrounds of Directors and
+continued the efforts to enhance the professionalism of the Board of Directors, thus laying the foundation for the effective
+operation and scientific decision-making of the Board of the Directors.
+Corporate Governance Report
+ICBC
+100
+The Articles of Association of the Bank specifies methods and procedures to nominate Directors. Please refer to Article 118
+of the Articles of Association. During the reporting period, the Bank appointed and renewed the appointments of Directors
+of the Bank in strict accordance with the Articles of Association of the Bank. The Nomination Committee reviews the
+qualifications of candidates for Directors based on whether the candidate complies with applicable laws, administrative
+rules, regulations and the Articles of Association of the Bank. According to the requirement on diversified composition of
+the Board of Directors in the Rules for Recommendation and Nomination of Board Candidates of the Bank, the Nomination
+Committee shall pay attention to the complementarity of the candidates in terms of expertise, professional competence
+and experience, cultural and educational background, gender, etc., to ensure the members of the Board of Directors are
+well equipped, experienced and have diversified perspectives and views. In order to implement the diversity policy, the
+The Nomination Committee is mainly responsible for making recommendations to the Board of Directors on candidates
+for Directors and Senior Management members, nominating candidates for chairmen and members of special committees
+of the Board of Directors, and formulating the standards and procedures for selection and appointment of Directors
+and Senior Management members as well as the training and development plans for Senior Management members and
+key reserved talents. The Nomination Committee is also responsible for assessing the structure, size and composition of
+the Board of Directors on a yearly basis and making recommendations to the Board of Directors based on the Bank's
+development strategy. As at the disclosure date of the results, the Nomination Committee consisted of six directors,
+including Executive Director Mr. Gu Shu; Independent Non-executive Directors Mr. Hong Yongmiao, Mr. Anthony Francis
+Neoh, Mr. Yang Siu Shun and Ms. Sheila Colleen Bair; Non-executive Director Mr. Ye Donghai. Independent Non-executive
+Director Mr. Hong Yongmiao was Chairman of the Committee.
+◆ Nomination Committee
+For dividend-related tax and tax reduction, please refer to the announcements on dividend distribution of the Bank.
+Examining the risk management system
+The Risk Management Committee held a seminar in May and December 2018, respectively. At the seminars, the committee
+heard the implementation of EPS by the Bank's US-based institutions and their compliance with EPS and launched a relevant
+discussion; learned about the development of the Bank's anti-money laundering systems-BRAINS and COMPASS and the
+operation of the anti-money laundering monitoring system at domestic institutions and launched a relevant discussion; heard
+the report on the Bank's information security rules and regulations, information security challenges and countermeasures
+and discussed the design of the Bank's information security system architecture and policy; heard the influence of the EU
+General Data Protection Regulation (GDPR) on the Bank and countermeasures and discussed how to link GDPR compliance
+with anti-money laundering compliance.
+Performance of the Risk Management Committee During the reporting period, the Risk Management Committee
+held eight meetings, considered 17 proposals including the proposals on the liquidity risk management strategy for 2018,
+the country risk concentration limit for 2018-2019, the risk appetite management measures, and the liquidity risk appetite
+of US-based institutions, and heard 17 reports on the topics including the Group's AML work for 2017 and the IT risk
+management for 2017. The Risk Management Committee put forward comments or suggestions on matters including
+institutionalizing of the risk management policy mechanism, the Group's AML work and the risk management of US-based
+institutions.
+Corporate Governance Report
+99
+Annual Report 2018
+The Risk Management Committee is primarily responsible for constantly overseeing the Bank's risk management system,
+reviewing and revising the strategy, policy and procedures of risk management and internal control process of the Bank,
+and supervising and evaluating the performance of Senior Management members and risk management departments in
+respect of risk management. It concurrently serves as the US risk committee in accordance with the relevant requirements
+in the Enhanced Prudential Standards for Bank Holding Companies and Foreign Banking Organizations ("EPS") established
+by the Federal Reserve Board. As at the disclosure date of the results, the Risk Management Committee consisted of eight
+directors, including Independent Non-executive Directors Mr. Anthony Francis Neoh, Mr. Hong Yongmiao, Mr. Yang Siu Shun,
+Ms. Sheila Colleen Bair and Mr. Shen Si; Non-executive Directors Mr. Cheng Fengchao, Mr. Zheng Fuqing and Mr. Dong Shi.
+Independent Non-executive Director Mr. Anthony Francis Neoh was Chairman of the Committee.
+◆Risk Management Committee
+The Bank has established a vertical and independent internal audit management system responsible and reporting to
+the Board of Directors. The Board of Directors regularly reviews the internal audit plan and hears internal audit reports
+on internal audit activities, audit supporting measures, internal audit team building, etc., thus effectively performing the
+function of risk management. The Audit Committee examines, monitors and assesses the internal audit work of the Bank,
+supervises the internal audit rules and their implementation, and makes assessment of audit procedures and results of the
+internal audit department. It is also responsible for urging the Bank to ensure adequate resources for the internal audit
+department and coordinating the communication between the internal audit department and external auditors. The internal
+audit department is accountable to and reports to the Board of Directors, is guided by the Board of Supervisors and is under
+the examination, supervision and assessment of the Audit Committee. For details of the internal audit, please refer to the
+section headed "Corporate Governance Report - Internal Audit".
+Effectiveness of the internal audit function
+Examining internal control system
+-
+In 2019, the Bank will further and proactively deepen the communication and exchange with investors to enhance investors'
+understanding and recognition of the Bank and continue to protect legitimate interests of the investors, and at the same
+time hope to receive more support from, and attention of the investors.
+As approved at the Annual General Meeting for the Year 2017 held on 26 June 2018, the Bank has distributed cash
+dividends of about RMB85,823 million, or RMB2.408 per ten shares (pre-tax) for the period from 1 January 2017 to
+31 December 2017 to the ordinary shareholders whose names appeared on the share register after the close of market on
+12 July 2018.
+Xi'an
+Office
+Wuhan
+Office
+Shanghai
+Office
+Nanjing
+Office
+Office
+Tianjin
+Shenyang
+Office
+Beijing
+Office
+Board of Supervisors
+Internal Audit Bureau
+Senior Management
+Guangzhou Kunming
+Office
+Office
+Audit Committee
+The Bank established a vertical and independent internal audit management system responsible and reporting to the Board
+of Directors. The chart below illustrates the internal audit management and reporting framework of the Bank:
+Internal Audit
+There was no factor that affected the assessment conclusion of internal control effectiveness from the benchmark date to
+the issuance date of the internal control assessment report.
+The Board of Directors of the Bank conducted a self-assessment on the effectiveness of the Group's internal control during
+the reporting period in accordance with the Basic Standard for Enterprise Internal Control and its supporting guidelines
+issued by five ministries and commissions including MOF, the Guidelines for Internal Control of Listed Companies issued
+by SSE and relevant regulatory requirements of CBIRC. No material or significant deficiencies were detected in the Bank's
+internal control system during the assessment. Risks that may arise from ordinary deficiencies are controllable and corrective
+actions have been or are being taken, which have no material impact on the fulfillment of internal control objectives of the
+Bank. The Bank had maintained effective internal control in all material aspects in accordance with the standard system for
+enterprise internal control and relevant rules.
+Internal Control Evaluation and Defects
+Corporate Governance Report
+105
+Annual Report 2018
+While disclosing the annual report, the Bank also disclosed the 2018 Internal Control Assessment Report of Industrial and
+Commercial Bank of China Limited in accordance with the requirements of MOF, CSRC and SSE. The report stated that the
+Bank had maintained effective internal control over financial reporting in all material aspects in accordance with the standard
+system for enterprise internal control and relevant rules as at 31 December 2018 (benchmark date). KPMG Huazhen (Special
+General Partnership) has audited the effectiveness of the Bank's internal control over financial reporting as at 31 December
+2018 and issued the standardized audit report on internal control. For details, please refer to the websites of SSE and SEHK.
+Internal Control Evaluation Report and Internal Control Audit
+Annual Report 2018
+Board of Directors
+Chengdu
+Office
+Secondary reporting line
+During the reporting period, the Bank acted on the regulatory requirements of the industry, implemented risk-oriented audit
+activities and fully accomplished the annual audit plan according to the development strategy and central tasks of the Bank.
+The audit activities covered main aspects of operation and management, such as credit business, financial benefit, internal
+control, capital management, overseas institutions, asset management, internet-based finance, customer services and duty
+performance of Senior Management members in their tenure of office. The audit activities paid close attention to credit risk,
+market risk, liquidity risk and operational risk under the complicated operating circumstances, and underscored the coverage
+of cross-business, cross-market and cross-regulator complicated risks and their control effects. The audit activities supervised
+and assessed the quality and effect of the compliance with regulatory requirements, implementation of major strategies,
+management of major risks and intensified internal control by some institutions and in main business areas of the Group. The
+Bank also paid close heed to audit findings and made full use of relevant audit recommendations, with the aim of enhancing
+risk management, internal control and corporate governance level.
+The profit and financial status of the Bank during the reporting period are presented in the Auditor's Report and Financial
+Statements of the Annual Report.
+Profits and Dividends Distribution
+Principal Business The principal business of the Bank and its subsidiaries is the provision of banking and related
+financial services. Please refer to the section headed "Discussion and Analysis" for the business review of the Bank.
+Report of the Board of Directors
+107
+Annual Report 2018
+Postal code: 100140
+Address: Corporate Strategy and Investor Relations Department, Industrial and Commercial Bank of China Limited,
+55 Fuxingmennei Avenue, Xicheng District, Beijing, China
+E-mail: ir@icbc.com.cn
+Facsimile: 86-10-66107571
+If an investor wishes to enquire any questions related to operation performance of the Bank, please contact:
+Telephone: 86-10-66108608
+Investor Enquiries
+The Bank made constant and extensive communication with institutional investors and minority investors through press
+conferences in relation to periodic results announcements, non-deal road shows, reverse road shows, conferences with large
+institutions, investor hotline, investor relations mailbox, investor relations website and the online platform of sseinfo.com,
+which enhanced investors' confidence in economic development of China and the operational transformation of the Bank
+and helped bring the market value in line with the long-term intrinsic value of the Bank. The Bank improved investor
+relations information collection and market information feedback mechanism, strengthened dynamic monitoring of share
+price valuation, analyst reports and media and public opinions, followed and analyzed spotlight issues of the capital market,
+and effectively enhanced the quality of communication with the investors. The Bank actively understood and solicited the
+comments and suggestions of the capital market on the Bank, and made timely reaction with the help of many operation
+and communication strategies, so as to continuously strengthen the level of corporate governance and core values of the
+Bank.
+In 2018, the Bank strove to improve the quality of investor relations services and generate stable return to shareholders
+following the principle of serving investors in a proactive, precise, coordinated and efficient manner.
+Overview of Investor Relations Activities in 2018
+Investor Relations
+During the reporting period, KPMG and its member institutions provided the Group with non-audit services such as tax advisory
+services and the professional services for the bonds issuance, and received RMB6 million for such professional non-audit services.
+During the reporting period, the Group paid KPMG and its member institutions a total fee of RMB210 million for the
+audit of financial statements (including the audit of financial statements of subsidiaries and overseas branches). Of which,
+RMB136 million (including fee for internal control audit of RMB11.50 million) was paid by the Bank.
+KPMG Huazhen LLP and KPMG have been providers of audit services for the Bank for six consecutive years (2013-2018).
+KPMG Huazhen LLP was the domestic auditors of the Bank for the financial statements audit in 2018, and KPMG was the
+international auditors of the Bank for the financial statements audit in 2018. KPMG Huazhen LLP was also the auditors of
+internal control of the Bank in 2018.
+Engagement of Auditors
+Corporate Governance Report
+ICBC
+106
+During the reporting period, internal audit of the Bank actively adapted to the changes in the risk management conditions,
+refined the audit management mechanism, improved the audit quality and efficiency, continuously advanced the digital
+transformation of internal audit, intensified efforts in organizing professional qualification programs and project-specific
+trainings, expanded the professional development space of teams, and constantly enhanced the audit service capacity and
+professionalism.
+The Board of Directors of the Bank proposed distributing cash dividends of RMB2.506 (pre-tax) for each ten shares of
+356,406,257,089 ordinary shares for 2018, totaling about RMB89,315 million. The distribution plan will be submitted for
+approval to the Annual General Meeting for the Year 2018. Once approved, the above-mentioned dividends will be paid to
+the holders of A shares and H shares whose names appeared on the share register of the Bank after the close of market on
+2 July 2019. The Bank will suspend the registration procedures of H share ownership transfer on 27 June 2019 (inclusive)
+through 2 July 2019 (inclusive). The holders of H shares of the Bank that desire to receive the proposed cash dividends
+but have not registered the ownership transfer documents are requested to hand over their ownership transfer documents
+together with the H shares to the Bank's H share registrar- Computershare Hong Kong Investor Services Limited that is
+located at Room 1712-1716, 17 Floor, Hopewell Center, 183 Queen's Road East, Wanchai, Hong Kong no later than 4:30
+p.m. of 26 June 2019. Pursuant to relevant regulatory requirements and operational rules, dividends on A shares and H
+shares will be paid on 3 July 2019 and 23 July 2019, respectively.
+Primary reporting line
+The internal monitoring and evaluation has remained effective. The Bank hardened the whole-process control over supervision
+and inspection, standardized the processes of supervision and inspection, and built a three-dimensional, well-linked and multi-
+channel supervision and inspection mechanism. Consistent with the regulatory requirements, the Bank adopted a "four-
+driver" system (assessment governance - - inspection - rectification) to improve the quality of correction. It carried forward
+inspection and audit projects in a focused manner. It raised more stringent requirements, adhered to "dual-line remediation",
+supervised and assessed the effects of remediation, and strengthened the implementation of remediation accountability
+measures and the improvement of remediation effects. The Bank constantly improved the internal control assessment work,
+and facilitated the evolution of internal control assessment to one featuring "big data monitoring and regular assessment".
+Anti-money Laundering and Regulatory Compliance
+•
+Compliance of Overseas Institutions
+•
+Effective Risk Data Aggregation
+Introduction trainings for newly-appointed directors of the Bank:
+•
+Introduction to Corporate Governance and Operation of the Board of Directors
+102
+ICBC
+Information Security and Compliance Management
+Corporate Governance Report
+Independence and Performance of Duties of Independent Non-executive Directors
+The qualifications, number and proportion of the Bank's Independent Non-executive Directors comply with regulatory
+requirements. The Bank's Independent Non-executive Directors do not have any business or financial interests in the
+Bank or its subsidiaries, and they have not assumed any managerial position in the Bank. The Bank has received the
+annual confirmation on independence from all Independent Non-executive Directors and considered that they were
+independent.
+During the reporting period, the Bank's Independent Non-executive Directors earnestly attended the meetings of the
+Board of Directors and special committees, gave independent opinions during consideration of issues, and provided
+recommendations on areas such as strategic management, business transformation, innovative development, corporate
+governance, risk management, compliance management, FinTech and inclusive financial business of the Bank. During
+the adjournment, Independent Non-executive Directors of the Bank conducted on-site investigations in terms of the
+Bank's support for private economy, the provision of financial services to fight against poverty, the credit asset quality
+and credit cultural improvement and the impacts of changes in international conditions on the operation of overseas
+institutions; they also proactively exchanged opinions with the Management during special-topic discussions. During the
+reporting period, the Bank's Independent Non-executive Directors put forward comments and suggestions in respect
+of business management and strategy implementation. Their suggestions were about providing appropriate services for
+private economy, accelerating FinTech innovation, strengthening information security management, advancing channel
+transformation and intelligent bank construction and reinforcing risk control and compliant development. The Bank paid
+close attention to the relevant comments and suggestions, and organized the implementation thereof according to the
+actual conditions.
+During the reporting period, the Bank's Independent Non-executive Directors did not raise any objection on proposals of
+the Board of Directors and special committees of the Board of Directors.
+For information of performance of duties of Independent Non-executive Directors of the Bank during the reporting
+period, please refer to the Work Report of Independent Non-executive Directors for 2018 issued by the Bank on
+28 March 2019.
+Board of Supervisors
+Composition of the Board of Supervisors
+As at the disclosure date of the results, the Board of Supervisors of the Bank consisted of five members, including one
+Shareholder Supervisor, namely Mr. Zhang Wei; two Employee Supervisors, namely Mr. Hui Ping and Mr. Huang Li; and two
+External Supervisors, namely Mr. Qu Qiang and Mr. Shen Bingxi.
+Meetings of the Board of Supervisors
+Training of Board Secretary
+•
+•
+Improvement of the Board of Directors and Duty Performance of Directors
+101
+Corporate Governance Report
+Performance of the Related Party Transactions Control Committee During the reporting period, the Related
+Party Transactions Control Committee held three meetings, considered two proposals in respect of, among others, the
+identification of related parties of the Bank, and heard two reports including the report on related party transactions in 2017
+and the identification of related parties of the Bank in 2017. The Related Party Transaction Control Committee put forward
+comments or suggestions on matters including the improvement of management of related party transactions and inside
+transactions of the Bank.
+Responsibilities of Directors in Respect of Financial Statements
+The Directors of the Bank acknowledged that they are responsible for the preparation of the financial statements of the
+Bank. During the reporting period, in strict compliance with relevant provisions, the Bank published the 2017 Annual Report,
+the First Quarterly Report, the Interim Report and the Third Quarterly Report of 2018 as scheduled.
+Term of Directors
+The Bank has strictly complied with the requirements of the exchanges on which the Bank is listed and the Articles of
+Association of the Bank that Directors are elected by the Shareholders' General Meeting with a term of three years, and the
+appointment shall take effect from the date of approval by CBIRC or upon completion of relevant procedures according to
+the requirements of CBIRC. Directors may be re-appointed through re-election at the Shareholders' General Meeting after
+expiry of their term.
+Investigation and Training of Directors
+During the reporting period, the Bank developed the training plan for the Board of Directors, increased training resources,
+and encouraged and actively organized the Directors to attend trainings, with the aim of assisting the Directors in continuing
+to improve their ability to perform their duties. During the reporting period, Directors of the Bank attended relevant trainings
+according to work needs. Besides, the Directors of the Bank enhanced their duty performance capabilities by attending
+seminars as well as conducting on-site investigations in some domestic and overseas peers and affiliates of the Bank.
+Subject matters of the trainings attended by the Directors of the Bank during the reporting period were mainly as follows:
+Trainings held by the regulatory authorities:
+•
+Beijing Office of CSRC
+Regulated Operation, Investment and Financing, Information Disclosure, Newly-appointed
+Directors and Supervisors
+Special business trainings of the Bank:
+•
+Corporate Governance
+• Influence of the US Tax Cuts & Jobs Act on Banks
+•
+FinTech and Network Security
+New Banking Regulations and Their Influence
+During the reporting period, the Board of Supervisors held seven meetings, reviewed 19 proposals including the proposals
+on the 2017 Work Report of the Board of Supervisors and the Report on Development Strategy Assessment Opinions, heard
+13 reports on the business operation, internal control and risk management, and reviewed 26 documents including the
+documents on the supervision in each quarter of 2018 and the rectification progress of issues indicated in the survey reports
+of the Board of Supervisors.
+Annual Report 2018
+During the reporting period, the Board Secretary of the Bank attended the relevant specialized trainings, with the training
+hours over 15 hours, which meets relevant regulatory requirements.
+Corporate Governance Report
+0/0
+Note: For the change of supervisors, please refer to the section headed "Directors, Supervisors, Senior Management, Employees and
+Institutions Appointment and Removal".
+Securities Transactions of Directors and Supervisors
+The Bank has adopted a set of codes of conduct concerning the securities transactions by directors and supervisors which
+are no less stringent than the standards set out in the Model Code for Securities Transactions by Directors of Listed Issuers,
+Appendix 10 to the Hong Kong Listing Rules. After making enquiries to all Directors and Supervisors of the Bank, each
+Director and Supervisor confirmed that he/she has complied with the provisions of the aforesaid codes of conduct during the
+year ended 31 December 2018.
+Chairman and President
+Pursuant to Code Provision A.2.1 of the Corporate Governance Code (Appendix 14 to the Hong Kong Listing Rules) and the
+Articles of Association of the Bank, the roles of Chairman and President should be separated, and the Chairman shall not
+concurrently hold the position of legal representative or chief responsible officer of the controlling shareholder.
+The Chairman of the Bank is the legal representative of the Bank, and is responsible for leading the Board of Directors
+in considering and formulating business development strategies, risk management, internal control and other significant
+matters of the Bank.
+Mr. Gu Shu is the President of the Bank, who is responsible for the daily management of the business operations of the
+Bank. The President is appointed by and accountable to the Board of Directors, and performs his responsibilities as stipulated
+in the Articles of Association of the Bank and as authorized by the Board of Directors.
+103
+The powers of the Board of Directors and the Senior Management are separated in strict compliance with the Articles
+of Association and other corporate governance documents of the Bank. During the reporting period, the Bank made an
+inspection on the implementation of the plan on authorization of the Board of Directors to the President, and no matter was
+found to be beyond the approval authority of the President.
+Inside Information Management
+The Bank manages inside information and insiders in strict accordance with regulatory requirements of the exchanges
+on which the Bank is listed and the Bank's rules, and ensures collection, delivery, sorting, preparation and disclosure of
+relevant information in compliance with applicable laws and regulations. During the reporting period, the Bank continued
+104
+ICBC
+Corporate Governance Report
+to strengthen inside information confidentiality management, timely organized the completion of insider lists and regularly
+conducted insider transaction self-inspections. After self-inspections, none of the insiders of the Bank were found to be
+involved in dealings in shares of the Bank who have taken advantage of inside information during the reporting period.
+Internal Control
+The Board of Directors is responsible for formulating the basic regulations for internal control and supervising the
+implementation of such regulations. The Audit Committee and the Related Party Transactions Control Committee of the Board
+of Directors perform the responsibilities of internal control management and review the effectiveness of internal control.
+The Bank has set up the Internal Audit Bureau and the Internal Audit Sub-bureau, which adopt a hierarchical management
+system and are responsible to and report to the Board of Directors. The Head Office and branches have internal control and
+compliance departments which are responsible for the bank-wide organization, promotion and coordination of internal control.
+The internal control environment has been optimized continuously. The Bank put the Planning for Internal Control System
+Building for 2018-2020 into implementation and set the objective of the Group's internal control system building in the new
+era. While launching the "Year of Internal Control and Compliance" campaign, the Bank promoted the core philosophy of
+compliance culture that "compliance is the fundamental of responsibility of the entire staff to keep risks under control and
+ensure efficient operation". Based on the operation transformation needs, the Bank completed the structural adjustment of the
+Head Office, branches and sub-branches as well as staffing, and refined the performance assessment and business evaluation
+system.
+The technological level of risk management has risen evidently. The Bank completed the hierarchical risk appetite indicators
+system with capital constraint at the core, and built a risk limit management system by the Group, the Bank, geographical
+location, industry, customer, product and mitigant. The Bank encouraged the initiation of the cross-financial risk statistics &
+monitoring platform system project and the phased development of the system in a bid to become more capable of identifying,
+assessing, monitoring, counting, warning and reporting cross-financial risks.
+Control activities have become more effective. The Bank developed the Internal Control Manual to perfect the all-staff and
+whole-process internal control system building. The review and approval function of financing for general legal person
+customers and small and micro enterprises and residential mortgages were caused to delegate to tier-2 branches, while the
+business scope, targets and authorities of credit sub-authorization business were determined on a reasonable and prudential
+basis. The Bank installed a uniform management platform of internal account accounting and pushed forward the collation and
+amelioration of relevant business processes to step up the whole-process e-management of internal accounts.
+Information communication has been further streamlined. The Bank issued a new version of data quality assessment measures,
+updated domestic and overseas data quality management system and established a comprehensive and accurate data quality
+evaluation system. It strengthened the intelligent monitoring, analysis and mining of customers and treasury transactions,
+performed mining labeling of behavior classification and relationship network and put the analytical results into wider
+applications in business scenarios. The Bank advanced the construction of Information Security Operation Center, perfected the
+rapid emergency response mechanism in face of attacks and realized the automatic ban on high-risk alarms.
+0/0
+Qian Wenhui
+Powers and Functions of the Senior Management
+Supervisor leaving office:
+Supervisor
+Current supervisors:
+Zhang Wei
+Hui Ping
+Huang Li
+Qu Qiang
+Shen Bingxi
+Attendances in person/Number of meetings that should be attended
+Shareholders'
+General
+Meeting
+Board of
+Supervisors
+Attendance of supervisors of the Bank in meetings during the reporting period is as follows:
+7/7
+2/2
+7/7
+2/2
+7/7
+2/2
+7/7
+2/2
+7/7
+2/2
+General Meeting
+Audit Committee
+Related Party
+Transactions Control
+Committee
+Head Office Departments, Profitability Units and
+Directly Managed Institutions of the Head Office
+Internal Audit
+Sub-bureau
+Internal Audit Bureau
+Shareholders'
+Marketing
+Management
+Departments
+Senior Management
+Compensation
+Committee
+Board of Directors' Office
+Nomination
+Strategy
+Committee
+Risk
+Management
+Committee
+Board of Directors
+Organizational Chart
+117
+Annual Report 2018
+Establishment of Wealth Management Subsidiary The Board of Directors of the Bank reviewed and
+approved the Proposal on the Establishment of ICBC Wealth Management Co., Ltd. at the meeting of the Board of Directors
+convened on 26 November 2018. The proposal is to establish a wholly-owned subsidiary ICBC Wealth Management Co.,
+Ltd. by contributing no more than RMB16.0 billion of the Bank's proprietary funds. On 15 February 2019, CBIRC officially
+approved the Bank's establishment of ICBC Wealth Management Co., Ltd.
+Disciplinary Actions During the reporting period, neither the Bank nor any of its Directors, Supervisors, Senior
+Management members and controlling shareholders was subject to any investigation by competent authorities, coercive measures
+taken by judicial authorities or disciplinary inspection departments, transferred to judicial authorities or charged for criminal
+responsibility, case filing investigation or administrative penalty by CSRC, restricted access to market, identification as unqualified,
+major penalty by other administrative authorities of environmental protection, safety supervision, taxation, etc. or public
+reprimand by the stock exchanges.
+Profitability
+Units
+Committee
+Risk
+Management
+Departments
+Urban Finance
+Research Institute
+Credit and Investment
+Save as disclosed above, neither the Bank nor any of its other related parties made any commitments in performing.
+Risk Management
+Department
+Finance & Accounting
+Department
+Credit Approval
+Department
+Executive Office
+Comprehensive
+Administration
+Departments
+Pension Business
+Department
+Special Financing
+Department
+(Banking Department)
+Precious Metal
+Business Department
+Investment Banking
+Department
+Private Banking
+Department
+ICBC Bills Discounting
+Department
+Asset Custody
+Department
+Asset Management
+Department
+Internet Finance
+Department*
+Bank Card
+Department
+(ICBC Peony Card
+Center)
+Settlement & Cash
+Management
+Department
+Inclusive Finance
+Department
+Institutional Banking
+Department
+Personal Banking
+Department
+Banking
+Department
+Management
+Department
+Global Market
+Department
+Corporate
+As at
+31 December
+2018, Huijin
+strictly fulfilled
+the above
+commitment
+and did not
+do anything in
+violation of the
+commitment.
+114
+Provided that Huijin continues to hold
+any share of the Bank or is deemed as
+the controlling shareholder of the Bank
+or the related party of the controlling
+shareholder of the Bank according to
+the laws or listing rules of China or the
+listing place of the Bank, Huijin will not
+engage in or participate in any competitive
+commercial banking business including but
+not limited to granting loans, attracting
+deposits and providing settlement, fund
+custody, bank card and money exchange
+services. However, Huijin can engage in or
+participate in some competitive businesses
+by investing in other commercial banks.
+In this regard, Huijin has committed that
+it will: (1) fairly treat the investments in
+commercial banks and will not make
+any decision or judgment that will
+have adverse impact on the Bank or be
+beneficial to other commercial banks by
+taking advantage of the status of being
+a shareholder of the Bank or information
+obtained by taking advantage of the status
+of being a shareholder of the Bank; and
+(2) perform the shareholders' rights for the
+maximum interests of the Bank.
+Independent Non-executive Directors' Special Explanation and Independent Opinions
+on External Guarantees of the Bank
+Material Guarantees The provision of guarantees is in the ordinary course of business of the Bank. During the reporting
+period, the Bank did not have any material guarantee that needs to be disclosed except for the financial guarantee services
+within the business scope as approved by PBC and the CBIRC.
+Material Trust, Sub-contract and Lease During the reporting period, the Bank had not held on trust to a material extent
+or entered into any material sub-contract or lease arrangement in respect of assets of other corporations, which were subject
+to disclosure, and no other corporation had held on trust to a material extent or entered into any material sub-contract or
+lease arrangement in respect of the Bank's assets, which were subject to disclosure.
+Material Contracts and Performance of Obligations thereunder
+Significant Events
+115
+Annual Report 2018
+Please refer to "Note 49. to the Financial Statements: Related Party Disclosures" for details of the related party transactions
+defined under the laws and regulations of China and the relevant accounting standards.
+During the reporting period, the Bank did not enter into any material related party transactions.
+Material Related Party Transactions
+In accordance with the Circular Concerning Several Issues on Regulating Fund Transfers between Listed Companies
+and Their Related Parties and External Guarantee of Listed Companies issued by CSRC and the State-owned Assets
+Supervision and Administration Commission of the State Council and relevant provisions of SSE, we, in the capacity
+of Independent Non-executive Directors of the Bank, reviewed external guarantees of the Bank on the principles of
+fairness, impartiality and objectivity, and hereby give our specific explanation and opinions as follows: upon review,
+external guarantees provided by the Bank mainly focus on issuance of letters of guarantee, which is part of the
+ordinary banking services within the business scope of the Bank as approved by relevant regulatory authorities. As at
+31 December 2018, the balance of letters of guarantee issued by the Bank totaled RMB509,301 million.
+Key Audit Matters The Audit Committee has reviewed the key audit matters in the audit report and concluded that
+it is unnecessary to provide a supplementary explanation.
+Performance of the Poverty Relief Social Responsibility Please refer to the section headed "Social
+Responsibility" for details of the Bank's poverty relief social responsibility performance during the reporting period.
+Implementation of Share Incentive Plan and Employee Stock Ownership Plan during the
+Reporting Period During the reporting period, the Bank did not implement any share incentive plan or any employee
+stock ownership plan.
+Credit Standing During the reporting period, there had not been any significant court judgment with which the Bank
+and its controlling shareholders have not complied, nor were there any outstanding debt of significant amount.
+Material Assets Acquisition, Sale and Merger During the reporting period, the Bank had no material assets
+acquisition, sale and merger.
+Material Legal Proceedings and Arbitration The Bank was involved in several legal proceedings in the
+ordinary course of business. Most of these legal proceedings were initiated by the Bank to recover non-performing loans.
+The rest are mainly related to disputes with clients. As at 31 December 2018, the amount of pending proceedings in which
+the Bank and/or its subsidiaries acted as defendants totaled RMB4,154 million. The Bank does not expect any material
+adverse effect from the above-mentioned pending legal proceedings on the Bank's business, financial position or operating
+results.
+Significant Events
+ICBC
+Internal Control &
+Compliance
+Department
+Save as disclosed above, the Board of Supervisors had no objection to any other matters during the reporting period.
+Implementation of Information Disclosure Rules During the reporting period, the Bank performed its duty
+of information disclosure in compliance with the regulatory requirements, implemented the information disclosure
+management rules in earnest, and disclosed information in a timely and fair manner. Information disclosed was authentic,
+accurate and complete.
+Environmental Information Please refer to the section headed "Social Responsibility" for the details of the Bank's
+environmental information during the reporting period.
+Fulfillment of
+commitment
+The Bank has attached great importance to the management of risks arising from such business, formulated strict rules
+on the credit ratings of the entities to which the guarantee was provided and on the operation process and review
+procedures of provision of guarantee services, and carried out relevant business on such basis.
+Hong Yongmiao, Anthony Francis Neoh, Yang Siu Shun, Sheila Colleen Bair, Shen Si and Nout Wellink
+Commitment
+Prospectus
+on A Share
+Rights Issue of
+Industrial and
+Commercial
+Bank of China
+Limited
+commitment
+is made
+Prospectus of
+Industrial and
+Commercial
+Bank of China
+Limited on
+Initial Public
+Offering
+(A Share)
+Legal document
+under which the
+term
+November 2010/
+No specific
+Review of the Internal Control Assessment Report The Board of Supervisors reviewed the 2018 Internal Control
+Assessment Report of the Bank and had no objection to the report.
+term
+competition
+October 2006/
+No specific
+Independent Non-executive Directors of Industrial and Commercial Bank of China Limited
+of non-
+Type of
+Commitment
+commitment
+Shareholder
+Huijin
+As at 31 December 2018, all of the continuing commitments made by the shareholders were properly fulfilled, and were
+listed as follows:
+Commitments
+Significant Events
+ICBC
+116
+Occupation of Fund by Controlling Shareholders and Other Related Parties During the reporting
+period, none of the controlling shareholders and other related parties of the Bank occupied any fund of the Bank. The
+auditors have issued the Special Explanation on the Occupation of Fund by Controlling Shareholders and Other Related
+Parties of Industrial and Commercial Bank of China Limited in 2018.
+Time and term of
+commitment
+Legal Affairs
+Department (Consumer
+Protection Office)
+Asset & Liability
+Management
+Department
+Subsidiaries Particulars of the Bank's major subsidiaries as at 31 December 2018 are set out in the sections headed
+"Discussion and Analysis Business Overview" and "Note 25. to the Financial Statements: Investments in Subsidiaries" in
+this annual report.
+Relations among Directors, Supervisors and Senior Management Directors, Supervisors and Senior
+Management members of the Bank are not related to one another with respect to finance, business, family, or other
+material relationships which are required to be disclosed.
+Liability Insurance of Directors, Supervisors and Senior Management Pursuant to the Articles
+of Association of the Bank, where conditions permit, the Bank may establish the professional liability insurance system of
+Directors, Supervisors and Senior Management members upon approval of the Shareholders' General Meeting. The Bank will
+use its own assets to compensate each Director, Supervisor and Senior Management member for any liability arising during
+their performance period to the maximum extent permitted by laws and administrative regulations or within the scope not
+prohibited by laws and administrative regulations, unless the Directors, Supervisors and Senior Management members are
+otherwise proved to have failed to act honestly or in good faith during their duty performance. During the reporting period,
+the Bank renewed liability insurance for Directors, Supervisors and Senior Management members.
+Report of the Board of Directors
+ICBC
+110
+Please refer to "Note 49. to the Financial Statements: Related Party Disclosures" for details of the related party transactions
+defined under the laws, regulations and accounting standards of China.
+During the reporting period, the Bank had no connected transaction to be submitted to the Board of Directors or the
+Shareholders' General Meeting for review, and all connected transactions occurred complied with the disclosure exemptions
+under the Listing Rules of the Shanghai Stock Exchange and the Hong Kong Listing Rules on disclosure exemptions.
+In 2018, the Bank carried out standardized management of the Group's connected transactions in strict accordance with the
+regulations of CBIRC and CSRC as well as listing rules in Shanghai and Hong Kong.
+Connected Transactions
+Save as above, as at 31 December 2018, none of the Directors or Supervisors of the Bank had any interests or short positions
+in the shares, underlying shares or debentures of the Bank or any of its associated corporations (as defined in Part XV of the
+Securities and Futures Ordinance of Hong Kong) which have to be notified to the Bank and SEHK under Divisions 7 and 8 of
+Part XV of the Securities and Futures Ordinance of Hong Kong (including interests or short positions therein that they shall
+be deemed to have pursuant to such provisions of the Securities and Futures Ordinance of Hong Kong), or any interests or
+short positions which have to be recorded in the register under Section 352 of the Securities and Futures Ordinance of Hong
+Kong, or any interests or short positions which have to be notified to the Bank and SEHK pursuant to the Model Code for
+Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to the Hong Kong Listing Rules.
+Interests in Shares, Underlying Shares, and Debentures Held by Directors and Supervisors
+Mr. Zhang Hongli ceased to act as Director of the Bank from 2 July 2018. As at 1 July 2018, Mr. Zhang Hongli held 2,000 H
+shares of the Bank. Mr. Or Ching Fai ceased to act as Director of the Bank from 31 October 2018. As at 30 October 2018,
+the spouse of Mr. Or Ching Fai held 1,316,040 H shares of the Bank.
+Directors' and Supervisors' Rights to Acquire Shares or Debentures None of the Bank, its
+subsidiaries, its controlling shareholders or subsidiaries of its controlling shareholders entered into any agreement or
+arrangement enabling the Directors and Supervisors to acquire benefits by means of the acquisition of shares in or
+debentures of the Bank or any other body corporate.
+Directors' Interests in Competing Business None of the Bank's Directors held any interests in any business
+competes or competed or is or was likely to compete, either directly or indirectly, with the Bank.
+Directors' and Supervisors' Interests in Transactions, Agreements or Contracts of
+Significance During the reporting period, none of the Directors or Supervisors of the Bank had any material interests,
+whether directly or indirectly, in any transaction, arrangement or contract of significance regarding the Bank's business to
+which the Bank, its subsidiaries, its controlling shareholders or subsidiaries of its controlling shareholders was a party. None
+of the Directors or Supervisors of the Bank have entered into any service contract with the Bank, which is not determinable
+by the Bank within one year without payment of compensation (other than statutory compensation).
+Management Contracts During the reporting period, the Bank did not enter into or have any contract regarding
+the management and administration of the whole or any important business.
+Equity-linked Agreement There is neither any agreement to which the Bank is a party, any options to subscribe
+shares, nor any securities convertible to shares of the Bank that requires the Bank to issue shares. In addition, there is no
+securities offering holders the right to subscribe shares of the Bank, the employee participation plan or share option plan,
+etc. as required by the disclosure requirements of the Hong Kong Listing Rules.
+Report of the Board of Directors
+109
+Annual Report 2018
+For future planning disclosed in the public disclosure documents such as previous offering prospectuses and fund raising
+prospectuses issued by the Bank which has continued during the reporting period, its implementation progress conformed to
+the planning as described after verification and analysis.
+The funds raised from the Bank's fundraising activities were used for the purposes as disclosed in the prospectuses, namely,
+strengthening the capital base to support the ongoing business growth of the Bank.
+Use of Proceeds from Fundraising Activities
+Major Customers In 2018, the aggregate interest income and other operating income from top five customers of the
+Bank did not exceed 30% of the interest income and other operating income of the Bank for the year.
+Pre-emptive Rights The Articles of Association of the Bank does not have any mandatory provision regarding pre-
+emptive rights. Pursuant to the Articles of Association, the Bank may increase its registered capital after obtaining approval
+of the Shareholders' General Meeting and of relevant authorities, by issuing shares through public or non-public offering,
+issuing bonus shares to the existing shareholders, converting capital reserve to share capital or using other methods as
+allowed by applicable laws and administrative regulations or approved by relevant authorities.
+Purchase, Sale or Redemption of Securities During the reporting period, neither the Bank nor any of its
+subsidiaries purchased, sold or redeemed any listed securities of the Bank.
+As at the latest practicable date before the publication of this annual report, the Bank has maintained the minimum public float of
+23.45%, based on the publicly available information and to the best knowledge of the Board of Directors of the Bank.
+Changes in the share capital of the Bank for the year ended 31 December 2018 are set out in "Note 37. to the Financial
+Statements: Share Capital".
+Remuneration Policy for Directors, Supervisors and Senior Management The Bank has clearly
+documented the remuneration policy for Directors, Supervisors and Senior Management members, and has continuously
+improved its performance assessment system and incentive and restriction mechanism. From the perspectives of economic
+benefit, risk cost control and social responsibilities, the Bank adopted a system composed of balanced scorecard-based
+indicators for management and duties allocation based indicators for individuals. The remuneration to the Chairman of the
+Board of Directors, the President, the Chairman of the Board of Supervisors and other executives of the Bank has followed
+the State's policies relating to the remuneration reform on executives of central enterprises, which consists of basic annual
+remuneration, performance-based remuneration and incentive income linked to term appraisal. The remuneration to other
+Senior Management members and Shareholder Supervisors consists of basic annual remuneration and performance-based
+remuneration, and part of performance-based remuneration is paid in a deferred manner. The Bank has contributed to
+statutory retirement programs organized by Chinese governmental organizations at different levels for Directors, Supervisors
+and Senior Management members concurrently as the employees of the Bank. Upon obtaining all applicable approvals,
+the Bank will implement a long-term incentive program. As at 31 December 2018, the Bank had not granted any share
+appreciation rights to any Director, Supervisor, Senior Management member, or other core business personnel designated by
+the Board of Directors.
+Share Capital and Public Float
+Members of the Board of Directors
+Non-executive Directors: Mr. Cheng Fengchao, Mr. Zheng Fuqing, Ms. Mei Yingchun, Mr. Dong Shi and Mr. Ye Donghai;
+Independent Non-executive Directors: Mr. Hong Yongmiao, Mr. Anthony Francis Neoh, Mr. Yang Siu Shun, Ms. Sheila
+Colleen Bair, Mr. Shen Si and Mr. Nout Wellink.
+Financial supervision. The Board of Supervisors supervised the Bank's financial activities and implementation of decisions
+on material financial issues. It paid close attention to the changes in key financial figures, material financial approval matters
+and accounting, changes in accounting standards and financial policies and their impacts. It carefully reviewed periodic
+reports, final accounts and profit distribution plan, regularly heard reports on business conditions and review results,
+conducted spot checks on major accounting issues, verified the authenticity of financial information, and issued independent
+opinions in an objective and fair manner. It launched special surveys on the management of deposit interest rate pricing and
+the running of the business operation system, analyzed and researched into the soundness of deposit interest rate pricing
+management mechanism, policy transmission and implementation, improvement of business operation system and operating
+risk management, and gave related recommendations to promote the management of deposit interest rate pricing and the
+perfection of business operation system. It oversaw the independence and effectiveness of audit work, reminded auditors of
+the areas of focus in audit and evaluated the duty performance of external auditors.
+Supervision on risk management. The Board of Supervisors supervised the effectiveness and soundness of
+the Group's risk management system and mechanism. It paid close attention to the enterprise risk management,
+consolidated management, capital management, compliance of major regulatory indicators and adjustments of
+regulatory policies. It strengthened the supervision on main material risks, and highlighted credit system and
+mechanism reform, asset quality management, non-performing asset disposal, credit management of overseas
+institutions, exchange rate risk management, liquidity risk management, operational risk management, reputational risk
+management, country risk management and management of cross and transmissional risks, as well as the management
+of risk exposures of major geographical locations, institutions and products. It launched special surveys on the
+management of supply chain financing business and retail banking development of branches in key cities, analyzed and
+researched into the management mechanism of supply chain financing business, risk control system, competitiveness of
+retail banking of branches in key cities and scenario development, and put forth related recommendations to promote
+the healthy development of supply chain financing business and retail banking of branches in key cities.
+112
+ICBC
+Report of the Board of Supervisors
+Supervision on internal control. The Board of Supervisors supervised the effectiveness of the internal control system,
+the performance of internal control duties and the business compliance with laws and regulations. It paid close attention
+to the internal control system construction, handling of cases and risk events, compliance of important internal control
+indicators, operation of IT systems and production safety, supervision and inspection, and implementation of remediation,
+and reinforced the supervision of key areas such as anti-money laundering and information disclosure. It earnestly reviewed
+the internal control assessment report, paid attention to the implementation and quality control of the internal control
+assessment, as well as the identification, reporting, correction and accountability of internal control deficiencies, and issued
+review opinions. It launched special surveys on IT risk management and credit card installment business management,
+analyzed and researched into IT risk management mechanism, security control of main application systems, credit approval
+of installment business, partner management and system development, and put forth related recommendations for the
+purpose of further improving the IT risk management system and mechanism and promoting the healthy development of
+credit card installment business.
+Strengthening of self-building. To align with the new changes in the Bank's corporate governance, the Board of
+Supervisors amended the former two supervision measures and merged them into the Measures of the Board of Supervisors
+for Supervision Work, making clear the principles of supervision, highlighting the priorities of supervision and offering
+an institutional framework for doing well in the supervision work. On the basis of summarizing the duty performance
+assessment work experience in the past few years, the Board of Supervisors revised the Rules on Assessment of Duty
+Performance of the Board of Directors and the Senior Management and Their Members by the Board of Supervisors and the
+Rules on Assessment of Duty Performance of Supervisors by the Board of Supervisors for the purpose of further ameliorating
+the ways and methods of work and improving the quality and effectiveness of duty performance assessment.
+Performance of duties by members of the Board of Supervisors. The Board of Supervisors organized the annual
+assessment on the supervisors for their performance of duties in accordance with the regulatory requirements and corporate
+governance rules. The members of the Board of Supervisors diligently and faithfully fulfilled their duties, attended the
+meetings of the Board of Supervisors on schedule, earnestly studied and reviewed the proposals and special reports, issued
+opinions in an objective and fair manner, appropriately exercised voting rights, attended meetings of the Board of Directors
+and meetings of special committees as non-voting attendees, attended relevant meetings of Senior Management, and
+devoted sufficient time and energy to relevant supervision, inspection and research activities. It attached great importance
+to strengthening theoretical learning and summary of experience from practice. It held discussions and exchanges with the
+boards of supervisors of several financial institutions, learned from the relevant experiences of its peers, and participated
+in the training organized by securities regulatory authority, and further improved its performance capability. External
+supervisors of the Bank worked for more than 15 working days in the Bank, complying with the relevant requirement.
+Independent Opinions of the Board of Supervisors on Relevant Issues
+Compliant Operation During the reporting period, the Board of Directors and the Senior Management of the Bank
+continued to operate in compliance with applicable laws and regulations, and the decision-making procedures complied
+with applicable laws and regulations and the Articles of Association of the Bank. Members of the Board of Directors and the
+Senior Management diligently and faithfully performed their duties, and the Board of Supervisors did not find any violation
+of laws and regulations, or any circumstance that contravened the interests of the Bank in their performance of duties
+during the reporting period.
+Preparation of Annual Report Preparation and review procedures of the Bank's Annual Report were in compliance with
+laws, regulations and regulatory rules. Contents of this report reflected the actual conditions of the Bank truly, accurately
+and completely.
+Use of Proceeds from Fundraising Activities During the reporting period, the use of proceeds from the Bank's
+fundraising activities was consistent with the purpose stated in the prospectuses.
+Purchase and Sale of Assets During the reporting period, the Board of Supervisors did not find any insider trading or any
+circumstance that contravened the shareholders' interests or caused the loss of the Bank's assets in the process of the Bank's
+purchase or sale of assets.
+Annual Report 2018
+113
+Report of the Board of Supervisors
+Connected Transactions During the reporting period, the connected transactions of the Bank were conducted on normal
+commercial terms. The Board of Supervisors did not find any circumstance that infringed upon the interests of the Bank. The
+approval, voting, disclosure and implementation of connected transactions complied with applicable laws and regulations
+and the Articles of Association of the Bank.
+Implementation of Resolutions Passed at the Shareholders' General Meeting During the reporting period, the Board
+of Supervisors had no objection to the reports or proposals presented by the Board of Directors to the Shareholders' General
+Meeting for consideration. The Board of Directors earnestly implemented the resolutions approved at the Shareholders'
+General Meetings.
+ICBC
+118
+Staff Union Working
+Committee
+Work of the Board of Supervisors
+Report of the Board of Supervisors
+Human Resources
+Department
+111
+Annual Report 2018
+Industrial and Commercial Bank of China Limited
+Board of Directors
+As at the disclosure date of the results, the composition of the Board of Directors of the Bank is as follows:
+Executive Director: Mr. Gu Shu;
+Supervision on the performance of duties. The Board of Supervisors supervised the Board of Directors, Senior
+Management and their members on their compliance with the laws and regulations, the Articles of Association of the
+Bank, and the implementation of the resolutions of the Shareholders' General Meeting and the Board of Directors and the
+regulatory opinions. It paid close attention to the duty performance and due diligence of the Board of Directors and the
+Senior Management in corporate governance, development strategy and operation and management. It carried out duty
+performance assessment, talked with members of the Board of Directors and the Senior Management, general managers
+of the related Head Office departments and some branches for comments and suggestions, and then formulated its
+assessment opinions on the duty performance of the Board of Directors, the Senior Management and their members in
+combination with their day-to-day duty performance supervision to promote the legitimate and compliant duty performance.
+It performed strategic assessment, assessed how scientific, reasonable and effective the Bank's development strategies
+were and the implementation of those development strategies, and put forward comments and suggestions to strengthen
+strategy management. It launched a special survey on strengthening the capital base of institutions, analyzed and researched
+into the mechanism of managing the capital increase of institutions, the implementation of capital increase plans and the
+post-increase management, and put forth related recommendations to help improve the management level of institutions'
+capital increase.
+During the reporting period, the Board of Supervisors, pursuant to relevant laws and regulations, regulatory requirements
+and the Articles of Association, performed supervision duties earnestly, carried out supervision of duty performance and
+due diligence, financial activities, risk management and internal control, etc. in a down-to-earth way, and promoted the
+improvement in corporate governance and the legal, compliant and prudent development.
+Financial Summary The summary of results, assets and liabilities for the five years ended 31 December 2018 is set
+out in the section headed "Financial Highlights" of this annual report.
+2. Channel Management Department includes Remote Banking Center.
+Notes: 1. Internet Finance Department includes Innovation Research & Development Center, User Development
+Center and Operation Support Center.
+Software
+Development Center
+Security Department
+Department
+Discipline
+Enforcement
+Department
+Affairs
+Banking
+Department*
+Data Center
+(Shanghai)
+Business Research &
+Development Center
+Hangzhou Institute
+of Financial Managers
+3. International Banking Department includes International Settlement Documentation Center.
+Changchun Institute
+of Financial Managers
+Party-related
+Corporate
+Culture
+Department
+Information
+Management
+Department
+Operation
+Management
+Department
+Financial Technology
+Department
+Supporting
+Departments
+International
+Department*
+Management
+Channel
+Department
+Corporate Strategy and
+Investor Relations
+Directly
+Managed
+Institutions
+Donations During the reporting period, the Group made external donations of RMB104,251.8 thousand equivalent.
+Retired Staff
+Management
+Department
+Distributable Reserves Details of the distributable reserves of the Bank as at 31 December 2018 are set out in
+"Note 39. to the Financial Statements: Reserves" of this annual report.
+The formulation and implementation of the Bank's cash dividend policy, which has been reviewed and approved by
+the Independent Non-executive Directors, accords with the provisions stipulated in the Articles of Association and the
+requirements provided in the resolutions of the Shareholders' General Meeting, the dividend distribution standards and
+proportion are clear and explicit, and the decision-making procedure and mechanism are complete. Minority shareholders
+can fully express their opinions and appeals, to completely safeguard their legitimate rights.
+Report of the Board of Directors
+297
+The key audit matter
+The Group may acquire or retain an ownership interest in,
+or act as a sponsor to, a structured entity, through issuing
+a wealth management product, an investment fund, an
+asset management plan, a trust plan, a structured lease
+or an asset-backed security. The Group may also retain
+partial interests in derecognised assets due to guarantees
+or securitisation structures.
+Structured entities are generally created to achieve a
+narrow and well defined objective with restrictions around
+their ongoing activities which include providing investment
+services and products to customers and managing the
+Group's assets and liabilities.
+The key audit matter
+Refer to the accounting policies in "Note 3. (1) to the Financial Statements: Subsidiaries", "Note 4. to the Financial
+Statements: Significant Accounting Judgments and Estimates" and "Note 41. to the Financial Statements: Involvement
+with Unconsolidated Structured Entities".
+23. Loans and Advances to Customers
+299
+INFORMATION
+195
+UNAUDITED SUPPLEMENTARY FINANCIAL
+Financial Position
+22. Reverse Repurchase Agreements
+21. Derivative Financial Instruments
+298
+56. Approval of the Consolidated
+Financial Statements
+187
+Financial Institutions
+185
+298
+55. Comparative Amounts
+20. Due From Banks and Other
+298
+54. After the Reporting Period Event
+186
+19. Cash and Balances With Central Banks
+188
+18. Earnings Per Share
+200
+24. Financial Investments
+123
+Annual Report 2018
+assessing the reliability of expected credit loss
+models and parameters used, including evaluating
+probability of default, loss given default, exposure at
+default, discount rate, forward-looking adjustment
+and other adjustment factors, and evaluating the
+reasonableness of key management judgments
+involved.
+assessing the information system controls,
+including general information technology
+control, completeness of key internal historical
+data, data transmission between systems,
+mapping of parameters of expected credit
+loss model, and system calculation of loss
+allowance for expected credit loss.
+assessing the key design and operational
+effectiveness of internal controls of the
+financial reporting process, including credit
+approval, recording, monitoring, re-evaluation
+of periodic credit grading, and the accrual
+of loss allowance; In particular, we assessed
+the design, implementation and operating
+effectiveness of the key internal controls over
+the classification of loans by credit quality
+across all stages;
+evaluating the effectiveness of internal control
+operations related to provision for expected credit
+losses:
+Independent Auditor's Report
+Our audit procedures to assess loss allowance for expected
+credit losses included the following:
+Impairment of loans and advances to customers is a
+subjective area due to the degree of judgment applied
+by management in determining impairment allowances.
+From the Group's perspective, the determination of the
+loss allowances for loans and advances to customers is
+heavily dependent on the external macro environment and
+the Group's internal credit risk management strategy, and
+the judgments in determining the loss given default or the
+assessment of recoverable cash flows relating to individual
+loans and advances to customers, where loans and
+advances to customers were unsecured or were subject to
+potential collateral shortfalls.
+The Group has adopted International Financial Reporting
+Standard 9 Financial instruments ("IFRS 9") since 1 January
+2018. IFRS 9 uses the expected credit loss ("ECL") model
+to calculate the loss allowance.
+The key audit matter
+Refer to the accounting policies in "Note 3.(6) to the Financial Statements: Impairment of the Financial Assets", "Note 4.
+to the Financial Statements: Significant Accounting Judgments and Estimates" and "Note 23. to the Financial Statements:
+Loans and Advances to Customers".
+Impairment of loans and advances to customers
+Key audit matters (continued)
+How the matter was addressed in our audit
+Independent Auditor's Report
+Key audit matters (continued)
+Refer to the accounting policies in "Note 3. (6) to the Financial Statements: Impairment of the Financial Assets", "Note 4.
+to the Financial Statements: Significant Accounting Judgments and Estimates" and "Note 23. to the Financial Statements:
+Loans and Advances to Customers".
+Refer to the accounting policies in "Note 3. (6) to the Financial Statements: Impairment of the Financial Assets", "Note 4.
+to the Financial Statements: Significant Accounting Judgments and Estimates" and "Note 23. to the Financial Statements:
+Loans and Advances to Customers".
+Impairment of loans and advances to customers (continued)
+Key audit matters (continued)
+Independent Auditor's Report
+ICBC
+124
+Impairment of loans and advances to customers (continued)
+performing back-testing, which included the
+assessment of the model's predictions using
+quantitative methods to measure the outputs against
+the actual realised observations, including how they
+change over time.
+assessing key parameters involving judgments
+by seeking evidence from external sources and
+comparing it with internal records including historical
+loss experience and type of collaterals. As part
+of these procedures, we inquired management
+for the reasons of modifications of estimates and
+model parameters, considered the consistency of
+management judgments, and assessed key internal
+controls over the input of underlying data into the
+models.
+•
+How the matter was addressed in our audit
+The loss allowance for loans and advances to customers,
+other than those corporate loans and advances which are
+credit-impaired, is measured using the risk parameters
+method. The key parameters include probability of default
+(PD), loss given default (LGD) and exposure at default
+(EAD), which are derived from considerations including the
+historical overdue data, historical loss ratio, internal credit
+grading and other adjustment factors.
+The Group classifies financial instruments into three stages
+and recognises an impairment allowance based on the
+expected credit loss for the next 12 months or the entire
+lifetime of the financial asset, depending on whether credit
+risk on that financial instrument has increased significantly
+since initial recognition and whether an asset is considered
+to be credit-impaired respectively.
+The key audit matter
+comparing the economic factors used in the models
+with market information to assess whether they were
+aligned with market and economic development.
+196
+ICBC
+Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
+consolidated financial statements of the current period. These matters were addressed in the context of our audit of the
+consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion
+on these matters.
+Independent Auditor's Report
+Key audit matters (continued)
+Recognition of interests in and consolidation of structured entities
+(Incorporated in the People's Republic of China with limited liability)
+To the shareholders of Industrial and Commercial Bank of China Limited
+KPMG
+125
+Independent Auditor's Report
+Annual Report 2018
+210
+Joint Ventures
+26. Investments in Associates and
+208
+25. Investments in Subsidiaries
+121
+122
+Annual Report 2018
+evaluating the experience,
+competence and integrity of the external appraiser
+engaged by the Group to value certain property and
+illiquid collateral, including comparing the valuations
+with externally derived data such as commodity
+prices and real estate valuations; and
+Key audit matters
+We conducted our audit in accordance with International Standards on Auditing ("ISAS"). Our responsibilities under those
+standards are further described in the Auditor's responsibilities for the audit of the consolidated financial statements section
+of our report. We are independent of the Group in accordance with the code of Ethics for Professional Accountants issued
+by International Ethics Standards Board for Accountants ("the Code") together with any ethical requirements that are
+relevant to our audit of the consolidated financial statements in the People's Republic of China, and we have fulfilled our
+other ethical responsibilities in accordance with these requirements and the Code. We believe that the audit evidence we
+have obtained is sufficient and appropriate to provide a basis for our opinion.
+Basis for opinion
+In our opinion, the consolidated financial statements give a true and fair view of the financial position of the Bank and of
+the Group as at 31 December 2018 and of the Group's financial performance and cash flows for the year then ended in
+accordance with International Financial Reporting Standards ("IFRSS") issued by the International Accounting Standards
+Board ("IASB") and have been properly prepared in compliance with the disclosure requirements of the Hong Kong
+Companies Ordinance.
+We have audited the consolidated financial statements of Industrial and Commercial Bank of China Limited (the "Bank") and
+its subsidiaries (the "Group") set out on pages 133 to 298, which comprise the consolidated and the Bank's statements of
+financial position as at 31 December 2018, the consolidated statement of profit or loss, the consolidated statement of profit
+or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated cash flow
+statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
+Opinion
+evaluating whether the disclosures relating to
+loss allowance for expected credit losses met the
+disclosure requirements of the prevailing accounting
+standards.
+Loss allowances for the credit-impaired corporate loans
+and advances are measured using the discounted cash
+flow method. Management exercises judgment in
+determining recoverable cash flow based on a range
+of factors. These factors include available remedies for
+recovery, the financial situation of the borrowers, collateral
+valuation, the seniority of the claim and the existence
+and cooperativeness of other creditors. Whilst the Group
+appoints an external appraiser for the valuation of certain
+property and other illiquid collateral, enforceability,
+timing and means of realisation also affect the ultimate
+collectability and thereby the amount of expected credit
+loss allowances at the end of the reporting period.
+How the matter was addressed in our audit
+.
+selecting samples to assess the reasonableness of
+management judgments on whether the credit risk
+has increased significantly since initial recognition
+and whether credit impairment has occurred. We
+analysed the loan portfolio by industry sector to
+select samples in industries vulnerable to the current
+economic situation and regulation measures. We
+also focused on loans with perceived higher risk
+and selected samples from non-performing loans,
+overdue but performing loans and borrowers with
+negative warning signs or adverse press coverage.
+performing credit assessments for the selected credit
+impaired corporate loans and advances by assessing
+the forecast of recoverable cash flows through
+inquiry, applying judgment and our own research.
+We evaluated the timing and means of realisation of
+collateral and considered other sources of repayment
+asserted by management. We also evaluated the
+consistency of management's application of key
+assumptions and compared them with our own data
+sources.
+independence,
+We identified the loss allowance for expected credit losses
+as a key audit matter because of the inherent uncertainty
+and management judgments involved, and because the
+loss allowance is significant to the financial results and
+capital of the Group.
+53. Company-Level Statement of
+39. Reserves
+17. Dividends
+ICBC-AXA
+ICBC Investment
+Rural Banks
+Primary reporting line
+Secondary reporting line
+Annual Report 2018
+119
+Auditor's Report and
+Financial Statements
+ICBC Credit Suisse
+Asset Management
+CONTENTS
+Pages
+INDEPENDENT AUDITOR'S REPORT
+Consolidated:
+122
+27. Property and Equipment
+212
+AUDITED FINANCIAL STATEMENTS
+28. Deferred Income Tax Assets and Liabilities
+215
+Pages
+Domestic Subsidiaries
+and their Branches
+ICBC Leasing
+Overseas Subsidiaries
+and their Institutions
+(376)
+Supervisory Board Office
+Retail Banking
+Promotion Committee
+Institutional Banking
+Promotion Committee
+Investment Banking
+Promotion Committee
+Asset & Liability
+Management Committee
+Risk Management
+Committee
+Domestic Branches
+Internet Finance
+Financial Technology
+Financial Assets Service
+Management Committee
+Inclusive Finance
+Promotion Committee Development Committee Promotion Committee
+Domestic Institutions
+Overseas Institutions
+Tier-one Branches
+(including Directly Managed Branches)
+(36)
+Banking Departments of Tier-one Branches and
+Tier-two Branches (446)
+Grassroots Branches
+(15,752)
+Overseas Branches
+and their Institutions
+(50)
+29.
+Other Assets
+218
+Statement of Profit or Loss
+221
+NOTES TO THE FINANCIAL STATEMENTS
+35. Debt Securities Issued
+221
+1.
+Corporate Information
+142
+36. Other Liabilities
+225
+2.
+Basis of Preparation
+142
+37. Share Capital
+225
+3.
+Summary of Significant Accounting Policies
+154
+38. Other Equity Instruments
+226
+4.
+Significant Accounting Judgements and
+34. Due to Customers
+Organizational Chart
+141
+Company:
+133
+30.
+Financial Liabilities Designated as at
+Statement of Profit or Loss and
+Fair Value through Profit or Loss
+219
+Other Comprehensive Income
+134
+31. Due to Banks and Other Financial
+Statement of Financial Position
+135
+Institutions
+220
+Statement of Changes in Equity
+137
+32. Repurchase Agreements
+220
+Cash Flow Statement
+139
+33. Certificates of Deposit
+220
+Statement of Financial Position
+Board of Supervisors
+Corporate Banking
+Promotion Committee
+How the matter was addressed in our audit
+126
+230
+Independent Auditor's Report
+240
+Key audit matters (continued)
+Recognition of interests in and consolidation of structured entities (continued)
+Refer to the accounting policies in "Note 3. (1) to the Financial Statements: Subsidiaries", "Note 4. to the Financial
+Statements: Significant Accounting Judgments and Estimates" and "Note 41. to the Financial Statements: Involvement
+with Unconsolidated Structured Entities".
+The key audit matter
+In determining whether the Group should retain any partial
+interests in a structured entity or should consolidate a
+structured entity, management is required to consider the
+risks and rewards retained, the power the Group is able
+to exercise over the activities of the entity and its ability
+to influence the Group's own returns from the entity.
+These factors are not purely quantitative and need to
+be considered collectively in the overall substance of the
+transactions.
+We identified the recognition of interests in and
+consolidation of structured entities as a key audit matter
+because of the complex nature of certain of these
+structured entities and because of the judgment exercised
+by management in the qualitative assessment of the terms
+and the nature of each entity.
+How the matter was addressed in our audit
+inspecting the risk and reward structure of
+the structured entity, including any capital
+or return guarantee, provision of liquidity
+support, commission paid and distribution of
+the returns, to assess management's judgment
+as to the exposure, or rights, to variable
+returns from the Group's involvement in such
+an entity;
+evaluating management's analysis of the
+structured entity, including qualitative analysis
+and the calculation of the magnitude and
+variability associated with the Group's economic
+interests in the structured entity, to assess
+management's judgment over the Group's
+ability to influence its own returns from the
+structured entity;
+assessing management's judgment over
+whether the structured entity should be
+consolidated or not; and
+evaluating the disclosures in the financial statements
+in relation to the recognition of interests in and
+consolidation of structured entities with reference
+to the requirements of the prevailing accounting
+standards.
+Annual Report 2018
+127
+Independent Auditor's Report
+Key audit matters (continued)
+Fair value of financial instruments
+Refer to the accounting policies on "Note 3. (5) to the Financial Statements: Financial Instruments", "Note 4. to the
+Financial Statements: Significant Accounting Judgments and Estimates" and "Note 52. to the Financial Statements: Fair
+Value of Financial Instruments".
+inspecting the related contracts, internal
+establishment documents and information
+I disclosed to the investors to understand the
+purpose of the establishment of the structured
+entity and the involvement the Group has
+with the structured entity and to assess
+management's judgment over whether the
+Group has the ability to exercise power over
+the structured entity;
+The key audit matter
+selecting significant structured entities of each
+key product type and performing the following
+procedures for each structured entity selected:
+179
+184
+286
+52. Fair Value of Financial Instruments
+of the Parent Company
+250
+51. Financial Instruments Risk Management
+16. Profit Attributable to Equity Holders
+245
+50. Segment Information
+184
+15. Income Tax Expense
+241
+49. Related Party Disclosures
+183
+14. Impairment Losses on Assets
+241
+48. Fiduciary Activities
+183
+13. Five Highest Paid Individuals
+240
+47. Assets Pledged as Security
+12. Directors' and Supervisors' Emoluments
+185
+Financial instruments carried at fair value account for a
+significant part of the Group's assets and liabilities. The
+effect of fair value adjustments of financial instruments
+may impact either the profit or loss or other comprehensive
+income.
+The Group has developed its own models to value certain
+level 2 and level 3 financial instruments, which also involve
+significant management judgment.
+Net Trading Income
+8.
+237
+43. Transferred Financial Assets
+177
+Net Fee and Commission Income
+7.
+236
+Statement
+42. Notes to the Consolidated Cash Flow
+177
+International Financial Reporting Standards 174
+Net Interest Income
+6.
+234
+Entities
+40. Components of Other Comprehensive Income 233
+41. Involvement With Unconsolidated Structured
+5. Impact of Issued But Not Yet Effective
+172
+Estimates
+making enquiries of management and inspecting
+documents relating to the judgment process over
+whether a structured entity is consolidated or not
+to assess whether the Group has a robust process in
+this regard.
+Our audit procedures to assess the recognition of interests
+in and consolidation of structured entities included the
+following:
+177
+The valuation of the Group's financial instruments, held
+at fair value, is based on a combination of market data
+and valuation models which often require a considerable
+number of inputs. Many of these inputs are obtained
+from readily available data, in particular for level 1 and
+level 2 financial instruments in the fair value hierarchy,
+the valuation techniques for which use quoted market
+prices and observable inputs, respectively. Where one or
+more significant inputs are unobservable in the valuation
+techniques, as in the case of level 3 financial instruments,
+then estimates need to be developed which can involve
+significant management judgment.
+9.
+178
+We identified assessing the fair value of financial
+instruments as a key audit matter because of the degree of
+complexity involved in valuing certain financial instruments
+and because of the degree of judgment exercised by
+management in determining the inputs used in the
+valuation models.
+How the matter was addressed in our audit
+Our audit procedures to assess the fair value of financial
+instruments included the following:
+•
+assessing the design, implementation and operating
+effectiveness of key internal controls over the
+valuation, independent price verification, front office
+and back office reconciliations and model approval
+for financial instruments.
+assessing the level 1 fair values, on a sample basis, by
+comparing the fair values applied by the Group with
+publicly available market data.
+involving our internal valuation specialists to assist us
+in performing independent valuations, on a sample
+basis, of level 2 and level 3 financial instruments
+and comparing our valuations with the Group's
+valuations. Our procedures included developing
+parallel models, obtaining inputs independently and
+verifying the inputs.
+engaging our internal valuation specialists to conduct
+model validation, on a sample basis, for the valuation
+of complex financial instruments.
+assessing the appropriate application of fair value
+adjustment that form an integral part of fair values,
+inquiring of management about any changes in the
+fair value adjustment methodologies and assessing
+the appropriateness of the inputs applied; and
+assessing whether the disclosures in the consolidated
+financial statements, including fair value hierarchy
+information and sensitivity to key inputs,
+appropriately reflected the Group's exposure to
+financial instrument valuation risk with reference
+to the requirements of the prevailing accounting
+standards.
+128
+ICBC
+46. Designated Funds and Loans
+178
+11. Operating Expenses
+238
+45. Commitments and Contingent Liabilities
+178
+10. Other Operating Income, Net
+238
+44. Share Appreciation Rights Plan
+Net Gain on Financial Investments
+ICBC
+139,625
+356,407
+(i)
+Attributable to equity holders of the parent company
+Reserves
+Foreign
+Issued
+Other
+Investment currency
+Cash flow
+share
+equity
+Capital
+Surplus
+General revaluation translation
+hedging
+Other
+Retained
+capital instruments
+reserve
+reserve
+reserve
+reserve
+reserve
+reserve
+reserves Subtotal
+Balance as at 1 January 2017
+(In RMB millions, unless otherwise stated)
+Year ended 31 December 2018
+Consolidated Statement of Changes in Equity
+137
+Other comprehensive income
+transferred to retained earnings
+Others
+Balance as at
+31 December 2018
+(ii)
+1
+(1)
+16
+16
+16
+49
+Profit for the year
+40
+(327)
+(327)
+16
+356,407
+86,051 152,043 261,720 279,064 15,495 (22,894) (3,804)
+(747)
+680,877 1,206,666 2,330,001
+14,882 2,344,883
+Includes the appropriation made by overseas branches and subsidiaries in the amounts of RMB103 million and RMB596 million,
+respectively.
+Includes the reversal made by overseas branches in the amounts of RMB9 million and appropriation made by subsidiaries in
+the amounts of RMB2,345 million, respectively.
+The notes on pages 142 to 298 form part of these financial statements.
+Annual Report 2018
+49
+shareholders
+356,407 86,051 152,043
+1,133
+(27,682)
+13,543
+(13,543)
+Capital injection by non-controlling
+shareholders
+Change in share holding in
+subsidiaries
+Dividends to non-controlling
+shareholders
+Others
+Balance as at
+31 December 2017
+2,312
+2,312
+.
+(194)
+(194)
+(309)
+(309)
+(46)
+(46)
+(46)
+(46)
+356,407 86,051 152,043 232,703
+264,892 (31,752) (26,302) (3,761) (334)
+27,682
+13,543
+27,682
+Appropriation to general reserve (ii)
+(18,050)
+(4,645)
+(221)
+586,630
+Other comprehensive income (note 40)
+(32,885)
+(8,252)
+884
+(67)
+(40,320)
+Dividends ordinary shares
+Total comprehensive income
+205,021 251,349
+2016 final (note 17)
+Appropriation to surplus reserve (1)
+(32,885) (8,252)
+884
+(67)
+(40,320)
+286,049
+Non-
+controlling Total
+profits Total interests equity
+940,663 1,969,751 11,412 1,981,163
+286,049 286,049 1,402 287,451
+(40,320) (1,058) (41,378)
+245,729
+344
+246,073
+(83,506) (83,506)
+(83,506)
+(4,437) (4,437)
+(4,437)
+Dividends preference shares (note 17)
+Dividends to non-controlling
+subsidiaries
+76
+ICBC
+Consolidated Statement of Changes in Equity
+Year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+(i)
+Attributable to equity holders of the parent company
+Reserves
+Issued
+Other
+share equity
+capital instruments
+Capital
+Surplus
+reserve
+reserve
+Foreign
+Investment currency
+General revaluation translation
+reserve reserve reserve
+Cash flow
+hedging
+Non-
+Balance as at 31 December 2017
+356,407
+86,051 152,043 232,703 264,892
+(31,752) (26,302)
+Other
+reserve reserves
+(3,761) (334)
+Retained
+controlling Total
+Subtotal profits Total interests equity
+Impact of adopting IFRS 9
+22,877
+136
+The notes on pages 142 to 298 form part of these financial statements.
+and Accounting Department
+General Manager of Finance
+356,407
+Other equity instruments
+38
+86,051
+86,051
+Reserves
+39
+680,877
+587,489
+Retained profits
+1,206,666
+1,097,544
+587,489 1,097,544 2,127,491 13,565 2,141,056
+22,877 (55,035) (32,158) (32) (32,190)
+2,330,001
+Non-controlling interests
+TOTAL EQUITY
+TOTAL EQUITY AND LIABILITIES
+14,882
+13,565
+2,344,883
+2,141,056
+27,699,540
+26,087,043
+Gu Shu
+Zhang Wenwu
+Vice Chairman and President
+2,127,491
+Balance as at 1 January 2018
+356,407
+86,051
+reserve (i)
+Dividends ordinary shares
+2017 final (note 17)
+Dividends preference shares
+(note 17)
+Appropriation to surplus
+Appropriation to general
+reserve (ii)
+Capital injection by non-controlling
+shareholders
+Change in share holding in
+(85,823)
+1,551 326,532
+(85,823)
+(4,506)
+(4,506)
+(4,506)
+29,017
+29,017
+(29,017)
+14,172
+14,172
+(14,172)
+1
+1
+76
+(85,823)
+37
+324,981
+27,305
+152,043
+232,703 264,892
+(8,875) (26,302)
+(3,761)
+(334)
+610,366 1,042,509
+2,095,333
+13,533 2,108,866
+Profit for the year
+297,676
+297,676
+1,047 298,723
+297,676
+Other comprehensive income
+3,408
+(43)
+(429)
+27,305
+27,305
+504
+27,809
+Total comprehensive income
+24,369
+3,408
+(43)
+(429)
+(note 40)
+24,369
+433
+23,945,987
+9
+1,345
+2,165
+Other operating income, net
+OPERATING INCOME
+10
+3,111
+6,033
+725,121
+675,654
+Operating expenses
+Impairment losses on assets
+OPERATING PROFIT
+Share of profits of associates and joint ventures
+PROFIT BEFORE TAXATION
+Net gain on financial investments
+5,753
+2,846
+8
+Independent Auditor's Report
+129
+Annual Report 2018
+evaluating the design, implementation and
+operating effectiveness of the cybersecurity
+management mechanism, the operational security
+of key information infrastructure, data and client
+information management, and monitoring and
+emergency management.
+evaluating the design, implementation and operating
+effectiveness of the significant accounts-related
+IT automated controls which are relevant to the
+accuracy of system calculation, and the consistency
+of data transmission, covering business in corporate
+loans, financial asset service, interbank business,
+bills, retail business and others, as well as key
+accounting procedures; and
+assessing the design, implementation and
+operating effectiveness of key internal controls
+over the continued integrity of all major IT systems
+fundamental to dealing with the financial data,
+particularly financial reporting.
+We involved our internal IT specialists in our assessment of
+the IT systems and controls over financial reporting, which
+included carrying out the following audit procedures:
+Income tax expense
+How the matter was addressed in our audit
+The volume of on-line transactions of the Group
+increased rapidly over the past year. With the continuous
+development of new technologies, the Group is facing new
+challenges on cyber security and data protection.
+Of particular importance are system calculations and data
+logic regarding significant accounts, including interest
+calculations, as well as interfaces between business
+management systems and accounting systems.
+Automated accounting procedures and IT environment
+controls, which include IT governance, controls over
+program development and changes, access to programs
+and data and IT operations, are required to be designed
+and to operate effectively to ensure accurate financial
+reporting.
+As one of the largest banking groups in the world, the
+Group's IT systems are necessarily large and complex.
+IT systems and controls over financial reporting
+The key audit matter
+Key audit matters (continued)
+Independent Auditor's Report
+We identified IT systems and controls over financial
+reporting as a key audit matter because the Group's
+financial accounting and reporting systems are
+fundamentally reliant on complex IT systems and control
+processes which are driven by significant transaction
+volumes caused by the size of the customer base both in
+the corporate and the retail banking businesses in China
+and globally.
+PROFIT FOR THE YEAR
+Attributable to:
+Equity holders of the parent company
+287,451
+297,676
+286,049
+1,047
+298,723
+1,402
+287,451
+Basic (RMB yuan)
+298,723
+Diluted (RMB yuan)
+0.82
+0.79
+18
+0.82
+0.79
+Details of the dividends declared and paid or proposed are disclosed in Note 17 to the financial statements.
+The notes on pages 142 to 298 form part of these financial statements.
+18
+Key audit matters (continued)
+587,489 1,097,544 2,127,491
+(73,690)
+Non-controlling interests
+PROFIT FOR THE YEAR
+EARNINGS PER SHARE
+11
+(194,203)
+(186,194)
+14
+(77,190)
+(161,594)
+369,324
+361,691
+3,089
+2,950
+372,413
+364,641
+15
+(127,769)
+Adjustments and disclosures in relation to transition to the International Financial Reporting Standard 9
+Financial instruments
+Refer to "Note 2. (3) to the Financial Statements: Change in accounting policies".
+The key audit matter
+The Group has applied International Financial Reporting
+Standard 9 Financial Instruments ("IFRS 9") since 1 January
+2018.
+Interest income
+2018
+Notes
+(In RMB millions, unless otherwise stated)
+Year ended 31 December 2018
+Consolidated Statement of Profit or Loss
+ICBC
+Interest expense
+132
+Central, Hong Kong
+10 Chater Road
+8th Floor, Prince's Building
+Certified Public Accountants
+KPMG
+The engagement partner on the audit resulting in this independent auditor's report is Wong Yuen Shan.
+From the matters communicated with the Audit Committee, we determine those matters that were of most significance in
+the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe
+these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in
+extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse
+consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
+28 March 2019
+We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements regarding
+independence and communicate with them all relationships and other matters that may reasonably be thought to bear on
+our independence and, where applicable, related safeguards.
+NET INTEREST INCOME
+Fee and commission expense
+145,301
+7
+NET FEE AND COMMISSION INCOME
+(19,041)
+(17,046)
+158,666
+162,347
+Fee and commission income
+522,078
+(339,516)
+(375,576)
+2017
+861,594
+948,094
+77
+60
+66
+572,518
+Annual Report 2018
+We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the audit
+and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
+Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
+disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a
+manner that achieves fair presentation.
+The Directors are responsible for the other information. The other information comprises all the information included in the
+annual report, other than the consolidated financial statements and our auditor's report thereon.
+Other information
+Independent Auditor's Report
+ICBC
+130
+assessing whether the relevant disclosures in relation
+to transition to IFRS 9 at 1 January 2018 were in
+compliance with the prevailing accounting standards.
+obtaining journal entries relating to adjustments
+made on transition to the IFRS 9 and comparing it
+Iwith the list of classification, valuation, expected
+credit loss of financial instruments as at 1 January
+2018, to assess the completeness and accuracy
+of adjustment journals, and compliance with the
+prevailing accounting standards; and
+Our opinion on the consolidated financial statements does not cover the other information and we do not express any form
+of assurance conclusion thereon.
+obtaining a list of hedge accounting items as at
+1 January 2018 and selecting samples and checking
+relevant hedging documents to determine whether
+they meet the requirements of the IFRS 9.
+involving our internal valuation specialists in
+evaluating the valuation method of financial assets
+and the key parameters used for financial assets
+that are measured at fair value due to changes
+in classification and measurement, and selecting
+samples to independently verify their fair value.
+assessing the accuracy of the classification of
+financial instruments, including obtaining a list of
+financial instruments classified by management as
+at 1 January 2018, selecting samples to check the
+contractual cash flow terms, and understanding
+and evaluating the business model of the relevant
+financial instrument portfolio.
+assessing the key internal controls of the financial
+reporting process related to the transition to IFRS
+9, including internal control processes related to
+the selection and approval of accounting policy
+and expected credit loss model methodology, and
+information system related controls.
+Our audit procedures relating to the transition to IFRS 9
+included the following:
+How the matter was addressed in our audit
+We identified the adjustments and disclosures in relation
+to the transition to IFRS 9 as a key audit matter, because
+of the complexity of the transition process which involved
+changes in internal controls of the financial reporting
+process, accounting treatments, and application of new
+system data; also, management judgment was applied.
+IFRS 9 revised the requirements for the classification and
+measurement of financial instruments previously adopted,
+and requires the loss allowance of expected credit losses
+to be recognised for relevant financial assets and credit
+commitments. In addition, it also provides greater flexibility
+of transaction types in applying hedging accounting. The
+Group is required to make retrospective adjustments on
+the classification and measurement, the loss allowance,
+and hedge accounting of financial instruments in
+accordance with the requirements of the IFRS 9.
+with the assistance of our internal valuation
+specialists, assessing the design and methodology of
+the expected credit loss model, and evaluating the
+key parameters including probability of default, loss
+given default, exposure at default, discount rate,
+forward-looking adjustment and other adjustment
+factors, and evaluating the reasonableness of key
+management judgments involved.
+Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
+within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction,
+supervision and performance of the Group audit. We remain solely responsible for our audit opinion.
+In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and,
+in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or
+our knowledge obtained in the audit or otherwise appears to be materially misstated.
+Responsibilities of the directors for the consolidated financial statements
+Conclude on the appropriateness of the Directors' use of the going concern basis of accounting and, based on the
+audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
+doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
+required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or,
+if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained
+up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue
+as a going concern.
+Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
+disclosures made by the Directors.
+Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
+appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's
+internal control.
+Auditor's responsibilities for the audit of the consolidated financial statements (continued)
+Independent Auditor's Report
+131
+Annual Report 2018
+If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we
+are required to report that fact. We have nothing to report in this regard.
+Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud
+or error, design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient
+and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
+fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
+misrepresentations or the override of internal control.
+As part of an audit in accordance with ISAS, we exercise professional judgement and maintain professional scepticism
+throughout the audit. We also:
+Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAS
+will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
+material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
+taken on the basis of these consolidated financial statements.
+Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free
+from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. This
+report is made solely to you, as a body, and for no other purpose. We do not assume responsibility towards or accept liability
+to any other person for the contents of this report.
+Auditor's responsibilities for the audit of the consolidated financial statements
+The Directors are assisted by the Audit Committee in discharging their responsibilities for overseeing the Group's financial
+reporting process.
+In preparing the consolidated financial statements, the Directors are responsible for assessing the Group's ability to continue as
+a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting
+unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
+The Directors are responsible for the preparation of the consolidated financial statements that give a true and fair view in
+accordance with IFRSS issued by IASB and the disclosure requirements of the Hong Kong Companies Ordinance, and for such
+internal control as the Directors determine is necessary to enable the preparation of consolidated financial statements that
+are free from material misstatement, whether due to fraud or error.
+•
+EQUITY
+133
+Year ended 31 December 2018
+247,744
+48,392
+571,669
+TOTAL ASSETS
+27,699,540
+26,087,043
+The notes on pages 142 to 298 form part of these financial statements.
+Annual Report 2018
+135
+Consolidated Statement of Financial Position
+31 December 2018
+(In RMB millions, unless otherwise stated)
+LIABILITIES
+Notes
+31 December 2018 31 December 2017
+32,441
+29,124
+290,404
+58,375
+380,404
+27
+26
+Financial investments measured at fair value through
+other comprehensive income
+1,430,163
+Financial investments measured at amortised cost
+4,519,182
+Available-for-sale financial assets
+Held-to-maturity investments
+Due to central banks
+Receivables
+Property and equipment
+Deferred income tax assets
+1,496,453
+3,542,184
+277,129
+Other assets
+29
+2282
+Investments in associates and joint ventures
+481
+Financial liabilities designated as at fair value through profit or loss
+30
+260,274
+19,562,936
+Deferred income tax liabilities
+28
+84,741
+1,217
+70,644
+Net trading income
+Debt securities issued
+21,408,934
+35
+526,940
+Other liabilities
+36
+409,819
+603,500
+TOTAL LIABILITIES
+25,354,657
+617,842
+440,938
+34
+341,354
+87,400
+456
+89,361
+Derivative financial liabilities
+21
+73,573
+78,556
+Due to banks and other financial institutions
+Due to customers
+31
+1,706,549
+Repurchase agreements
+32
+514,801
+1,046,338
+Certificates of deposit
+33
+1,814,495
+805,347
+Financial investments measured at fair value through
+profit or loss
+13,892,966
+5,756,704
+Net loss from change in fair value of available-for-sale
+financial assets
+(33,494)
+Reserve from cash flow hedging instruments
+(53)
+939
+Other comprehensive income recognised under equity method
+488
+(1,238)
+(757)
+3,325
+(8,752)
+Others
+(903)
+712
+Subtotal of other comprehensive income for the year
+27,809
+Foreign currency translation differences
+(41,378)
+Credit losses of debt instruments measured at fair value through
+other comprehensive income
+fair value through other comprehensive income
+(In RMB millions, unless otherwise stated)
+Profit for the year
+Other comprehensive income (after tax, net):
+Items that will not be reclassified to profit or loss:
+Notes
+2018
+2017
+24,599
+298,723
+40
+Changes in fair value of equity instruments designated as at
+fair value through other comprehensive income
+Other comprehensive income recognised under equity method
+Others
+1,605
+(5)
+(29)
+3
+Items that may be reclassified subsequently to profit or loss:
+Changes in fair value of debt instruments measured at
+287,451
+Consolidated Statement of Profit or Loss and Other Comprehensive Income
+Total comprehensive income for the year
+246,073
+Reverse repurchase agreements
+Loans and advances to customers
+Financial investments
+222222
+19
+20
+3,372,576
+962,449
+21
+3,613,872
+71,335
+89,013
+23
+734,049
+15,046,132
+986,631
+24
+6,754,692
+847,611
+326,532
+Derivative financial assets
+Cash and balances with central banks
+Total comprehensive income attributable to:
+Equity holders of the parent company
+Non-controlling interests
+The notes on pages 142 to 298 form part of these financial statements.
+134
+ICBC
+324,981
+245,729
+Due from banks and other financial institutions
+1,551
+326,532
+246,073
+Consolidated Statement of Financial Position
+31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes
+31 December 2018 31 December 2017
+ASSETS
+344
+13,565 2,141,056
+Share capital
+Includes the appropriation made by overseas branches and subsidiaries in the amounts of RMB20 million and RMB477 million,
+respectively.
+Equity attributable to equity holders of the parent company
+Income tax payable
+Includes the appropriation made by overseas branches and subsidiaries in the amounts of RMB107 million and
+RMB516 million, respectively.
+138
+The notes on pages 142 to 298 form part of these financial statements.
+ICBC
+23,824,295
+436,376
+436,275
+499,291
+247,348
+18,894,447
+36
+35
+69,344
+82,946
+55
+34
+22,585,711
+TOTAL EQUITY AND LIABILITIES
+TOTAL EQUITY
+Retained profits
+Reserves
+Other equity instruments
+Share capital
+EQUITY
+TOTAL LIABILITIES
+Other liabilities
+Debt securities issued
+20,646,928
+37
+39
+Income tax payable
+2. BASIS OF PREPARATION
+The principal activities of the Bank and its subsidiaries (collectively referred to as the "Group") comprise corporate and
+personal banking, treasury operations, investment banking, asset management, trust, financial leasing, insurance and other
+financial services. Domestic establishments refer to the Head Office of the Bank, branches and subsidiaries established inside
+Mainland China. Overseas establishments refer to branches and subsidiaries established under local jurisdictions outside
+Mainland China.
+The Bank's A Shares and H Shares are listed on the Shanghai Stock Exchange and the Stock Exchange of Hong Kong
+Limited and the stock codes are 601398 and 1398, respectively. The Bank's offshore preference shares are listed on the
+Stock Exchange of Hong Kong Limited and the stock codes are 4603, 4604 and 84602, respectively. The Bank's domestic
+preference shares are listed on the Shanghai Stock Exchange and the stock code is 360011.
+The Bank obtained its finance permit No. B0001H111000001 from the China Banking and Insurance Regulatory Commission
+(the "CBIRC") of the PRC. The Bank obtained its business license with unified social credit code 91100000100003962T from
+the State Administration for Industry and Commerce of the PRC. The registered office is located at No. 55 Fuxingmennei
+Avenue, Xicheng District, Beijing, the PRC.
+Industrial and Commercial Bank of China Limited (the "Bank"), which was previously known as Industrial and Commercial
+Bank of China ("ICBC"), used to be a wholly-state-owned commercial bank established on 1 January 1984 based on
+the authorisation of the State Council and the People's Bank of China (the "PBOC") of the People's Republic of China
+(the "PRC"). On 28 October 2005, with the approval of the State Council, ICBC was restructured and incorporated as
+a joint-stock limited company. The joint-stock limited company undertook all the assets and liabilities of ICBC upon the
+restructuring.
+1. CORPORATE INFORMATION
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+141
+Annual Report 2018
+The notes on pages 142 to 298 form part of these financial statements.
+38
+General Manager of Finance
+and Accounting Department
+Zhang Wenwu
+Gu Shu
+2,059,401
+24,645,112
+2,247,865
+26,072,160
+1,013,320
+610,299
+79,375
+79,375
+700,637
+1,111,446
+356,407
+356,407
+1809
+Vice Chairman and President
+Due to customers
+33
+281,380
+56,220
+122,387
+124,548
+27
+34,242
+34,242
+26
+120,301
+122,110
+25
+22282
+47,250
+231,631
+1,358,802
+4,362,174
+1,245,837
+TOTAL ASSETS
+Other assets
+Deferred income tax assets
+Property and equipment
+Investments in associates
+Investments in subsidiaries
+Receivables
+- Held-to-maturity investments
+3,439,471
+29
+269,769
+483,090
+(1) Statement of compliance
+Certificates of deposit
+810,610
+300,988
+32
+Repurchase agreements
+1,596,232
+1,644,147
+31
+Due to banks and other financial institutions
+46,682
+42,120
+21
+Derivative financial liabilities
+73,852
+78,737
+30
+profit or loss
+Financial liabilities designated as at fair value through
+404
+410
+Due to central banks
+LIABILITIES
+24,645,112
+26,072,160
+221,489
+The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards
+("IFRSS") and interpretations promulgated by the International Accounting Standards Board (the "IASB") and the disclosure
+requirements of the Hong Kong Companies Ordinance.
+The preparation of financial statements in conformity with IFRSS requires management to make judgements, estimates and
+assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses.
+Actual results may differ from these estimates. Judgements made by management in the application of IFRSS that have
+significant effect on the financial statements and major sources of estimation uncertainty are discussed in Note 4. The
+consolidated financial statements should be read in conjunction with the Group's annual consolidated financial statements
+for the year ended 31 December 2017, which have been audited.
+The consolidated financial statements have been prepared under the historical cost convention, except for derivative
+financial instruments, financial assets and financial liabilities measured at fair value through profit or loss and financial
+assets measured at fair value through other comprehensive income, as further explained in the respective accounting
+policies below.
+FVTPL (mandatory)
+986,631
+791,065
+Amortised cost
+Amortised cost (loans and
+receivables)
+89,013
+FVTPL (mandatory)
+847,611
+89,013
+FVTPL
+Loans and advances to customers
+Derivative financial assets
+Reverse repurchase agreements
+847,341
+Amortised cost
+Amortised cost (loans and
+receivables)
+Due from banks and other financial
+institutions
+3,613,872
+3,613,872
+Amortised cost
+Amortised cost (loans and
+receivables)
+Cash and balances with central banks
+Financial assets:
+8
+Financial instruments
+195,520
+Amortised cost (loans and
+receivables)
+Amortised cost
+13,759,417
+353,601
+FVTPL (designated)
+87,337
+FVTPL (held for trading)
+1,496,453
+351,802
+FVTPL (designated)
+FVOCI (available for sale)
+148,518
+FVTPL (mandatory)
+3,542,184
+amount
+maturity)
+FVOCI
+3,835,107
+Amortised cost
+277,129
+Amortised cost (receivables)
+Amortised cost (held to
+Financial investments
+410
+FVTPL (mandatory)
+100,975
+FVOCI
+13,892,966
+1,443,785
+Carrying
+IFRS 9
+Classification
+Under IFRS 15, revenue is recognised based on a single model that applies to contracts with customers. The model features
+the replacement of the previous "transfer of risk-reward" by the "transfer of control" as the criteria for revenue recognition.
+The standard contains a contract-based five-step analysis of transactions to determine whether, how much and when
+(at a point in time or over time) revenue is recognised. It replaced IAS 18 Revenue, IAS 11 Construction Contracts and
+related interpretations, under which revenue is recognised in accordance with transactions distinguished from sales of
+goods, rendering of services and construction contracts.
+IFRS 15 "Revenue from contracts with customers"
+The principal effects of adopting these amended IFRSS are as follows:
+Insurance contracts "Applying IFRS 9 Financial instruments with IFRS 4
+Insurance contracts"
+Amendments to IFRS 1, First-time adoption of International Financial
+Investments in associates and joint ventures
+Foreign currency transactions and advance consideration
+Investment property "Transfers of investment property"
+payment transactions"
+Share-based payment "Classification and measurement of share-based
+Financial instruments
+Revenue from contracts with customers
+IFRS 15 also introduces extensive qualitative and quantitative disclosure requirements which aim to enable users of the
+financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from
+contracts with customers.
+Annual Improvements to IFRSS 2014-2016 Cycle
+Reporting Standards and Amendments to IAS 28,
+Amendments to IFRS 4
+Amendments to IAS 40
+Amendments to IFRS 2
+IFRS 9
+IFRS 15
+The IASB has issued the following amendments to IFRSS (including International Accounting Standards ("IASS"), and
+International Financial Reporting Interpretations Committee ("IFRICS")) that are effective in 2018 and relevant to the Group's
+operation.
+(3) Change in accounting policies
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+142
+ICBC
+- Available-for-sale financial assets
+IFRIC 22
+(2) Basis of preparation
+The adoption has no material impact on the financial position and the financial result of the Group.
+IFRS 9 Financial Instruments ("IFRS 9") introduces new requirements for classification and measurement of financial
+instruments, measurement of impairment for financial assets and hedge accounting. IFRS 9 is effective on 1 January 2018.
+The Group adjusted the classification and measurement of financial instruments that were not derecognised on 1 January
+2018 on a retrospective basis in accordance with the reconciliations requirements under IFRS 9. The Group did not adjust
+the comparative figures of consolidated financial statements and recognised any transition adjustments against the opening
+balance of retained earnings or other comprehensive income. Refer to Note 3 summary of significant accounting policies
+for the accounting policies under IFRS 9, and refer to Note 3 summary of significant accounting policies of the Group's
+Financial Statements for the year ended 31 December 2017 for the accounting policies under IAS 39 Financial Instruments:
+Recognition and Measurement ("IAS 39").
+Carrying
+amount
+IAS 39
+The following table illustrates the original classification and measurement of financial instruments under IAS 39 and the new
+classification and measurement of financial instruments under IFRS 9 as at 1 January 2018.
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+144
+The Group is required to adopt IFRS 9 from 1 January 2018. The Group adjusted the classification and measurement
+of financial instruments that were not derecognised on 1 January 2018 on a retrospective basis in accordance with the
+reconciliations requirements under IFRS 9. The Group did not adjust the comparative figures of consolidated financial
+statements and recognised any transition adjustments against the opening balance of retained earnings or other
+comprehensive income.
+Transition
+IFRS 9 requires extensive new disclosures, in particular about hedge accounting, credit risk and expected credit losses.
+Disclosure
+IFRS 9 "Financial instruments"
+IFRS 9 does not fundamentally change the requirements relating to measuring and recognising ineffectiveness under IAS 39.
+However, greater flexibility has been introduced to the types of transactions eligible for hedge accounting.
+The new impairment model in IFRS 9 replaces the "incurred loss" model in IAS 39 with an "expected credit losses ("ECL")"
+model. Under the expected credit loss model, it is no longer necessary for a loss event to occur before an impairment loss
+is recognised. Instead, an entity is required to recognise and measure either a 12-month expected credit loss or lifetime
+expected credit loss, depending on the asset and the facts and circumstances, which results in an early recognition of credit
+losses.
+Impairment
+The classification and measurement requirements for financial liabilities under IFRS 9 are largely unchanged from IAS 39,
+except that IFRS 9 requires the fair value change of a financial liability designated as at FVTPL that is attributable to changes of
+that financial liability's credit risk to be recognised in other comprehensive income (without reclassification to profit or loss).
+The classification for debt instruments is determined based on the entity's business model for managing the financial
+instruments and the contractual cash flow characteristics of the assets. On initial recognition, the Group may
+irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or
+at FVOCI as at FVTPL. If a debt instrument is classified as financial assets measured at FVOCI, then interest income,
+impairment loss, foreign exchange gains or losses and gains or losses on disposal will be recognised in profit or loss.
+For equity securities, the classification is FVTPL regardless of the entity's business model, except for the equity security
+is not held for trading and the entity irrevocably elects to designate that security as at FVOCI. If an equity security is
+designated as at FVOCI then only dividend income on that security will be recognised in profit or loss. Gains and losses
+on that security will be recognised in other comprehensive income without reclassification to profit or loss.
+IFRS 9 contains three principal classification categories for financial assets: measured at (1) amortised cost, (2) fair value
+through profit or loss ("FVTPL") and (3) fair value through other comprehensive income ("FVOCI"):
+Classification and measurement
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+143
+Annual Report 2018
+Hedge accounting
+398,329
+930,593
+750,763
+13,125,401
+Due to central banks
+Financial liabilities designated as at fair value through profit or loss
+Net (decrease)/increase in operating liabilities:
+(1,501,830)
+(942,798)
+4,150
+150,444
+Other assets
+(1,333,103)
+(1,258,665)
+Loans and advances to customers
+(106,555)
+158,257
+Reverse repurchase agreements
+39,668
+(201,848)
+Financial investments measured at fair value through profit or loss
+102,201
+(88,016)
+Due from banks and other financial institutions
+(208,191)
+297,030
+Due from central banks
+(12,329)
+32
+10,923
+Due to banks and other financial institutions
+70,966
+770,864
+724,133
+(68,499)
+(67,781)
+839,363
+791,914
+Net cash flows from operating activities
+Income tax paid
+Net cash flows from operating activities before tax
+1,807,448
+1,136,393
+Net decrease/(increase) in operating assets:
+26,456
+1,525,280
+1,780,568
+Other liabilities
+Due to customers
+55,903
+66,036
+Certificates of deposit
+457,032
+(531,619)
+Repurchase agreements
+(89)
+(268,057)
+(237,261)
+533,745
+598,319
+(328)
+Net loss on changes at fair value
+Net gain on disposal and overage of property and equipment and
+other assets (other than repossessed assets)
+Dividend income
+(3,089)
+(2,950)
+20,315
+17,958
+11
+2,339
+2,114
+Net trading loss/(gain) on equity investments
+283
+14
+161,594
+127,769
+20,009
+10,288
+23,175
+16,219
+(2,659)
+(3,189)
+(1,116)
+(2,313)
+5,194
+The notes on pages 142 to 298 form part of these financial statements.
+Net gain on disposal of financial investments
+Interest expense on debt securities issued
+(229)
+9
+(1,377)
+(1,787)
+476
+6,920
+(757)
+Consolidated Cash Flow Statement
+Year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes
+Accreted interest on impaired loans
+2018
+CASH FLOWS FROM OPERATING ACTIVITIES
+Profit before taxation
+372,413
+364,641
+Adjustments for:
+Share of profits of associates and joint ventures
+Depreciation
+Amortisation
+Amortisation of financial investments
+Impairment losses on assets
+Unrealised loss on foreign exchange
+2017
+Annual Report 2018
+139
+Consolidated Cash Flow Statement
+31 December 2018
+Statement of Financial Position
+ICBC
+140
+The notes on pages 142 to 298 form part of these financial statements.
+(324,813)
+(351,828)
+891,366
+973,512
+Interest paid
+NET CASH FLOWS FROM OPERATING ACTIVITIES INCLUDE:
+Interest received
+(In RMB millions, unless otherwise stated)
+1,520,330
+42
+CASH AND CASH EQUIVALENTS AT END OF THE YEAR
+(32,479)
+32,729
+Effect of exchange rate changes on cash and cash equivalents
+1,189,368
+1,520,330
+363,441
+(43,536)
+81,835
+(35,924)
+1,509,523
+(309)
+Notes
+ASSETS
+53,856
+Other assets
+3,548,996
+740,645
+6,348,656
+521,393
+14,211,777
+38,295
+1,031,402
+3,313,748
+Financial investments measured at amortised cost
+other comprehensive income
+31 December 2018 31 December 2017
+Financial investments measured at fair value through
+24
+20
+19
+222232
+Financial investments
+Loans and advances to customers
+Reverse repurchase agreements
+21
+Derivative financial assets
+Due from banks and other financial institutions
+Cash and balances with central banks
+Financial investments measured at fair value through
+profit or loss
+5,428,233
+(327)
+(4,506)
+Dividends paid to non-controlling shareholders
+Dividends paid on preference shares
+Dividends paid on ordinary shares
+Acquisition of non-controlling interests
+Repayment of debt securities
+Interest paid on debt securities
+Proceeds from issuance of debt securities
+Capital injection by non-controlling shareholders
+CASH FLOWS FROM FINANCING ACTIVITIES
+Net cash flows from investing activities
+Dividends received
+Net cash flows from financing activities
+Proceeds from disposal of associates and joint ventures
+Proceeds from sale and redemption of financial investments
+Purchases of financial investments
+(other than repossessed assets)
+Proceeds from disposal of property and equipment and other assets
+Purchases of property and equipment and other assets
+CASH FLOWS FROM INVESTING ACTIVITIES
+2017
+2018
+Notes
+(In RMB millions, unless otherwise stated)
+Year ended 31 December 2018
+Investments in associates and joint ventures
+(4,437)
+NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS
+(60,496)
+(83,506)
+(85,823)
+(194)
+(759,095)
+(968,222)
+(15,370)
+(22,917)
+943,954
+1,045,746
+792
+125
+Cash and cash equivalents at beginning of the year
+(489,258)
+1,731
+1,732
+633
+1,168
+(1,605)
+(799)
+2,153,124
+1,495,633
+3,195
+(2,633,240)
+2,855
+(2,171,838)
+(13,096)
+(731,745)
+Amortised cost (loans and
+Classification
+449,233
+Remeasurement: provision for expected credit losses
+Balance under IAS 39
+Financial investments - amortised cost
+Carrying amount
+under IFRS 9 as at
+1 January 2018
+Remeasurement
+Reclassification
+31 December 2017
+Note
+under IAS 39 as at
+mandatory (IFRS 9)
+Carrying amount
+Notes to the Financial Statements
+ICBC
+146
+13,759,417
+Balance under IFRS 9
+(33,193)
+Remeasurement: provision for expected credit losses
+(411)
+C
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+(99,945)
+Less: to FVOCI (IFRS 9)
+Less: to FVTPL
+Remeasurement: provision for expected credit losses
+1,799
+E
+as at FVTPL (IAS 39)
+Add: from financial assets designated
+99
+66
+during previous reclassifications
+value adjustments recognised
+B
+Remeasurement: reversal of the fair
+3,286,309
+(22,050)
+(2,600)
+5
+277,129
+Remeasurement: provision for expected credit losses
+D
+Add: from held-to-maturity investments (IAS 39)
+C
+(843)
+(2)
+B
+Less: to FVOCI (IFRS 9)
+Reclassification Remeasurement
+Note 31 December 2017
+Carrying amount
+under IAS 39 as at
+Cash and balances with central banks
+Financial assets measured at amortised cost
+Financial assets
+The following table reconciles the carrying amounts of financial assets and financial liabilities under IAS 39 to the carrying
+amounts under IFRS 9.
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+Amortised cost
+Notes to the Financial Statements
+Annual Report 2018
+Note: As at 1 January 2018, the financial liabilities issued by the Group had not been reclassified or re-measured except for the
+financial liabilities listed above.
+88,391
+FVTPL (designated)
+527,928
+Amortised cost
+526,940
+89,361
+FVTPL (designated)
+Amortised cost
+145
+Less: to FVTPL― mandatory (IFRS 9)
+Balance under IAS 39 and balance under IFRS 9
+3,613,872
+13,892,966
+Balance under IAS 39
+Loans and advances to customers
+791,065
+Balance under IFRS 9
+(46)
+Remeasurement: provision for expected credit losses
+(195,520)
+A
+3,613,872
+Less: to FVTPL mandatory (IFRS 9)
+Balance under IAS 39
+Reverse repurchase agreements
+847,341
+(270)
+Balance under IFRS 9
+Remeasurement: provision for expected credit losses
+847,611
+Balance under IAS 39
+Due from banks and other financial institutions
+986,631
+Add: from available-for-sale financial assets (IAS 39)
+F
+277,841
+(86)
+8,115
+C
+Add: from held-to-maturity investments (IAS 39)
+Remeasurement: from amortised cost to fair value
+Add: from available-for-sale financial assets (IAS 39)
+Remeasurement: reversal of impairment
+(465)
+Remeasurement: from amortised cost to fair value
+22,050
+C
+Add: from receivables (IAS 39)
+86
+87,337
+Financial investments - FVTPL (mandatory)
+Balance under IFRS 9
+Remeasurement: from amortised cost to fair value
+411
+411
+C
+Add: from amortised cost (IAS 39)
+Balance under IAS 39
+Loans and advances to customers
+Balance under IAS 39
+Balance under IFRS 9
+C, H
+allowance under IAS 39
+785,263
+(548)
+255,860
+529,951
+351,802
+148,518
+(720)
+724
+(1,799)
+31,563
+E
+ICBC
+148
+Financial assets measured at FVTPL
+Balance under IFRS 9
+Less: to amortised cost (IFRS 9)
+Balance under IAS 39
+Financial investments - designated as at FVTPL
+Balance under IFRS 9
+Remeasurement: fair value remeasurement
+353,601
+195,520
+A
+Add: from amortised cost (IAS 39)
+3,835,107
+17,550
+(97)
+450,166
+(3,286,309)
+(247,760)
+(8,115)
+3,542,184
+Financial assets measured at amortised cost
+Balance under IFRS 9
+Remeasurement: provision for expected credit losses
+(933)
+Balance under IAS 39
+Balance under IFRS 9
+DB U
+C
+mandatory (IFRS 9)
+Less: to FVTPL
+Less: to FVOCI (IFRS 9)
+Less: to amortised cost (IFRS 9)
+Financial investments - held-to-maturity investments
+Balance under IAS 39
+Remeasurement: provision for expected credit losses
+Remeasurement: from fair value to amortised cost
+Balance under IFRS 9
+Other assets
+23,610,559
+(296,761)
+(17,763)
+410
+(1)
+195,520
+89,013
+1 January 2018
+Remeasurement
+Reclassification
+Carrying amount
+under IFRS 9 as at
+89,013
+Note 31 December 2017
+Carrying amount
+under IAS 39 as at
+Balance under IAS 39
+Reverse repurchase agreements
+Balance under IAS 39 and balance under IFRS 9
+Derivative financial assets
+Financial assets measured at FVTPL
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+147
+Annual Report 2018
+449,233
+23,296,035
+fair value through profit or loss
+Financial liabilities designated as at
+Carrying amount
+under IFRS 9 as at
+1 January 2018
+151
+receivables)
+450,166
+Financial liabilities:
+Debt securities issued
+Foreign currency transactions are initially recorded in the functional currency using the exchange rates ruling at the dates
+of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated into the functional
+currency at the applicable exchange rates ruling at the end of the reporting period. Exchange differences arising on the
+settlement of monetary items or on translating monetary items at period end rates are recognised in profit or loss, with the
+exception that they are taken directly to other comprehensive income when the monetary items are designated as part of
+the hedge of the Bank's net investment of a foreign entity, and the aggregate exchange differences are not recognised in
+profit or loss until the disposal of such net investment. Tax charges and credits attributable to exchange differences on those
+monetary items are also recorded in other comprehensive income.
+The consolidated financial statements are presented in RMB, being the functional and presentation currency of the Bank's
+operations in Mainland China. Each entity in the Group determines its own functional currency and the financial statements
+of each entity are presented using that functional currency.
+(4) Foreign currency translation
+In the Bank's statement of financial position, investments in associates and joint ventures are stated at cost less impairment
+losses (see Note 3(21)).
+If an investment in an associate becomes an investment in a joint venture or vice versa, retained interest is not remeasured.
+Instead, the investment continues to be accounted for under the equity method.
+The Group's investments in associates or joint ventures are accounted for under the equity method of accounting. Under
+the equity method, an investment in an associate or joint venture is carried in the consolidated statement of financial
+position at cost plus post-acquisition changes in the Group's share of the net assets of the associate or joint venture, less any
+impairment losses. The consolidated statement of profit or loss reflects the share of the results of operations of the associate
+or joint venture. Where there has been a change recognised directly in the equity of the associate or joint venture, the Group
+recognises its share of any changes and discloses this, when applicable, in the consolidated statement of changes in equity.
+Under the equity method, unrealised profits and losses resulting from transactions between the Group and the associates or
+joint ventures are eliminated to the extent of the Group's interests in the associates or joint ventures.
+A joint venture is an arrangement whereby the Group or Bank and other parties contractually agree to share control of the
+arrangement, and have rights to the net assets of the arrangement.
+An associate is an entity in which the Group or Bank has significant influence.
+(3) Associates and Joint ventures
+Non-controlling interests represent the equity in a subsidiary not attributable directly or indirectly to a parent.
+Non-controlling interests are presented in the consolidated statement of financial position within equity, separately from
+equity attributable to the equity shareholders of the Bank. Non-controlling interests in the results of the Group are presented
+on the face of the consolidated statement of profit or loss and the consolidated statement of profit or loss and other
+comprehensive income as an allocation of the total profit or loss and total comprehensive income for the year between non-
+controlling interests and the equity shareholders of the Bank.
+Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rates as at
+the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using
+the exchange rates as at the date when the fair value is determined. Any goodwill arising on the acquisition of a foreign
+operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition are
+treated as assets and liabilities of the foreign operation and translated at the rates ruling at the end of the reporting period.
+The exchange differences are recognised in profit or loss or in other comprehensive income, depending on the nature of
+non-monetary items.
+(2) Non-controlling interests
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+154
+In the Bank's statement of financial position, its investments in subsidiaries are stated at cost less impairment losses
+(see Note 3(21)).
+An investment in a subsidiary is consolidated into the consolidated financial statements from the date that control
+commences until the date that control ceases. Intra-group balances, transactions and any unrealised profit or loss arising
+from intra-group transactions are eliminated in full in preparing the consolidated financial statements.
+Changes in the Group's interests in a subsidiary that do not result in a loss of control are accounted for as equity
+transactions, whereby adjustments are made to the amounts of controlling and non-controlling interests within consolidated
+equity to reflect the change in relative interests, but no adjustments are made to goodwill and no gain or loss is recognised.
+Annual Report 2018
+Notes to the Financial Statements
+A structured entity is an entity that has been designed so that voting or similar rights are not the dominant factor in deciding
+who controls the entity, such as when any voting rights relate to administrative tasks only and the relevant activities are
+directed by means of contractual arrangements.
+156
+Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for
+managing financial assets in which case all affected financial assets are reclassified on the first day of the first reporting
+period following the change in the business model.
+The classification of financial assets is generally based on the business model in which a financial asset is managed and its
+contractual cash flow characteristics. On initial recognition, a financial asset is classified as measured at amortised cost, at
+FVOCI, or at FVTPL.
+Classification of financial assets
+(ii) Classification and subsequent measurement of financial assets
+When measuring fair value, the Group shall take into account the characteristics of the asset or liability if market participants
+would take those characteristics into account when pricing the asset or liability at the measurement date (including
+the condition and location of the asset; and restrictions, if any, on the sale or use of the asset, etc.), and use valuation
+techniques that are appropriate in the circumstances and for which sufficient data and other information are available to
+measure fair value. The adopted valuation techniques mainly include market approach, income approach and cost approach.
+Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
+market participants at the measurement date.
+Measurement of fair value
+155
+Financial assets and financial liabilities are measured initially at fair value. For financial assets and financial liabilities measured
+at FVTPL, any related directly attributable transaction costs are charged to profit or loss; for other categories of financial
+assets and financial liabilities, any related directly attributable transaction costs are included in their initial costs.
+At initial recognition, financial assets are classified into three categories: financial assets measured at amortised cost,
+financial assets measured at FVOCI and financial assets measured at FVTPL.
+(i) Initial recognition of financial instruments
+A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
+instrument of another entity.
+(5) Financial instruments
+Cash flows arising from transactions in foreign currencies and cash flows of overseas subsidiaries are translated using the
+weighted average exchange rates for the year. The effect of exchange rate movements on cash is presented separately in the
+statement of cash flows as a reconciling item.
+As at the end of the reporting period, the assets and liabilities of foreign operations are translated into the presentation
+currency of the Bank at the exchange rates ruling at the end of the reporting period. All items within equity except for
+retained profits are translated at the exchange rates ruling at the dates of the initial transactions. Income and expenses in
+the statement of profit or loss are translated at the weighted average exchange rates for the year. The exchange differences
+arising on the above translation are taken to other comprehensive income. On disposal of a foreign operation, the
+cumulative amount recognised in other comprehensive income relating to that particular foreign operation is recognised in
+profit or loss.
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+At initial recognition, financial liabilities are classified into two categories: financial liabilities measured at FVTPL and other
+financial liabilities.
+Subsidiaries are entities (including structured entities) controlled by the Group. The Group controls an entity if it is exposed,
+or has rights, to, variable returns from its involvement with the entity and has the ability to affect those returns through its
+power over the entity. The Group reassesses whether it has control if there are changes to one or more of the elements of
+control. This includes circumstances in which protective rights held (e.g. those resulting from a lending relationship) become
+substantive and lead to the Group having power over an entity.
+The Group does not adopt any issued but not yet effective international financial reporting standards, interpretations and
+amendments.
+ICBC
+97
+Financial investments
+amortised cost (IFRS 9)
+Financial assets measured at
+Available-for-sale financial assets (IAS 39)/
+1,010
+843
+167
+97
+Financial investments
+23
+2
+2
+amortised cost (IFRS 9)
+Financial assets measured at
+Held-to-maturity investments (IAS 39)/
+Financial investments
+Financial assets measured at FVOCI (IFRS 9)
+23
+Available-for-sale financial assets (IAS 39)/
+Financial assets measured at FVOCI (IFRS 9)
+Financial investments
+The adoption has no material impact on the financial position and the financial result of the Group.
+All companies that issue insurance contracts may choose to recognise in other comprehensive income, rather than
+profit or loss, the volatility that could arise when IFRS 9 is applied before the new insurance contracts standard is
+applied.
+Overlay approach
+Companies whose activities are predominantly connected with insurance may choose to defer the application of IFRS 9
+until 2021 (the effective date of IFRS 17).
+Deferral approach - Temporary exemption from IFRS 9
+The amendments address concerns arising from the different effective dates of IFRS 9 and the new insurance contracts
+standard, IFRS 17. The amendments introduce the following two approaches:
+Amendments to IFRS 4, Insurance contracts "Applying IFRS 9 Financial instruments with IFRS 4 Insurance
+contracts"
+a non-investment entity investor may elect to retain the fair value accounting applied by its investment entity associate
+or joint venture and this election can be made separately for each investment entity associate or joint venture.
+The adoption has no material impact on the financial position and the financial result of the Group.
+a venture capital organisation, or other qualifying entity, may elect to measure its investments in an associate or joint
+ventures at fair value through profit or loss on an investment-by-investment basis; and
+•
+The amendments to IAS 28 clarify that:
+The amendments to IFRS 1 delete the short-term exemptions for first-time adopters that are already out-of-date.
+Amendments to IFRS 1, First-time adoption of
+International Financial Reporting Standards and Amendments to IAS 28, Investments in associates and
+joint ventures
+Annual Improvements to IFRSS 2014-2016 Cycle
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+(479)
+628
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
+(1) Subsidiaries
+Notes to the Financial Statements
+(In RMB millions, unless otherwise stated)
+Held-to-maturity investments (IAS 39)/
+152
+IAS 37 stands for International Accounting Standard 37 "Provisions, Contingent Liabilities and Contingent Assets".
+(i)
+30,907
+413,175
+68,554
+(1,203)
+345,824
+Total
+ICBC
+30,807
+Credit commitments
+financial guarantee contracts
+Loan commitments and
+(724)
+724
+Financial investments
+Financial assets measured at FVTPL (IFRS 9)
+Available-for-sale financial assets (IAS 39)/
+100
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Amendments to IFRS 2, Share-based payment "Classification and measurement of share-based payment
+transactions"
+Annual Report 2018
+The adoption has no material impact on the financial position and the financial result of the Group.
+The Interpretation clarifies that "the date of the transaction" for the purpose of determining the exchange rate to use on
+initial application of the related asset, expense or income (or part of it) is the date on which an entity initially recognises the
+non-monetary asset or liability arising from the payment or receipt of advance consideration. If there are multiple payments
+or receipts in advance of recognising the related item, the entity should determine the date of the transaction for each
+payment or receipt.
+153
+The Interpretation provides guidance on how to determine "the date of the transaction" when applying IAS 21. The effects
+of changes in foreign exchange rates to situations where an entity receives or pays advance consideration in a foreign
+currency and recognises a non-monetary asset or liability.
+IFRIC 22, "Foreign currency transactions and advance consideration"
+The adoption has no material impact on the financial position and the financial result of the Group.
+The amendments also re-characterise the list of evidence provided in the standard as a non-exhaustive list of examples i.e.
+other forms of evidence may support a transfer.
+The amendments provide guidance on deciding when there is a change in use to transfer a property to or from investment
+property. The amendments clarify that a change in use occurs when the property meets or ceases to meet the definition of
+investment property and there is evidence of the change in use.
+Amendments to IAS 40, Investment property "Transfers of investment property"
+The adoption has no material impact on the financial position and the financial result of the Group.
+Any difference between the carrying amount of the liability derecognised and the amount recognised in equity at the
+modification date is recognised in profit or loss immediately.
+The amendments clarify that on such a modification the liability for the original cash-settled share-based payment is
+derecognised and the equity-settled share-based payment is measured at its fair value and recognised to the extent
+that the goods or services have been received up to that date.
+Accounting for a modification of a share-based payment from cash-settled to equity-settled
+The amendments introduce an exception so that a share-based payment transaction with net settlement feature
+for withholding an amount to cover the employee's tax obligations is classified as equity-settled in its entirety when
+certain conditions are met, even though the entity is then required to transfer cash (or other assets) to the tax
+authority to settle the employee's tax obligation.
+The amendments clarify that the fair value of liabilities for cash-settled share-based payments should be measured
+using the same approach as for equity-settled share-based payments ―i.e. using the modified grant date method.
+Classification of share-based payments settled net of tax withholdings
+Measurement of cash-settled share-based payments
+•
+The amendments clarify the accounting for the following classification and measurement issues under IFRS 2:
+3,100
+Financial Statements for the year ended 31 December 2018
+2,951
+158
+These assets are subsequently measured at fair value. Interest income calculated using the effective interest method,
+impairment and foreign exchange gains and losses are recognised in profit or loss. Other net gains and losses are recognised
+in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are
+reclassified to profit or loss.
+Debt instruments measured at FVOCI
+These assets are subsequently measured at amortised cost using the effective interest method. A gain or loss on a financial
+asset that is measured at amortised cost and is not part of a hedging relationship shall be recognised in profit or loss when
+the financial asset is derecognised, through the amortisation process or in order to recognise impairment gains or losses.
+Financial assets measured at amortised cost
+These financial assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend
+income, are recognised in profit or loss unless the financial assets are part of a hedging relationship.
+Financial assets measured at FVTPL
+Subsequent measurement of financial assets
+The business model refers to how the Group manages its financial assets in order to generate cash flows. That is, the
+Group's business model determines whether cash flows will result from collecting contractual cash flows, selling financial
+assets or both. The Group determines the business model for managing the financial assets according to the facts and based
+on the specific business objective for managing the financial assets determined by the Group's key management personnel.
+In assessing whether the contractual cash flows are solely payments of principal and interest, the Group considers the
+contractual terms of the instrument. For the purposes of this assessment, 'principal' is defined as the fair value of the
+financial asset on initial recognition. 'Interest' is defined as consideration for the time value of money and for the credit risk
+associated with the principal amount outstanding during a particular period of time and for other basic lending risks and
+costs, as well as a profit margin. The Group also assesses whether the financial asset contains a contractual term that could
+change the timing or amount of contractual cash flows such that it would not meet this condition.
+Annual Report 2018
+All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. On
+initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be
+measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch
+that would otherwise arise.
+its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the
+principal amount outstanding.
+it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling
+financial assets; and
+A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:
+its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the
+principal amount outstanding.
+it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
+-
+-
+A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:
+On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present
+subsequent changes in the investment's fair value in other comprehensive income. This election is made on an investment-
+by-investment basis.
+157
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+The Group's method of measuring expected credit losses of financial instruments reflects the following elements: (i) unbiased
+weighted average probability determined by the results of evaluating a range of possible outcomes; (ii) time value of money;
+(iii) reasonable and evidence-based information about past events, current conditions, and future economic forecasts that
+are available at no additional cost or effort at the end of the reporting period.
+ECLS are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash
+shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows
+that the Group expects to receive).
+Measurement of ECLS
+Financial assets measured at fair value, including debt investments or equity securities measured at FVTPL, equity securities
+designated as at FVOCI and derivative financial assets, are not subject to the ECL assessment.
+Loan commitments and financial guarantee contracts.
+Debt instruments measured at FVOCI; and
+Financial assets measured at amortised cost;
+The Group recognises loss allowances for ECL on:
+(6) Impairment of the financial assets
+Other financial liabilities are subsequently measured at amortised cost using the effective interest method.
+Other financial liabilities
+For the financial liabilities designated as at FVTPL, the gains and losses arose are accounted for in accordance with the
+following requirements: (i) the amount of changes in the fair value of the financial liability arising from changes in the
+Group's own credit risk should be included in other comprehensive income; (ii) other changes in fair value of the financial
+liabilities are recognised in current profit or loss. If the treatment of the impact of changes in the financial liabilities' own
+credit risk will create or enlarge the accounting mismatch in profit or loss in accordance with (i), the Group shall recognise
+the entire gain or loss of the financial liabilities (including the amount of the impact of changes in its own credit risk) in profit
+and loss. When these liabilities are derecognised, the cumulative gain or loss previously recognised in other comprehensive
+income is reclassified from equity to retained earnings.
+Financial liabilities measured at FVTPL are subsequently measured at fair value and net gains and losses (including any
+interest expense) are recognised in profit or loss, unless the financial liabilities are part of a hedging relationship.
+A financial liability is classified as measured at FVTPL if it is classified as held-for-trading (including derivative financial liability)
+or it is designated as such on initial recognition.
+Financial liabilities measured at FVTPL
+Financial liabilities are classified as measured at FVTPL and other financial liabilities.
+(iii) Classification and subsequent measurement of financial liabilities
+These assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss. Other net
+gains and losses are recognised in other comprehensive income. On derecognition, gains and losses accumulated in other
+comprehensive income are reclassified to retained earnings.
+Equity instruments measured at FVOCI
+ICBC
+479
+(1,774)
+(31,563)
+(IAS 39)/Financial assets measured at
+1,496,453
+5,691
+3,438
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Carrying amount
+Financial assets measured at FVOCI
+Loans and advances to customers
+40,901
+Balance under IAS 39
+Remeasurement: reversal of impairment
+allowance under IAS 39
+Remeasurement: from amortised cost to fair value
+Balance under IFRS 9
+under IAS 39 as at
+Note 31 December 2017
+B
+Reclassification
+Remeasurement
+Add: from amortised cost (IAS 39)
+7,406
+1,544,760
+Annual Report 2018
+Remeasurement
+Reclassification
+Note 31 December 2017
+Carrying amount
+under IFRS 9 as at
+Carrying amount
+under IAS 39 as at
+Financial liabilities measured
+Balance under IFRS 9
+amortised cost
+Remeasurement: from fair value to
+at FVTPL (IAS 39)
+Add: from financial liabilities designated as
+Balance under IAS 39
+Debt securities issued
+at amortised cost
+Financial liabilities measured
+Financial liabilities
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+149
+Carrying amount
+under IFRS 9 as at
+1 January 2018
+99,945
+1,077
+(47)
+100,975
+Remeasurement: reversal of impairment
+allowance under IAS 39
+Remeasurement: fair value remeasurement
+Balance under IFRS 9
+Financial investments - available-for-sale
+financial assets (IAS 39)
+Balance under IAS 39
+Less: to amortised cost (IFRS 9)
+Less: to FVOCI (IFRS 9) - debt instruments
+Less: to FVOCI (IFRS 9) - equity instruments
+Less: to FVTPL mandatory (IFRS 9)
+Balance under IFRS 9
+Financial assets measured at FVOCI
+G
+1,774
+FDGF
+C, H
+1,496,453
+(277,841)
+(1,185,275)
+designated
+1 January 2018
+(IAS 39)
+Balance under IAS 39
+Financial investments - FVOCI (debt instruments)
+Balance under IAS 39
+Add: from held-to-maturity investments (IAS 39)
+B
+247,760
+Remeasurement: from amortised cost to fair value
+2,329
+Add: from available-for-sale financial assets (IAS 39)
+Remeasurement: reversal of impairment
+D
+1,185,275
+allowance under IAS 39
+149
+Add: from receivables (IAS 39)
+B
+2,600
+Remeasurement: from amortised cost to fair value
+(19)
+Balance under IFRS 9
+1,438,094
+Financial investments - FVOCI (equity instruments)
+Add: from available-for-sale financial assets
+amortised cost (IFRS 9)
+526,940
+18
+270
+583
+Due from banks and other financial institutions
+1 January 2018
+IFRS 9 as at
+Impairment
+allowance under
+Remeasurement
+Reclassification
+853
+31 December 2017
+allowance under
+Impairment
+Cash and balances with central banks
+measured at amortised cost (IFRS 9)
+Loans and receivables (IAS 39)/Financial assets
+The following table reconciles the closing impairment allowance under IAS 39 to opening allowance determined in
+accordance with IFRS 9 on the initial application date:
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+IAS 39/IAS
+37 (i) as at
+Reverse repurchase agreements
+46
+Loans and advances to customers
+Financial assets designated as at FVTPL
+471
+(606)
+1,077
+Loans and advances to customers
+measured at FVOCI (IFRS 9)
+Loans and receivables (IAS 39)/Financial assets
+3,921
+933
+2,988
+Other assets
+147
+(5)
+152
+Financial investments
+46
+372,598
+33,193
+(1,077)
+340,482
+Notes to the Financial Statements
+151
+Annual Report 2018
+Under IAS 39, certain debt securities issued were designated as at FVTPL when the Group held related derivative
+financial instruments. As at 1 January 2018, the Group revoked the previous designation due to the criteria of
+designating for eliminating or significantly reducing an accounting mismatch are no longer met.
+Note: As at 1 January 2018, the financial liabilities issued by the Group had not been reclassified or re-measured except for the
+financial liabilities listed above.
+88,391
+88,391
+(970)
+89,361
+Financial liabilities measured at FVTPL
+Balance under IFRS 9
+(970)
+Less: to amortised cost (IFRS 9)
+89,361
+Balance under IAS 39
+Financial liabilities designated as at FVTPL
+Financial liabilities measured at FVTPL
+527,928
+18
+970
+526,940
+at amortised cost
+527,928
+The application of IFRS 9 resulted in the reclassifications set out in the table above and explained below.
+970
+A.
+C.
+The reclassified and re-measured financial assets amounted to RMB21,519 million are equity investments, which the
+Group did not designate as at FVOCI at the date of initial application.
+The reclassified and re-measured financial assets are equity investments designated irrevocably by the Group as
+financial assets measured at FVOCI at the date of initial application.
+Certain debt instruments originally classified as available-for-sale financial assets were held within a business model
+whose objective at the date of initial application was to collect contractual cash flows. In addition, their contractual
+cash flows were identified as solely payments of principal and interest on the principal outstanding. Therefore, these
+assets were classified as financial assets measured at amortised cost under IFRS 9. The fair value of these instruments
+as at 31 December 2018 was RMB293,092 million. Assuming that these financial assets were not reclassified upon
+transition to IFRS 9, the gain arising from changes in their fair value during the year that would have been recognised
+in other comprehensive income was RMB13,004 million.
+Under IAS 39, certain debt instruments held by the Group were designated as at FVTPL, which no longer met the
+criteria under IFRS 9 for designation as at FVTPL. Therefore, the Group revoked its previous designation of these
+financial assets, reassessed their business model and contractual cash flows and classified them as measured at
+amortised cost. The effective interest rate of these debt instruments was 0.75% to 4.38%, and interest income
+recognised during the year amounted to RMB33 million. The fair value of these debt instruments as at 31 December
+2018 was RMB1,805 million. Assuming that these debt instruments were not reclassified upon transition to IFRS 9, the
+gain arising from changes in their fair value during the year that would have been recognised in the profit or loss was
+RMB6 million.
+I.
+H.
+G.
+F.
+E.
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+150
+Those previously classified as available-for-sale financial assets and now classified as measured at FVOCI; and
+(ii) Those previously classified as held-to-maturity investments and now classified as measured at amortised cost.
+(i)
+In addition to the above, the following debt instruments have been reclassified to new categories under IFRS 9, as their
+previous categories were no longer used, with no changes to their measurement basis:
+Certain loans and advances to customers held by the Group, and certain debt instruments originally classified as
+receivables, held-to-maturity investments or available-for-sale financial assets, their contractual cash flows were not
+identified as solely payments of principal and interest on the principal outstanding. Therefore, these assets were
+classified as financial assets measured at FVTPL under IFRS 9.
+Certain reverse repurchase agreements held by the Group were held within a business model whose objective at the
+date of initial application was neither collecting contractual cash flows, nor both collecting contractual cash flows and
+selling financial assets. Therefore, these assets were classified as financial assets measured at FVTPL under IFRS 9.
+Certain loans and advances to customers held by the Group, and certain debt instruments originally classified as
+receivables or held-to-maturity investments were held within a business model in which objective at the date of initial
+application was both collecting contractual cash flows and selling financial assets. In addition, their contractual cash
+flows were identified as solely payments of principal and interest on the principal amount outstanding. Therefore,
+these assets were classified as financial assets measured at FVOCI under IFRS 9.
+D.
+B.
+Financial investments
+Net investment hedge is a hedge of the currency risk of a net investment in a foreign institution operation.
+Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the
+hedging instrument relating to the effective portion of the hedge is recognised directly in other comprehensive income; the
+gain or loss relating to the ineffective portion is recognised in profit or loss immediately. Gains and losses accumulated in
+other comprehensive income are included in profit or loss when the foreign operation is disposed of as part of the gain or
+loss on the disposal.
+ICBC
+When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and
+designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition
+date. This includes the separation of embedded derivatives in host contracts by the acquiree.
+If the business combination is achieved in stages, the acquisition date fair value of the acquirer's previously held equity
+interest in the acquiree is remeasured to fair value as at the acquisition date through profit or loss.
+Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. Subsequent
+changes to the fair value of the contingent consideration which is deemed to be an asset or liability, is recognised either in
+profit or loss or as change to other comprehensive income. If the contingent consideration is classified as equity, it shall not
+be remeasured until it is finally settled within equity.
+Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred, the amount
+recognised for non-controlling interests and any fair value of the Group's previously held equity interests in the acquiree over
+the net identifiable assets acquired and liabilities assumed. If the sum of this consideration and other items is lower than the
+fair value of the net assets of the subsidiary acquired, the difference is, after reassessment, recognised in profit or loss as
+gain on bargain purchase.
+After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is tested for
+impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be
+impaired. The Group performs its annual impairment test of goodwill as at 31 December. For the purpose of impairment
+testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group's cash-
+generating units ("CGU"), or groups of CGUs, that are expected to benefit from the synergies of the combination,
+irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units.
+Impairment is determined by assessing the recoverable amount of the CGU (group of CGUs) to which the goodwill relates.
+Where the recoverable amount of the CGU (group of CGUS) is less than the carrying amount, an impairment loss is
+recognised. An impairment loss recognised for goodwill is not reversed in a subsequent period.
+Where goodwill forms part of a CGU (group of CGUs) and part of the operation within that unit is disposed of, the goodwill
+associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or
+loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the
+operation disposed of and the portion of the CGU retained.
+Annual Report 2018
+165
+Business combinations are accounted for using the acquisition method. The consideration transferred is measured at
+acquisition date fair value which is the sum of the acquisition date fair values of assets transferred by the Group, liabilities
+assumed by the Group to the former owners of the acquiree and the equity interests issued by the Group in exchange for
+control of the acquiree. Acquisition costs incurred are expensed.
+Notes to the Financial Statements
+(In RMB millions, unless otherwise stated)
+(20) Provisions
+Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, and it
+is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
+estimate can be made of the amount of the obligation.
+A provision shall be initially measured at the best estimate of the expenditure required to settle the related present
+obligation. When the effect of the time value of money is material, the best estimate shall be determined by discounting the
+related future cash outflows. When determining the best estimate, the Group considers factors pertaining to a contingency
+such as risks, uncertainties and time of value of money. Where there is a continuous range of the expenditure required, and
+each possible outcome in that range is as likely as any other, the best estimate shall be the mid-point of that range. In other
+cases, the best estimate shall be determined according to the following circumstances:
+Where the contingency involves a single item, the best estimate shall be the most likely outcome.
+Where the contingency involves a large population of items, the best estimate shall be determined by weighting all
+possible outcomes by their associated probabilities.
+The Group shall review the carrying amount of a provision at the end of reporting period. The carrying amount shall be
+adjusted to the current best estimate.
+(21) Asset impairment
+Impairment losses on assets except for deferred tax assets, financial assets and goodwill are determined based on the
+following:
+Financial Statements for the year ended 31 December 2018
+The Group assesses at the end of each reporting period whether there is any indication that an asset may be impaired. If
+any such indication exists, or when impairment testing for an asset is required, the Group makes an estimate of the asset's
+recoverable amount. An asset's recoverable amount is the higher of its fair value less costs to sell and its value in use and
+is determined on an individual basis, unless the asset does not generate cash inflows that are largely independent of those
+from other assets or groups of assets, in which case the recoverable amount is determined for the CGU to which the asset
+belongs. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered to be impaired
+and is written down to its recoverable amount. In assessing value in use of an asset, the estimated future cash flows are
+discounted to their present values using a pre-tax discount rate that reflects current market assessments of the time value of
+money and the risks specific to the asset.
+Repossessed assets are initially recognised at fair value, and are subsequently measured at the lower of the carrying value
+and net recoverable amount. If the recoverable amount is lower than the carrying value of the repossessed assets, the assets
+are written down to the recoverable amount.
+Land use rights are recognised at cost, being the fair value at the time of injection from the central government of the PRC
+(the "Government") or the consideration paid. The rights are amortised using the straight-line basis over the periods of the
+leases. When the prepaid land lease payments cannot be allocated reliably between the land and buildings elements, the
+entire lease payments are included in the costs of properties and buildings as finance leases in property and equipment.
+Office equipment and motor vehicles
+(excluding aircraft and vessels)
+Leasehold improvements
+Estimated
+useful life
+5-50 years
+Estimated residual
+Annual
+value rate
+0%-3%
+depreciation rate
+1.94%-20%
+2-7 years
+14.29%-50%
+(18) Repossessed assets
+Over the shorter of the economic useful
+lives and remaining lease terms
+For an item of impaired fixed assets, the depreciation is calculated based on the carrying value less the cumulative
+impairment loss.
+Where parts of an item of property and equipment have different useful lives, the cost of that item is allocated on a
+reasonable basis among the parts and each part is depreciated separately.
+Residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at least at each financial
+year end.
+An item of property and equipment or any significant part initially recognised is derecognised upon disposal or when no
+future economic benefits are expected from its use or disposal. Any gain or loss arising from derecognition of the asset
+(calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the
+statement of profit or loss in the year the asset is derecognised.
+164
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+(17) Land use rights
+Equipment under operating leases where the Group is the lessor contains aircraft, aircraft engines and vessels. The estimated
+useful lives and depreciation methods are determined according to the real conditions of individual aircraft and vessels.
+The residual values are assessed by an independent valuer based on historical data. The estimated useful lives range from
+15 to 25 years.
+Properties and buildings
+An assessment is made at the end of each reporting period as to whether there is any indication that previously recognised
+impairment losses may no longer exist or may have decreased. If such an indication exists, the recoverable amount is
+estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to
+determine the asset's recoverable amount since the last impairment loss was recognised. If that is the case, the carrying
+amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that
+would have been determined, net of any depreciation/amortisation, had no impairment loss been recognised for the asset
+in prior years. Any such reversal is recognised in profit or loss. After such a reversal, the depreciation/amortisation charge is
+adjusted in future periods to allocate the asset's revised carrying amount, less any residual value, on a systematic basis over
+its remaining useful life.
+Cash and cash equivalents refer to short-term highly liquid assets, which are readily convertible into known amounts of cash
+and subject to an insignificant risk of changes in value. Cash and cash equivalents comprise cash, unrestricted balances with
+central banks, amounts due from banks and other financial institutions and reverse repurchase agreements with original
+maturity of less than three months.
+The asset custody services of the Group refer to the business that the Group as trustee approved by regulatory authorities,
+signs custody agreement with clients and takes the responsibility of trustee in accordance with relevant laws and regulations.
+The assets under custody are recorded as off-balance sheet items as the Group merely fulfils the responsibility as trustee and
+charges fees in accordance with these agreements without retaining any risks or rewards of the assets under custody.
+The Group grants entrusted loans on behalf of trustors, which are recorded off-balance sheet. The Group, as a trustee,
+grants such entrusted loans to borrowers under the direction of those trustors who fund these loans. The Group has been
+contracted by those trustors to manage the administration and collection of these loans on their behalf. Those trustors
+determine both the underwriting criteria for and the terms of all entrusted loans including their purposes, amounts, interest
+rates, and repayment schedules. The Group charges a commission related to its activities in connection with entrusted loans
+which are recognised ratably over the period in which the service is provided. The risk of loss is borne by those trustors.
+(25) Insurance contracts
+Insurance contracts classification
+The Group's insurance subsidiary executes the contract with the policyholder. Where the Group undertakes insurance risk,
+which means a risk, rather than a financial risk, transferred from the holder of a contract to the insurance provider and over
+time, the combined cost of claims, administration and acquisition of the contract may exceed the aggregate amount of
+premiums received and investment income, the contract is classified as an insurance contract; where the Group undertakes
+the risks other than insurance risk. The contract is classified as non-insurance contract; and where the Group undertakes
+both insurance risk and other risks, forming a contract with mixed risks, the following stipulations are applied:
+(i)
+(ii)
+Where the insurance risk and other risks can be distinguished from each other and separately measured, the insurance
+risk is separated from other risks. The insurance risk is accounted for as an insurance contract and other risks are
+accounted for according to the relevant accounting standards;
+Where the insurance risk and other risks cannot be distinguished from each other, or can be distinguished but cannot
+be separately measured, an umbrella contract applies and significant insurance risk test shall be performed based on it.
+If the insurance risk is significant, the contract is accounted for as an insurance contract; otherwise, it is accounted for
+as a non-insurance contract.
+Where the Group acts in a fiduciary capacity such as custodian or agent, assets arising thereon together with related
+undertakings to return such assets to customers are excluded from the statement of financial position.
+Insurance income recognition
+(i)
+The insurance contract is issued, and related insurance risk is undertaken by the Group;
+(ii)
+The related economic benefits are likely to flow to the Group;
+(iii) Related income can be reliably measured.
+Insurance contract liabilities
+When measuring insurance contract liabilities, the Group classifies insurance contracts whose insurance risks are of similar
+nature as a measurement unit. Insurance contract liabilities are measured based on a reasonably estimated amount of
+payment that the Group is obliged to pay to fulfill relevant obligations under the insurance contract. At the end of each
+reporting period, liability adequacy tests are performed. If the insurance contract liabilities re-calculated with the insurance
+actuarial method exceed their carrying amounts on date of the liability adequacy test, an additional provision shall be made
+for the respective insurance contract liabilities based on the difference. Otherwise, no adjustment is made to the respective
+insurance contract liabilities.
+168
+ICBC
+Insurance premium income is recognised when:
+(22) Cash and cash equivalents
+(24) Fiduciary activities
+Financial Statements for the year ended 31 December 2018
+166
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+(23) Employee benefits
+Employee benefits refer to all forms of consideration and other related expenditure given by the Group in exchange for
+services rendered by employees. The benefits payable are recognised as liabilities during the period in which the employees
+have rendered services to the Group. If the effect of discounting the benefits payable which are payable after one year from
+the end of the reporting period is significant, the Group will present them at their present value.
+Short-term employee benefits
+Employee wages or salaries, bonuses, social security contributions such as medical insurance, work injury insurance,
+maternity insurance and housing fund, measured at the amount incurred or at the applicable benchmarks and rates, are
+recognised as a liability as the employee provides services, with a corresponding charge to profit or loss or included in the
+cost of assets where appropriate.
+All eligible employees outside Mainland China participate in local defined contribution schemes. The Group contributes to
+these defined contribution schemes based on the requirements of the local regulatory bodies.
+Post-employment benefits-defined contribution plans
+(In RMB millions, unless otherwise stated)
+Pursuant to the relevant laws and regulations of the PRC, the Group participated in a defined contribution basic pension
+insurance in the social insurance system established and managed by government organisations. The Group makes
+contributions to basic pension insurance plans based on the applicable benchmarks and rates stipulated by the government.
+Basic pension insurance contributions are recognised as part of the cost of the assets or charged to profit or loss as the
+related services are rendered by the employees.
+Termination benefits
+Termination benefits are payable as a result of either the Group's decision to terminate an employee's employment before
+the normal retirement date or an employee's decision to accept an offer of benefits in exchange for the termination of
+employment. The Group recognise termination benefits in profit or loss at the earlier of:
+When the Group can no longer withdraw an offer of those benefits;
+When the Group has a specific, formal restructure plan involving payment of termination benefits, and the plan has
+started or informed each affected party about the influence of the plan, therefore each party formed reasonable
+expectations.
+Early retirement benefits
+According to the Bank's policy on early retirement benefits, certain employees are entitled to take leave of absence and
+in return receive a certain level of staff salaries and related benefits from the Bank. The salaries and benefit payments are
+made from the date of early retirement to the normal retirement date. Differences arising from changes in assumptions and
+estimates of the present value of the liabilities are recognised in profit or loss when they are incurred.
+Annual Report 2018
+167
+Notes to the Financial Statements
+In addition, employees in Mainland China also participate in a defined contribution retirement benefit plan established by the
+Group (the "Annuity Plan"). The Group and its employees are required to contribute a certain percentage of the employees'
+previous year basic salaries to the Annuity Plan. The contribution is charged to profit or loss when it is incurred. The Group
+pays a fixed contribution into the Annuity Plan and has no obligation to pay further contributions if the Annuity Plan does
+not hold sufficient assets to pay all employee benefits.
+Depreciation is calculated on the straight-line basis to write off the cost of each item of property and equipment, less any
+estimated residual value, over the estimated useful life. The estimated useful life, estimated residual value and the annual
+depreciation rate of each item of property and equipment (excluding aircraft and vessels) are as follows:
+(19) Business combination and goodwill
+Construction in progress comprises the direct costs of construction during the period of construction and is not depreciated.
+Construction in progress is reclassified to the appropriate category of property and equipment when completed and ready
+for use.
+the financial asset has been transferred, although the Group neither transfers nor retains substantially all of the risks
+and rewards of ownership of the financial asset, it does not retain control over the transferred asset.
+Where the Group has transferred its rights to receive cash flows from an asset or has retained its rights to receive cash
+flows from the asset but assumed the obligation to pay those cash flows to the eventual recipients and meanwhile meet the
+conditions of the transfer of financial assets, and has neither transferred nor retained substantially all the risks and rewards
+of the asset nor transferred control of the asset, the asset is recognised to the extent of the Group's continuing involvement
+in the asset.
+Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the
+original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.
+Securitisation
+As part of its operational activities, the Group securitises financial assets, generally through the sale of these assets to
+structured entities which issue securities to investors. Further details on prerequisites for derecognition of financial assets
+are set out above. When a securitisation of financial assets does not qualify for derecognition, the relevant financial assets
+are not derecognised, and the consideration paid by third parties are recorded as a financial liability; when the securitisation
+of financial assets partially qualifies for derecognition, the Group continue to recognise the transferred assets to the extent
+of its continuing involvement, derecognise the remaining. The carrying amount of the transferred assets is apportioned
+between the derecognised portion and the retained portion based on their respective relative fair values, and the difference
+between the carrying amount of the derecognised portion and the total consideration paid for the derecognised portion is
+recorded in profit or loss.
+Sales of assets on condition of repurchase
+The derecognition of financial assets sold on condition of repurchase is determined by the economic substance of the
+transaction. If a financial asset is sold under an agreement to repurchase the same or substantially the same asset at a
+fixed price or at the sale price plus a reasonable return, the Group will not derecognise the asset. If a financial asset is sold
+together with an option to repurchase the financial asset at its fair value at the time of repurchase (in case of transferor sells
+such financial asset), the Group will derecognise the financial asset.
+Financial liabilities
+The Group derecognises a financial liability (or part of it) only when its contractual obligation (or part of it) is extinguished.
+the financial asset has been transferred and the Group transfers substantially all of the risks and rewards of ownership
+of the financial asset; or
+(9) Convertible instruments
+160
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+The initial carrying amount of a compound financial instrument is allocated to its equity and liability components. The
+amount recognised in the equity is the difference between the fair value of the instrument as a whole and the separately
+determined fair value of the liability component (including the value of any embedded derivatives other than the equity
+component). Transaction costs that relate to the issue of a compound financial instrument are allocated to the liability and
+equity components in proportion to the allocation of proceeds.
+Subsequent to initial recognition, the liability component is measured at amortised cost using the effective interest method,
+unless it is designated upon recognition at FVTPL. The equity component is not re-measured.
+If the convertible instrument is converted, the liability component, together with the equity component, is transferred to
+equity. If the convertible instrument is redeemed, the consideration paid for the redemption, are allocated to the liability
+and equity components. The method used to allocate the consideration and transaction costs is the same as that used
+for issuance. After allocating the consideration and transaction costs, the difference between the allocated and carrying
+amounts is charged to profit and loss if it relates to the liability component or directly recognised in equity if it relates to the
+equity component.
+(10) Preference shares and perpetual bonds
+At initial recognition, the Group classifies the preference shares, perpetual bonds issued or their components as financial
+assets, financial liabilities or equity instruments based on their contractual terms and their economic substance after
+considering the definition of financial assets, financial liabilities and equity instruments.
+Convertible instruments issued by the Group that can be converted to equity shares, where the number of shares to be
+issued and the value of consideration to be received at that time do not vary, are accounted for as compound financial
+instruments containing both liability and equity components.
+the Group's contractual rights to the cash flows from the financial asset expire;
+The carrying values of property and equipment are reviewed for impairment when events or changes in circumstances
+indicate that the carrying values may not be recoverable.
+Financial asset is derecognised when one of the following conditions is met:
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+The maximum period considered when estimating ECLs is the maximum contractual period (including extension options) over
+which the Group is exposed to credit risk.
+Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.
+12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the end
+of the reporting period (or a shorter period if the expected life of the instrument is less than 12 months).
+The Group classifies financial instruments into three stages and makes provisions for expected credit losses accordingly,
+depending on whether credit risk on that financial instrument has increased significantly since initial recognition.
+The three risk stages are defined as follows:
+Stage 1: A financial instrument of which the credit risk has not significantly increase since initial recognition. The amount
+equal to 12-month expected credit losses is recognised as loss allowance.
+Stage 2: A financial instrument with a significant increase in credit risk since initial recognition but is not considered to be
+credit-impaired. The amount equal to lifetime expected credit losses is recognised as loss allowance. Refer to Note 51(a)
+credit risk for the description of how the Group determines when a significant increase in credit risk has occurred.
+Stage 3: A financial instrument is considered to be credit-impaired as at the end of the reporting period. The amount equal
+to lifetime expected credit losses is recognised as loss allowance. Refer to Note 51(a) credit risk for the definition of credit-
+impaired financial assets.
+Presentation of allowance for ECL
+ECLs are remeasured at the end of each reporting period to reflect changes in the financial instrument's credit risk since
+initial recognition. Any change in the ECL amount is recognised as an impairment gain or loss in profit or loss. The Group
+recognises an impairment gain or loss for financial instruments measured at amortised cost with a corresponding adjustment
+to their carrying amount through a loss allowance account; for debt instruments that are measured at FVOCI, the loss
+allowance is recognised in other comprehensive income. The Group recognises loss allowances for loan commitments and
+financial guarantee contracts through other liabilities (allowance for impairment losses on credit commitments).
+Write-off
+The book value of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect
+of recovery. A write-off constitutes a derecognition event. This is generally the case when the Group determines that the
+debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to
+the write-off. However, financial assets that are written off could still be subject to enforcement activities in order to comply
+with the Group's procedures for recovery of amounts due.
+Subsequent recoveries of an asset that was previously written off are recognised as a reversal of impairment in profit or loss
+in the period in which the recovery occurs.
+(7) Modification of loan contracts
+In some cases (such as renegotiating loans), the Group may renegotiate or otherwise modify the financial assets contracts.
+The Group would assess whether or not the new contractual terms are substantially different to the original terms. If the terms
+are substantially different, the Group derecognises the original financial asset and recognises a 'new' asset under the revised
+terms. If the renegotiation or modification does not result in derecognition, but lead to changes in contractual cash flows, the
+Group assesses whether a significant increase in credit risk has occurred, based on comparing the risk of a default occurring
+under the revised terms as at the end of the reporting period with that as at the date of initial recognition under original terms.
+Annual Report 2018
+159
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+(8) Derecognition of financial assets and liabilities
+Financial assets
+Preference shares and perpetual bonds issued containing both equity and liability components are accounted for using the
+accounting policy for convertible instruments containing an equity component. Preference shares and perpetual bonds issued
+not containing an equity component are accounted for using the accounting policy for other convertible instruments not
+containing an equity component.
+Preference shares and perpetual bonds issued that should be classified as equity instruments are recognised in equity based
+on the actual amount received. Any distribution of dividends or interests during the instruments' duration is treated as profit
+appropriation. When the preference shares and perpetual bonds are redeemed according to the contractual terms, the
+redemption price is charged to equity.
+-
+Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered
+into and are subsequently remeasured at fair value. Derivatives are carried as assets when the fair value is positive and as
+liabilities when the fair value is negative.
+All regular way purchases and sales of financial assets are recognised at the trade date, which is the date that the Group
+commits to purchase or sell the assets. A regular way purchase or sale is the purchase or sale of financial assets that requires
+delivery of assets within the time frame generally established by regulation or convention in the marketplace.
+(13) Presentation of financial instruments
+Financial assets and financial liabilities are generally presented separately in the statement of financial position and are not
+offset. However, a financial asset and a financial liability are offset and the net amount is presented in the statement of
+financial position when both the following conditions are satisfied:
+the Group currently has a legally enforceable right to set off the recognised amounts; and
+the Group intends either to settle on a net basis, or to realise the financial asset and settle the financial liability
+simultaneously.
+(14) Repurchase and reverse repurchase transactions (including securities borrowing and
+lending)
+Assets sold under agreements to repurchase at a specified future date ("repos") are not derecognised from the statement
+of financial position. The corresponding cash received, including accrued interest, is recognised on the statement of financial
+position as a "repurchase agreement", reflecting its economic substance as a loan to the Group. The difference between the
+sale and repurchase prices is treated as an interest expense and is accrued over the life of the agreement using the effective
+interest rate method.
+Conversely, assets purchased under agreements to resell at a specified future date ("reverse repos") are not recognised on
+the statement of financial position. The corresponding cash paid, including accrued interest, is recognised on the statement
+of financial position as a "reverse repurchase agreement". The difference between the purchase and resale prices is treated
+as an interest income and is accrued over the life of the agreement using the effective interest rate method.
+According to the policy of classification of financial assets (refer to Note 3(5)), the reverse repurchase agreements held by
+the Group were divided into different classification according to the entity's business model for managing the financial
+instruments and the contractual cash flow characteristics of the assets: financial assets measured at amortised cost and
+financial assets measured at FVTPL.
+Securities borrowed are not recognised on the statement of financial position, unless they are then sold to third parties,
+in which case the obligation to return the securities is recorded as a financial liability held for trading and measured at fair
+value with any gains or losses included in profit or loss.
+Annual Report 2018
+163
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+(15) Precious metals
+Precious metals comprise gold, silver and other precious metals. Precious metals that are not related to the Group's precious
+metals trading activities are initially measured at acquisition cost and subsequently measured at the lower of cost and
+net realisable value. Precious metals acquired by the Group for trading purposes are initially measured at fair value and
+subsequent changes in fair value are recorded in the statement of profit or loss.
+The Group records the precious metals received as an asset. A liability to return the amount of precious metals deposited
+is also recognised. The precious metals deposited in the Group are measured at fair value both on initial recognition and in
+subsequent measurement.
+(16) Property and equipment
+Property and equipment, other than construction in progress are stated at costs less accumulated depreciation and
+any impairment loss. The cost of an item of property and equipment comprises its purchase price, tax and any directly
+attributable costs of bringing the asset to its present working condition and location for its intended use. Expenditure
+incurred after items of property and equipment have been put into operation, such as repairs and maintenance, is normally
+charged to profit or loss in the period in which it is incurred. In situations where the recognition criteria are satisfied, the
+expenditure for a major inspection is capitalised in the carrying amount of the asset as a replacement.
+(11) Derivatives and hedge accounting
+Derivatives
+(12) Trade date accounting
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Securities borrowing and lending transactions are usually collateralised by securities or cash. The transfer of the securities
+to counterparties is only reflected on the statement of financial position if the risks and rewards of ownership are also
+transferred. Cash advanced or received as collateral is recorded as an asset or liability.
+Notes to the Financial Statements
+If the main contract included in the hybrid contract is an asset within the scope of a new financial instrument standard, the
+embedded derivative is no longer split from the main contract of the financial asset, but the hybrid financial instrument as
+a whole is related to the classification of the financial asset provision. If the main contract included in the hybrid contract is
+not an asset within the scope of the new financial instrument standard, when their economic characteristics and risks are not
+closely related to those of the hybrid contract, those separate instruments with the same terms as the embedded derivative
+would meet the definition of a derivative, and the hybrid instrument is not carried at FVTPL, certain derivatives embedded
+in other financial instruments should be split from the hybrid contract and treated as separate derivatives. These embedded
+derivatives are measured at fair value with the changes in fair value recognised in profit or loss.
+Notes to the Financial Statements
+Any gains or losses arising from changes in fair value on derivatives that do not qualify for hedge accounting are taken
+directly to profit or loss.
+For less complex derivative products, the fair values are principally determined by valuation models which are commonly used
+by market participants. Inputs to valuation models are determined from observable market data wherever possible, including
+foreign exchange spot and forward rates and interest rate yield curves. For more complex derivative products, the fair values
+are mainly determined by quoted prices from dealers.
+Annual Report 2018
+161
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Hedge accounting
+At the inception of a hedge relationship, the Group formally designates the hedge instruments and the hedged items,
+and documents the hedge relationship to which the Group wishes to apply hedge accounting and the risk management
+objective and strategy for undertaking the hedge. The documentation includes identification of the hedging instrument, the
+hedged item or transaction, the nature of the risk being hedged and how the entity will assess the hedging instrument's
+effectiveness in offsetting the exposure to changes in the hedged item's fair value or cash flows attributable to the hedged
+risk. Such hedges are expected to meet the hedge effectiveness in achieving offsetting changes in fair value or cash flows
+and are assessed on an ongoing basis to analyse the sources of hedge ineffectiveness which are expected to affect the hedge
+relationship in remaining hedging period. If a hedging relationship ceases to meet the hedge effectiveness requirement
+relating to the hedge ratio, but the risk management objective for that designated hedging relationship remains the same,
+the Group would rebalance the hedging relationship.
+Fair value hedges
+Certain derivative transactions, while providing effective economic hedges under the Group's risk management positions,
+do not qualify for hedge accounting and are therefore treated as derivatives held for trading with fair value gains or losses
+recognised in profit or loss. Hedges which meet the strict criteria for hedge accounting are accounted for in accordance with
+the Group's accounting policy as set out below.
+Fair value hedges are hedges of the Group's exposure to changes in the fair value of a recognised asset or liability or an
+unrecognised firm commitment, or an identified portion of such an asset, liability or unrecognised firm commitment, that
+is attributable to a particular risk and could affect the profit or loss or other comprehensive income. Among them, the
+circumstances affecting other comprehensive income are limited to the hedging for the risk exposure from fair value change
+of non-trading equity investment designated as at FVOCI. For fair value hedges, the carrying amount of the hedged item is
+adjusted for gains and losses attributable to the risk being hedged, the derivative is remeasured at fair value and the gains
+and losses from both are taken to profit or loss or other comprehensive income.
+For hedged items recorded at amortised cost, the difference between the carrying value of the hedged item and the face
+value is amortised over the remaining term of the original hedge using the effective interest rate method.
+When an unrecognised firm commitment is designated as a hedged item, the subsequent cumulative change in the fair value
+of the firm commitment attributable to the hedged risk is recognised as an asset or liability with a corresponding gain or loss
+recognised in profit or loss. The changes in the fair value of the hedging instrument are also recognised in profit or loss.
+The Group discontinues fair value hedge accounting when the hedging relationship ceases to meet the qualifying criteria after
+taking into account any rebalancing of the hedging relationship, including the hedging instrument has expired or has been
+sold, terminated or exercised. If the hedged items are derecognised, the unamortised fair value is recorded in profit or loss.
+Cash flow hedges
+Cash flow hedges are hedges of the Group's exposure to variability in cash flows that is attributable to a particular risk
+associated with a recognised asset or liability, a highly probable forecast transaction or a component of any such item, and
+could affect profit or loss. For designated and qualifying cash flow hedges, the effective portion of the gain or loss on the
+hedging instrument is initially recognised directly in other comprehensive income. The ineffective portion of the gain or loss
+on the hedging instrument is recognised immediately in profit or loss.
+When the hedged cash flow affects profit or loss, the gain or loss on the hedging instrument recognised directly in other
+comprehensive income is recycled in the corresponding income or expense line of the statement of profit or loss. When
+the hedging relationship ceases to meet the qualifying criteria after taking into account any rebalancing of the hedging
+relationship, including the hedging instrument has expired or has been sold, terminated or exercised, any cumulative gain or
+loss existing in other comprehensive income at that time remains in other comprehensive income until the hedged forecast
+transaction ultimately occurs. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that
+was reported in other comprehensive income is immediately transferred to profit or loss.
+162
+ICBC
+Net investment hedges
+635
+2,313
+Gain on available-for-sale financial assets, net
+Others
+Gain on disposal of financial assets measured at FVOCI, net
+Net gain on disposal of property and equipment, repossessed assets and others
+Others
+(1,824)
+Loss on financial assets and liabilities designated as at FVTPL
+189
+Including:
+(476)
+1,345
+(38,525)
+10. OTHER OPERATING INCOME, NET
+2018
+2017
+Net premium income
+33,420
+38,093
+Operating cost of insurance business
+(31,772)
+1,936
+(476)
+2,165
+292
+(1,090)
+162
+(151)
+1,484
+757
+1,238
+2,846
+5,753
+The above amounts mainly include gains and losses arising from the buying and selling of, interest income and expense on,
+and changes in the fair value of financial assets and liabilities held for trading.
+Annual Report 2018
+177
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+9. NET GAIN ON FINANCIAL INVESTMENTS
+2018
+2017
+Dividend income from equity investments designated as at FVOCI, including:
+derecognised during the year
+1
+held at the year end
+228
+Dividend income from unlisted investments
+166
+Dividend income from listed investments
+Gain/(loss) on financial assets measured at FVTPL, net
+(473)
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+3,111
+2,305
+27,088
+27,562
+Amortisation
+2,339
+2,114
+Other administrative expenses (ii)
+Taxes and surcharges
+23,294
+21,661
+7,781
+7,465
+Others
+12,627
+12,438
+194,203
+186,194
+(i)
+The defined contribution plans mainly include contributions to the state pension and the Bank's Annuity Plan.
+(ii) The principal auditor's remuneration of RMB216 million for the year (2017: RMB205 million) is included in other
+administrative expenses.
+178
+ICBC
+3,758
+2,235
+4,981
+Utility expenses
+3,903
+6,033
+11. OPERATING EXPENSES
+Staff costs:
+2018
+2017
+Salaries and bonuses
+Staff benefits
+Post-employment benefits defined contribution plans (i)
+76,985
+74,919
+27,137
+25,642
+16,952
+14,393
+121,074
+114,954
+Premises and equipment expenses:
+Depreciation
+13,407
+13,873
+Lease payments under operating leases in respect of land and buildings
+Repairs and maintenance charges
+7,543
+7,384
+4,000
+Notes to the Financial Statements
+4,087
+2018
+Impairment of goodwill
+The Group determines whether goodwill is impaired at least on an annual basis and when circumstances indicate that the
+carrying value may be impaired. This requires an estimation of the recoverable amount of the CGU or groups of CGUs to
+which the goodwill is allocated. Estimating the recoverable amount requires the Group to make an estimate of the expected
+future cash flows from the CGU or groups of CGUS and also to choose a suitable discount rate in order to calculate the
+present value of those cash flows.
+172
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+The measurement of the expected credit loss allowance for financial assets measured at amortised cost and FVOCI and with
+exposure arising from loan commitments and financial guarantee contracts, is an area that requires the use of complex
+models and significant assumptions about future economic conditions and credit behavior (the likelihood of customers
+defaulting and the resulting losses). Refer to Note 51(a) credit risk for the explanation of the inputs, assumptions and
+estimation techniques used in measuring ECL.
+Income tax
+Fair value of financial instruments
+If the market for a financial instrument is not active, the Group establishes fair value by using a valuation technique.
+Valuation techniques include using recent arm's length market transactions between knowledgeable and willing parties,
+if available, reference to the current fair value of another instrument that is substantially the same, discounted cash flow
+analysis and option pricing models. To the extent practicable, valuation technique makes maximum use of market inputs.
+However, where market inputs are not available, management needs to make estimates on such unobservable market
+inputs.
+Determination of control over investees
+Management applies its judgement to determine whether the control indicators set out in Note 3(1) indicate that the Group
+controls securitisation vehicles, investment funds, wealth management products, asset management plans, trust plans or
+asset-backed securities.
+Securitisation vehicles
+Certain securitisation vehicles sponsored by the Group under its securitisation programme are run according to
+predetermined criteria that are part of the initial design of the vehicles. In addition, the Group is exposed to variability of
+returns from the vehicles through its holding of debt securities in the vehicles and outside the day-to-day servicing of the
+receivables (which is carried out by the Group under a servicing contract). Key decisions are usually required only when
+receivables in the vehicles go into default. Therefore, in considering whether it has control, the Group considers whether it
+manages these key decisions that most significantly affect these vehicles' returns.
+Determining income tax provisions requires the Group to estimate the future tax treatment of certain transactions. The
+Group carefully evaluates tax implications of transactions in accordance with prevailing tax regulations and makes tax
+provisions accordingly. In addition, deferred income tax assets are recognised to the extent that it is probable that future
+taxable profit will be available against which the deductible temporary differences can be utilised. This requires significant
+estimation on the tax treatments of certain transactions and also significant assessment on the probability that adequate
+future taxable profits will be available for the deferred income tax assets to be recovered.
+Measurement of the expected credit loss allowance
+In the process of applying the Group's accounting policies, management has used its judgements and made assumptions
+of the effects of uncertain future events on the financial statements. The most significant use of judgements and key
+assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period
+that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the
+next financial period are described below. Refer to Note 4 significant accounting judgements and estimates of the Group's
+Financial Statements for the year ended 31 December 2017 for the significant accounting judgements and estimates under
+IAS 39.
+SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES
+the entity is controlled or jointly controlled by a person identified in (a);
+(vii)
+a person identified in (a)(i) has significant influence over the entity or is a member of the key management
+personnel of the entity (or of a parent of the entity); and
+(viii) The entity, or any member of a Group of which it is a part, provides key management personnel services to the
+Group or to the Group's parent.
+Annual Report 2018
+171
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+(30) Financial guarantee contracts
+The Group issues financial guarantee contracts, including letters of credit, letters of guarantee and acceptance. These
+financial guarantee contracts provide for specified payments to be made to reimburse the holders for the losses they incur
+when a guaranteed party defaults under the original or modified terms of a debt instrument, loan or any other obligation.
+The Group initially measures all financial contracts at fair value, in other liabilities, being the premium received. This
+amount is recognised ratably over the period of the contract as fee and commission income. Subsequently, the liabilities are
+measured at the higher of the amount of the loss allowance determined in accordance with impairment policies of financial
+instruments (refer to Note 3(6)) and the amount initially recognised less the cumulative amount of income. Any increase in
+the liability relating to a financial guarantee is taken to the statement of profit or loss.
+(31) Contingent liabilities
+A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by
+the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. It
+can also be a present obligation arising from past events that is not recognised because it is not probable that an outflow
+of economic resources will be required or the amount of obligation cannot be measured reliably. Contingent liabilities are
+disclosed in the notes to the financial statements. When a change in the probability of an outflow occurs so that outflow is
+probable and can be reliably estimated, it will then be recognised as a provision.
+(32) Dividends
+Dividends are recognised as a liability and deducted from equity when they are approved by the Bank's shareholders in
+general meetings and declared. Interim dividends are deducted from equity when they are approved and declared, and no
+longer at the discretion of the Bank. Dividend for the year that is approved after the end of the reporting period is disclosed
+as an event after the reporting period.
+4.
+Investment funds, wealth management products, asset management plans, trust plans and asset-backed
+securities
+(vi)
+The Group acts as manager to a number of investment funds, wealth management products, asset management plans, trust
+plans and assets-backed securities. When assessing whether controls such a structured entity, the Group would determine
+whether it exercises the decision-making rights as a principal or an agent and usually focuses on the assessment of the
+aggregate economic interests of the Group in the entity (comprising any carried interests and expected management fees)
+and the decision-making authority of the entity. The Group would also determine whether another entity with decision-
+making rights is acting as an agent for it.
+Annual Report 2018
+IFRS 10 and IAS 28 Amendments
+1
+Plan Amendment, Curtailment or Settlement
+Clarifying what is a business³
+Definition of Material³
+Insurance contracts
+Sale or contribution of assets between an investor and its associate or joint venture
+IFRS 17
+Effective for annual periods beginning on or after 1 January 2019, early adoption is permitted only for companies that also
+apply IFRS 15.
+Effective for annual periods beginning on or after 1 January 2019, early adoption is permitted.
+3
+Effective for annual periods beginning on or after 1 January 2020, early adoption is permitted.
+4
+Effective for annual periods beginning on or after 1 January 2021, early adoption is permitted only for companies that also
+apply IFRS 9 and IFRS 15.
+5
+2
+IAS 1 and IAS 8 Amendments
+IFRS 3 Amendments
+IAS 19 Amendments
+173
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+5.
+IMPACT OF ISSUED BUT NOT YET EFFECTIVE INTERNATIONAL FINANCIAL REPORTING
+STANDARDS
+The Group has not applied the following new and revised IFRSS and IASS that have been issued but are not yet effective, in
+these financial statements.
+IFRS 16
+IFRIC 23
+IFRS 9 Amendments
+IAS 28 Amendments
+Leases'
+Uncertainty over income tax treatments?
+Prepayment features with negative compensation and modifications of financial liabilities
+Long-term interests in associates and joint ventures²
+Annual Improvements to IFRSS 2015-2017 Cycle²
+For further disclosure in respect of unconsolidated investment funds, wealth management products, asset management
+plans, trust plans and assets-backed securities in which the Group has an interest or for which it is a sponsor, see Note 41.
+(v)
+the entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity
+related to the Group;
+(iv) one entity is a joint venture of a third entity and the other entity is an associate of the third entity;
+Results arising from trading activities include all gains and losses from changes in fair value for financial assets and financial
+liabilities that are held for trading. This includes gains and losses from changes in fair value relating to the ineffective portion
+of the hedging arrangements.
+Annual Report 2018
+169
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Net trading income
+(27) Income tax
+Current tax
+Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from
+or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or
+substantively enacted by the end of each reporting period.
+Deferred income tax
+Deferred income tax is provided using the liability method on temporary differences at the end of the reporting period
+between the tax bases of assets and liabilities and their carrying amounts.
+Deferred income tax liabilities are recognised for all taxable temporary differences, except:
+(i) Where the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a
+transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit
+nor taxable income or deductible expenses; and
+Income tax comprises current and deferred income tax. Income tax is recognised in profit or loss except that it relates to
+items recognised directly in equity, in which case it is recognised in equity.
+Dividend income is recognised when the Group's right to receive payment is established.
+Dividend income
+In other cases, the Group recognises revenue at a point in time at which a customer obtains control of the promised
+services.
+(26) Revenue recognition
+Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and when the
+revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:
+Interest income
+For all financial instruments measured at amortised cost and interest-generating financial instruments classified as financial
+assets measured at FVOCI, interest income is recorded at the effective interest rate, which is the rate that exactly discounts
+estimated future cash payments or receipts through the expected life of the financial instrument, where appropriate, to the
+book value of the financial asset, or the amortised cost of financial liability. The calculation takes into account all contractual
+terms of the financial instrument (for example, prepayment options) and includes any fees or incremental costs that are
+directly attributable to the instrument and are an integral part of the effective interest rate, but not expected credit losses.
+Interest income is calculated by applying the effective interest rate to the book value of financial assets and is included in
+interest income, except for:
+(i)
+For purchased or originated credit-impaired financial assets, whose interest income is calculated, since initial
+recognition, by applying the credit adjusted effective interest rate to their amortised cost; and
+Financial assets that are not purchased or originated credit-impaired but have subsequently become credit-impaired,
+whose interest income is calculated by applying the effective interest rate to their amortised cost (i.e. net of the
+expected credit loss provision). If, in a subsequent period, the financial assets improve their qualities so that they are
+no longer credit-impaired and the improvement in credit quality is related objectively to a certain event occurring after
+the application of the above-mentioned rules, then the interest income is calculated by applying the effective interest
+rate to their book value.
+Fee and commission income
+The Group earns fee and commission income from a diverse range of services it provides to its customers. The fee and
+commission income recognised by the Group reflects the amount of consideration to which the Group expects to be entitled
+in exchange for transferring promised services to customers, and income is recognised when its performance obligation in
+contracts is satisfied.
+(i) The Group recognises income over time by measuring the progress towards the complete satisfaction of a
+performance obligation, if one of the following criteria is met:
+(ii)
+-
+The customer simultaneously receives and consumes the benefits provided by the Group's performance as the
+Group performs;
+The customer controls the service provided by the Group in the course of performance; or
+The Group does not provide service with an alternative use to the Group, and the Group has an enforceable
+right to payment for performance completed to date.
+(ii)
+In respect of taxable temporary differences associated with investments in subsidiaries, associates and joint ventures,
+where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary
+differences will not be reversed in the foreseeable future.
+Deferred income tax assets are recognised for all deductible temporary differences, carryforward of unused tax credits
+and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible
+temporary differences, and the carryforward of unused tax credits and unused tax losses can be utilised, except:
+(i)
+(i)
+has control or joint control over the Group;
+(ii)
+has significant influence over the Group; or
+or
+(iii)
+is a member of the key management personnel of the Group or of a parent of the Group;
+(b)
+the party is an entity where any of the following conditions applies:
+(i)
+the entity and the Group are members of the same group;
+(ii)
+one entity is an associate or joint venture of the other entity (or of a parent, subsidiary or fellow subsidiary of the
+other entity);
+(iii)
+the entity and the Group are joint ventures of the same third party;
+the party is a person or a close member of that person's family and that person:
+Effective for annual periods is to be determined, early adoption is permitted.
+(a)
+(29) Related parties
+(ii)
+Where the deferred income tax asset relating to the deductible temporary differences arises from the initial recognition
+of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects
+neither the accounting profit nor taxable income or deductible expenses; and
+In respect of deductible temporary differences associated with investments in subsidiaries, associates and joint
+ventures, deferred income tax assets are recognised only to the extent that it is probable that the temporary
+differences will be reversed in the foreseeable future and taxable profit will be available against which the temporary
+differences can be utilised.
+Deferred income tax assets and deferred income tax liabilities are measured at the tax rates that are expected to apply to
+the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
+substantively enacted by the end of each reporting period and reflect the corresponding tax effect.
+The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and reduced to the extent
+that it is no longer probable that sufficient taxable income will be available to allow all or part of the deferred income tax
+asset to be utilised. When it is virtually probable that sufficient taxable income will be available, the reduced amount can be
+reversed accordingly.
+Deferred income tax assets and deferred income tax liabilities are offset if a legally enforceable right exists to set off current
+tax assets against current tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation
+authority.
+170
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Leases which transfer substantially all the risks and rewards of ownership of the assets to the lessees are classified as
+finance leases. Leases where substantially all the rewards and risks of the assets remain with the lessor are accounted for as
+operating leases.
+Finance leases
+When the Group is a lessor under finance leases, an amount representing the minimum lease payment receivables and initial
+direct costs is included in the statement of financial position as loans and advances to customers. Any unguaranteed residual
+value is also recognised at the inception of the lease. The difference between the sum of the minimum lease payment
+receivables, initial direct costs, the unguaranteed residual value and their present value is recognised as unearned finance
+income. Unearned finance income is recognised over the period of the lease using the effective interest rate method.
+Operating leases
+Rental payments applicable to operating leases are charged to profit or loss on the straight-line basis over the lease terms.
+When the Group is the lessor under operating leases, the assets subject to operating leases are accounted for as the Group's
+assets. Rental income is recognised as "other operating income, net" in the statement of profit or loss on the straight-line
+basis over the lease term.
+A party is considered to be related to the Group if:
+2017
+174
+Notes to the Financial Statements
+572,518
+522,078
+Net interest income
+The above interest income and expense are related to financial instruments which are not measured at FVTPL.
+7.
+NET FEE AND COMMISSION INCOME
+(339,516)
+2018
+Bank card business
+43,719
+38,692
+Settlement, clearing business and cash management
+31,785
+26,820
+2017
+(375,576)
+(20,142)
+(30,373)
+58,660
+55,390
+Due from central banks
+49,246
+48,335
+948,094
+861,594
+Interest expense on:
+Due to customers
+Due to banks and other financial institutions
+Debt securities issued
+(280,212)
+(260,956)
+(64,991)
+(58,418)
+Personal wealth management and private banking services (i)
+Due from banks and other financial institutions
+27,596
+Investment banking business
+158,666
+Fee and commission expense
+Net fee and commission income
+(i)
+(17,046)
+(19,041)
+162,347
+145,301
+Included in personal wealth management and private banking services, corporate wealth management services, asset
+custody business and trust and agency services above is an amount of RMB15,835 million (2017: RMB19,937 million)
+with respect to trust and other fiduciary activities.
+8.
+NET TRADING INCOME
+Debt securities
+Equity investments
+Derivatives and others
+139,625
+2,781
+2,798
+1,805
+24,002
+23,189
+Corporate wealth management services (i)
+14,582
+18,984
+Guarantee and commitment business
+8,861
+6,818
+Asset custody business (i)
+Trust and agency services (i)
+Others
+Fee and commission income
+7,045
+6,731
+1,959
+32,846
+185,181
+200,157
+Financial investments
+•
+Financial assets containing prepayment features with negative compensation can now be measured at amortised cost
+or at fair value through other comprehensive income (FVOCI) if they meet the other relevant requirements of IFRS 9.
+For the companies that have modified or exchanged fixed rate financial liabilities that do not result in derecognition,
+they were required to recalculate the amortised cost of the modified financial liability by discounting the modified
+contractual cash flows using the original EIR; and recognise any adjustment in profit or loss.
+The amendments are expected to have no material impact on financial position and financial performance.
+Amendments to IAS 28, Investment in associates and joint ventures "Long-term interests in
+associates and joint ventures"
+The IASB has clarified that IFRS 9 applies to long-term interests that, in substance, form part of the entity's net investment in
+an associate or joint venture. In applying IFRS 9, the entity does not take account of any adjustments to the carrying amount
+of long-term interests that arise from applying IAS 28.
+•
+The amendments are expected to have no material impact on financial position and financial performance.
+175
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Annual Improvements to IFRS Standards 2015-2017 Cycle
+The 2015-2017 cycle of annual improvements contain amendments to four standards including IFRS 3 Business
+combinations, IFRS 11 Joint arrangements, IAS 12 Income taxes and IAS 23 Borrowing costs.
+Annual Report 2018
+The IASB has changed IFRS 9's requirements in two areas of financial instruments accounting.
+Amendments to IFRS 9, Financial instruments "Prepayment features with negative
+compensation and modifications of financial liabilities"
+The interpretation is expected to have no material impact on financial position and financial performance.
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Further information about those changes that are expected to affect the Group is as follows:
+IFRS 16, "Leases"
+In January 2016, the IASB issued IFRS 16, "Leases", which replaces the current guidance in IAS 17. The new standard
+requires the companies to bring leases on-balance sheet for lessees. The new standard also makes changes in accounting
+over the life of the lease, and introduces a stark dividing line between leases and service contracts.
+Under IFRS 16 there is no longer a distinction between finance leases and operating leases so far as lessees are concerned.
+Instead, subject to practical expedients, a lessee recognises all leases on-balance sheet by recognising a right-of-use (ROU)
+asset and lease liability.
+Lessor accounting is substantially unchanged - i.e. lessors continue to classify leases as finance and operating leases.
+However, there are a number of changes in the details of lessor accounting. For example, lessors apply the new definition of
+a lease, sale-and-leaseback guidance, sub-lease guidance and disclosure requirements.
+The Group plans to apply IFRS 16 initially on 1 January 2019, using the modified retrospective approach. Therefore, the
+cumulative effect of adopting IFRS 16 will be recognised as an adjustment to the opening balance of retained earnings at
+1 January 2019, with no restatement of comparative information. The standard is expected to have no material impact on
+financial position and financial performance.
+IFRIC 23, "Uncertainty over income tax treatments"
+This Interpretation provides guidance on how to apply IAS 12, Income taxes when there is uncertainty over whether a tax
+treatment will be accepted by the tax authority.
+Under the Interpretation, the key test is whether it is probable that the tax authority will accept the entity's tax treatment.
+•
+If it is probable, then the entity should measure current and deferred tax consistently with the tax treatment in its tax
+return.
+If it is not probable, then the entity should reflect the effect of uncertainty in its accounting for income tax by using
+the "expected value" approach or the "the most likely amount" approach whichever better predicts the resolution
+-
+of the uncertainty and in that case the tax amounts in the financial statements will not be the same as the amounts in
+the tax return.
+The annual improvements are expected to have no material impact on financial position and financial performance.
+Amendments to IAS 19, Employee Benefits "Plan Amendment, Curtailment or Settlement"
+The amendments to IAS 19 clarify that:
+•
+2018
+2017
+Interest income on:
+Loans and advances to customers
+Corporate loans and advances
+Personal loans
+640,031
+572,688
+407,779
+369,740
+217,860
+186,089
+Discounted bills
+14,392
+16,859
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+ICBC
+6. NET INTEREST INCOME
+ICBC
+on amendment, curtailment or settlement of a defined benefit plan, a company should use updated actuarial
+assumptions to determine its current service cost and net interest for the period; and
+the effect of the asset ceiling cost is disregarded when calculating the gain or loss on any settlement of the plan and is
+dealt with separately in other comprehensive income.
+The amendments are expected to have no material impact on the financial position and the financial result of the Group.
+Amendments to IFRS 3, Business Combinations "Clarifying what is a business"
+The IASB has issued amendments to IFRS 3 that seek to clarify the definition of business. The amendments include an
+election to use a concentration test. If a preparer chooses not to apply the concentration test, or the test is failed, then the
+assessment focuses on the existence of a substantive process. The effect of these changes is that the new definition of a
+business is narrower, which could result in fewer business combinations being recognised. The amendments may require a
+complex assessment to decide whether a transaction is a business combination or an asset acquisition.
+The Group is currently assessing the impact of the amendments on its financial position and financial performance.
+Amendments to IAS 1, Presentation of Financial Statements, and IAS 8, Accounting Policies,
+Changes in Accounting Estimates and Errors, "Definition of Material"
+The amendments clarify the definition of material and how it should be applied by including in the definition guidance that
+until now has featured elsewhere in IFRS Standards. In addition, the explanations accompanying the definition have been
+improved and the amendments ensure that the definition of material is consistent across all IFRS Standards.
+The Group is currently assessing the impact of the amendments on its financial position and financial performance.
+IFRS 17, "Insurance contracts"
+IFRS 17 is issued to resolve the comparison problems created by IFRS 4 by setting out a single principle-based standard for
+the recognition, measurement, presentation and disclosure of insurance contracts in the financial statements of the issuers
+of those contracts.
+The Group is currently assessing the impact of the standard on its financial position and financial performance.
+Amendments to IFRS 10, Consolidated Financial Statements, and IAS 28, Investment in
+associates and joint ventures, "Sale or contribution of assets between an investor and its
+associate or joint venture"
+The amendments introduce new requirements on loss of control over assets in a transaction with an associate or joint
+venture. These requirements require the full gain to be recognised when the assets transferred meet the definition of a
+"business" under IFRS 3, Business combination.
+The Group is currently assessing the impact of the amendments on its financial position and financial performance.
+176
+(28) Leases
+30
+188
+385
+281
+811
+811
+146
+384
+281
+891
+891
+149
+430
+312
+300
+སྦྲུgg, ཙྪ༔ཝིངྒིབྦེབྦེ,,,,,,,,
+437
+Independent Non-executive Director
+Independent Non-executive Director
+Independent Non-executive Director
+Shareholder Representative Supervisor
+Employee Representative Supervisor
+External Supervisor
+146
+812
+812
+470
+470
+470
+རྒྱུུསྐྱ་་་་''ཊྛབྦཀྑུཥྞ༈༙ ཨྰཿ ༞ ༞ པུཾ 'ཆ
+-
+275
+50
+50
+1,582
+External Supervisor
+458
+371
+1,142
+527
+308
+300
+437
+445
+470
+2,040
+445
+Employee Representative Supervisor
+Qu Qiang
+Fei Zhoulin
+Non-executive Director
+Zheng Fuqing
+Non-executive Director
+Executive Director, Vice President
+Executive Director, Vice President
+Executive Director, President
+Vice Chairman of the Board of Directors,
+Cheng Fengchao
+Wang Jingdong
+Zhang Hongli
+Gu Shu
+891
+891
+149
+430
+312
+Non-executive Director
+Mei Yingchun (i)
+Non-executive Director
+Dong Shi (i)
+Huang Li
+Hui Ping
+Zhang Wei
+Shen Si (iv)
+Sheila Colleen Bair (iii)
+Yang Siu Shun
+445
+Independent Non-executive Director
+Shen Bingxi
+Anthony Francis Neoh
+Independent Non-executive Director
+Hong Yongmiao
+470
+Independent Non-executive Director
+Or Ching Fai
+Non-executive Director
+Ye Donghai (ii)
+Non-executive Director
+470
+437
+300
+308
+The five highest paid individuals of the Group are employees of the Bank's subsidiaries. Their emoluments were determined
+based on the prevailing market rates in the respective countries/regions where the subsidiaries are operating. None of them
+are directors, supervisors or key management personnel of the Bank whose emoluments are disclosed in notes 12 and 49(e)
+to the financial statements. Details of the emoluments in respect of the five highest paid individuals are as follows:
+13. FIVE HIGHEST PAID INDIVIDUALS
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+182
+During the year, no emolument was paid by the Group to any of the Directors or Supervisors as an inducement to join or
+upon joining the Group or as a compensation for loss of office (2017: Nil).
+During the year, there was no arrangement under which a Director or a Supervisor waived or agreed to waive any
+remuneration (2017: Nil).
+The Non-executive Directors of the Bank who were recommended by Huijin received emoluments from Huijin in respect of
+their services during the year.
+(viii) In March 2017, due to expiration of the term of office, Mr. Kenneth Patrick Chung ceased to act as Independent
+Non-executive Director of the Bank.
+In January 2017, due to expiration of the term of office, Mr. Fu Zhongjun ceased to act as Non-executive Director of the
+Bank.
+In June 2017, Ms. Wang Xiaoya and Ms. Ge Rongrong ceased to act as Non-executive Directors of the Bank due to
+work adjustment.
+In January 2018, Mr. Qian Wenhui resigned from the positions of Supervisor and Chairman of the Board of Supervisors
+of the Bank due to change of job assignments.
+At the Annual General Meeting for the Year 2015 held on 24 June 2016, Mr. Shen Si was appointed as Independent
+Non-executive Director of the Bank, and his qualification was approved by the former CBRC in March 2017.
+March 2017.
+At the First Extraordinary General Meeting of 2016 held on 29 November 2016, Ms. Sheila Colleen Bair was appointed
+as Independent Non-executive Director of the Bank, and her qualification was approved by the former CBRC in
+(vii)
+Group
+Salaries and allowances
+Discretionary bonuses
+Defined contribution plans
+1
+1
+RMB12,000,001 Yuan to RMB12,500,000 Yuan
+RMB13,500,001 Yuan to RMB14,000,000 Yuan
+RMB14,500,001 Yuan to RMB15,000,000 Yuan
+RMB15,000,001 Yuan to RMB15,500,000 Yuan
+RMB15,500,001 Yuan to RMB16,000,000 Yuan
+RMB23,000,001 Yuan to RMB23,500,000 Yuan
+RMB23,500,001 Yuan to RMB24,000,000 Yuan
+RMB25,500,001 Yuan to RMB26,000,000 Yuan
+RMB26,500,001 Yuan to RMB27,000,000 Yuan
+2017
+2018
+Number of employees
+The number of these individuals whose emoluments fell within the following bands is set out below:
+92,541
+(vi)
+94,294
+1,473
+75,134
+67,333
+611
+15,865
+26,350
+2017
+RMB'000
+2018
+RMB'000
+Others
+69
+(v)
+(iv)
+(iii)
+110
+Former Independent Non-executive Director
+Kenneth Patrick Chung (viii)
+Former Non-executive Director
+Fu Zhongjun (vii)
+Former Non-executive Director
+Ge Rongrong (vi)
+Former Non-executive Director
+110
+Wang Xiaoya (vi)
+149
+430
+312
+Former Chairman of the Board of Supervisors
+Qian Wenhui (v)
+275
+50
+50
+891
+(7)=(5)-(6)
+110
+2,025
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+181
+Annual Report 2018
+At the Annual General Meeting for the Year 2016 held on 27 June 2017, Mr. Ye Donghai was appointed as
+Non-executive Director of the Bank, and his qualification was approved by the former CBRC in October 2017.
+At the Annual General Meeting for the Year 2016 held on 27 June 2017, Ms. Mei Yingchun and Mr. Dong Shi were
+appointed as Non-executive Director of the Bank, and their qualifications were approved by the former China Banking
+Regulatory Commission (the "former CBRC") in August 2017.
+(ii)
+2,915
+(i)
+Fees of Mr. Hui Ping and Mr. Huang Li were their allowances obtained as Employee Representative Supervisors of the Bank,
+excluding their remuneration with the Bank in accordance with the employee remuneration system.
+The remuneration before tax payable to Directors and Supervisors for 2017 set out in the table above represents the total
+amount of annual remuneration for each of these individuals, which includes the amount disclosed in the 2017 Annual Report.
+Pursuant to the PRC relevant regulations, a portion of the discretionary bonus payments for the Chairman of the Board
+of Directors, the President, the Chairman of the Board of Supervisors, Executive Directors and other senior management
+members are deferred based on the future performance.
+Note: Since January 2015, the remuneration to the Chairman of the Board of Directors, the President, the Chairman of the Board of
+Supervisors and other executives of the Bank have followed the PRC authorities' policies relating to the remuneration reform
+on executives of central enterprises.
+8,793
+458
+9,251
+1,110
+3,201
+As at the approval date of 2017 financial statements, changes of directors and supervisors of the Bank are as follows:
+1
+(6)
+RMB'000
+1,083
+203
+880
+25
+25
+413
+413
+365
+365
+Independent Non-executive Director
+Independent Non-executive Director
+Independent Non-executive Director
+Shareholder Representative Supervisor
+Employee Representative Supervisor
+Hui Ping (iv)
+Nout Wellink (iii)
+Zhang Wei
+440
+440
+440
+440
+470
+50
+50
+Huang Li
+Employee Representative Supervisor
+Zhang Hongli (viii)
+12
+46
+Former Chairman of the Board of Supervisors
+Qian Wenhui (vii)
+127
+546
+Executive Director
+470
+Former Chairman of the Board of Directors,
+External Supervisor
+Shen Bingxi
+250
+250
+External Supervisor
+Qu Qiang (v)
+50
+50
+Yi Huiman (vi)
+Former Executive Director, Vice President
+Independent Non-executive Director
+Independent Non-executive Director
+Year ended 31 December 2018
+Non-executive Director
+Non-executive Director
+Mei Yingchun
+Non-executive Director
+Zheng Fuqing (ii)
+Non-executive Director
+Cheng Fengchao (i)
+Executive Director, President
+Vice Chairman of the Board of Directors,
+Position
+Gu Shu
+Name
+Details of the directors' and supervisors' emoluments before tax, as disclosed pursuant to the Rules Governing the Listing
+of Securities on the Stock Exchange of Hong Kong Limited and Chapter 622 Section 383 of the Hong Kong Companies
+Ordinance, are as follows:
+12. DIRECTORS' AND SUPERVISORS' EMOLUMENTS
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+Remuneration
+paid
+before tax
+RMB'000
+(1)
+Defined
+contribution
+plans
+RMB'000
+Non-executive Director
+Sheila Colleen Bair
+Shen Si
+Anthony Francis Neoh
+Yang Siu Shun
+Hong Yongmiao
+Ye Donghai
+Dong Shi
+673
+| | |
+Independent Non-executive Director
+27
+546
+RMB'000
+(4)=(1)+(2)+(3)
+(3)
+(2)
+RMB'000
+before tax
+Fees
+Total
+emoluments
+127
+246
+61
+Wang Jingdong (ix)
+Remuneration
+and welfare
+insurance
+to social
+the employer
+Contribution by
+Year ended 31 December 2017
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+Executive Director
+Chairman of the Board of Directors,
+Yi Huiman
+Position
+Name
+ICBC
+180
+In October 2018, due to expiration of the term of office, Mr. Or Ching Fai ceased to act as Independent Non-executive
+Director of the Bank.
+Discretionary
+plans, housing
+Total
+emoluments
+Of which:
+deferred
+RMB'000
+(5)=(1)+(2)+(3)+(4)
+(4)
+(3)
+(2)
+(1)
+RMB'000
+RMB'000
+RMB'000
+(xi)
+RMB'000
+payment
+before tax
+allowance, etc.
+bonuses
+ICBC
+Fees
+remuneration
+Actual
+amount of
+paid before tax
+In October 2018, Mr. Fei Zhoulin ceased to act as Non-executive Director of the Bank citing his age.
+(x)
+In September 2018, Mr. Wang Jingdong ceased to act as Executive Director and Vice President of the Bank due to
+change of job assignments.
+The total compensation packages for the Chairman of the Board of Directors, President, Chairman of the Board of
+Supervisors, Executive Directors, and Shareholder Representative Supervisors of the Bank have not been finalised in
+accordance with the regulations of the PRC relevant authorities. The remuneration not yet accrued is not expected to have a
+significant impact on the Group's and the Bank's 2018 financial statements. The total compensation packages will be further
+disclosed when determined by the relevant authorities.
+Note: Since January 2015, the remuneration to the Chairman of the Board of Directors, the President, the Chairman of the Board of
+Supervisors and other executives of the Bank have followed the PRC authorities' policies relating to the remuneration reform
+on executives of central enterprises.
+6,100
+2,895
+392
+392
+613
+2,592
+Fees of Mr. Hui Ping and Mr. Huang Li were their allowances obtained as Employee Representative Supervisors of the Bank,
+excluding their remuneration with the Bank in accordance with the employee remuneration system.
+Total
+411
+307
+58
+673
+83
+328
+Former Executive Director, Vice President
+Former Non-executive Director
+Fei Zhoulin (x)
+Or Ching Fai (xi)
+Former Independent Non-executive Director
+RMB'000
+Annual Report 2018
+Notes to the Financial Statements
+(ix)
+(viii) In July 2018, Mr. Zhang Hongli ceased to act as Executive Director of the Bank due to expiration of the term of office,
+and resigned from the position of Vice President of the Bank due to family reasons.
+In January 2018, Mr. Qian Wenhui resigned from the positions of Supervisor and Chairman of the Board of Supervisors
+of the Bank due to change of job assignments.
+In January 2019, Mr. Yi Huiman ceased to act as Chairman of the Board of Directors and Executive Director of the Bank
+due to change of job assignments.
+At the First Extraordinary General Meeting of 2018 held on 21 November 2018, Mr. Qu Qiang was re-elected as
+External Supervisor of the Bank, and his new term of office took effect from 20 December 2018.
+On 21 September 2018, the Bank re-elected Mr. Hui Ping as Employee Supervisor of the Bank at the Interim Employees'
+Congress, and his new term of office took effect from the date of review and approval by the Employees' Congress.
+At the First Extraordinary General Meeting of 2018 held on 21 November 2018, Mr. Zheng Fuqing was re-elected as Non-
+executive Director of the Bank, and his new term of office took effect from the date of review and approval by the meeting.
+At the First Extraordinary General Meeting of 2018 held on 21 November 2018, Mr. Nout Wellink was appointed as
+Independent Non-executive Director of the Bank, and his term of office took effect from 3 December 2018.
+At the 2017 Annual General Meeting held on 26 June 2018, Mr. Cheng Fengchao was re-elected as Non-executive
+Director of the Bank, and his new term of office took effect from the date of review and approval by the meeting.
+179
+(vii)
+(v)
+(iv)
+(iii)
+(ii)
+(i)
+As at the approval date of these financial statements, changes of directors and supervisors of the Bank are as follows:
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+(vi)
+2
+paid
+1
+118,211
+147,805
+Banks operating in Mainland China
+institutions:
+Placements with banks and other financial
+358,498
+359,472
+370,074
+384,646
+(360)
+(393)
+(380)
+(401)
+Less: Allowance for impairment losses
+358,858
+359,865
+370,454
+147,940
+385,047
+119,112
+Mainland China
+572,294
+672,468
+477,740
+578,417
+5,893
+6,781
+Accrued interest
+219,106
+285,354
+125,407
+230,640
+operating outside Mainland China
+Banks and other financial institutions
+234,076
+233,281
+234,122
+193,191
+Other financial institutions operating in
+2,387
+2,624
+Accrued interest
+2018
+Bank
+Group
+20. DUE FROM BANKS AND OTHER FINANCIAL INSTITUTIONS
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+186
+The Group is required to place mandatory reserve deposits and other restricted deposits with the PBOC and certain
+central banks of overseas countries or regions where it has operations. Mandatory reserve deposits with central banks
+and other restricted deposits are not available for use in the Group's daily operations. Mandatory reserve deposits
+mainly consist of deposits placed with the PBOC. As at 31 December 2018, the mandatory deposit reserve ratios of
+the domestic branches of the Bank in respect of customer deposits denominated in RMB and foreign currencies were
+consistent with the requirement of the PBOC. The amounts of mandatory reserve deposits placed with the central
+banks of those countries or regions outside Mainland China are determined by local jurisdictions.
+Surplus reserves with the PBOC include funds for the purpose of cash settlement and other kinds of unrestricted
+deposits.
+(ii)
+3,548,996
+3,313,748
+3,613,872
+1,668
+1,668
+3,372,576
+central banks
+2017
+2018
+2017
+Due from banks and other financial
+40,755
+76,709
+51,635
+70,141
+operating outside Mainland China
+Banks and other financial institutions
+4,992
+3,910
+Less: Allowance for impairment losses
+5,116
+Mainland China
+Other financial institutions operating in
+313,111
+276,859
+313,703
+307,588
+Banks operating in Mainland China
+institutions:
+4,694
+(614)
+577,803
+(203)
+477,537
+84
+34
+441
+115
+326
+Total
+banks and other
+financial institutions
+banks and other
+financial institutions
+Placements with
+Due from
+At 31 December 2018
+Charge for the year
+At 1 January 2018
+Impact of adopting IFRS 9
+At 31 December 2017
+Charge for the year
+At 1 January 2017
+118
+360
+199
+559
+1
+In accordance with accounting policy of offsetting, the Group offsets derivative assets and derivative liabilities which
+meet the criteria for offsetting, and presents net amount in the financial statements. As at 31 December 2018, derivative
+assets and derivative liabilities which meet the criteria for offsetting were RMB44,552 million (31 December 2017:
+RMB51,266 million) and RMB45,254 million (31 December 2017: RMB52,649 million) respectively, and the net derivative
+assets and net derivative liabilities were RMB25,906 million (31 December 2017: RMB26,949 million) and RMB26,608
+million (31 December 2017: RMB28,332 million) respectively.
+Fair value is the price that would be received to sell an asset or paid to transfer a liability in any orderly transaction between
+markets participates at measured date.
+The notional amount of a derivative represents the amount of an underlying asset upon which the value of the derivative is
+based. It indicates the volume of business transacted by the Group but does not reflect the risk.
+A derivative is a financial instrument, the value of which changes in response to the change in a specified interest rate,
+financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or
+other similar variables. The Group uses derivative financial instruments including forwards, swaps and options.
+21. DERIVATIVE FINANCIAL INSTRUMENTS
+931
+538
+Bank
+393
+127
+27
+777
+411
+366
+218
+212
+6
+154
+Accrued interest on balances with
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+187
+Total
+Placements with
+banks and other
+financial institutions
+Due from
+banks and other
+financial institutions
+At 31 December 2018
+Charge for the year
+At 1 January 2018
+At 31 December 2017
+Impact of adopting IFRS 9
+Charge for the year
+At 1 January 2017
+Group
+930,593
+1,031,402
+847,611
+962,449
+572,095
+(199)
+(538)
+671,930
+327
+118
+445
+53
+Annual Report 2018
+1,015
+614
+401
+162
+139
+23
+853
+Notes to the Financial Statements
+475
+270
+272
+(2)
+583
+203
+380
+138
+85
+378
+3,340,333
+Movements of the allowance for impairment losses during the year are as follows:
+23,246
+3,034,230
+(737)
+(772)
+Effects of profits attributable to associates and joint ventures
+(23,673)
+(28,969)
+Effects of non-taxable income (ii)
+8,956
+11,171
+(889)
+(1,177)
+Effects of different applicable rates of tax prevailing in other countries/regions
+Effects of non-deductible expenses (i)
+91,160
+93,103
+Tax at the PRC statutory income tax rate
+2017
+364,641
+372,413
+Profit before taxation
+Effects of others
+334
+2,373
+Income tax expense
+83,506
+85,823
+Final ordinary shares dividends for 2017: RMBO.2408 per share
+(2016: RMB0.2343 per share)
+Dividends on ordinary shares declared and paid:
+2017
+2018
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+2018
+17. DIVIDENDS
+184
+The consolidated profit attributable to equity holders of the parent company for the year ended 31 December 2018 includes
+a profit of RMB282,044 million (2017: RMB269,205 million) which has been dealt with in the financial statements of the
+Bank (Note 39).
+16. PROFIT ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT COMPANY
+The non-deductible expenses mainly represent non-deductible impairment provision, write-offs and others.
+The non-taxable income mainly represents interest income arising from the PRC government bonds and municipal
+debts, which is exempted from income tax.
+(ii)
+(i)
+77,190
+73,690
+ICBC
+Dividends on preference shares declared and paid: Dividends
+PRC income tax has been provided at the statutory rate of 25% in accordance with the relevant tax laws in Mainland China
+during the year. Taxes on profits assessable elsewhere have been calculated at the applicable rates of tax prevailing in the
+countries/regions in which the Group operates, based on existing legislation, interpretations and practices in respect thereof.
+A reconciliation of the income tax expense applicable to profit before taxation at the PRC statutory income tax rate to
+income tax expense at the Group's effective income tax rate is as follows:
+73,690
+Annual Report 2018
+127,769
+3,673
+14,247
+161,594
+2017
+124,096
+147,347
+2018
+Notes
+23
+Others
+Loans and advances to customers
+14. IMPAIRMENT LOSSES ON ASSETS
+During the year, no emoluments were paid by the Group to any of these non-director and non-supervisor individuals as an
+inducement to join or upon joining the Group (2017: Nil).
+5
+1
+5
+1
+18,785
+1
+183
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+15. INCOME TAX EXPENSE
+(8,188)
+86,502
+81,878
+3,397
+3,280
+2,123
+2,510
+80,982
+77,190
+76,088
+2018
+(b) Reconciliation between income tax and accounting profit
+Deferred income tax expense
+Overseas
+Hong Kong and Macau
+Mainland China
+Current income tax expense:
+(a) Income tax expense
+2017
+4,506
+(9,312)
+Dividends on ordinary shares proposed for approval
+308,333
+114,413
+150,850
+123,500
+overseas countries or regions
+Unrestricted balances with central banks of
+23,082
+113,996
+26,507
+114,786
+Surplus reserves with the PBOC (i)
+71,168
+64,327
+75,214
+70,047
+Cash on hand
+central banks:
+252,571
+277,850
+208,663
+Restricted balances with central banks:
+32,254
+3,361,301
+3,062,575
+4,437
+42,885
+overseas countries or regions (ii)
+Mandatory reserves with central banks of
+36,961
+7,641
+Cash and unrestricted balances with
+276,936
+2,749,172
+254,171
+3,015,150
+276,936
+36,961
+8,738
+Other restricted balances with the PBOC (ii)
+254,171
+Fiscal deposits with the PBOC
+2,756,781
+Mandatory reserves with the PBOC (ii)
+3,007,651
+2017
+99,527
+2018
+Profit for the year attributable to ordinary equity holders of the parent company
+Shares:
+(4,437)
+(4,506)
+holders of the parent company
+Less: Profit for the year attributable to other equity instruments
+286,049
+(not recognised as at 31 December):
+Profit for the year attributable to equity holders of the parent company
+Earnings:
+293,170
+2017
+85,823
+89,315
+2017
+2018
+The calculation of basic and diluted earnings per share of the Group is based on the following:
+18. EARNINGS PER SHARE
+Bank
+(2017: RMBO.2408 per share)
+Final ordinary shares dividends for 2018: RMB0.2506 per share
+2018
+281,612
+297,676
+2018
+Weighted average number of ordinary shares in issue (in million shares)
+Group
+19. CASH AND BALANCES WITH CENTRAL BANKS
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+185
+(i)
+Basic and diluted earnings per share was calculated as the profit for the year attributable to ordinary equity holders of the
+parent company divided by the weighted average number of ordinary shares in issue.
+Basic and diluted earnings per share (RMB yuan)
+356,407
+Annual Report 2018
+2017
+356,407
+0.82
+0.79
+0.6
+162,347
+158,666
+2.3
+Less: Fee and commission expense
+Net fee and commission income
+17,046
+145,301
+19,041
+(1,995)
+3,681
+ICBC
+139,625
+5,676
+4.1
+Net gain on financial investments
+The Bank proactively responded to the New Rules on Asset Management and other regulatory requirements, focused
+on serving the real economy and satisfying the financial needs of consumers, and made continuous efforts to promote
+the transformation and innovation of intermediary services. In 2018, the Bank realized a net fee and commission income
+of RMB145,301 million, representing an increase of RMB5,676 million or 4.1% over last year. The bank card business
+income recorded an increase of RMB5,027 million, as benefited by the fast increase in credit card installment service fee
+and consumption return commission income; income on settlement, clearing business and cash management increased
+by RMB4,965 million, mainly driven by the rapid growth of third party payment; income on guarantee and commitment
+business registered an increase of RMB2,043 million, primarily attributable to the fast development of commitment business.
+The Bank proactively promoted the product transformation based on the New Rules on Asset Management, and meanwhile,
+as affected by the implementation of VAT for asset management products which started in 2018, income on personal wealth
+management and corporate wealth management services declined.
+Net trading income
+Item
+OTHER NON-INTEREST RELATED GAINS
+16
+(10.5)
+17
+6,818
+2,798
+(4,402)
+3.5
+(23.2)
+Guarantee and commitment business
+8,861
+Other operating income, net
+18,984
+2,043
+30.0
+Asset custody business
+2,781
+7,045
+314
+4.7
+Trust and agency services
+Others
+Fee and commission income
+1,959
+1,805
+154
+8.5
+6,731
+Total
+Premises and equipment expenses
+In RMB millions, except for percentages
+OPERATING EXPENSES
+In RMB millions, except for percentages
+Item
+2018
+2017
+Increase/
+(decrease)
+Growth rate
+(%)
+Staff costs
+Operating Expenses
+121,074
+6,120
+5.3
+27,088
+27,562
+(474)
+(1.7)
+Taxes and surcharges
+14,582
+7,781
+114,954
+Discussion and Analysis
+Other non-interest related gains amounted to RMB7,302 million, RMB6,649 million or 47.7% lower than that of the
+previous year. Specifically, the decrease in net trading income was mainly attributable to the increase in losses from
+derivative contracts; the fall of net gain on financial investments was primarily due to the increase in expected payments to
+customers resulted from the growth of structured deposits; and the decrease in other net operating income was principally
+derived from the increase in net loss on exchange and exchange rate products.
+(6,649)
+Increase/
+Growth rate
+2018
+2017
+(decrease)
+(%)
+2,846
+5,753
+(2,907)
+(47.7)
+(50.5)
+2,165
+(820)
+(37.9)
+3,111
+6,033
+(2,922)
+(48.4)
+7,302
+13,951
+1,345
+Corporate wealth management services
+5,494,567
+23,189
+2.43
+4,448,649
+108,442
+2.44
+Demand deposits
+3,719,278
+14,105
+0.38
+3,620,245
+108,872
+14,115
+Subtotal
+8,207,406
+122,977
+1.50
+8,068,894
+122,557
+Time deposits
+Overseas business
+839,534
+0.39
+16,598
+4,488,128
+Personal deposits
+7,465
+4,286,839
+98,625
+2.30
+4,052,540
+90,893
+2.24
+Demand deposits
+5,983,490
+Time deposits
+42,012
+36,989
+0.67
+Subtotal
+10,270,329
+140,637
+1.37
+9,547,107
+127,882
+1.34
+0.70
+813
+1.98
+10,517
+(%)
+Bank card business
+43,719
+38,692
+5,027
+13.0
+Settlement, clearing business and
+31,785
+26,820
+Growth rate
+4,965
+cash management
+Personal wealth management and
+27,596
+32,846
+(5,250)
+(16.0)
+private banking services
+Investment banking business
+24,002
+18.5
+719,824
+Increase/
+(decrease)
+2018
+1.46
+Total deposits
+19,317,269
+280,212
+1.45
+18,335,825
+260,956
+1.42
+♦ Interest Expense on Due to Banks and Other Financial Institutions
+2017
+Interest expense on due to banks and other financial institutions was RMB64,991 million, RMB6,573 million or 11.3%
+higher over last year, principally attributable to the rise of interest rates in the USD markets during the reporting period and
+relatively high funds rate in the RMB market in the first half year of 2018, which resulted in the increase of 25 basis points in
+the average cost of due to banks and other financial institutions.
+15
+Discussion and Analysis
+♦ Interest Expense on Debt Securities Issued
+Interest expense on debt securities issued was RMB30,373 million, indicating an increase of RMB10,231 million or 50.8%
+over last year, mainly attributable to the increase in the size and average cost of the financial bonds, bills and CDs issued by
+overseas institutions during the reporting period and the issuance of RMB88.0 billion of tier 2 capital bonds by the Bank in
+the second half of 2017. Please refer to "Note 35. to the Financial Statements: Debt Securities Issued" for the debt securities
+issued by the Bank.
+Non-interest Income
+In 2018, non-interest income was RMB152,603 million, RMB973 million or 0.6% lower than that of last year, accounting
+for 21.0% of the Bank's operating income. Specifically, net fee and commission income increased by 4.1% to RMB145,301
+million, and other non-interest income dropped by 47.7% to RMB7,302 million.
+NET FEE AND COMMISSION INCOME
+In RMB millions, except for percentages
+Item
+Annual Report 2018
+316
+36,027
+Amortisation
+18.8
+Central China
+88,192
+12.2
+81,341
+12.0
+Western China
+108,518
+15.0
+126,006
+100,795
+Northeastern China
+27,958
+3.9
+28,632
+4.2
+Overseas and others
+57,021
+7.9
+59,445
+14.9
+8.8
+18.7
+Bohai Rim
+Operating income
+725,121
+100.0
+675,654
+100.0
+Head Office
+86,107
+11.9
+73,787
+136,799
+10.9
+126,151
+17.4
+117,132
+17.3
+Pearl River Delta
+94,375
+13.0
+88,516
+13.1
+Yangtze River Delta
+(%)
+Profit before taxation
+100.0
+32,659
+9.0
+Western China
+54,409
+14.6
+47,694
+13.1
+Northeastern China
+5,562
+9.7
+1.5
+3.0
+Overseas and others
+33,239
+8.9
+40,273
+11.1
+Note: Please see "Note 50. to the Financial Statements: Segment Information" for details.
+18
+ICBC
+10,812
+372,413
+Central China
+66,818
+364,641
+100.0
+Head Office
+38,506
+10.3
+47,191
+12.9
+Yangtze River Delta
+77,056
+18.3
+20.7
+19.6
+Pearl River Delta
+52,131
+14.0
+47,561
+13.0
+Bohai Rim
+75,483
+20.3
+71,633
+Amount
+(%)
+Amount
+SUMMARY OPERATING SEGMENT INFORMATION
+In RMB millions, except for percentages
+2018
+2017
+Percentage
+Percentage
+Item
+Amount
+(%)
+The Bank's principal operating segments include corporate banking, personal banking and treasury operations. The Bank
+adopts the MOVA (Management of Value Accounting) to evaluate the performance of each of its operating segments.
+Amount
+Operating income
+725,121
+100.0
+675,654
+100.0
+Corporate banking
+353,859
+48.8
+332,264
+(%)
+49.2
+Segment Information
+17
+Others
+2,339
+2,114
+225
+10.6
+35,921
+34,099
+1,822
+5.3
+Discussion and Analysis
+Total
+186,194
+8,009
+4.3
+The Bank continued to strengthen cost control and management. Operating expenses amounted to RMB194,203 million, an
+increase of RMB8,009 million or 4.3% over last year.
+Impairment Losses
+In 2018, the Bank set aside an allowance for impairment losses of RMB161,594 million, an increase of RMB33,825 million or
+26.5% as compared to that of last year. Specifically, the allowance for impairment losses on loans was RMB147,347 million,
+indicating an increase of RMB23,251 million or 18.7%. Please refer to "Note 23. to the Financial Statements: Loans and
+Advances to Customers; Note 14. to the Financial Statements: Impairment Losses" for details.
+Income Tax Expense
+Income tax expense decreased by RMB3,500 million or 4.5% to RMB73,690 million as compared to the previous year.
+The effective tax rate stood at 19.79%. Please see "Note 15. to the Financial Statements: Income Tax Expense" for the
+reconciliation of income tax expense applicable to profit before tax at the PRC statutory income tax rate and the effective
+income tax rate.
+Annual Report 2018
+194,203
+Personal banking
+273,490
+37.7
+137,843
+37.9
+Treasury operations
+75,828
+20.4
+72,713
+19.9
+Others
+587
+38.7
+0.2
+0.3
+Note: Please see "Note 50. to the Financial Statements: Segment Information" for details.
+Please refer to the section headed "Discussion and Analysis - Business Overview" for details on the development of each of
+these operating segments.
+SUMMARY GEOGRAPHICAL SEGMENT INFORMATION
+In RMB millions, except for percentages
+2018
+2017
+Percentage
+Percentage
+Item
+1,212
+144,284
+Personal banking
+41.9
+247,919
+36.7
+Treasury operations
+92,484
+12.8
+90,599
+13.4
+Others
+5,288
+0.7
+4,872
+0.7
+Profit before taxation
+372,413
+100.0
+364,641
+100.0
+Corporate banking
+151,714
+40.7
+152,873
+4.2
+Corporate deposits
+1.52
+Average cost
+expense
+cost (%)
+Item
+Assets
+Loans and advances to customers
+14,600,596
+640,031
+4.38
+13,535,464
+balance
+572,688
+Investment
+5,483,420
+200,157
+3.65
+5,135,606
+185,181
+3.61
+Due from central banks (2)
+3,155,407
+4.23
+49,246
+cost (%)
+balance
+company
+Non-controlling interests
+1,047
+1,402
+(355)
+(25.3)
+12
+ICBC
+Discussion and Analysis
+expense
+Net Interest Income
+AVERAGE YIELD OF INTEREST-GENERATING ASSETS AND AVERAGE COST OF INTEREST-BEARING LIABILITIES
+In RMB millions, except for percentages
+2018
+2017
+Interest
+Interest
+Average
+income/ Average yield/
+Average
+income/ Average yield/
+In 2018, net interest income was RMB572,518 million, RMB50,440 million or 9.7% higher than that of last year, accounting
+for 79.0% of the Bank's operating income. Interest income grew by RMB86,500 million or 10.0% to RMB948,094 million
+and interest expenses increased by RMB36,060 million or 10.6% to RMB375,576 million. Net interest spread and net interest
+margin came at 2.16% and 2.30%, 6 basis points and 8 basis points higher than those of the previous year, respectively.
+4.1
+1.56
+48,335
+24,930,742
+Liabilities
+Deposits
+19,317,269
+280,212
+1.45
+18,335,825
+260,956
+1.42
+26,691,916
+Due to banks and other financial
+64,991
+2.44
+2,668,436
+58,418
+2.19
+institutions(3)
+Debt securities issued
+845,347
+30,373
+2,668,229
+3,142,370
+Total assets
+(387,490)
+1.54
+Due from banks and other
+1,628,820
+58,660
+3.60
+1,651,391
+55,390
+3.35
+financial institutions(3)
+(322,769)
+Total interest-generating assets
+948,094
+3.81
+23,464,831
+861,594
+3.67
+Non-interest-generating assets
+2,211,163
+1,788,680
+Allowance for impairment losses
+24,868,243
+3.59
+11,627
+297,676
+The PBC implemented a prudent monetary policy. Through targeted reduction of required reserve ratio and increased
+re-lending and rediscounting quotas, more support was given to the real economy. Credit financing support policies for
+private enterprises and small and micro enterprises were introduced, and bond-financing-backed instruments were launched
+for private enterprises. The New Rules on Asset Management and guidelines for regulation of systemically important financial
+institutions were released. Moreover, innovative capital replenishment instruments such as undated additional tier 1 capital
+bonds were introduced, to promote the standardized and innovative development of financial market.
+Both monetary credit and social financing maintained a stable growth. At the end of 2018, the balance of M2 was
+RMB182.67 trillion, up 8.1% year-on-year. The outstanding RMB loans reached RMB136.30 trillion, increasing by 13.5%
+year-on-year. The balance of RMB deposits amounted to RMB177.52 trillion, up 8.2% from the previous year. The existing
+social financing scale size stood at RMB200.75 trillion, a year-on-year increase of 9.8%. Major stock indexes declined in
+volatile trading, with a decrease of 24.6% and 34.4% in the Shanghai Composite Index and the Shenzhen Component
+Index respectively. The total issuance amount of various bonds in the bond market came in at RMB43.1 trillion, up 7.5%.
+The issuance rate of bond market dropped significantly, and the bond yield curve presented an overall downward trend. At
+the end of 2018, the central parity of RMB against the US dollar was RMB6.8632, a depreciation of 4.8% from the end of
+last year.
+The asset scale of the Chinese banking sector grew steadily, with the quality of credit assets remaining stable overall. At
+the end of 2018, the total assets of financial institutions in China's banking sector were RMB268.24 trillion, up 6.27%.
+The balance of NPLs of commercial banks reached RMB2.03 trillion, with a NPL ratio of 1.83% and allowance to NPLs of
+186.31%. Besides, the core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio were
+11.03%, 11.58% and 14.20% respectively.
+Looking forward to 2019, the global economy will be exposed to more downside risks, and the international financial
+market is likely to show an aggravated fluctuation. Under the influence of countercyclical adjustment of macroeconomic
+policy and other factors, China's economic performance will remain within a reasonable range. A proactive fiscal policy
+would increase effectiveness, and a larger scale of tax cut and fee reductions would be implemented. The fiscal expenditure
+structure would be further adjusted and optimized. A moderately sound monetary policy, while maintaining a reasonable
+and sufficient liquidity, would facilitate structural optimization and better serve the real economy. Supply-side structural
+reform would adopt more market-oriented and rule-of-law means to continuously optimize economic structure, and hence
+the employment situation would be further improved.
+Annual Report 2018
+11
+Discussion and Analysis
+FINANCIAL STATEMENTS ANALYSIS
+Income Statement Analysis
+In 2018, China's economic performance remained within a reasonable range. China's gross domestic product (GDP),
+consumer price index, retail sales of consumer goods, fixed asset investment, industrial added value of above-scale
+enterprises, and total imports and exports rose by 6.6%, 2.1%, 9.0%, 5.9%, 6.2% and 9.7% respectively.
+In 2018, the Bank continued to enhance its service capability for the real economy, consolidated the foundation of operation
+and management, optimized its profitability structure and intensified its risk precaution and control ability, achieving stability
+in both benefits and quality. In 2018, the Bank realized a net profit of RMB298,723 million, representing an increase of
+RMB11,272 million or 3.9% as compared to the previous year. Return on average total assets stood at 1.11%, and return
+on weighted average equity was 13.79%. Operating income amounted to RMB725,121 million, representing an increase
+of 7.3%, of which, due to the increase in interest-generating assets and net interest margin, net interest income grew by
+9.7% to RMB572,518 million; non-interest income was RMB152,603 million, down by 0.6%. Operating expenses amounted
+to RMB194,203 million, representing an increase of 4.3%, and the cost-to-income ratio was 25.71%. Allowance for
+impairment losses was RMB161,594 million, representing an increase of 26.5%. Income tax expense reduced by 4.5% to
+RMB73,690 million.
+In RMB millions, except for percentages
+Growth rate
+Item
+Net interest income
+Non-interest income
+Operating income
+2018
+2017
+Increase/
+(decrease)
+(%)
+CHANGES OF KEY INCOME STATEMENT ITEMS
+572,518
+In 2018, affected by tightened global monetary policy, intensified trade friction, Brexit and geopolitical risks, the momentum
+for global economic recovery faded, and the internal recovery of developed and emerging market economies diverged.
+The US economic growth rate approached a staged high, and the growth of the Eurozone and Japan slowed down. The
+international financial market continued to fluctuate, with the slight appreciation of USD and YEN, and the decline of EUR,
+emerging market currencies, global stock markets, and the prices of crude oil and gold to varying degrees.
+Discussion and Analysis
+(%)
+President's Statement
+The year 2018 marked the 40th anniversary of China's reform and opening-up. In retrospect from this significant juncture
+in history, we feel honored to have taken part in and witnessed the great reform practice. In 2018, ICBC stayed focused,
+stimulated vitality and pooled efforts to deliver its annual results marked with high-quality development and steady progress
+in its new journey towards being a world-class and modern financial enterprise with global competitiveness.
+Our overall operation and fundamentals were "stable", especially our profitability, quality and risk control
+constituted a "multi-stable" prospect. In terms of profitability, the Group recorded RMB298.7 billion in net profit,
+representing an increase of 3.9% from the previous year. Profit before provision was RMB534.0 billion, representing an
+increase of 8.4%. Net interest margin (NIM) rose by 8 basis points to 2.30% from the previous year, a major contributing
+factor to profit growth. In terms of quality, the Bank continued to enhance asset quality through the implementation of the
+"Consolidate the Foundation" program. Our balance sheet has become cleaner, and our ability to serve the real economy
+has become more sustainable. The Bank recovered and disposed of RMB226.5 billion of non-performing loans (NPLs), an
+increase of RMB33.8 billion from the previous year. The NPL ratio dropped 0.03 percentage points to 1.52% from the end
+of the previous year, falling for 8 consecutive quarters. The "scissors difference" between overdue loans and NPLs fell for
+three consecutive years and it dropped by 46% in 2018. Allowance to NPLs rose to over 175%. In terms of risk control, we
+have acquired a deeper understanding of the characteristics and nature of risks as they evolve. With the goal of "clear vision,
+thorough understanding and good management", we have built a risk control system that allows for lifecycle management
+of a full spectrum of risks across the entire market, which in turn ensures that each type of risks overall is within a
+manageable level and forges a healthier operation structure.
+We stepped "forward" by further improving and enhancing our financial services for the real economy. We
+established a new mechanism for the integrated development of investment and financing, coordinated increment and
+stock, credit and non-credit as well as financing and intelligence, which led to the activation of the vitality and efficiency
+of all key financial elements. In 2018, aggregate new financing reached nearly RMB4 trillion, including new RMB loans of
+RMB1.16 trillion, re-lending after collections of RMB1.96 trillion, and new bond investment and other non-credit financing
+of RMB840.0 billion. We provided targeted support to private enterprises and small and micro enterprises as breakthrough
+points for promoting the spread of the monetary policy and implementing the principle of "Six Stabilities". We upheld the
+development philosophy of "ICBC has no future without serving small and micro enterprises" and the principle of equal
+credit. We reinforced our policy on "dare to lend, willing to lend, able to lend and good at lending", and extended our
+credit to private enterprises and small and macro enterprises at fair prices and terms, so that hard-working entrepreneurs
+may experience a real sense of fulfillment. New loans to private enterprises reached RMB113.7 billion, and inclusive
+finance loans grew more than twice as fast as the average of all loans, demonstrating the Bank's leading role in providing
+enterprises with accessible and affordable financing. In addition, in alignment with the requirements of high-quality
+economic development, the Bank continued to improve on the allocations of financial resources and nourished the real
+economy through "targeted irrigation" by focusing on areas such as major national infrastructure, development of advanced
+manufacturing, a shift to new growth drivers, enhancement of domestic consumption and cooperation under the Belt and
+Road Initiative.
+We could "maintain stability while making progress", as we insisted on reform and innovation as well as
+transformation and development. Based on the new-era concept of "serving the broadest customer base", we
+endeavored to build a more open and more inclusive customer base. Following the addition of 40.00 million new
+personal customers in the year, which represented the strongest growth in recent years, the Bank's total number of
+personal customers exceeds 0.6 billion. The total number of users on our online platforms exceeds 0.4 billion. Owing to
+the continuous expansion of our customer base and the ongoing improvement of the services we provide, the Bank's
+general deposits increased by RMB1.45 trillion, the best level in nearly a decade. Our strategy on mega retail began to
+reap rewards, as shown by the stronger revenue contribution and an increase in the market competitiveness in the sector.
+Asset management and investment banking transformed steadily amid the implementation of the New Rules on Asset
+Management. As the key battle of last year's innovation, we upheld an ICBC outlook on FinTech development, reformed
+the technology system, launched the IT architecture upgrading project and pursued smart banking across the board. From
+setting sail to bravely forging ahead, we have become a "main force" in the FinTech arena. We pursued coordinated reforms
+in areas such as credit system and mechanism, enhancing city branches' competitiveness, integrated marketing service
+system, differentiated performance assessment, network mapping and improvements of human resources, so as to enhance
+connectivity and unleash dividend and vitality across the Bank.
+Annual Report 2018
+9
+President's Statement
+ECONOMIC, FINANCIAL AND REGULATORY ENVIRONMENTS
+In the past year, we acquired a deeper understanding of and further applied the Bank's governance philosophies and
+methodologies as we forged ahead against all odds. That is, we must remain guided by our strategy. The larger the
+vessel, the greater the winds and waves it will experience, and the more it will have to give full play to the role of strategy
+as the "bellwether", enshrine our new vision to guide us in the pursuit of our common values across the Bank, and unify our
+operation activities with the new strategy, in order to get through the "last mile" to fulfill our strategy and reach our goal
+without distractions.
+We must stay on the track of reform and innovation. The best celebration of the 40th anniversary of China's reform
+and opening-up is to address our own challenges by learning from past experience, to seek truth from facts while freeing
+our minds and to keep moving forward non-stop with reform and innovation. To make steady, prudent yet innovative
+reform will be the indispensable pillars of ICBC. We look downwards and inwards. We combine top-level design with grass-
+roots exploration, specially targeted breakthroughs with overall advancement, individual strike with concerted action, and
+temporary fixes with permanent solutions. The reform and innovation we have undertaken enable us to develop on all
+fronts.
+We must adhere to the principle of "people-orientation". The Bank's two most gratifying changes are the quality of
+management and the team morale. We are committed to choosing and using the right people and managing them well. We
+have upheld the "fighter + doer" culture, fostered a healthy atmosphere of integrity and forged ahead boldly to ensure that
+ICBC rises to the forefront.
+In January 2019, Mr. Yi Huiman resigned from the positions of Chairman of the Board of Directors and Executive Director
+due to a change in job assignments. Mr. Yi Huiman has outstanding strategic and dialectic mindset. With keen financial
+insights, diligence and dedication, he has led and steered the Bank amid significant changes in the market to a steady
+growth of quality, and exemplified how a leading bank should act at home and abroad. On behalf of the Board of Directors
+of the Bank, I would like to express my sincere gratitude to Mr. Yi Huiman for his outstanding contribution during his term
+of office. There were other significant changes to the Board of Directors, the Board of Supervisors and other members of the
+Bank's senior management last year. Their hard work and contributions during their terms of office are greatly appreciated.
+In 2019, banks will see a more complex operating environment and a higher level of uncertainties, and may face another
+period of challenges since the new economic normal. ICBC is now sailing against stronger currents in the middle reaches,
+where it becomes increasingly difficult to advance, and where we have no choice but to advance. Banks are born to deal
+with risks. We will maintain strategic resolve, take bold steps in a clear direction, strive to identify opportunities for growth in
+adversities, find certainty among uncertainties, and create opportunities in addressing risks and challenges.
+10
+ICBC
+瓜澍
+谷
+President: Gu Shu
+28 March 2019
+We must abide by the rules of commercial banking. Banking requires a high level of professionalism. It is our cardinal
+principle to stand in awe of, respect and comply with its rules. We continuously refresh our knowledge and further our
+understanding of the nature and laws of finance. In managing the relationships between assets and liabilities, scale and
+price, size and structure, market and risk, centralization and decentralization, inheritance and innovation, strategy and
+tactics, and others, we have struck a balance. We have made changes while following the rules, sought development
+without rash advance, forestalled systemic risks without being too conservative, and sailed through the trends without being
+led by them.
+286,049
+522,078
+9.7
+2,950
+139
+4.7
+joint ventures
+Profit before taxation
+372,413
+364,641
+7,772
+2.1
+3,089
+Less: Income tax expense
+77,190
+(3,500)
+(4.5)
+Net profit
+298,723
+287,451
+11,272
+3.9
+Attributable to: Equity holders of the parent
+73,690
+50,440
+Shares of profits of associates and
+7,633
+152,603
+153,576
+(973)
+(0.6)
+725,121
+675,654
+49,467
+7.3
+Less: Operating expenses
+2.1
+194,203
+8,009
+4.3
+Less: Impairment losses
+161,594
+127,769
+33,825
+26.5
+369,324
+361,691
+186,194
+613,804
+Operating profit
+3.28
+Item
+balance
+Corporate loans
+8,019,984
+Interest
+income
+356,176
+Average yield
+Average
+(%)
+balance
+Average
+Interest
+income
+(%)
+4.44
+7,589,729
+331,081
+4.36
+Discounted bills
+312,438
+14,493
+4.64
+Average yield
+418,935
+2018
+ANALYSIS OF THE AVERAGE YIELD OF LOANS AND ADVANCES TO CUSTOMERS BY BUSINESS LINE
+135,948
+4.08
+3,632,235
+137,050
+3.77
+Medium to long-term
+11,266,588
+504,083
+4.47
+In RMB millions, except for percentages
+2017
+9,903,229
+4.40
+loans
+Total loans and
+advances to customers
+14,600,596
+640,031
+4.38
+13,535,464
+572,688
+4.23
+435,638
+3,334,008
+16,503
+Personal loans
+Interest income on investment amounted to RMB200,157 million, representing an increase of RMB14,976 million or 8.1%
+as compared to that of last year, mainly due to the Bank's moderate increase in investment and the increase in the average
+yield of investment by 4 basis points.
+♦ Interest Income on Due from Central Banks
+Interest income on due from central banks was RMB49,246 million, recording an increase of RMB911 million or 1.9% as
+compared to that of last year.
+♦ Interest Income on Due from Banks and Other Financial Institutions
+Interest income on due from banks and other financial institutions was RMB58,660 million, representing an increase of
+RMB3,270 million or 5.9% as compared to that of last year, principally due to the increase of 25 basis points in the average
+yield of due from banks and other financial institutions as affected by the product structure adjustment by the Bank in due
+time based on the trend of interest rates in the market.
+Interest Expense
+♦ Interest Expense on Deposits
+Interest expense on deposits amounted to RMB280,212 million, representing an increase of RMB19,256 million or 7.4% over
+the previous year, principally due to the expansion in the size of due to customers and the increase in the average cost of
+deposits by 3 basis points.
+ANALYSIS OF AVERAGE DEPOSIT COST BY PRODUCTS
+♦ Interest Income on Investment
+In RMB millions, except for percentages
+2017
+Item
+Average
+balance
+Interest
+expense
+Average cost
+(%)
+Average
+balance
+Interest
+expense
+20,142
+2018
+3.94
+Discussion and Analysis
+14
+4,891,776
+214,317
+4.38
+4,230,587
+182,589
+4.32
+Overseas business
+1,376,398
+55,045
+ICBC
+4.00
+3.28
+Total loans and
+14,600,596
+640,031
+4.38
+13,535,464
+572,688
+4.23
+advances to customers
+42,515
+Short-term loans
+1,296,213
+Average yield
+Annual Report 2018
+13
+Discussion and Analysis
+ANALYSIS OF CHANGES IN INTEREST INCOME AND EXPENSE
+Item
+Assets
+In RMB millions
+Comparison between 2018 and 2017
+Increase/(decrease) due to
+Volume
+(3) Due from banks and other financial institutions includes the amount of reverse repurchase agreements, and due to banks and
+other financial institutions includes the amount of repurchase agreements.
+Interest rate
+Loans and advances to customers
+47,040
+20,303
+67,343
+Investment
+12,922
+2,054
+14,976
+Due from central banks
+Net increase/
+(decrease)
+283
+Due from central banks mainly includes mandatory reserves and surplus reserves with central banks.
+Notes: (1) The average balances of interest-generating assets and interest-bearing liabilities represent their daily average balances. The
+average balances of non-interest-generating assets, non-interest-bearing liabilities and the allowance for impairment losses
+represent the average of the balances at the beginning of the year and at the end of the year.
+Total interest-bearing liabilities
+(%)
+22,830,845
+375,576
+1.65
+21,618,065
+339,516
+1.57
+Non-interest-bearing liabilities
+(2)
+Total liabilities
+1,461,336
+23,079,401
+Net Interest Income
+572,518
+522,078
+Net interest spread
+2.16
+2.10
+2.30
+2.22
+1,729,863
+24,560,708
+628
+Net interest margin
+Due from banks and other financial institutions
+14,075
+36,060
+37,402
+13,038
+50,440
+Note: Changes in volume are measured by the changes in average balances, while the changes in interest rate are measured by the changes
+in average interest rates. Changes resulted from the combination of volume and interest rate have been allocated to the changes
+resulted from business volume.
+Interest Income
+♦ Interest Income on Loans and Advances to Customers
+Interest income on loans and advances to customers was RMB640,031 million, RMB67,343 million or 11.8% higher as
+compared to that of last year, as affected by the increase in the size of loans and advances to customers and the increase in
+the average yield of loans and advances to customers by 15 basis points.
+21,985
+ANALYSIS OF THE AVERAGE YIELD OF LOANS AND ADVANCES TO CUSTOMERS BY MATURITY STRUCTURE
+Average
+Item
+balance
+Interest
+income
+Average yield
+Average
+911
+(%)
+balance
+2018
+10,231
+In RMB millions, except for percentages
+2017
+8,328
+(858)
+4,128
+3,270
+1,903
+Changes in interest income
+59,387
+27,113
+86,500
+Liabilities
+Deposits
+Due to banks and other financial institutions
+Interest
+income
+6,573
+Changes in interest expenses
+Changes in net interest income
+13,755
+5,501
+19,256
+Debt securities issued
+6,671
+(98)
+Liabilities
+Assets
+124
+16,482
+1,401
+one year
+1,875
+(100)
+Interest rate swap contracts
+Total
+five years
+five years
+11,493
+1,713
+16,482
+1,875
+11,493
+1,401
+one year
+124
+(100)
+2017
+Fair values
+Over three
+Over
+Within
+months
+three
+months
+1,713
+Notional amounts with remaining life of
+2,012
+Over
+Assets
+Total
+but within
+Liabilities
+3,665,186
+2,012
+34,715
+13,084
+49,811
+830
+(219)
+34,715
+13,084
+months
+49,811
+(219)
+Bank
+2018
+Notional amounts with remaining life of
+Fair values
+Over three
+Over
+Within
+months
+one year
+three
+but within
+but within
+830
+but within
+Reverse repurchase agreements
+/Certificates of deposit
+one year
+(3,943)
+(379)
+11
+39,617
+(7,443)
+(606)
+(37)
+Line items in the statement
+of financial position
+Financial investments
+measured at FVTPL/
+Financial investments
+measured at FVOCI/
+Debt securities issued
+Loans and advances to
+customers
+/Due to customers
+Annual Report 2018
+193
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Net investment hedges
+The Group's consolidated statement of financial position is affected by exchange differences between the functional
+currency of the Bank and functional currencies of its branches and subsidiaries. The Group hedges such exchange exposures
+only in limited circumstances. Hedging is undertaken using deposits taken in the same currencies as the functional currencies
+of related branches and subsidiaries which are accounted for as hedges of certain net investment in foreign operations.
+As at 31 December 2018, an accumulated net loss from the hedging instrument of RMB333 million was recognised in
+"Other comprehensive income" on net investment hedges (as at 31 December 2017 net accumulated gain: RMB708 million).
+As at 31 December 2018, there was no ineffectiveness in profit or loss that arises from the net investment hedges
+(31 December 2017: Nil).
+Counterparty credit risk-weighted assets of derivative financial instruments
+The credit risk-weighted assets in respect of the above derivatives of the Group and the Bank as at the end of the reporting
+date are as follows:
+Counterparty credit default
+Group
+Bank
+2018
+2017
+five years
+2018
+13,405
+Others
+(185)
+1,416
+Interest rate swap contracts
+2,012
+five years
+16,276
+five years
+Total
+1,706
+19,994
+Assets
+213
+Liabilities
+(104)
+2,012
+16,276
+1,706
+19,994
+Over
+213
+Details of the Group's hedged risk exposures in fair value hedges are set out below:
+31 December 2018
+Carrying amount of
+hedged items
+Accumulated adjustments to the fair value
+of hedged items
+Assets
+Bonds
+24,796
+Liabilities
+(3,500)
+Assets
+(42)
+Liabilities
+(48)
+Loans
+(104)
+five years
+2,986,033
+months
+21,880
+5,770,092
+42,142
+(42,193)
+Interest rate contracts:
+Swap contracts
+293,502
+400,038
+852,201
+240,521
+1,786,262
+16,179
+(16,277)
+Forward contracts
+71,076
+42,965
+29,431
+321
+143,793
+2
+(202)
+Option contracts purchased
+7,544
+3,393
+2,869
+1,660
+15,466
+106,402
+2,655,777
+(863)
+110,560
+2017
+but within
+but within
+Over
+one year
+five years
+five years
+Total
+Assets
+Liabilities
+Exchange rate contracts:
+Forward and swap contracts
+2,893,412
+41
+2,542,823
+21,756
+Option contracts purchased
+43,801
+52,688
+3,163
+124
+5,559,756
+99,776
+41,230
+912
+(41,330)
+Option contracts written
+48,820
+60,266
+1,474
+101,765
+one year
+Option contracts written
+2,391
+three
+months
+but within
+one year
+but within
+Over
+months
+one year
+five years
+five
+years
+Total
+Assets
+Liabilities
+Exchange rate contracts:
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+2017
+Notional amounts with remaining life of
+Fair values
+Over three
+Over
+Within
+months
+one year
+three
+but within
+but within
+Over
+Within
+Over
+Over three
+Fair values
+1,768
+1,141
+11,298
+(42)
+378,120
+448,787
+886,269
+243,643
+1,956,819
+16,222
+(16,521)
+Commodity derivatives and others
+811,111
+5,998
+260,790
+10,519
+1,130,402
+12,971
+(14,859)
+4,175,264
+3,365,354
+1,040,653
+276,042
+8,857,313
+71,335
+(73,573)
+2017
+Notional amounts with remaining life of
+47,982
+risk-weighted assets
+― to stage 3
+55,843
+354,228
+343,827
+Accrued interest
+10
+360,483
+343,827
+Measured at FVTPL:
+Corporate loans and advances
+1,368
+15,046,132
+13,892,966
+924
+14,211,777
+13,125,401
+As at 31 December 2018, the Group's and the Bank's allowance for impairment losses on loans and advances to customers
+measured at FVOCI were RMB446 million and RMB432 million respectively, see Note 23(b) (31 December 2017: Not applicable).
+196
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+During the year, movements of the allowance for impairment losses on loans and advances to customers are as follows:
+(a) Movements of allowance for impairment losses of loans and advances to customers
+measured at amortised cost are as follows:
+Group
+Stage 1
+31 December 2018
+Stage 2
+Stage 3
+Transfer:
+Balance at 1 January 2018
+to stage 1
+Discounted bills
+6,245
+Corporate loans and advances
+Measured at FVOCI:
+5,636,574
+8,936,864
+4,945,458
+8,708,167
+8,263,344
+5,515,538
+4,843,049
+Discounted bills
+10,209
+351,126
+9,450
+349,024
+Accrued interest
+38,948
+to stage 2
+34,345
+14,233,448
+14,267,500
+13,455,417
+Less: Allowance for impairment losses
+of loans and advances to customers
+measured at amortised cost
+(note 23(a))
+(412,731)
+(340,482)
+14,684,281
+13,892,966
+(400,474)
+13,867,026
+(330,016)
+13,125,401
+15,097,012
+Personal loans
+three
+months
+Write-offs and transfer out
+173,241
+412,731
+Bank
+Balance at 1 January 2018
+Stage 1
+102,873
+31 December 2018
+Stage 2
+109,683
+Stage 3
+148,379
+Total
+360,935
+Transfer:
+― to stage 1
+19,389
+(17,972)
+(1,417)
+― to stage 2
+(4,883)
+5,475
+(592)
+― to stage 3
+(2,869)
+(40,413)
+43,282
+Charge
+38,077
+23,409
+83,481
+81,406
+158,084
+Balance at 31 December 2018
+(604)
+107,961
+111,867
+152,770
+Total
+372,598
+19,393
+(17,976)
+(1,417)
+(4,901)
+5,493
+(592)
+(2,869)
+(40,413)
+43,282
+Charge
+38,217
+85,074
+(338)
+(2,294)
+(106,146)
+147,374
+(108,778)
+Recoveries of loans and advances
+previously written off
+2,141
+2,141
+Other movements
+621
+646
+(1,871)
+24,083
+9,411,281
+Corporate loans and advances
+Measured at amortised cost:
+14,973
+Central counterparties credit
+risk-weighted assets
+3,639
+4,267
+1,942
+1,111
+71,738
+78,922
+40,062
+45,993
+The credit risk-weighted assets of derivative financial instruments were calculated with reference to Regulation Governing
+Capital of Commercial Banks (Provisional). The credit risk-weighted assets of the Group's derivative financial instruments
+include counterparty credit default risk-weighted assets, credit value adjustment risk-weighted assets and central
+counterparties credit risk-weighted assets.
+194
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+22. REVERSE REPURCHASE AGREEMENTS
+Reverse repurchase agreements comprise reverse repurchases of bills, securities and cash advanced as collateral on securities
+borrowing.
+Group
+Bank
+2018
+2017
+2018
+2017
+Measured at amortised cost:
+Reverse repurchase agreements-bills:
+Banks
+16,303
+18,812
+22,443
+risk-weighted assets
+21,817
+29,909
+Currency derivatives
+16,456
+20,809
+11,126
+13,535
+Interest rate derivatives
+4,119
+3,045
+952
+769
+Credit derivatives
+161,467
+1
+1
+Commodity derivatives and others
+9,706
+16,393
+7,855
+12,231
+Netting settled credit default
+risk-weighted assets
+15,374
+15,567
+1,883
+3,374
+Credit value adjustment
+29
+207,123
+164,130
+208,641
+Reverse repurchase agreements-securities:
+Banks
+2,470
+Other financial institutions
+142,502
+144,972
+Cash advanced as collateral on
+securities borrowing
+29,822
+174,794
+734,049
+986,631
+521,393
+750,763
+Measured at FVTPL:
+(i)
+In accordance with master repurchase agreements and related supplementary agreements, the Group offsets
+reverse repurchase agreements and repurchase agreements which meet the criteria for offsetting (note 3(13)), and
+presents net positive (or negative) amounts as reverse repurchase agreements (or repurchase agreements) in the
+financial statement. As at 31 December 2018, reverse repurchase agreements and repurchase agreements which
+meet the criteria for offsetting were RMB467,516 million and RMB476,199 million respectively (31 December 2017:
+RMB542,062 million and RMB560,138 million respectively), and the net reverse repurchase agreements and net
+repurchase agreements were RMB145,648 million and RMB154,331 million, respectively (31 December 2017:
+RMB137,155 million and RMB155,231 million, respectively).
+As part of the reverse repurchase agreements, the Group has received securities that is allowed to sell or repledge
+in the absence of default by their owners. As at 31 December 2018, the Group had received securities with a fair
+value of approximately RMB227,372 million on such terms (31 December 2017: RMB157,222 million). Of these,
+securities with a fair value of approximately RMB202,508 million have been repledged under repurchase agreements
+(31 December 2017: RMB136,694 million). The Group has an obligation to return the securities to its counterparties.
+If the collateral received declines in value, the Group may, in certain circumstances, require additional collateral.
+Annual Report 2018
+195
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+23. LOANS AND ADVANCES TO CUSTOMERS
+Group
+Bank
+2018
+2017
+2018
+2017
+(ii)
+45,656
+750,763
+986,631
+161,467
+207,123
+164,130
+208,641
+Reverse repurchase agreements-securities:
+Banks
+52,633
+189,140
+28,618
+159,825
+Other financial institutions
+344,993
+532,323
+521,393
+328,594
+397,626
+721,463
+357,212
+542,122
+Cash advanced as collateral on
+securities borrowing
+58,045
+Accrued interest
+202
+Less: Allowance for impairment losses
+(40)
+88
+(37)
+559,255
+382,297
+one year
+Fair values
+Within
+Over
+Over three
+Fair values
+Notional amounts with remaining life of
+2017
+(42,120)
+38,295
+6,063,613
+36,655
+526,300
+(4,956)
+1,044
+231,462
+165
+162,337
+2,827,128
+2,673,530
+68,960
+Commodity derivatives and others
+(1,411)
+1,659
+713,103
+34,267
+432,886
+151,375
+94,575
+(3)
+3
+Within
+months
+one year
+three
+months
+50,692
+153
+32,173
+18,366
+Option contracts written
+2,292
+86,402
+230
+50,274
+35,898
+Option contracts purchased
+(44,370)
+44,944
+510
+3,528,092
+77,392
+1,707,181
+1,739,995
+Forward and swap contracts
+Exchange rate contracts:
+Liabilities
+Assets
+Total
+Over
+five years
+five years
+one year
+but within
+but within
+3,524
+(362)
+295
+(1,408)
+2,438,794
+2,456,198
+Forward and swap contracts
+Exchange rate contracts:
+Liabilities
+Assets
+Total
+five years
+five years
+one year
+months
+Over
+but within
+but within
+three
+one year
+months
+Within
+Over
+Over three
+Fair values
+Notional amounts with remaining life of
+2018
+Bank
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+189
+90,537
+2,388
+4,987,917
+Option contracts purchased
+1,656
+712,593
+33,972
+432,671
+151,375
+94,575
+Forward contracts
+Swap contracts
+Interest rate contracts:
+(35,753)
+35,592
+5,119,048
+2,388
+215
+93,249
+2,509,995
+(652)
+67,091
+1,346
+38,133
+27,612
+Option contracts written
+(35,101)
+34,860
+732
+64,040
+1,366
+36,489
+26,185
+2,513,416
+Annual Report 2018
+1,794,259
+77,775
+Fair values
+Over three
+Over
+Within
+three
+months
+but within
+one year
+but within
+Over
+months
+one year
+five years
+five years
+Total
+Assets
+Liabilities
+Interest rate swap contracts
+1,374
+344
+15,216
+1,855
+18,789
+91
+(30)
+Currency swap contracts
+21,142
+58,117
+Notional amounts with remaining life of
+2018
+Among the above derivative financial instruments, those designated as hedging instruments in cash flow hedges are set out below.
+Group
+The Group's cash flow hedges consist of interest rate swap contracts, currency swap contracts and equity derivatives that are
+used to protect against exposures to variability of future cash flows.
+47,236
+(44,732)
+Interest rate contracts:
+Swap contracts
+8,512
+Commodity derivatives and others
+66,703
+1,869,474
+30,746
+158,836
+1,979,210
+80,853
+35,182
+155,293
+1,451
+1,541
+(1,114)
+225,621
+5,169
+(836)
+158,710
+38,706
+4,046,100
+53,856
+(46,682)
+190
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Cash flow hedges
+82
+1,789,628
+824
+692
+Liabilities
+Interest rate swap contracts
+1,953
+Currency swap contracts
+1,617
+2,383
+417
+6,441
+2,081
+12,858
+152
+(22)
+730
+2,764
+36
+(45)
+Equity derivative
+47
+8
+46
+101
+41
+3,617
+2,808
+7,217
+2,081
+15,723
+229
+Assets
+Total
+five years
+five years
+(613)
+Equity derivative
+51
+43
+94
+16
+(9)
+22,567
+58,461
+16,800
+2,679
+100,507
+799
+81,624
+(652)
+Notional amounts with remaining life of
+Fair values
+Over three
+Over
+Within
+months
+one year
+three
+but within
+but within
+Over
+months
+one year
+2017
+(78,556)
+89,013
+(13,407)
+25
+37
+Debt securities issued
+Loans and advances to
+customers
+Others
+(65,120)
+80
+(3,866)
+27,376
+(70,988)
+(42)
+(3,794)
+Placements from banks and
+other financial institutions
+/Certificates of deposit
+/Due to customers
+/Other liabilities
+There was no ineffectiveness recognised in profit or loss that arises from the cash flow hedges for the current year (2017: Nil).
+Fair value hedges
+Fair value hedges are used by the Group to protect against changes in the fair value of financial assets and financial liabilities
+due to movements in market interest rates. Interest rate swaps are used as hedging instruments to hedge the interest risk of
+financial assets and financial liabilities, respectively.
+The effectiveness of hedges based on changes in fair value of the derivatives and the hedged items attributable to the
+hedged risk recognised in profit or loss during the year is presented as follows:
+(Loss)/gain arising from fair value hedges, net:
+Hedging instruments
+Hedged items attributable to the hedged risk
+Group
+2018
+2017
+(71)
+104
+63
+7,966
+Loans
+measured at amortised cost/
+Financial investments
+323
+4,675
+23
+(56)
+Annual Report 2018
+191
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Details of the Group's hedged risk exposures in cash flow hedges and the corresponding effect on equities are as follows:
+Effect of hedging
+instruments
+31 December 2018
+(110)
+Accumulated effect
+on other
+comprehensive
+income during
+the year
+of hedging
+instruments on
+other comprehensive
+income
+(147)
+35
+Carrying amount of
+hedged items
+Assets
+Bonds
+19,410
+Line items in the statement
+of financial position
+Financial investments
+measured at FVOCI/
+Liabilities
+(5,868)
+920
+(8)
+Among the above derivative financial instruments, those designated as hedging instruments in fair value hedges are set out
+below:
+Notes to the Financial Statements
+29,612
+Option contracts written
+2,498
+118,173
+117
+3,769
+67,284
+47,003
+Option contracts purchased
+(49,569)
+49,806
+3,916,083
+34,293
+97,581
+1,833,069
+1,951,140
+Forward and swap contracts
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+At the end of the reporting period, the Group and the Bank had derivative financial instruments as follows:
+Group
+2018
+Notional amounts with remaining life of
+Fair values
+Over three
+Over
+ICBC
+192
+(283)
+709
+Group
+2018
+Notional amounts with remaining life of
+Over three
+Fair values
+Over
+Within
+three
+months
+months
+but within
+one year
+one year
+but within
+Over
+five years
+five years
+(6)
+Total
+1,713
+5,366
+30,670
+12,074
+49,823
+Assets
+709
+Liabilities
+(283)
+1,713
+5,366
+30,670
+12,074
+49,823
+Interest rate swap contracts
+1,953
+1,479
+(45)
+161,207
+24,739
+33,737
+102,731
+Forward contracts
+(14,671)
+16,042
+1,072,116
+193,588
+558,629
+224,343
+95,556
+Swap contracts
+Interest rate contracts:
+(50,194)
+52,304
+4,106,157
+34,410
+101,701
+1,942,291
+2,027,755
+(625)
+71,901
+351
+41,938
+(67)
+Bank
+31
+(215)
+Option contracts purchased
+3,588
+20,554
+1,090,185
+6,462,553
+5,625
+235,087
+34,722
+730,861
+2,482,403
+3,014,202
+265,794
+784,044
+Commodity derivatives and others
+(14,955)
+16,155
+1,266,211
+195,052
+2018
+594,438
+202,403
+(69)
+18,348
+397
+8,653
+8,770
+528
+Option contracts written
+82
+14,540
+1,067
+2,417
+7,468
+274,318
+Notional amounts with remaining life of
+Write-offs and transfer out
+Over three
+Over three
+Over
+Within
+months
+one year
+three
+but within
+but within
+Over
+months
+one year
+five years
+five years
+Fair values
+Total
+Liabilities
+Interest rate swap contracts
+1,953
+190
+323
+2,466
+8
+(11)
+Currency swap contracts
+1,479
+730
+2,209
+15
+Assets
+months
+Notional amounts with remaining life of
+(603)
+Over
+Within
+months
+one year
+three
+but within
+but within
+months
+one year
+five years
+Over
+five years
+Total
+Assets
+2017
+Liabilities
+20,828
+56,262
+1,541
+824
+79,455
+675
+(603)
+20,828
+56,262
+1,541
+824
+79,455
+675
+Currency swap contracts
+(338)
+Interest rate swap contracts
+(104,424)
+― to stage 3
+― to stage 2
+to stage 1
+Stage 1
+23
+Balance at 1 January 2018
+Transfer:
+446
+248
+0
+198
+2
+2
+(27)
+(200)
+173
+| | |
+Charge/(reverse)
+| | |OI
+Other movements
+IIIOI
+(2,294)
+ICBC
+198
+432
+248
+0
+184
+Balance at 31 December 2018
+(39)
+(200)
+0
+161
+471
+Total
+Stage 3
+448
+31 December 2018
+Stage 2
+Total
+471
+3,524
+23
+400,474
+169,073
+78,524
+152,877
+Balance at 31 December 2018
+(506)
+(1,770)
+636
+628
+Other movements
+2,134
+previously written off
+Recoveries of loans and advances
+Stage 3
+448
+144,967
+(107,056)
+Annual Report 2018
+197
+2,134
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+Stage 2
+Stage 1
+Bank
+Balance at 31 December 2018
+Other movements
+to stage 3
+Charge/(reverse)
+31 December 2018
+― to stage 2
+― to stage 1
+Transfer:
+Balance at 1 January 2018
+Group
+(b) Movements of the allowance for impairment losses on loans and advances to
+customers measured at FVOCI are as follows:
+-
+(In RMB millions, unless otherwise stated)
+3,557,040
+3,618,546
+Accrued interest
+Corporate entities
+Including: Huarong bonds (ii)
+Policy banks
+Public sector entities
+Including: Special government bond (i)
+85,000
+Governments and central banks
+Banks and other financial institutions
+85,000
+35,914
+484,521
+8,560
+4,003
+264,929
+236,600
+90,309
+90,309
+18,600
+61,622
+60,698
+4,491,205
+Debt securities (analysed by type of issuers):
+501,634
+Bank
+(1)
+2018
+2,701
+190
+2,891
+Transfer:
+to stage 1
+- to stage 2
+to stage 3
+Charge/(Reverse)
+Other movements
+Balance at 31 December 2018
+4,361,462
+(1,487)
+Group
+89
+90
+||||6
+196
+(1,398)
+200
+1,693
+Allowance for impairment losses on financial investments measured at FVOCI is recognised in other comprehensive income
+without decreasing the carrying amount of financial investments presented in the statement of financial position, and any
+impairment loss or gain is recognised in the profit or loss. As at 31 December 2018, the financial investments measured at
+FVOCI included credit-impaired financial investments whose impairment provision have been fully charged.
+Annual Report 2018
+203
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+(c) Financial investments measured at amortised cost
+194
+1,407
+Other investments (iii)
+Other investments:
+30,331
+129
+Market value of listed securities
+123,618
+61,497
+204
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+During the year, movements of the allowance for impairment losses on financial investments measured at amortised cost are
+as follows:
+Group
+Balance at 1 January 2018
+Stage 1
+1,171
+Stage 2
+4,362,174
+2
+Total
+1,256
+Transfer:
+to stage 1
+to stage 2
+(11)
+11
+to stage 3
+(2)
+2
+Charge
+325
+Stage 3
+83
+Accrued interest
+4,519,182
+29,560
+3,000
+30,460
+3,000
+4,521,665
+4,364,462
+Less: Allowance for impairment losses
+(2,483)
+(2,288)
+4,519,182
+4,362,174
+Analysed into:
+Debt securities:
+2,170
+Listed in Hong Kong
+Unlisted
+Balance at 1 January 2018
+36,855
+86,296
+14,776
+46,603
+4,366,471
+4,298,625
+4,489,622
+4,360,004
+Unlisted
+29,560
+2,170
+Listed outside Hong Kong
+Total
+Charge/(Reverse)
+Stage 2
+Equity investments (i)
+Other investments
+Analysed into:
+Debt securities:
+Listed in Hong Kong
+Listed outside Hong Kong
+Unlisted
+Equity investments:
+Listed outside Hong Kong
+Unlisted
+Other investments:
+Unlisted
+Accrued interest
+2018
+Bank
+413,941
+380,287
+223,877
+202,787
+201,183
+195,339
+302,685
+242,056
+235,641
+176,687
+22,610
+Group
+20,606
+Corporate entities
+Public sector entities
+Listed in Hong Kong
+1,462
+Listed outside Hong Kong
+1,104
+Unlisted
+532,504
+293,826
+520,341
+290,843
+533,608
+295,288
+520,341
+Banks and other financial institutions
+290,843
+440,938
+740,645
+398,329
+Annual Report 2018
+201
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+(b) Financial investments measured at FVOCI
+Debt securities (analysed by type of issuers):
+Governments and central banks
+Policy banks
+805,347
+Stage 3
+1,399,937
+29,919
+Transfer:
+to stage 1
+Stage 1
+2,933
+Stage 2
+Stage 3
+Total
+190
+3,123
+to stage 2
+― to stage 3
+841
+(1)
+Balance at 1 January 2018
+1
+91
+Other movements
+166
+||||6
+(1,385)
+172
+Balance at 31 December 2018
+1,622
+92
+196
+1,910
+Bank
+Stage 1
+(1,476)
+1,217,762
+Group
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+28,075
+307
+1,430,163
+1,245,837
+123,358
+58,363
+216,471
+140,571
+1,060,108
+1,018,828
+1,399,937
+1,217,762
+During the year, movements of the allowance for impairment losses on financial investments measured at FVOCI are as
+follows:
+688
+327
+27,748
+29,919
+28,075
+307
+307
+1,430,163
+1,245,837
+(i)
+The Group designates part of non-trading equity investments as financial investments measured at FVOCI. As at
+31 December 2018, the fair value of such equity investments was RMB29,919 million. During the year, dividend
+income recognised for such equity investments was RMB229 million (including the dividend income of RMB1 million
+for the termination of such equity investments during the year). The value of the Group disposal of such equity
+investments was RMB25 million and the cumulative loss of transferring into retained earnings from other
+comprehensive income after disposal was RMB1 million during the year.
+202
+ICBC
+Notes to the Financial Statements
+29,231
+38
+24
+Other movements
+Bank
+90,309
+90,309
+85,000
+85,000
+101,820
+56,322
+277,129
+231,631
+2017
+Group
+Bank
+Group
+22,004
+255,125
+209,627
+277,129
+231,631
+(i)
+(ii)
+As at 31 December 2017, the Bank received accumulated early repayments on the Huarong bonds amounting to
+RMB222,687 million.
+Others include financial and corporate bonds, debt investment plans, asset backed securities, asset management plans,
+wealth management products and trust plans with fixed or determinable payments. They will mature from January
+2018 to November 2032 and bear interest rates ranging from 2.00% to 7.50% per annum. During the year of 2017,
+the amounts which have been matured have been repaid without overdue history.
+Annual Report 2018
+207
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+22,004
+(In RMB millions, unless otherwise stated)
+2017
+Analysed into:
+Unlisted
+2017
+Group
+3,542,351
+(167)
+Bank
+3,439,576
+(105)
+3,542,184
+3,439,471
+2017
+Group
+Bank
+27,532
+4,793
+Listed outside Hong Kong
+Unlisted
+92,886
+3,421,766
+3,386,243
+3,542,184
+120,395
+3,439,471
+Market value of listed debt securities
+53,554
+As at 31 December 2017, the total carrying amount of held-to-maturity investments that the Group disposed prior to their
+maturity with remaining maturity more than three months was RMB11,661 million, which accounted for 0.33% of the total
+amount of the Group's held-to-maturity investments.
+(f) Receivables
+The receivables are stated at amortised cost and comprise the following:
+Huarong bonds (i)
+Special government bond
+Others (ii)
+48,435
+Listed outside Hong Kong
+(g) Movements of allowance for impairment losses of held-to-maturity investments and
+available-for-sale equity investments measured at cost are as follows:
+Bank
+Available-
+€
+(194)
+(195)
+Other movements
+(5)
+(5)
+At 31 December 2017
+167
+479
+646
+105
+412
+(200)
+517
+Listed investments, at cost
+208
+ICBC
+Bank
+2018
+2017
+2,712
+2,712
+119,398
+117,589
+122,110
+120,301
+25. INVESTMENTS IN SUBSIDIARIES
+Group
+Available-
+(194)
+Dispose
+Held-to-
+for-sale
+maturity
+equity
+investments
+investments
+Total
+Held-to-
+maturity
+investments
+for-sale
+equity
+investments
+Total
+(6)
+At 1 January 2017
+678
+785
+39
+606
+645
+Charge
+70
+70
+67
+67
+Reverse
+(4)
+107
+1,204
+Listed in Hong Kong
+Less: Allowance for impairment losses
+6
+1,392
+2
+8
+66
+2,288
+(i)
+(ii)
+(iii)
+The special government bond represents a non-negotiable bond with a nominal value of RMB85,000 million issued by
+the Ministry of Finance of the People's Republic of China (the "MOF") to the Bank in 1998. The bond will mature in
+2028 and bears interest at a fixed rate of 2.25% per annum.
+The Huarong bonds are a series of long-term bonds issued by China Huarong Asset Management Co., Ltd.
+("Huarong") in the year of 2000 and 2001 to the Bank, with an aggregate amount of RMB312,996 million. The
+proceeds from the issuance of the bonds were used to purchase non-performing loans of the Bank. The bonds are
+non-negotiable, with a tenure of 10 years and bear interest at a fixed rate of 2.25% per annum. In 2010, the Bank
+received a notice from the MOF that the maturity dates of the Huarong bonds were extended for another ten years
+and the interest rate remains unchanged. Additionally, the MOF will continue providing funding in support of the
+repayment of the principal and interest of the bonds. As at 31 December 2018, the Bank received accumulated early
+repayments amounting to RMB222,687 million.
+Other investments include debt investment plans, asset management plans and trust plans with fixed or determinable
+payments. They will mature from January 2019 to November 2032 and bear interest rates ranging from 2.00% to
+7.50% per annum. During the year, the amounts which have been matured have been repaid without overdue history.
+Annual Report 2018
+1,204
+205
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+(d) Available-for-sale financial assets
+Available-for-sale financial assets comprise the following:
+(i)
+Debt securities, at fair value (i)
+Other debt instruments, at fair value
+Equity investments:
+At fair value (i)
+At cost (ii)
+Debt for equity swaps
+Others
+Less: Allowance for impairment losses of equity investments, at cost
+Notes to the Financial Statements
+Debt securities analysed into:
+38
+336
+21
+2
+23
+Balance at 31 December 2018
+1,504
+854
+125
+2,483
+Bank
+Stage 1
+Stage 2
+Stage 3
+830
+Total
+1,052
+Funds and other investments:
+1,076
+Transfer:
+to stage 1
+- to stage 2
+to stage 3
+Charge
+Other movements
+Balance at 31 December 2018
+830
+2
+Balance at 1 January 2018
+Analysed into:
+Listed in Hong Kong
+Unlisted
+1,151,886
+1,466,995
+1,324,817
+1,401
+3
+3,262
+1,430
+18,631
+32,552
+23,294
+33,985
+280,222
+1,186,773
+172,931
+1,433
+284,885
+174,364
+When impairment of an available-for-sale investment measured at fair value occurs, any impairment recognised is
+recorded in the carrying amount directly. As at 31 December 2017, the available-for-sale financial assets measured at
+fair value include impaired debt securities whose carrying amount was RMB85 million, and impaired equity investments
+whose impairment provision has been fully charged, with the accrual of impairment recognised in profit or loss of
+RMB22 million on available-for-sale debt securities; and the accrual of impairment recognised in profit or loss of
+RMB84 million on available-for-sale equity investments.
+Certain available-for-sale unlisted equity investments which do not have any quoted market prices and whose
+fair values cannot be measured reliably are stated at cost less any impairment. There is no active market for these
+investments and it is the Group's intention to dispose of them as opportunities arise. During the year of 2017, the
+carrying amount of these equity investments decreased by RMB71 million. The gain on disposal of these equity
+investments was RMB743 million.
+206
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+(e) Held-to-maturity investments
+Held-to-maturity investments are stated at amortised cost and comprise the following:
+Debt securities
+4,663
+Listed outside Hong Kong
+126,430
+92,538
+187,684
+Equity investments analysed into:
+Listed in Hong Kong
+Listed outside Hong Kong
+Unlisted
+(!!)
+Market value of listed securities:
+Debt securities
+Equity investments
+2017
+Group
+Bank
+1,466,995
+46,501
+1,324,817
+20,292
+33,417
+3,002
+568
+1,292
+720
+2,189
+260
+(479)
+(412)
+1,496,453
+1,358,802
+6,164
+1,292
+Unlisted investments, at cost
+(f)
+1,128
+2,228
+1,127
+2,199
+Public sector entities
+7,229
+4,670
+7,175
+4,618
+Banks and other financial institutions
+Policy banks
+16,984
+14,708
+7,957
+Corporate entities
+8,830
+38,724
+8,015
+37,927
+67,312
+78,542
+55,178
+8,452
+7,371
+24,153
+24,468
+1,496,453
+1,358,802
+Held-to-maturity investments
+3,542,184
+3,439,471
+Receivables
+277,129
+231,631
+6,754,692
+5,756,704
+6,348,656
+5,428,233
+(a) Financial investments measured at FVTPL
+Group
+Bank
+2018
+2017
+2018
+2017
+Financial investments held for trading
+Debt securities (analysed by type of issuers):
+Governments and central banks
+33,141
+60,072
+(d)
+Equity investments
+7,331
+5,576
+8,539
+5,479
+6,766
+92,506
+59,777
+83,254
+47,414
+Other investments
+493,230
+Corporate entities
+293,824
+585,736
+353,601
+573,504
+338,257
+200
+ICBC
+Financial investments measured at
+FVTPL (mandatory)
+Debt securities (analysed by type of issuers):
+Notes to the Financial Statements
+490,250
+6,966
+39,651
+6,966
+Funds investments
+1,464
+72,796
+87,337
+55,178
+60,072
+Financial investments designated as at
+FVTPL
+Debt securities (analysed by type of issuers):
+Governments and central banks
+9,155
+10,590
+Policy banks
+38,077
+30,729
+38,077
+30,729
+Public sector entities
+47
+2,953
+47
+2,953
+Banks and other financial institutions
+39,651
+5,484
+Available-for-sale financial assets
+4,362,174
+4,519,182
+(3,189)
+(3,189)
+Recoveries of loans and advances previously written off
+1,426
+838
+Write-offs and other movements
+(57,031)
+(15,170)
+2,264
+(72,201)
+At 31 December 2017
+(169,935)
+115,746
+340,482
+Bank
+Individually
+Collectively
+assessed
+assessed
+Total
+At 1 January 2017
+Impairment loss:
+― impairment allowances charged
+-impairment allowances transferred
+reversal of impairment allowances
+224,736
+(119,167)
+(50,768)
+(1,399)
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+During the year of 2017, movements of the allowance for impairment losses on loans and advances to customers are as
+follows:
+Group
+Individually
+assessed
+Collectively
+assessed
+Total
+At 1 January 2017
+Impairment loss:
+- impairment allowances charged
+-impairment allowances transferred
+reversal of impairment allowances
+Accreted interest on impaired loans
+65,557
+223,955
+289,512
+108,983
+15,113
+124,096
+158,352
+135,679
+294,031
+1,399
+61,458
+218,152
+279,610
+108,512
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+24. FINANCIAL INVESTMENTS
+Group
+Bank
+2018
+2017
+2018
+2017
+Financial investments measured
+at FVTPL
+(a)
+805,347
+440,938
+740,645
+398,329
+Financial investments measured
+at FVOCI
+(b)
+1,430,163
+1,245,837
+Financial investments measured
+at amortised cost
+(c)
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+199
+330,016
+13,959
+122,471
+156,823
+134,057
+290,880
+1,402
+(1,402)
+(49,713)
+(118,696)
+(168,409)
+Accreted interest on impaired loans
+(3,166)
+(3,166)
+Recoveries of loans and advances previously written off
+1,383
+836
+Write-offs and other movements
+(56,473)
+(14,645)
+2,219
+(71,118)
+At 31 December 2017
+111,714
+218,302
+Annual Report 2018
+Group
+290,843
+2018
+2,193
+Listed outside Hong Kong
+8,135
+12,860
+1,428
+1,902
+Unlisted
+231,343
+122,791
+215,027
+103,391
+243,749
+138,319
+219,012
+2,557
+107,486
+3,805
+3,615
+5
+Listed outside Hong Kong
+3,688
+2,967
+1,013
+Unlisted
+20,497
+749
+274
+27,990
+7,331
+Bank
+Equity investments:
+2,668
+Listed in Hong Kong
+Listed in Hong Kong
+2017
+4,271
+2018
+2017
+Policy banks
+Public sector entities
+Banks and other financial institutions
+Corporate entities
+10,086
+8
+69,785
+69,785
+4,052
+709
+83,931
+10,086
+Equity investments
+Analysed into:
+80,580
+398,329
+740,645
+440,938
+805,347
+146,815
+111,963
+40,378
+Funds and other investments
+1,292
+22,506
+30,091
+Debt securities:
+and motor
+At 1 January 2017
+Leasehold
+improvements
+vehicles
+Total
+in progress
+Cost:
+Additions
+16,716
+9,295
+72,435
+235,729
+853
+Construction
+6,720
+378
+137,283
+buildings
+113,323
+Office
+equipment
+4,454
+86,871
+29,531
+2,057
+15,962
+247,744
+At 31 December 2018
+90,444
+Properties and
+35,081
+15,500
+147,581
+290,404
+212
+ICBC
+Bank
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+1,798
+12,405
+16,145
+3,072
+(1,347)
+Disposals
+2,162
+67
+(5,333)
+3,104
+CIP transfer in/(out)
+34,220
+(97)
+At 31 December 2017
+438
+11,993
+922
+Additions
+371,420
+122,507
+75,993
+10,073
+4,722
+CIP transfer in/out)
+(136)
+(13,052)
+(3,132)
+60
+Disposals
+(995)
+(90)
+(103)
+(6,265)
+(7,453)
+(8,345)
+At 31 December 2017 and 1 January 2018
+20,214
+9,570
+70,684
+240,681
+Additions
+1,421
+7,535
+(22,977)
+140,213
+Carrying amount:
+(101)
+23,491
+(101)
+(4,200)
+(4,178)
+(9,871)
+At 31 December 2018
+151,145
+35,122
+10,954
+74,860
+171,072
+443,153
+At 31 December 2017 and 1 January 2018
+Accumulated depreciation and impairment:
+At 1 January 2017
+50,814
+41
+7,483
+(471)
+(921)
+Disposals
+5,340
+23,009
+142,517
+29,572
+10,375
+72,437
+127,762
+382,663
+Additions
+55,597
+5,450
+680
+6,509
+42,148
+70,361
+CIP transfer in/(out)
+4,099
+(9,553)
+114
+15,574
+11,276
+125,211
+Depreciation charge for the year
+868
+6,868
+6,908
+20,315
+Impairment charge for the year
+3,088
+3,088
+Disposals
+5,671
+(616)
+(3,983)
+(944)
+(5,573)
+At 31 December 2018
+60,701
+41
+9,156
+59,360
+(30)
+152,749
+Depreciation charge for the year
+14,439
+5,654
+936
+7,283
+4,085
+17,958
+Impairment charge for the year
+558
+558
+134,919
+Disposals
+(6,405)
+(1,480)
+(8,808)
+At 31 December 2017 and 1 January 2018
+55,646
+41
+8,318
+56,475
+(822)
+139,838
+10,584
+Total
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+210
+The market value of the Group's investment in Standard Bank amounts to RMB27,677 million as at 31 December 2018
+(31 December 2017: RMB33,564 million).
+Standard Bank, a listed commercial bank in Republic of South Africa and a strategic partner for the Group, enables the
+Group to widen its customer base in Africa.
+(i)
+Republic of
+South Africa
+Johannesburg, Commercial banking
+20.08
+20.07
+Principal
+activities
+registration
+2018
+2017
+2018
+20.08
+incorporation/
+The summarised financial information of Standard Bank, being consistent with the Group's accounting policies, and
+reconciled to the carrying amounts using the equity method in the Group's consolidated financial statements is as follows:
+2018
+2017
+Gross amounts of the associate
+(2,500)
+2,153
+13,891
+13,362
+54,379
+51,265
+100,307
+94,818
+31 December
+970,202
+1,070,509
+1,013,117
+Other comprehensive income
+Profit from continuing operations
+Revenue
+Net assets
+Liabilities
+Assets
+918,299
+Total comprehensive income
+31 December 31 December
+Voting
+rights %
+21,614
+19,385
+Goodwill
+Share of net assets
+2017
+2018
+Group
+32,441
+29,124
+3,855
+2,025
+(b)
+28,586
+27,099
+흐흐
+2017
+2018
+10,087
+11,175
+29,472
+32,789
+equity interest %
+Percentage of
+2017
+34,242
+34,242
+2018
+Bank
+("Standard Bank") (i)
+Standard Bank Group Limited
+Place of
+Name
+(i)
+(a) Interest in associates
+Shares listed outside Hong Kong, at cost
+32,441
+29,124
+(348)
+(348)
+Less: Allowance for impairment losses
+Particulars of the Group's only material associate are as follows:
+15,515
+11,391
+Dividends received from the associate
+All of the above joint ventures are accounted for using the equity method in the consolidated financial statements.
+578
+Total comprehensive income
+Other comprehensive income
+Profit from continuing operations
+3,855
+2,025
+Aggregate amounts of the Group's share of those joint ventures:
+in the consolidated financial statements
+Aggregate carrying amount of individually immaterial joint ventures
+2017
+2018
+The Group has interests in a number of individually immaterial joint ventures. The following tables illustrate the summarised
+financial information of the joint ventures that are not individually material to the Group:
+(b) Interest in joint ventures
+All of the above associates are accounted for using the equity method in the consolidated financial statements.
+28,586
+27,099
+150
+138
+0
+(20)
+vessels
+vehicles
+Aircraft and
+and motor
+Leasehold
+improvements
+in progress
+Construction
+Properties and
+buildings
+Interest in associates in the consolidated financial statements
+Office
+equipment
+Group
+27. PROPERTY AND EQUIPMENT
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+211
+Annual Report 2018
+118
+150
+Cost:
+(348)
+686
+1,088
+(348)
+26,359
+in the consolidated financial statements
+Carrying amount of the Group's interest in Standard Bank
+11,139
+10,051
+Goodwill
+17,109
+16,308
+28,248
+Group's share of net assets of the associate
+20.08%
+Group's effective interest
+85,254
+81,215
+Gross amounts of net assets of the associate attribute to the parent company
+Reconciled to the Group's interests in the associate
+7,176
+7,356
+20.07%
+At 1 January 2017
+(ii)
+2018
+Less: Allowance for impairment losses
+Carrying amount of individually immaterial associates
+28,248
+26,359
+Carrying amount of material associates-Standard Bank
+2017
+2018
+(iii) Reconciliation of carrying amounts to the Group's total interests in the associates:
+The following tables illustrate the summarised financial information of the associates that are not individually material
+to the Group:
+(245)
+(285)
+40
+287
+Total comprehensive income
+Other comprehensive income
+Profit from continuing operations
+Aggregate amounts of the Group's share of those associates:
+2017
+287
+6,130
+214
+CIP transfer in/out)
+Notes to the Financial Statements
+215
+Annual Report 2018
+433
+1,674
+1,217
+5,492
+973
+4,053
+575
+2,272
+(38)
+(367)
+Others
+financial assets
+Change in fair value of available-for-sale
+900
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Bank
+As at 31 December 2018
+Deductible/
+Deferred
+As at 31 December 2017
+Change in fair value of financial instruments
+36,719
+146,986
+50,910
+203,782
+Allowance for impairment losses
+Deferred income tax assets:
+tax assets/
+(liabilities)
+3,592
+temporary
+differences
+differences
+temporary
+income
+Deferred
+(taxable)
+income
+(taxable)
+Deductible/
+tax assets/
+(liabilities)
+measured at FVTPL
+measured at FVOCI
+143
+193,552
+58,375
+234,902
+(3,373)
+(13,561)
+3,101
+11,788
+Others
+6,910
+27,640
+6,508
+26,033
+Accrued staff costs
+9,748
+38,471
+financial assets
+Change in fair value of available-for-sale
+48,392
+As at 31 December 2018
+Taxable/
+(deductible)
+Deferred
+income tax
+572
+measured at FVTPL
+Change in fair value of financial instruments
+(502)
+(2,012)
+(401)
+(944)
+Allowance for impairment losses
+Change in fair value of financial instruments
+Deferred income tax liabilities:
+tax liabilities/
+temporary
+differences
+liabilities/
+(assets)
+differences
+temporary
+Deferred
+income
+(deductible)
+As at 31 December 2017
+Taxable/
+(assets)
+442
+103
+(9,495)
+9,748
+financial assets
+available-for-sale
+Change in fair value of
+(3,819)
+(8,252)
+4,433
+4,433
+measured at FVOCI
+financial instruments
+Change in fair value of
+147
+1,938
+(1,791)
+577
+(2,368)
+measured at FVTPL
+(9,748)
+Accrued staff costs
+6,910
+6,910
+losses
+Allowance for impairment
+Deferred income tax liabilities:
+ICBC
+216
+58,375
+(8,263)
+6,508
+3,101
+financial instruments
+(11)
+58,610
+10,218
+48,392
+4,329
+7,702
+(3,373)
+Others
+(402)
+(1,217)
+8,028
+Change in fair value of
+52,438
+7,709
+(16,584)
+2,622
+10,036
+Others
+6,910
+27,640
+6,508
+26,033
+(4,126)
+Accrued staff costs
+40,057
+financial assets
+Change in fair value of available-for-sale
+(3,923)
+(15,664)
+measured at FVOCI
+Change in fair value of financial instruments
+(2,369)
+10,116
+(3,819)
+224,629
+188,604
+44,729
+7,254
+37,475
+losses
+Allowance for impairment
+2018
+As at
+31 December
+Recognised in
+equity
+56,220
+Recognised in
+profit or loss
+Impact of
+adopting
+IFRS 9
+2017
+31 December
+As at
+Deferred income tax assets:
+Group
+(b) Movements of deferred income tax
+47,250
+As at
+1 January
+2018
+15,664
+(14,248)
+Change in fair value of financial instruments
+15,394
+1,707
+20,173
+85,113
+At 31 December 2017
+Carrying amount:
+126,830
+58,081
+8,616
+41
+60,092
+At 31 December 2018
+(4,520)
+(3,878)
+(30)
+(612)
+Disposals
+122,387
+At 31 December 2018
+84,769
+23,346
+18,148
+Held in the PRC (other than Hong Kong)
+Long-term leases (over 50 years):
+2017
+2018
+2017
+2018
+Bank
+13,056
+Group
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+213
+Annual Report 2018
+124,548
+14,949
+1,484
+The carrying value of the Group's and the Bank's properties and buildings is analysed based on the remaining terms of the
+land leases as follows:
+17,656
+6,669
+5,604
+At 1 January 2017
+Accumulated depreciation and impairment:
+251,378
+73,030
+10,100
+23,387
+144,861
+At 31 December 2018
+(4,967)
+(3,898)
+(48)
+(149)
+(872)
+Disposals
+114
+(4,213)
+4,099
+50,095
+41
+7,096
+54,408
+Depreciation charge for the year
+118,294
+55,290
+7,863
+41
+55,100
+At 31 December 2017 and 1 January 2018
+(6,887)
+783
+(6,205)
+(584)
+Disposals
+13,541
+7,087
+865
+5,589
+Depreciation charge for the year
+111,640
+(98)
+18,121
+17,630
+Held in Hong Kong
+(taxable)
+As at 31 December 2017
+As at 31 December 2018
+Deductible/
+Group
+(a) Analysed by nature
+28. DEFERRED INCOME TAX ASSETS AND LIABILITIES
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+Group
+As at 31 December 2018, the net carrying value of aircraft and vessels owned by the Group that have been pledged as
+security for due to banks and other financial institutions was RMB90,887 million (31 December 2017: RMB68,355 million).
+As at 31 December 2018, the net carrying value of aircraft and vessels leased out by the Group under operating leases was
+RMB147,581 million (31 December 2017: RMB113,323 million).
+As at 31 December 2018, the process of obtaining the title for the Group's properties and buildings with an aggregate net
+carrying value of RMB10,539 million (31 December 2017: RMB12,850 million) was still in progress. Management is of the
+view that the aforesaid matter would neither affect the rights of the Group to these assets nor have any significant impact
+on the business operation of the Group.
+85,113
+84,769
+1,628
+2,029
+Deferred
+income
+Deductible/
+(taxable)
+Deferred
+(2,368)
+(9,491)
+147
+705
+measured at FVTPL
+Change in fair value of financial instruments
+37,475
+150,493
+1,653
+86,871
+52,438
+Allowance for impairment losses
+Deferred income tax assets:
+tax assets/
+(liabilities)
+temporary
+differences
+tax assets/
+(liabilities)
+differences
+temporary
+income
+210,624
+2,054
+90,444
+10
+2
+65,404
+64,275
+65,416
+68,247
+Held in the PRC (other than Hong Kong)
+Medium-term leases (10 to 50 years):
+17,885
+18,362
+Held in Hong Kong
+19,132
+202
+53
+57
+633
+745
+Held overseas
+184
+843
+869
+19,762
+measured at FVOCI
+124
+73
+35
+27
+1,618
+2,027
+1,618
+2,027
+Held in the PRC (other than Hong Kong)
+Held overseas
+Short-term leases (less than 10 years):
+212
+65,600
+66,086
+68,628
+33
+30
+458
+257
+Held overseas
+163
+64,378
+Interest in joint ventures
+938
+Investments in associates and joint ventures comprise the following:
+2018
+Industrial and Commercial Bank of China
+100
+100
+100
+HKD36,379 million
+by the Bank
+HKD46,930 million
+and operations
+activities
+Hong Kong, the PRC
+Commercial
+(Asia) Limited ("ICBC Asia")
+Interest in associates
+00
+2018
+100
+Industrial and Commercial Bank of China
+100
+100
+00
+10
+100
+HKD4,882 million
+HKD4,882 million Hong Kong, the PRC
+Investment
+banking
+100
+KZT8,933 million
+KZT8,933 million
+Almaty, Kazakhstan
+("ICBC International")
+2017
+2018
+Name
+25,749
+10,289
+384,524
+576,505
+Less: Allowance for impairment losses
+(4,120)
+(4,836)
+380,404
+571,669
+273,602
+(3,833)
+269,769
+118,644
+9,767
+487,592
+(4,502)
+483,090
+ICBC
+218
+Change in fair value of
+financial instruments
+Principal
+registration
+Place of
+incorporation/
+Amount
+invested
+issued share/
+paid-in capital
+Percentage of equity interest % Voting rights %
+Commercial
+Nominal value of
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+measured at FVOCI
+financial instruments
+Change in fair value of
+measured at FVTPL
+Particulars of the Group's principal subsidiaries as at the end of the reporting period are as follows:
+28,989
+(Almaty) Joint Stock Company
+100
+Commercial
+banking
+Bank ICBC (Joint stock company)
+100
+100
+100
+RUB10,810 million
+RUB10,810 million
+Moscow, Russia
+Commercial
+banking
+ICBC Financial Leasing Co., Ltd. *
+100
+100
+Jakarta, Indonesia
+100
+RMB11,000 million
+Tianjin, the PRC
+Leasing
+("ICBC Leasing")
+Industrial and Commercial Bank of China
+89.33
+89.33
+89.33
+MOP589 million
+MOP12,064 million
+Macau, the PRC
+Commercial
+(Macau) Limited ("ICBC Macau")
+Zhejiang Pinghu ICBC Rural Bank Co., Ltd. *
+banking
+RMB18,000 million
+USD361 million
+IDR3,692 billion
+98.61
+100
+100
+USD200 million
+USD200 million
+London,
+banking
+Commercial
+United Kingdom
+banking
+ICBC Credit Suisse Asset Management
+50
+80
+80
+80
+RMB200 million
+RMB433 million
+Beijing, the PRC
+Fund
+98.61
+98.61
+PT. Bank ICBC Indonesia ("ICBC Indonesia")
+banking
+(Europe) S.A.
+management
+Commercial
+ICBC (London) PLC ("ICBC London")
+Luxembourg
+EUR437 million
+100
+100
+100
+Industrial and Commercial Bank of China
+Co., Ltd. *
+EUR437 million
+60
+Others
+126,606
+(116)
+7,026
+10,116
+10,796
+(680)
+(2,369)
+19
+(2,388)
+36,719
+8,653
+28,066
+2017
+31 December
+Recognised
+in equity
+6,910
+Recognised in
+profit or loss
+1 January
+As at
+As at
+Others
+Accrued staff costs
+financial assets
+Change in fair value of available-for-sale
+measured at FVTPL
+Change in fair value of financial instruments
+Allowance for impairment losses
+Deferred income tax assets:
+56,220
+(8,497)
+7,640
+2017
+(4,690)
+598
+(34)
+10,274
+10,884
+Repossessed assets
+18,228
+17,437
+18,280
+17,464
+Land use rights
+116,820
+98,332
+138,501
+122,318
+Settlement accounts
+213,700
+134,280
+239,922
+182,391
+(4,126)
+27,334
+9,154
+10,762
+47,250
+The Group and the Bank did not have significant unrecognised deferred income tax assets or liabilities at the end of the
+reporting period.
+57,077
+29. OTHER ASSETS
+Bank
+2018
+2017
+2018
+2017
+Precious metals
+Group
+1,836
+9,827
+2,622
+Allowance for impairment losses
+Deferred income tax assets:
+2018
+31 December
+As at
+Recognised
+in equity
+Recognised in
+profit or loss
+2018
+IFRS 9
+2017
+As at
+1 January
+Impact of
+adopting
+31 December
+As at
+36,719
+Bank
+Notes to the Financial Statements
+217
+Annual Report 2018
+433
+Advance payments
+10,555
+8,217
+844
+460
+Goodwill (i)
+9,299
+8,956
+Interest receivable
+2,624
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+7,307
+44,026
+6,884
+(15)
+(771)
+3,408
+7,534
+(4,126)
+Others
+6,508
+(402)
+6,910
+6,910
+Accrued staff costs
+(10,116)
+10,116
+financial assets
+available-for-sale
+Change in fair value of
+(3,923)
+50,910
+Change in fair value of financial
+instruments measured at FVTPL
+(2,369)
+543
+(1,826)
+47,250
+1,929
+Change in fair value of
+financial instruments
+measured at FVOCI
+4,559
+4,559
+(8,482)
+103
+60
+100
+60
+TRY860 million
+92.84
+92.84
+92.84
+ICBC Turkey Bank Anonim
+Mexico S.A.
+MXN1,597 million
+(365)
+2017
+equity
+31 December
+Recognised in
+Recognised in
+profit or loss
+MXN1,597 million
+100
+100
+100
+2017
+Recognised in
+As at
+As at
+1 January
+Impact of
+adopting
+31 December
+USD425 million
+As at
+Notes to the Financial Statements
+Others
+financial assets
+available-for-sale
+60
+Change in fair value of
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Mexico City,
+Mexico
+Istanbul, Turkey
+Commercial
+banking
+Commercial
+Sirketi ("ICBC Turkey")
+100
+100
+EUR100 million
+EUR100 million
+Vienna, Austria
+Commercial
+ICBC Austria Bank GmbH
+banking
+These subsidiaries incorporated in Mainland China are all limited liability companies.
+The above table lists the principal subsidiaries of the Bank. To give details of other subsidiaries would, in the opinion of the
+management, result in particulars of excessive length.
+There is no subsidiary of the Group which has material non-controlling interests during the reporting period.
+Annual Report 2018
+209
+(38)
+Financial Statements for the year ended 31 December 2018
+*
+IFRS 9
+investment
+Banking
+banking
+ICBC Standard Bank PLC ("ICBC Standard")
+60
+60
+60
+USD1,083 million
+Financial asset
+USD839 million
+100
+100
+10
+100 RMB12,000 million
+RMB12,000 million
+London,
+United Kingdom
+Nanjing, the PRC
+ICBC Financial Asset Investment Co., Limited*
+(In RMB millions, unless otherwise stated)
+2018
+Recognised in 31 December
+equity
+17
+(2,385)
+37,475
+8,859
+28,616
+2017
+31 December
+Recognised in
+equity
+Recognised in
+profit or loss
+2017
+(496)
+1 January
+As at
+As at
+575
+1,217
+9,973
+(160)
+143
+(401)
+143
+938
+900
+(38)
+973
+(2,368)
+95
+-
+973
+(398)
+433
+6
+439
+38
+(973)
+10,721
+9,748
+Others
+financial assets
+Change in fair value of available-for-sale
+Allowance for impairment losses
+Deferred income tax liabilities:
+Others
+(502)
+Accrued staff costs
+Change in fair value of available-for-sale
+measured at FVTPL
+Change in fair value of financial instruments
+Allowance for impairment losses
+Deferred income tax assets:
+2018
+financial assets
+profit or loss
+6
+1 January
+7,026
+(116)
+6,910
+(3,886)
+539
+(26)
+2017
+(3,373)
+9,299
+10,695
+48,392
+ICBC International Holdings Limited
+As at
+As at
+28,398
+26. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
+Notes to the Financial Statements
+100
+Broker dealer
+Delaware and
+New York,
+United States
+Shanghai, the PRC
+RMB7,980 million
+USD306 million
+RMB12,505 million
+USD369 million
+80
+80
+80
+Industrial and Commercial Bank of China
+60
+60
+60
+ICBC-AXA Assurance Co., Ltd. *
+0
+USD50.25 million
+USD50 million
+100
+100
+(USA) NA
+100
+Industrial and Commercial Bank of China
+80
+Commercial
+banking
+Commercial
+banking
+Argentina
+Lima, Peru
+USD100 million
+USD100 million
+100
+80
+0
+100
+100
+ICBC PERU BANK
+(Argentina) S.A.("ICBC Argentina")
+Insurance
+Commercial
+New York,
+United States
+Buenos Aires,
+ARS3,505 million
+ARS1,345 million
+80
+80
+Industrial and Commercial Bank of China
+Financial Services LLC
+("ICBC Thai")
+banking
+Commercial
+banking
+80
+80
+80
+80
+Industrial and Commercial Bank of China
+RMB100 million
+RMB100 million
+100
+100
+00
+100
+Chongqing Bishan ICBC Rural Bank Co., Ltd. *
+banking
+Commercial
+Zhejiang, the PRC
+RMB120 million
+RMB200 million
+CAD158 million
+CAD178.66 million
+Chongqing,
+the PRC
+Toronto, Canada
+Commercial
+banking
+(Thai) Public Company Limited
+banking
+Commercial
+Kuala Lumpur,
+Malaysia
+Bangkok, Thailand
+THB23,711 million
+THB20,132 million
+97.86
+97.86
+97.86
+Industrial and Commercial Bank of China
+(Brazil) S.A.
+Industrial and Commercial Bank of China
+MYR833 million
+MYR833 million
+100
+100
+100
+Industrial and Commercial Bank of China
+(Canada)
+Commercial
+(Malaysia) Berhad
+100
+(38)
+10
+100
+100
+NZD234 million
+NZD234 million
+(New Zealand) Limited
+Auckland,
+New Zealand
+and investment
+banking
+Commercial
+banking
+("ICBC New Zealand")
+Industrial and Commercial Bank of China
+(158)
+(13)
+604
+banking
+973
+849
+(38)
+(158)
+120
+(502)
+(137)
+100
+Industrial and Commercial Bank of China
+124
+Sao Paulo, Brazil
+Real202 million
+Real202 million
+100
+banking
+Commercial
+on securities lending
+Cash received as collateral
+800,007
+282,483
+998,466
+799,220
+787
+1,958
+143,742
+148,663
+Other financial institutions
+480,354
+Accrued interest
+15,375
+37,246
+363
+514,801
+Group
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+34. DUE TO CUSTOMERS
+ICBC
+220
+Certificates of deposit issued by Hong Kong Branch, Singapore Branch, Tokyo Branch, Seoul Branch, Luxembourg Branch,
+Doha Branch, Sydney Branch, New York Branch, Abu Dhabi Branch, Dubai (DIFC) Branch, London Branch, ICBC London,
+ICBC Asia, ICBC Macau and ICBC New Zealand were recognised at amortised cost.
+810,610
+300,988
+33. CERTIFICATES OF DEPOSIT
+280,525
+Banks
+331,691
+2018
+2017
+2018
+2017
+10,603
+Demand deposits:
+Corporate customers
+6,405,136
+6,069,804
+6,287,825
+5,939,577
+Personal customers
+3,931,182
+16
+3,820,392
+3,864,212
+3,753,389
+10,336,318
+9,890,196
+10,152,037
+18,709
+10,626
+18,489
+10,603
+Repurchase agreements-securities:
+854,724
+1,046,338
+2018
+9,692,966
+20/07/2024
+20/07/2009
+4.00%
+24,000
+24,000
+100 Yuan
+16/07/2009
+09 ICBC 02 Bond
+(million)
+(million)
+Circulation date Notes
+Maturity date
+Value date
+rate
+(In RMB)
+(In RMB)
+(In RMB)
+Annual Report 2018
+221
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+(1) Subordinated bonds and Tier 2 Capital Notes
+20/08/2009
+The Bank:
+Issue Price
+Amount
+Ending
+balance
+Coupon
+Name
+Issue date
+As approved by the PBOC and the former CBRC, the Bank issued callable subordinated bonds through open market
+bidding in 2009, 2010, 2011, 2012, 2014 and 2017. Approved by the PBOC, these subordinated bonds were traded in the
+bond market among banks. The relevant information on these subordinated bonds is set out below:
+As at 31 December 2018, the amount of debt securities issued due within one year was RMB92,045
+million (31 December 2017: RMB41,820 million).
+(i)
+10/09/2010
+18,489
+11/06/2012
+12 ICBC 01 Bond
+(iv)
+17/01/2012
+30/12/2026
+30/12/2011
+5.50%
+50,000
+50,000
+100 Yuan
+29/12/2011
+11 ICBC 02 Bond
+(!!!)
+30/08/2011
+30/06/2031
+30/06/2011
+100 Yuan
+16,200
+16,200
+4.10%
+14/09/2010
+14/09/2025
+10 ICBC 02 Bond
+03/11/2010
+11 ICBC 01 Bond
+29/06/2011
+100 Yuan
+38,000
+38,000
+5.56%
+(ii)
+436,275
+499,291
+526,940
+2018
+Bank
+Group
+35. DEBT SECURITIES ISSUED
+18,894,447
+20,646,928
+19,562,936
+21,408,934
+216,740
+222,461
+288,279
+268,855
+288,554
+268,914
+Accrued interest
+Others
+8,913,202
+Time deposits:
+Corporate customers
+5,076,005
+4,635,661
+4,647,601
+4,269,384
+2017
+Personal customers
+4,748,525
+5,361,695
+4,643,818
+10,581,241
+9,384,186
+10,009,296
+5,505,236
+2017
+Subordinated bonds and
+Tier 2 Capital Notes issued by
+167,132
+225,075
+167,132
+Subsidiaries
+108,904
+78,700
+225,075
+Accrued interest
+917
+335,383
+245,832
+225,992
+167,132
+617,842
+1,404
+Bank
+The Bank
+269,143
+(1)
+The Bank
+Subsidiaries
+269,864
+9,122
+269,143
+269,864
+Other debt securities issued by
+269,143
+Accrued interest
+3,473
+3,435
+282,459
+281,108
+273,299
+11,965
+10,626
+44,000
+2017
+356,407
+356,407
+356,407
+356,407
+269,612
+269,612
+269,612
+269,612
+86,795
+86,795
+86,795
+Except for the dividends for H shares which are payable in Hong Kong dollars, all of the ordinary A shares and H shares rank
+pari passu with each other in respect of dividends on ordinary shares.
+86,795
+(millions)
+value
+Number
+of shares
+Nominal
+2017
+2018
+(millions)
+Number
+of shares
+A shares of RMB1 Yuan each
+H shares of RMB1 Yuan each
+Issued and fully paid:
+Nominal
+value
+37. SHARE CAPITAL
+Annual Report 2018
+Notes to the Financial Statements
+2014-12-10
+USD
+Shares in:
+Overseas Preference
+Conversion
+condition
+(million) Maturity
+(million)
+shares)
+rate Issue price
+Conversion
+225
+In RMB
+(million
+Dividend
+Accounting
+classification
+Issue date
+Financial instrument
+outstanding
+In original
+Amount
+(a) Preference shares outstanding at the end of the year
+(1) Preference shares
+38. OTHER EQUITY INSTRUMENTS
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+currency
+As at 31 December 2018, the amount of other liabilities due within one year was RMB376,731 million (31 December 2017:
+RMB550,736 million).
+(ii)
+(i) There was no overdue payment for staff salaries, bonuses, allowances, subsidies payables as at 31 December 2018
+(31 December 2017: Nil).
+25,308
+subsidies payables (i)
+Salaries, bonuses, allowances and
+34,088
+100
+34,715
+on credit commitments
+Allowance for impairment losses
+2017
+113,252
+126,555
+2018
+26,716
+2017
+158,083
+Settlement accounts
+2018
+Bank
+Group
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+36. OTHER LIABILITIES
+ICBC
+224
+In 2018, ICBC Argentina issued medium and long-term debt securities amounting to RMB240 million denominated in
+ARS with maturities in 2020 at floating interest rates.
+ICBC New Zealand issued medium and long-term debt securities and notes amounting to RMB2, 128
+million denominated in AUD and NZD with maturities between 2020 and 2023 at fixed or floating interest rates.
+Of which, in 2018, ICBC New Zealand issued medium and long-term bonds and notes amounting to RMB788
+million denominated in NZD with maturities between 2021 and 2023 at fixed or floating interest rates.
+167,015
+22,318
+23,557
+Sundry tax payables
+436,376
+247,348
+51,092
+52,647
+161,495
+603,500
+409,819
+169,898
+Others
+234,991
+242,399
+Interest payable
+1,361
+686
+1,361
+686
+Early retirement benefits
+825
+660
+1,440
+1,260
+Promissory notes
+11,298
+10,394
+11,906
+10,937
+Equity
+6.00% 20USD/Share
+147
+2,940
+Dividend reset every 5 years thereafter to the sum of the benchmark rate and the Fixed Spread.
+Fixed rate for a certain period (5 years) after issuance.
+Dividend
+a.
+(ii) Domestic preference shares
+The Group could pay dividends while the Group still has distributable after-tax profit after making up previous years' losses,
+contributing to the statutory reserve and making general provisions, and the Group's capital adequacy ratio meets regulatory
+requirements. Preference shareholders of the Group are senior to the ordinary shareholders on the right to dividends.
+The Group shall distribute dividends for the Preference Shares in cash, based on the total amount of the issued and
+outstanding Preference Shares on the corresponding times (i.e. the product of the issue price of preference shares and the
+number of the issued and outstanding preference shares). Interest method of the Preference Shares of the Group is once a
+year.
+Non cumulative dividend is a dividend on preference shares which does not cumulate upon omission of payment so as to
+require payment of a passed or omitted dividend of one year out of earnings of a following year. After receiving dividend
+at agreed dividend rate, preference shareholders of the Group will not participate the distribution of residual profits with
+ordinary shareholders.
+g. Dividend setting mechanism
+USD Preference Shares: the First Redemption Date is five years after issuance
+EUR Preference Shares: the First Redemption Date is seven years after issuance
+RMB Preference Shares: the First Redemption Date is five years after issuance
+Under the premise of obtaining the approval of the CBIRC and condition of redemption, the Group has right to redeem all or
+some of overseas preference shares in first call date and subsequent any dividend payment date. Redemption price is equal
+to issue price plus accrued dividend in current period.
+Redemption
+The Fixed Spread will be equal to the spread between the dividend rate at the time of issuance and the benchmark rate. The
+Fixed Spread will remain unchanged throughout the term of the Preference Shares.
+f.
+Upon the occurrence of an Additional Tier 1 Capital Trigger Event (Core Tier 1 Capital Adequacy Ratio of the Group falling
+to 5.125% or below), the Group shall have the right to convert all or part of the Preference Shares into H shares, in order
+to restore the Core Tier 1 Capital Adequacy Ratio of the Group to above 5.125%; If Preference Shares were converted to
+H shares, they may not be converted to Preference Shares again.
+Mandatory conversion trigger events
+e.
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+226
+The USD, EUR and RMB Preference Shareholders as well as the Domestic Preference Shareholders will rank equally for
+payment. The Preference Shareholders will be subordinated to the depositors, ordinary creditors, holders of subordinated
+debt, holders of convertible bonds, holders of Tier 2 capital bonds and holders of other Tier 2 capital instruments of the
+Group, but will be senior to the ordinary shareholders.
+Order of distribution and liquidation method
+d.
+If the Group cancels all or part of the dividends to the Preference Shareholders, the Group shall not make any dividend
+distribution to ordinary shareholders before the Group pays the dividends for the current dividend period to the Preference
+Shareholders in full.
+Upon the occurrence of a Non-Viability Trigger Event (Earlier of the two situations: (1) the CBIRC has determined that the
+Group would become non-viable if there is no conversion or write-down of capital; or (2) the relevant authorities have
+determined that a public sector injection of capital or equivalent support is necessary, without which the Group would
+become non-viable), the Group shall have the right to convert all Preference Shares into H shares. If Preference Shares were
+converted to H shares, they may not be converted to Preference Shares again.
+Dividends will be paid annually.
+Annual Report 2018
+227
+ICBC
+228
+The Group could pay dividends while the Group still has distributable after-tax profit after making up previous years' losses,
+contributing to the statutory reserve and making general provisions, and the Group's capital adequacy ratio meets regulatory
+requirements. Preference shareholders of the Group are senior to the ordinary shareholders on the right to dividends.
+Non cumulative dividend is a dividend on preference shares which does not cumulate upon omission of payment so as to
+require payment of a passed or omitted dividend of one year out of earnings of a following year. After receiving dividend
+at agreed dividend rate, preference shareholders of the Group will not participate the distribution of residual profits with
+ordinary shareholders.
+Dividend setting mechanism
+g.
+After five years have elapsed since the date of issuance (18 November 2015) under the premise of obtaining the approval of
+the CBIRC and compliance with regulatory requirements, the Group has right to redeem all or some of domestic preference
+shares. The redemption period of preference shares ranges from the start date of redemption to the date of full redemption
+or conversion. Redemption price is equal to book value plus accrued dividend in current period.
+Redemption
+f.
+Upon the occurrence of a Non-Viability Trigger Event (Earlier of the two situations: (1) the CBIRC has determined that the
+Group would become non-viable if there is no conversion or write-down of capital; or (2) the relevant authorities have
+determined that a public sector injection of capital or equivalent support is necessary, without which the Group would
+become non-viable), the Group shall have the right to convert all Preference Shares into A shares. If Preference Shares were
+converted to A shares, they may not be converted to Preference Shares again.
+Upon the occurrence of an Additional Tier 1 Capital Trigger Event (Core Tier 1 Capital Adequacy Ratio of the Group falling
+to 5.125% or below), the Group shall have the right to convert all or part of the Preference Shares into A shares, in order
+to restore the Core Tier 1 Capital Adequacy Ratio of the Group to above 5.125%; If Preference Shares were converted to
+A shares, they may not be converted to Preference Shares again.
+Mandatory conversion trigger events
+e.
+The Domestic Preference Shareholders as well as Overseas Preference Shareholders will rank equally for payment. The
+Preference Shareholders will be subordinated to the depositors, ordinary creditors, holders of subordinated debt, holders of
+convertible bonds, holders of Tier 2 capital bonds and holders of other Tier 2 capital instruments of the Group, but will be
+senior to the ordinary shareholders.
+Order of distribution and liquidation method
+d.
+If the Group cancels all or part of the dividends to the Preference Shareholders, the Group shall not make any dividend
+distribution to ordinary shareholders before the Group pays the dividends for the current dividend period to the Preference
+Shareholders in full.
+Dividend stopper
+C.
+The Group could pay dividends while the Group still has distributable after-tax profit after making up previous years'
+losses, contributing to the statutory reserve and making general provisions, and the Group's capital adequacy ratio meets
+regulatory requirements. The paying order of domestic preference shares is equal to overseas preference shares. Preference
+shareholders of the Group are senior to the ordinary shareholders on the right to dividends. The Group may elect to cancel
+any dividend, but such cancellation will require a shareholder's resolution to be passed.
+Conditions to distribution of dividends
+b.
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+Dividend stopper
+ICBC International issued medium and long-term debt securities amounting to RMB14,043 million denominated in
+USD with maturities in 2019 and 2021 at fixed or floating interest rates. Of which, in 2018, ICBC International issued
+medium and long-term debt securities amounting to RMB4,787 million denominated in USD with maturities in 2021 at
+floating interest rates.
+C.
+Conditions to distribution of dividends
+No
+No
+2 2 2
+Mandatory
+None
+12,000
+12,000
+120
+6.00% 100RMB/Share
+Equity
+2014-12-10
+Domestic Preference
+RMB
+None
+4,558
+600
+40
+6.00% 15EUR/Share
+Equity
+2014-12-10
+EUR
+Mandatory
+None
+17,991
+Mandatory
+Shares in:
+RMB
+Total
+b.
+Dividends will be paid annually.
+The Fixed Spread will be equal to the spread between the dividend rate at the time of issuance and the benchmark rate. The
+Fixed Spread will remain unchanged throughout the term of the Preference Shares.
+Dividend reset every 5 years thereafter to the sum of the benchmark rate and the Fixed Spread.
+Fixed rate for a certain period (5 years for USD and RMB tranche and 7 years for EUR tranche) after issuance.
+Dividend
+a.
+Overseas preference shares
+(i)
+Main Clauses
+(b)
+79,375
+174
+79,549
+757
+Mandatory No
+None
+45,000
+45,000
+450
+4.50% 100RMB/Share
+Equity
+2015-11-18
+Book value
+Less: Issue fees
+The Group could pay dividends while the Group still has distributable after-tax profit after making up previous years' losses,
+contributing to the statutory reserve and making general provisions, and the Group's capital adequacy ratio meets regulatory
+requirements. Preference shareholders of the Group are senior to the ordinary shareholders on the right to dividends. The
+Group may elect to cancel any dividend, but such cancellation will require a shareholder's resolution to be passed.
+(vi)
+(v)
+(iv)
+Debt securities
+(2)(b)
+2,285
+8,192
+2,919
+Other
+6,369
+10,228
+87,400
+89,361
+78,737
+60,175
+73,852
+(2)
+The principal-guaranteed interbank wealth management products issued by the Group and the financial assets in which
+the aforesaid products form parts of a group of financial instruments that are managed together on a fair value basis, and
+are classified as financial liabilities and financial assets designated as at FVTPL, respectively. As at 31 December 2018, the
+fair value of the interbank wealth management products was approximately the same as the amount that the Group would
+be contractually required to pay to the holders of the wealth management products upon maturity (31 December 2017:
+approximately the same).
+Financial liabilities related to precious metals and issued debt securities have been matched with precious metals and
+derivative as part of a documented risk management strategy to mitigate market risk, such as interest rate risk. An accounting
+mismatch would arise if these financial liabilities were accounted at amortised cost, whereas the related precious metals and
+derivative were measured at fair value with movements in the fair value taken through the statement of profit or loss. By
+designating these financial liabilities at FVTPL, the movement in their fair values is recorded in the statement of profit or loss.
+(a)
+(b)
+As at 31 December 2018, the fair value of the financial liabilities related to precious metals was higher than the
+amount that the Group would be contractually required to pay to the holders by RMB266 million (31 December 2017:
+RMB156 million higher).
+The debt securities including 5 equity-linked notes issued by ICBC Asia in 2016 and 2017 were classified as financial
+liabilities designated as at FVTPL. As at 31 December 2018, the fair value of the debt securities is lower than the
+amount that the Group would be contractually required to pay to the holder of these debt securities upon maturity by
+RMB720 million (31 December 2017: RMB364 million lower).
+There were no significant changes in the credit spread of the Group and therefore the amounts of changes in fair value of
+the financial liabilities arising from changes in credit risk were not considered significant during the year of 2018 and the
+year of 2017. The changes in fair value of the financial liabilities were mainly attributable to changes in other market factors.
+Annual Report 2018
+219
+Notes to the Financial Statements
+(1)
+67,257
+60,183
+67,266
+13/06/2012
+4.99%
+20,000
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+(i)
+Goodwill arising from business combinations has been allocated to the Group's CGU, which is not larger than the reportable
+segment of the Group, for impairment testing.
+The recoverable amount of the CGU is determined based on the discounted future cash flows of the CGU. The cash
+flow projections are based on financial forecasts approved by management of the subsidiaries. The average growth
+rates are projected based on the similar rates which do not exceed the long-term average growth rate for the business
+in which the CGU operates. The discount rate is the pre-tax rate and reflects the specific risk associated with the CGU.
+As indicated by the impairment tests, goodwill arising from business combinations is not impaired and thus, no
+impairment loss was recognised.
+30. FINANCIAL LIABILITIES DESIGNATED AS AT FAIR VALUE THROUGH PROFIT OR LOSS
+Interbank wealth management
+Group
+Bank
+2018
+2017
+2018
+2017
+products
+(1)
+11,480
+10,758
+11,480
+10,758
+Financial liabilities related to
+precious metals
+(2)(a)
+Financial Statements for the year ended 31 December 2018
+13/06/2027
+(In RMB millions, unless otherwise stated)
+Group
+Banks and other financial institutions
+operating outside Mainland China
+Accrued interest
+346,186
+350,893
+358,639
+388,171
+12,048
+9,554
+486,249
+1,814,495
+491,948
+388,633
+57,022
+445,193
+1,644,147
+1,596,232
+32. REPURCHASE AGREEMENTS
+Repurchase agreements comprise repurchases of bills, securities and cash received as collateral on securities lending.
+Repurchase agreements-bills:
+Banks
+Group
+2018
+2017
+Bank
+2018
+1,706,549
+20,440
+141,055
+128,015
+Bank
+2018
+2017
+2018
+2017
+Deposits:
+Banks and other financial institutions
+operating in Mainland China
+1,202,671
+1,106,888
+1,195,100
+1,096,021
+Banks and other financial institutions
+operating outside Mainland China
+Accrued interest
+123,317
+107,713
+2,258
+58,760
+1,654
+55,018
+1,328,246
+1,214,601
+1,255,514
+1,151,039
+Money market takings:
+Banks and other financial institutions
+operating in Mainland China
+31. DUE TO BANKS AND OTHER FINANCIAL INSTITUTIONS
+18,709
+13/07/2012
+14 ICBC 01 Bond
+(i)
+The Bank:
+As at 31 December 2018, the Group's other debt securities issued mainly include:
+(2) Other debt securities issued
+The above subordinated bonds and notes are separately listed on the London Stock Exchange Plc and the Stock Exchange of
+Hong Kong Limited. ICBC Standard, ICBC Asia and ICBC Macau have not had any defaults of principal or interest or other
+breaches with respect to the subordinated bonds and notes during the period (2017: Nil).
+On 10 September 2014, ICBC Macau issued a subordinated bond with an aggregate nominal amount of USD320 million,
+bearing a floating interest rate. The bond was issued at the price fixed at 99.298% of the nominal amount with maturity due
+on 10 September 2024.
+On 30 November 2010, ICBC Asia issued a subordinated bond with an aggregate nominal amount of USD500 million,
+bearing a fixed interest rate of 5.125% per annum. The bond was issued at the price fixed at 99.737% of the nominal
+amount with maturity due on 30 November 2020.
+On 2 December 2009, ICBC Standard issued a subordinated bond with an amount of USD500 million, bearing a fixed
+interest rate of 8.125% per annum and with maturity due on 2 December 2019.
+Subsidiaries:
+The Bank has not had any defaults of principal or interest or other breaches with respect to the subordinated bonds and
+Tier 2 Capital Notes during the current year (2017: Nil).
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+(ii)
+Notes to the Financial Statements
+222
+On 15 September 2015, the Bank issued Tier 2 Capital Notes with an aggregate nominal amount of USD2,000 million,
+bearing a fixed interest rate of 4.875% per annum. The listing and permission to deal in the Stock Exchange of Hong Kong
+Limited became effective on 22 September 2015. The Notes were issued at the price fixed at 99.189% of the nominal amount
+with maturity due on 21 September 2025 and cannot be redeemed before maturity.
+(ix)
+(ix)
+22/09/2015
+21/09/2025
+21/09/2015
+13,741 4.875%
+2,000
+99.189
+USD
+ICBC
+Sydney Branch issued notes and interbank deposit amounting to RMB13,641 million denominated in AUD, CHF,
+RMB, HKD, USD and GBP with maturities between 2019 and 2024 at fixed or floating interest rates. Of which, in
+2018, Sydney Branch issued notes amounting to RMB4,612 million denominated in AUD, USD and RMB at fixed or
+floating interest rates with maturities between 2019 and 2023 and issued interbank deposit amounting to RMB477
+million denominated in GBP with maturities in 2019.
+Singapore Branch issued notes amounting to RMB36,513 million denominated in RMB and USD with maturities
+between 2019 and 2023 at fixed or floating interest rates. Of which, in 2018, Singapore Branch issued notes
+amounting to RMB11,871 million denominated in RMB and USD with maturities in 2021 and 2023 at fixed or floating
+interest rates.
+(iii) Tokyo Branch issued notes amounting to RMB3,332 million denominated in JPY and RMB with maturities in 2019 at
+fixed interest rates. Of which, in 2018, Tokyo Branch issued notes amounting to RMB1,898 million denominated in JPY
+with maturities in 2019 at fixed interest rates.
+(iii) ICBC Thai issued debt securities amounting to RMB6,762 million denominated in THB with maturities between 2019
+and 2028 at fixed interest rates. Of which, in 2018, ICBC Thai issued debt securities of RMB3,319 million denominated
+in THB with maturities between 2019 and 2028 at fixed interest rates.
+Within China, in 2018, ICBCIL issued medium and long-term debt securities amounting to RMB3, 192
+million denominated in RMB with maturities in 2021 at fixed interest rates.
+Hai Jiao 1400 limited, which is controlled by the Group, issued a private placement bond amounting to
+RMB971 million denominated in USD with maturity in 2025 at a fixed interest rate. The bond was guaranteed by The
+Export-Import Bank of Korea.
+ICBCIL Finance Co., Ltd., which is controlled by the Group, issued medium and long-term notes amounting to
+RMB59,831 million denominated in RMB and USD, with maturities between 2019 and 2027 at fixed or floating
+interest rates. Of which, in 2018, ICBCIL Finance Co., Ltd. issued medium and long-term notes amounting to
+RMB10,252 million denominated in USD, with maturities between 2021 and 2023 at floating interest rates.
+By satisfying certain conditions, ICBCIL Finance Co., Ltd. has the option to redeem all of the notes at any time. Above
+notes were guaranteed by ICBC Financial Leasing Co., Ltd. and listed on the Irish Stock Exchange and the Stock
+Exchange of Hong Kong Limited respectively.
+Of which, Skysea International Capital Management Limited ("Skysea International"), which is controlled by
+the Group, issued guaranteed notes of USD750 million with a fixed interest rate of 4.875% in 2011. As at
+31 December 2018, Skysea International has redeemed USD153 million and the carrying amount of the Notes were
+RMB4,080 million. The Notes were guaranteed by Hong Kong Branch and were issued at the price fixed at 97.708%
+of the nominal amount with maturity due on 7 December 2021. By satisfying certain conditions, Skysea International
+has the option to redeem all of the notes at any time. The Notes were listed on the Stock Exchange of Hong Kong
+Limited.
+ICBC Financial Leasing issued medium and long-term debt securities and notes amounting to RMB68,074
+million denominated in RMB and USD with maturities between 2019 and 2027 at fixed or floating interest rates.
+ICBC Asia issued notes amounting to RMB17,814 million denominated in RMB, USD, EUR and HKD with maturities
+between 2020 and 2023 at fixed or floating interest rates. Of which, in 2018, ICBC Asia issued notes amounting to
+RMB16,434 million denominated in RMB, USD and HKD with maturities between 2020 and 2023 at fixed or floating
+interest rates.
+(i)
+Subsidiaries:
+The Head Office issued debt securities in Hong Kong amounting to RMB500 million denominated in RMB with
+maturity in 2019 at fixed interest rates.
+(ix)
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+223
+Annual Report 2018
+(viii) London Branch issued notes amounting to RMB29,316 million denominated in USD and EUR with maturities
+between 2019 and 2023 at floating interest rates. Of which, in 2018, London Branch issued notes amounting to
+RMB19,699 million denominated in USD and EUR with maturities in 2021 and 2023 at floating interest rates.
+(vii) Hong Kong Branch issued notes amounting to RMB27,739 million denominated in USD and HKD with maturities
+between 2019 and 2022 at fixed or floating interest rates. Of which, in 2018, Hong Kong Branch issued notes
+amounting to RMB4,408 million denominated in USD and HKD with maturities in 2020 and 2021 at fixed or floating
+interest rates.
+rates.
+Dubai (DIFC) Branch issued notes amounting to RMB30,877 million denominated in USD and EUR with maturities
+between 2019 and 2023 at fixed or floating interest rates. Of which, in 2018, Dubai (DIFC) Branch issued notes
+amounting to RMB13,270 million denominated in USD with maturities between 2020 and 2023 at floating interest
+Luxembourg Branch issued notes amounting to RMB26,905 million denominated in USD and EUR with maturities
+between 2019 and 2022 at fixed or floating interest rates. Of which, in 2018, Luxembourg Branch issued notes
+amounting to RMB755 million denominated in USD with maturities in 2019 at fixed or floating interest rates.
+New York Branch issued notes amounting to RMB56,095 million denominated in USD with maturities between
+2019 and 2027 at fixed or floating interest rates. Of which, in 2018, New York Branch issued notes amounting to
+RMB23,372 million denominated in USD with maturities in 2019 at fixed interest rates.
+(vi)
+(v)
+(iv)
+15/09/2015
+(v)
+Tier 2 Capital Notes
+Circulation date Note
+4.45%
+44,000
+100 Yuan
+20/11/2017
+17 ICBC 02 Bond
+(vii)
+10/11/2017
+08/11/2027
+08/11/2017
+4.45%
+44,000
+22/11/2017
+44,000
+06/11/2017
+17 ICBC 01 Bond
+(vi)
+24/09/2014
+05/08/2024
+05/08/2014
+5.80%
+20,000
+20,000
+100 Yuan
+04/08/2014
+100 Yuan
+22/11/2027
+23/11/2017
+(viii)
+Maturity date
+Value date
+rate
+(In RMB)
+(million)
+Coupon
+Ending
+balance
+Amount
+(Original
+Currency)
+(million)
+Issue Price
+Currency
+Issue date
+Name
+In 2015, the Bank issued Tier 2 Capital Notes denominated in USD. Approved by the Stock Exchange of Hong Kong Limited
+for listing and dealing, the Notes are listed on the Stock Exchange of Hong Kong Limited. The relevant information is set out
+below:
+The Bank has the option to redeem all of the bonds on 8 November 2022 upon the approval of the relevant regulatory
+authorities.
+The Bank has the option to redeem all of the bonds on 13 June 2022 upon the approval of the relevant regulatory authorities.
+The Bank has the option to redeem all of the bonds on 5 August 2019 upon the approval of the relevant regulatory
+authorities.
+The Bank has the option to redeem all of the bonds on 30 June 2026 upon the approval of the relevant regulatory authorities.
+The Bank has the option to redeem all of the bonds on 30 December 2021 upon the approval of the relevant regulatory
+authorities.
+The Bank has the option to redeem all of the bonds on 14 September 2020 upon the approval of the relevant regulatory
+authorities.
+The Bank has the option to redeem all or part of the bonds at face value on 20 July 2019. If the Bank does not exercise this
+option, the annual coupon rate will increase by 300 basis points thereafter.
+(viii)
+(vii)
+(vi)
+(v)
+(iv)
+(iii)
+(ii)
+(i)
+15 USD
+The Bank has the option to redeem all of the bonds on 22 November 2022 upon the approval of the relevant regulatory
+authorities.
+20,000
+100 Yuan
+(ii) Discretionary surplus reserve
+(27,166)
+27,166
+27,166
+Appropriation to surplus reserve (i)
+(4,437) (4,437)
+(83,506)
+(83,506)
+Dividends preference shares (note 17)
+2016 final (note 17)
+Dividends ordinary shares
+237,415
+269,205
+152 (31,790)
+786
+(968)
+(31,760)
+Total comprehensive income
+Appropriation to general reserve (ii)
+13,066
+13,066
+(13,066)
+356,407
+Other comprehensive income
+Profit for the year
+Balance as at 1 January 2018
+22,665 (53,341) (30,676)
+Impact of adopting IFRS 9
+610,299 1,013,320 2,059,401
+71
+(3,965)
+(1,205)
+(29,326)
+259,374
+229,146
+156,204
+79,375
+356,407
+Balance as at 31 December 2017
+(31,790)
+(31,790)
+152
+786
+reserve
+reserve
+Capital Surplus
+share equity
+capital instruments
+356,407
+Balance as at 1 January 2017
+Cash flow
+Investment currency
+Other
+Issued
+Foreign
+Reserves
+The statement of changes in equity of the Bank during the year are set out below.
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+231
+Annual Report 2018
+General revaluation
+reserve
+translation
+hedging
+Other
+(968)
+(31,760)
+Other comprehensive income
+269,205 269,205
+Profit for the year
+(81) 601,857 872,290 1,909,929
+Subtotal profits equity
+(4,751)
+79,375
+(237)
+156,204 201,980 246,308
+79,375
+reserves
+reserve
+reserve
+reserve
+Total
+Retained
+2,434
+156,204
+229,146
+259,374
+Less: Amount transferred to profit or loss from other comprehensive income
+Income tax effect
+32,971
+Changes in fair value of debt instruments measured at FVOCI
+Items that may be reclassified subsequently to profit or loss:
+(29)
+3
+1,605
+(481)
+2,086
+2017
+2018
+Other comprehensive income recognised under equity method
+Others
+Less: Income tax effect
+Changes in fair value of equity instruments designated as at FVOCI
+Items that will not be reclassified to profit or loss:
+40. COMPONENTS OF OTHER COMPREHENSIVE INCOME
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+337
+ICBC
+(8,709)
+24,599
+(1,027)
+939
+(53)
+(26)
+(11)
+965
+(42)
+Less: Income tax effect
+(Losses)/gains during the year
+Reserve from cash flow hedging instruments
+(33,494)
+10,879
+(631)
+(43,742)
+Net loss from change in fair value of available-for-sale financial assets
+Less: Amount transferred to profit or loss from other comprehensive income
+Income tax effect
+(1,238)
+(211)
+Less: Amount transferred to profit or loss from other comprehensive income
+Credit losses of debt instruments measured at FVOCI
+232
+Includes the appropriation made by overseas branches in the amount of RMB103 million (2017: RMB107 million).
+(ii) Includes the reversal made by overseas branches in the amount of RMB9 million (2017: appropriation in the amount of
+RMB20 million).
+(i)
+27,425
+(125)
+52
+911
+26,587
+27,425
+(125)
+52
+911
+26,587
+282,044 282,044
+959,979 2,028,725
+632,964
+71
+(3,965)
+(1,205)
+(6,661)
+282,044
+27,425
+309,469
+Total comprehensive income
+Dividends ordinary shares
+(54) 700,637 1,111,446 2,247,865
+(3,913)
+(294)
+19,926
+79,375 156,204 257,567 271,201
+356,407
+(11,827)
+(28,421)
+The Bank's distributable profits are based on the retained profits of the Bank as determined under PRC GAAP and IFRSS,
+whichever is lower. The amount that the Bank's subsidiaries can legally distribute is determined by reference to their profits
+as reflected in their financial statements prepared in accordance with the accounting regulations and principles promulgated
+by the local regulatory bodies of the respective countries/regions. These profits may differ from those dealt with in these
+financial statements, which are prepared in accordance with IFRSS.
+28,421
+11,827
+28,421
+(4,506) (4,506)
+(85,823) (85,823)
+Balance as at 31 December 2018
+Appropriation to general reserve (ii)
+Appropriation to surplus reserve (i)
+Dividends-preference shares (note 17)
+2017 final (note 17)
+11,827
+(h) Distributable profits
+Other reserves represent reserves of subsidiaries and share of reserves of associates and joint ventures other than the items
+listed above.
+(g) Other reserves
+6,691
+Total
+No
+Conversion
+Conversion
+condition
+None
+6,691 None
+1,000
+(million) Maturity
+(million)
+pieces)
+Issue price
+1,000USD/Piece
+Interest rate
+4.25%
+Equity
+2016-07-21
+USD Perpetual bond
+classification
+Issue date
+Less: Issue fees
+outstanding
+15
+6,676
+1 January 2018
+(c) Changes in perpetual bond outstanding
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+229
+Annual Report 2018
+the amendment of the maturity, distribution payment date and/or the distribution amount of the perpetual bond.
+ICBC Asia has a call option to redeem all the outstanding perpetual bond from 21 July 2021 or any subsequent distribution
+payment date thereafter.
+the conversion of all or a part of the principal and/or distribution of the perpetual bond into shares of ICBC Asia or
+another person; and/or
+reduction or cancellation of all or a part of the principal and/or distribution of the perpetual bond;
+(3)
+(2)
+(1)
+The perpetual bond will be written off up to the amount as directed by the Hong Kong Monetary Authority (hereinafter
+referred to as "HKMA") if the HKMA notifies ICBC Asia that in the opinion of the HKMA or a relevant government body,
+ICBC Asia would become non-viable if there is no written off of the principal. The perpetual bond also contain Hong Kong
+Bail-in Power. Each holder of the perpetual bond shall be subject to the exercise by the Hong Kong Resolution Authority to
+any or a combination of the following:
+The distribution shall be payable semi-annually, with the first distribution payment date being 21 January 2017. ICBC
+Asia has the right to cancel distribution payment (subject to the requirement as set out in the terms and conditions of the
+perpetual bond) and the distribution cancelled shall not be cumulative.
+On 21 July 2016, ICBC Asia issued Basel III-compliant Non-Cumulative Subordinated Additional Tier 1 Capital Securities
+(hereinafter referred to as "Perpetual Bond") in the aggregate amount of US$1 billion (equivalent to approximately
+RMB6,676 million net of related issuance costs). Fixed rate for the first 5 years after issuance of the bond is 4.25%. If
+perpetual bonds are not called, distribution will be reset based on the then prevailing 5-year USA national bonds yield plus a
+fixed initial spread (3.135 per cent. per annum) every 5 years.
+(b) Main Clauses
+Note: USD perpetual bond was issued by ICBC Asia, a subsidiary of the Bank.
+Book value
+In RMB
+currency
+(million
+EUR
+40
+147
+USD
+Domestic
+Preference Shares
+Overseas
+In RMB (million)
+31 December 2018
+In original currency (million)
+and
+Amount (million shares)
+1 January 2018
+Financial instrument outstanding
+(c) Changes in preference shares outstanding
+The Group shall distribute dividends for the Preference Shares in cash, based on the total amount of the issued and
+outstanding Preference Shares on the corresponding times (i.e. the product of the issue price of preference shares and the
+number of the issued and outstanding preference shares). Interest method of the Preference Shares of the Group is once a
+year.
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+RMB
+RMB
+Total
+120
+Accounting
+Financial instrument
+In original
+Amount
+(a) Perpetual bond outstanding at the end of the year
+(2) Perpetual Bond
+Note: The RMB amounts of offshore preference shares in U.S. dollar and Euro on 31 December 2018 are translated at the spot
+exchange rate on issuance date.
+79,549
+Financial
+45,000
+4,558
+N/A
+45,000
+12,000
+600
+2,940
+17,991
+757
+450
+12,000
+Other comprehensive income recognised under equity method
+In original
+31 December 2018
+Capital reserve mainly includes share premium arising from the issuance of new shares at prices in excess of par value.
+(a) Capital reserve
+39. RESERVES
+14,882
+13,533
+14,882
+13,533
+86,051
+86,051
+2,243,950
+2,009,282
+2,330,001
+2,095,333
+31 December
+2018
+1 January
+2018
+(2) Equity attribute to non-controlling interests of other equity instruments
+(1) Equity attribute to non-controlling interests of ordinary shares
+(b) Surplus reserves
+Total equity attribute to non-controlling interests
+(i) Statutory surplus reserve
+Subject to the approval of the shareholders, the statutory surplus reserve may be used to offset accumulated losses of the
+Bank, if any, and may also be converted into capital of the Bank, provided that the balance of the statutory surplus reserve
+after such capitalisation is not less than 25% of the registered capital immediately before capitalisation.
+Pursuant to the resolution of the board of directors' meeting held on 28 March 2019, the total appropriation to surplus
+reserve of the Bank was RMB28,421 million (2017: RMB27,166 million), among which an appropriation of 10% of the
+profit of the Bank for the year determined under the generally accepted accounting principles of PRC ("PRC GAAP") to
+the statutory surplus reserve, in the amount of RMB28,318 million (2017: RMB27,059 million) was approved and the total
+surplus reserve made by some overseas branches was RMB103 million (2017: RMB107 million) pursuant to the requirements
+of local authorities.
+The cash flow hedge reserve comprises the effective portion of the gain or loss on the hedging instrument.
+(f) Cash flow hedge reserve
+The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial
+statements of the subsidiaries and branches incorporated outside Mainland China.
+(e) Foreign currency translation reserve
+The investment revaluation reserve records the fair value changes and impairment provision of financial investments
+measured at FVOCI.
+(d) Investment revaluation reserve
+The general reserve balance of the Bank as at 31 December 2018 amounted to RMB271,201 million (31 December 2017:
+RMB259,374 million), which has reached 1.5% of the year end balance of the Bank's risk assets.
+The Bank's subsidiaries appropriate their profits to the general reserve according to the applicable local regulations.
+From 1 July 2012, the Bank is required by the MOF to maintain a general reserve within equity, through the appropriation of
+profit, which should not be less than 1.5% of the year end balance of its risk assets.
+(c) General reserve
+The Bank's overseas entities appropriate their profits to the surplus reserve in accordance with the relevant regulations
+promulgated by the local regulatory bodies.
+(iii) Other surplus reserve
+After making the appropriation to the statutory surplus reserve, the Bank may also appropriate its profit for the year
+determined under PRC GAAP to the discretionary surplus reserve upon approval by the shareholders in general meetings.
+Subject to the approval by the shareholders, the discretionary surplus reserve may be used to offset accumulated losses of
+the Bank, if any, and may be converted into capital.
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+230
+The Bank is required to appropriate 10% of its profit for the year pursuant to the Company Law of the People's Republic of
+China and the Articles to the statutory surplus reserve until the reserve balance reaches 50% of its registered capital.
+2.
+(2) Equity attribute to other equity instruments holders of the parent company
+(1) Equity attribute to ordinary equity holders of the parent company
+(million)
+In RMB
+currency
+Amount
+In RMB
+currency
+(million)
+(million pieces)
+(million)
+(million)
+(million pieces)
+outstanding
+Amount
+In RMB
+currency
+Amount
+instrument
+In original
+(million pieces)
+(million)
+(million)
+USD Perpetual bond
+Total equity attribute to equity holders of the parent company
+1.
+Equity instrument
+(3) Interests attribute to equity instruments' holders
+Note: The RMB amount of perpetual bond on 31 December 2018 is translated at the spot exchange rate on issuance date.
+6,691
+1,000
+1
+Movement during the year
+In original
+6,691
+1
+Total
+6,691
+1,000
+1
+6,691
+1,000
+1
+1,000
+488
+22,665
+Foreign currency translation differences
+shareholders
+Capital injection by non-controlling
+Cash flows from financing activities
+1,313,782
+Total
+interests
+11,412
+940,663
+3,770
+357,937
+Balance as at 1 January 2017
+profits
+securities
+issued
+controlling
+Retained
+payable on
+securities
+-- - 792
+Non-
+792
+943,954
+(83,506)
+(83,506)
+Dividends paid on ordinary shares
+(309)
+(309)
+Dividends paid to non-controlling shareholders
+(759,095)
+(759,095) --..
+Repayment of debt securities
+(194)
+(194)
+Acquisition of non-controlling interests
+(15,370)
+(16,219)
+849
+Interest paid on debt securities
+943,954
+Proceeds from issuance of debt securities
+Interest
+Debt
+Equity
+(35,924)
+(202)
+(113,504)
+77,782
+Net cash flows from financing activities
+(4,506)
+(4,506)
+Dividends paid on preference shares
+(85,823)
+(85,823)
+Dividends paid on ordinary shares
+(327)
+(327)
+Dividends paid to non-controlling shareholders
+(968,222)
+(968,222)
+Repayment of debt securities
+The effect of changes in foreign exchange rates
+11,580
+11,580
+Amortisation of debt securities
+Liabilities
+Group
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+236
+1,839,390
+279,212
+Dividends paid on preference shares
+1,551
+14,882
+Balance as at 31 December 2018
+277,661
+Total equity-related other changes
+(3,079)
+(3,079)
+Total liability-related other changes
+(3,079)
+(3,079)
+617,842 1,206,666
+Net cash flows from financing activities
+184,859
+849
+At the end of the reporting period, the Group and the Bank had capital commitments as follows:
+(a) Capital commitments
+45. COMMITMENTS AND CONTINGENT LIABILITIES
+The Bank's share appreciation rights plan was approved in 2006, which allows share appreciation rights to be granted to
+eligible participants including directors, supervisors, senior management and other key personnel designated by the board of
+directors. The share appreciation rights will be granted and exercised based on the price of the Bank's H shares and will be
+valid for 10 years. As at the approval date of these financial statements, no share appreciation rights have been granted.
+44. SHARE APPRECIATION RIGHTS PLAN
+With respect to the securitisation of financial assets that do not qualify for derecognition, the relevant financial assets are
+not derecognised, and the consideration paid by third parties are recorded as a financial liability. As at 31 December 2018,
+the Group does not have carrying amount of transferred assets that did not qualify for derecognition and carrying amount of
+their associated liabilities (31 December 2017: Nil).
+For those in which the Group has neither transferred nor retained substantially all the risks and rewards of the transferred
+credit assets, and retained control of the credit assets, the Group recognises the assets on the statement of financial position
+in accordance with the Group's continuing involvement and the rest is derecognised. The extent of the Group's continuing
+involvement is the extent of the risks and rewards undertaken by the Group with value changes of the transferred financial
+assets. The amount at the time of transfer of the original credit assets, which the Group determined that it has continuing
+involvement through acquiring some tranches, was RMB256,346 million as at 31 December 2018 (31 December 2017:
+RMB59,051 million) and the carrying amount of assets that the Group continues to recognise on the statement of financial
+position was RMB37,239 million as at 31 December 2018 (31 December 2017: RMB3,679 million).
+The Group enters into securitisation transactions in the normal course of business by which it transfers credit assets to
+structured entities which issue asset-backed securities to investors. The Group may acquire some asset-backed securities and
+fund shares at the subordinated tranche level and accordingly, may retain parts of the risks and rewards of the transferred
+credit assets. The Group would determine whether or not to derecognise the associated credit assets by evaluating the
+extent to which it retains the risks and rewards of the assets.
+Securitisation transactions
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+237
+Annual Report 2018
+44,433
+277,169
+321,627
+45,780
+306,846
+Group
+Bank
+2018
+2017
+ICBC
+238
+2,921
+1,796
+23,024
+33,386
+2,314
+1,469
+273,685
+22,380
+Contracted, but not provided for
+607
+327
+644
+344
+Authorised, but not contracted for
+2017
+2018
+33,042
+125
+1,045,746
+(22,917)
+Securities lending agreements
+44,458
+261,043
+1,097,544
+4,619
+526,940
+Balance as at 31 December 2017
+Total equity-related other changes
+187
+187
+Total liability-related other changes
+(16,043)
+187
+187
+Amortisation of debt securities
+(16,043)
+(757)
+81,835
+289
+(4,437)
+(4,437)
+(104,162)
+1,864
+262,907
+13,565
+1,642,668
+45,780
+33,161
+Repurchase agreements
+liabilities
+assets
+Carrying
+amount of
+associated
+transferred
+associated
+44,433
+Carrying
+amount of
+assets
+31 December 2017
+Carrying
+amount of
+transferred
+31 December 2018
+Carrying
+amount of
+The following table analyses the carrying amount of the above mentioned financial assets transferred to third parties that did
+not qualify for derecognition and their associated financial liabilities:
+Transferred financial assets that do not qualify for derecognition mainly include debt securities held by counterparties as
+collateral under repurchase agreements and debt securities lent to counterparties under securities lending agreements.
+The counterparties are allowed to sell or repledge those securities sold under repurchase agreements in the absence of
+default by the Group, but has an obligation to return the securities at the maturity of the contract. If the securities increase
+or decrease in value, the Group may in certain circumstances require or be required to pay additional cash collateral in
+certain circumstance. The Group has determined that it retains substantially all the risks and rewards of these securities and
+therefore has not derecognised them. In addition, it recognises a financial liability for cash received as collateral.
+Repurchase transactions and securities lending transactions
+The Group enters into transactions in the normal course of business by which it transfers recognised financial assets to third
+parties or to structured entities. In some cases where these transfers may give rise to full or partial derecognition of the
+financial assets concerned. In other cases where the transferred assets do not qualify for derecognition as the Group has
+retained substantially all the risks and rewards of these assets, the Group continued to recognise the transferred assets.
+43. TRANSFERRED FINANCIAL ASSETS
+liabilities
+(23,175)
+The effect of changes in foreign exchange rates
+Interest paid on debt securities
+234
+Asset-backed securities
+Trust plans
+Asset management plans
+Investment funds
+Group
+The following table sets out an analysis of the line items in the statement of financial position in which assets were
+recognised relating to the Group's interests in structured entities sponsored by third party institutions:
+The maximum exposures to loss in the above investment funds, wealth management products, asset management
+plans, trust plans and asset-backed securities are the amortised cost or fair value of the assets held by the Group at the
+reporting date.
+327,098
+327,098
+468,132
+468,132
+24,400
+24,400
+80,202
+80,202
+Asset-backed securities
+ICBC
+Financial
+investments
+measured at
+FVTPL
+31 December 2018
+Financial
+investments
+measured at
+FVOCI
+Notes to the Financial Statements
+Asset-backed securities
+Trust plans
+Asset management plans
+Wealth management products
+Investment funds
+43,562
+5,917
+24,200
+418,653
+5,917
+60,284
+11,769
+28,197
+17,792
+306,981
+23,191
+Financial
+investments
+measured at
+amortised cost
+14,001
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+24,200
+Trust plans
+The following table sets out an analysis of the carrying amounts and maximum exposure of interests held by the Group in
+the structured entities sponsored by third party institutions:
+The Group holds an interest in some structured entities sponsored by third party institutions through investments in
+the products issued by these structured entities. Such structured entities include investment funds, wealth management
+products, asset management plans, trust plans and asset-backed securities and the Group does not consolidate these
+structured entities. The nature and purpose of these structured entities are to generate fees from managing assets on behalf
+of investors and are financed through the issue of investment products to investors.
+(a) Structured entities sponsored by third party institutions in which the Group holds an
+interest
+41. INVOLVEMENT WITH UNCONSOLIDATED STRUCTURED ENTITIES
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+233
+Annual Report 2018
+(41,378)
+27,809
+712
+(903)
+Others
+(8,752)
+3,325
+258
+Group
+31 December 2018
+Carrying
+Maximum
+31 December 2017
+Carrying
+267,379
+267,379
+324,773
+324,773
+Asset management plans
+200
+200
+Wealth management products
+39,966
+10,919
+23,191
+23,191
+Investment funds
+exposure
+amount
+exposure
+amount
+Maximum
+10,919
+31 December 2017
+39,966
+for-sale
+195,393
+290,067
+Placements with banks and other financial institutions with original
+maturity of three months or less
+292,694
+224,886
+Nostro accounts with banks and other financial institutions with
+original maturity of three months or less
+177,357
+238,286
+19
+Balances with central banks other than restricted deposits
+75,214
+70,047
+19
+Cash on hand
+2017
+2018
+Note
+686,237
+42. NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT
+(a) Analysis of balances of cash and cash equivalents
+779,672
+1,520,330
+1,045,746
+Available-
+Proceeds from issuance of debt securities
+125
+shareholders
+Capital injection by non-controlling
+Cash flows from financing activities
+Balance as at 1 January 2018
+Total
+1,587,601
+Retained controlling
+interests
+13,533
+profits
+1,042,509
+issued
+531,559
+securities
+Non-
+Group
+Equity
+Liabilities
+Debt
+(b) Reconciliation of movements of liabilities to cash flows arising from financing activities
+1,509,523
+(In RMB millions, unless otherwise stated)
+Reverse repurchase agreements with original maturity of three
+months or less
+Notes to the Financial Statements
+228,063
+6,164
+200
+1,500
+1,443
+7,976
+| | | | $ན
+54
+33,152
+54
+as at FVTPL
+assets
+designated
+financial
+investments
+Financial Statements for the year ended 31 December 2018
+Held-to-
+Financial
+assets held
+for trading or
+Receivables
+8,157
+maturity
+16,043
+235
+During the year of 2018, the amount of income received from such category of investment funds was RMBO.19 million.
+(2017: RMB12 million).
+The aggregated amount of the investment funds sponsored and issued by the Group after 1 January 2018 but matured
+before 31 December 2018 was RMB66 million (The aggregated amount of the investment funds sponsored and issued by
+the Group after 1 January 2017 but matured before 31 December 2017 was RMB42,400 million).
+During the year of 2018, the amount of fee and commission income received from such category of non-principal-
+guaranteed wealth management products by the Group was RMB1,387 million (2017: RMB4,107 million).
+The aggregated amount of the non-principal-guaranteed wealth management products sponsored and issued by the Group
+after 1 January 2018 but matured before 31 December 2018 was RMB708,588 million (The aggregated amount of the non-
+principal-guaranteed wealth management products sponsored and issued by the Group after 1 January 2017 but matured
+before 31 December 2017 was RMB1,439,371 million).
+(c) Unconsolidated structured entities sponsored by the Group during the year in which
+the Group does not have an interest at 31 December 2018
+During the year of 2018, the amount of the average exposure of financing transactions through placements and reverse
+repurchase agreements from the Group with non-principal guaranteed wealth management products sponsored by the
+Group was RMB73,105 million (2017: RMB92,791 million). The transactions were conducted in the ordinary course of
+business under normal terms and conditions and at market rates.
+As at 31 December 2018, the amount of assets held by the unconsolidated non-principal-guaranteed wealth management
+products and investment funds, which are sponsored by the Group, were RMB2,575,857 million (31 December 2017:
+RMB2,665,795 million) and RMB 1,308,500 million (31 December 2017: RMB1,296,300 million) respectively.
+Annual Report 2018
+(b) Structured entities sponsored by the Group which the Group did not consolidate but
+held an interest
+51,894
+The types of unconsolidated structured entities sponsored by the Group include non-principal-guaranteed wealth
+management products and investment funds. The nature and purpose of these structured entities are to generate fees
+from managing assets on behalf of investors. These structured entities are financed through the issue of notes to investors.
+Interest held by the Group includes investments in notes issued by these structured entities and fees charged by providing
+management services. As at 31 December 2018, the carrying amounts of the investments in the notes issued by these
+structured entities and fee receivables being recognised were not material in the statement of financial positions.
+242,461
+32,689
+999
+4,798
+18,549
+Profit before taxation
+3,089
+369,324
+Share of profits of associates and joint ventures
+151,714
+(2,502)
+75,828
+3,089
+144,284
+Income tax expense
+587
+372,413
+(73,690)
+Profit for the year
+Other segment information:
+144,284
+Depreciation
+Amortisation
+298,723
+75,828
+151,714
+(7,677)
+(161,594)
+Operating income
+5,288
+353,859
+273,490
+92,484
+5,288
+725,121
+Operating expenses
+7,302
+(70,797)
+(98,280)
+(17,449)
+5,621
+(194,203)
+Impairment losses on assets
+(131,348)
+(30,926)
+793
+(113)
+Operating profit/(loss)
+5,011
+25,354,657
+538
+Other non-current assets (ii)
+20,760
+Segment liabilities
+12,292,100
+95,256
+6,982
+9,664,481
+42,370
+45,577
+290,404
+4,241
+15,863
+47,846
+3,179,501
+218,575
+Other segment information:
+Credit commitments
+2,222,156
+3,229,512
+(2,143)
+1,007,356
+107,201
+Property and equipment
+29,124
+29,124
+13,407
+996
+747
+432
+164
+2,339
+Capital expenditure
+30,471
+26,969
+2,237
+12,083
+72,555
+As at 31 December 2018
+Segment assets
+9,706,611
+5,711,799
+12,095,016
+186,114
+27,699,540
+Including: Investments in associates and joint ventures
+3,032
+1,606
+2018
+Other income/(expense), net (i)
+Short-term employment benefits
+Post-employment benefits
+2018
+RMB'000
+3,721
+262
+2017
+RMB'000
+7,519
+304
+3,983
+7,823
+Note: The above remuneration before tax payable to key management personnel for 2017 represents the total amount of annual
+remuneration, which includes the amount disclosed in the 2017 Annual Report.
+The total compensation packages for senior management of the Bank for the year ended 31 December 2018 have not
+been finalised in accordance with the regulations of the PRC relevant authorities. The remuneration not yet accrued is not
+expected to have a significant impact on the Group's and the Bank's 2018 financial statements. The total compensation
+packages will be further disclosed when determined by the relevant authorities.
+Companies or corporations, in which the key management of the Group or their close relatives are shareholders or key
+management personnel who are able to exercise control directly or indirectly are also considered as related parties of the Group.
+The transactions between the Group and the aforementioned parties for the year are as follows:
+Loans
+2018
+RMB'000
+2017
+RMB'000
+2,513
+2,603
+There were no other material transactions and balances with key management personnel on an individual basis during the
+year. The Group enters into banking transactions with key management personnel in the normal course of business.
+244
+ICBC
+Notes to the Financial Statements
+The aggregate compensation for the year, other than those for the personnel disclosed in note 12 above, is as follows:
+The key management personnel are those persons who have the authority and responsibility to plan, direct and control
+the activities of the Group, directly or indirectly, including members of the board of directors, the supervisory board and
+executive officers.
+(e) Key management personnel
+In the opinion of management, the transactions between the Group and the aforementioned parties were conducted in the
+ordinary course of business under normal terms and conditions and at market rates.
+(In RMB millions, unless otherwise stated)
+(i) Including net trading income, net gain on financial investments and other operating income (net).
+The major transactions between the Group and the associates and their affiliates comprised due from banks and
+other financial institutions, loans and advances to customers and due to banks and other financial institutions and the
+corresponding interest income and interest expense. In the opinion of management, the transactions between the Group
+and the associates and their affiliates were conducted under normal commercial terms and conditions.
+(d) Joint ventures and affiliates
+Balances at end of the year:
+Due to customers
+2018
+2017
+71
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+145
+Transactions during the year:
+Interest expense on amounts due to customers
+Interest rate ranges during the year:
+Due to customers
+1
+1
+%
+0.01 to 0.30
+%
+0.01 to 1.30
+2017
+The aggregate balance of loans and credit card overdraft to the person which are considered as related parties according
+to the relevant rules of Shanghai Stock Exchange was RMB93.45 million as at 31 December 2018 (31 December 2017:
+RMB36.52 million).
+In the opinion of management, the transactions between the Group and the aforementioned parties were conducted in the
+ordinary course of business under normal terms and conditions and at market rates.
+(f) Annuity Fund
+Year ended 31 December 2018
+Personal
+banking
+banking
+Treasury
+operations
+Others
+Total
+External net interest income
+273,082
+86,143
+Corporate
+213,293
+Internal net interest (expense)/income
+(3,458)
+122,772
+(119,314)
+Net fee and commission income
+81,684
+62,969
+648
+145,301
+572,518
+2,551
+Segment revenues, expenses, results, assets and liabilities include items directly attributable to a segment as well as those
+that can be allocated on a reasonable basis. The basis for allocation is mainly based on occupation of or contribution to
+resources. Income taxes are managed on a group basis and are not allocated to operating segments.
+Management monitors the operating results of the Group's business units separately for the purpose of making decisions
+about resources allocation and performance assessment. Segment information is prepared in conformity with the accounting
+policies adopted for preparing and presenting the financial statements of the Group.
+Apart from the obligations for defined contributions to the Annuity Fund, Annuity Fund holds A shares of the Bank with an
+amount of RMB4.41 million as at 31 December 2018 (31 December 2017: RMB21.58 million).
+(g) Transactions with state-owned entities in the PRC
+The Group operates in an economic environment predominated by enterprises directly or indirectly owned and/or controlled
+by the Government through its authorities, affiliates or other organisations (collectively the "state-owned entities"). During
+the year, the Group entered into extensive banking transactions with these state-owned entities including, but not limited
+to, lending and deposit taking, taking and placing of interbank balances, entrusted lending and the provision of intermediary
+services, the sale, purchase, underwriting and redemption of bonds issued by other state-owned entities, and the sale,
+purchase, and leasing of properties and other assets.
+Management considers that transactions with state-owned entities are activities conducted in the ordinary course of
+business, and that the dealings of the Group have not been significantly or unduly affected by the fact that the Group and
+those state-owned entities are ultimately controlled or owned by the Government. The Group has also established pricing
+policies for products and services and such pricing policies do not depend on whether or not the customers are state-owned
+entities.
+50. SEGMENT INFORMATION
+(a) Operating segments
+For management purposes, the Group is organised into different operating segments, namely corporate banking, personal
+banking and treasury operations, based on internal organisational structure, management requirement and internal
+reporting system.
+Corporate banking
+The corporate banking segment covers the provision of financial products and services to corporations, government agencies
+and financial institutions. The products and services include corporate loans, trade financing, deposit-taking activities,
+corporate wealth management services, custody activities and various types of corporate intermediary services, etc.
+Transactions between segments mainly represent the provision of funding to and from individual segments. These
+transactions are conducted on terms determined with reference to the average cost of funding and have been reflected
+in the performance of each segment. Net interest income and expense arising on internal fund transfer are referred to as
+"internal net interest income/expense". Net interest income and expense relating to third parties are referred to as "external
+net interest income/expense".
+Personal banking
+Treasury operations
+The treasury operations segment covers the Group's treasury operations which include money market transactions,
+investment securities, foreign exchange transactions and the holding of derivative positions, for its own accounts or on
+behalf of customers, etc.
+Annual Report 2018
+245
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Others
+This segment covers the Group's assets, liabilities, income and expenses that are not directly attributable or cannot be
+allocated to a segment on a reasonable basis.
+The personal banking segment covers the provision of financial products and services to individual customers. The products
+and services include personal loans, deposit-taking activities, card business, personal wealth management services and
+various types of personal intermediary services, etc.
+(!!)
+38,284
+246
+2,608,719
+902,217
+3,510,936
+(i)
+Including net trading income, net gain on financial investments and other operating income (net).
+(ii)
+Including long-term receivables, intangible assets, goodwill, long-term deferred expenses and other non-current assets.
+(b) Geographical information
+The Group operates principally in Mainland China, and also has branches and subsidiaries operating outside Mainland China
+(including: Hong Kong, Macau, Singapore, Frankfurt, Luxembourg, Seoul, Tokyo, London, Almaty, Jakarta, Moscow, Doha,
+Dubai, Abu Dhabi, Sydney, Toronto, Kuala Lumpur, Hanoi, Bangkok, New York, Karachi, Mumbai, Phnom Penh, Vientiane, Lima,
+Buenos Aires, Sao Paulo, Auckland, Kuwait City, Mexico City, Yangon, Riyadh, Istanbul, Prague, Zurich, Manila and Vienna, etc.).
+The distribution of the geographical areas is as follows:
+Mainland China (Head Office and domestic branches):
+Head Office ("HO"):
+Yangtze River Delta:
+Pearl River Delta:
+Bohai Rim:
+Central China:
+Western China:
+Northeastern China:
+Overseas and others:
+the HO business division (including institutions directly managed by the HO and their offices);
+including Shanghai, Jiangsu, Zhejiang and Ningbo;
+including Guangdong, Shenzhen, Fujian and Xiamen;
+including Beijing, Tianjin, Hebei, Shandong and Qingdao;
+Credit commitments
+Other segment information:
+23,945,987
+169,807
+26,087,043
+Including: Investments in associates and joint ventures
+32,441
+32,441
+Property and equipment
+96,515
+79,646
+37,649
+33,934
+including Shanxi, Henan, Hubei, Hunan, Anhui, Jiangxi and Hainan;
+247,744
+20,975
+7,076
+4,435
+11,124
+43,610
+Segment liabilities
+11,294,092
+8,627,592
+3,854,496
+Other non-current assets (ii)
+154,799
+including Chongqing, Sichuan, Guizhou, Yunnan, Guangxi, Shaanxi, Gansu, Qinghai, Ningxia,
+Xinjiang, Inner Mongolia and Tibet; and
+branches located outside Mainland China, domestic and overseas subsidiaries, and investments in
+associates and joint ventures.
+228,918
+61,134
+55,342
+30,593
+59,236
+80,818
+18,202
+38,275
+572,518
+Internal net interest (expense)/income
+(141,316)
+27,338
+11,824
+83,075
+11,846
+6,811
+5,554
+(5,132)
+Financial Statements for the year ended 31 December 2018
+External net interest income
+Total
+Eliminations
+others
+Annual Report 2018
+247
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Year ended 31 December 2018
+Mainland China (HO and domestic branches)
+Yangtze
+Pearl
+Bohai
+including Liaoning, Heilongjiang, Jilin and Dalian.
+Central
+Northeastern
+Overseas and
+Head Office
+River Delta
+River Delta
+Rim
+China
+China
+China
+Western
+Including long-term receivables, intangible assets, goodwill, long-term deferred expenses and other non-current assets.
+11,629,855
+9,309,390
+377
+139,625
+Other income/(expense), net (i)
+2,933
+(474)
+6,620
+4,872
+13,951
+Operating income
+332,264
+247,919
+90,599
+4,872
+675,654
+Operating expenses
+(70,089)
+(93,935)
+(15,857)
+(6,313)
+62,325
+76,923
+Net fee and commission income
+(128,992)
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Year ended 31 December 2017
+Corporate
+Personal
+Treasury
+banking
+banking
+(186,194)
+operations
+Total
+External net interest income
+251,100
+58,384
+212,594
+522,078
+Internal net interest income/(expense)
+1,308
+127,684
+Others
+4,992,999
+Impairment losses on assets
+(16,141)
+287,451
+6,122
+5,070
+2,404
+277
+13,873
+967
+682
+406
+59
+2,114
+15,794
+12,964
+6,185
+728
+35,671
+Capital expenditure
+As at 31 December 2017
+Segment assets
+Amortisation
+Depreciation
+Other segment information:
+Profit for the year
+(2,029)
+(297)
+(127,769)
+Operating profit/(loss)
+152,873
+137,843
+72,713
+(1,738)
+361,691
+(109,302)
+Share of profits of associates and joint ventures
+2,950
+Profit before taxation
+152,873
+137,843
+72,713
+1,212
+364,641
+Income tax expense
+(77,190)
+2,950
+Notes to the Financial Statements
+2017
+Annual Report 2018
+46. DESIGNATED FUNDS AND LOANS
+Designated funds
+Designated loans
+Group
+2018
+2017
+1,327,990
+1,327,433
+920,829
+920,476
+The designated funds represent the funding that the trustors have instructed the Group to use to make loans to third parties
+as designated by them. The credit risk remains with the trustors.
+The designated loans represent the loans granted to specific borrowers designated by the trustors on their behalf according
+to the entrusted agreements signed by the Group and the trustors. The Group does not bear any risk.
+47. ASSETS PLEDGED AS SECURITY
+Financial assets of the Group including securities, bills and loans have been pledged as collateral for liabilities or contingent
+liabilities, mainly the repurchase agreements and derivative contracts. As at 31 December 2018, the carrying value of the
+financial assets of the Group pledged as collateral amounted to approximately RMB490,913 million (31 December 2017:
+RMB878,823 million).
+240
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+48. FIDUCIARY ACTIVITIES
+The Group provides custody, trust and asset management services to third parties. Revenue from such activities is included in
+"net fee and commission income" set out in note 7 above. Those assets held in a fiduciary capacity are not included in the
+Group's consolidated statement of financial position.
+49. RELATED PARTY DISCLOSURES
+In addition to the transactions detailed elsewhere in these financial statements, the Group had the following transactions
+with related parties during the year:
+As at 31 December 2018, the unexpired securities underwriting obligations of the Group and the Bank amounted to
+RMB100 million (31 December 2017: Nil).
+(f) Underwriting obligations
+The MOF will not provide funding for the early redemption of these government bonds on a back-to-back basis but is
+obliged to repay the principal and the respective interest upon maturity.
+As an underwriting agent of the Government, the Bank underwrites certain PRC government bonds and sells the bonds
+to the general public. The Bank is obliged to redeem these bonds at the discretion of the holders at any time prior to
+maturity. The redemption price for the bonds is based on the nominal value of the bonds plus any interest accrued up to
+the redemption date. As at 31 December 2018, the Bank had underwritten and sold bonds with an accumulated amount of
+RMB85,845 million (31 December 2017: RMB87,981 million) to the general public, and these government bonds have not
+yet matured nor been redeemed. Management expects that the amount of redemption of these government bonds through
+the Bank prior to maturity will not be material.
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Credit risk-weighted assets of
+credit commitments(i)
+(i)
+Group
+Bank
+2018
+2017
+(a) Shareholders with significant influence
+2018
+1,402,715
+1,552,070
+1,363,246
+1,526,140
+Internal ratings-based approach was adopted to calculate the credit risk-weighted assets according to the scope approved by
+the former CBRC, and others were calculated by weighted approach.
+(d) Legal proceedings
+As at 31 December 2018, there were a number of legal proceedings outstanding against the Bank and/or its subsidiaries
+with a claimed amount of RMB4,154 million (31 December 2017: RMB4,496 million).
+In the opinion of management, the Group and the Bank have made adequate allowance for any probable losses based on
+the current facts and circumstances, and the ultimate outcome of these lawsuits will not have a material impact on the
+financial position or operations of the Group and the Bank.
+(e) Redemption commitments of government bonds
+2017
+239
+(i)
+The MOF is a ministry under the State Council of the PRC, primarily responsible for, among others, state fiscal revenues,
+expenses and taxation policies. As at 31 December 2018, the MOF directly owned approximately 34.60% (31 December
+2017: approximately 34.60%) of the issued share capital of the Bank. The Group enters into banking transactions with the
+MOF in its normal course of business, including the subscription and redemption of government bonds issued by the MOF.
+Details of the major transactions are as follows:
+As at 31 December 2018, Central Huijin Investment Ltd ("Huijin") directly owned approximately 34.71% (31 December
+2017: approximately 34.71%) of the issued share capital of the Bank. Huijin is a state-owned investment company
+established on 16 December 2003 under the Company Law of the PRC. Huijin has total registered and paid-in capital of
+RMB828,209 million. Huijin is a wholly-owned subsidiary of China Investment Corporation, and in accordance with the
+authorisation by the State, Huijin makes equity investments in the key state-owned financial institutions, and shall, to the
+extent of its capital contribution, exercise the rights and perform the obligations as an investor on behalf of the State in
+accordance with applicable laws, to achieve the goal of preserving and enhancing the value of state-owned financial assets.
+Huijin does not engage in other business activities, and does not intervene in the day-to-day business operations of the key
+state-owned financial institutions it controls.
+As at 31 December 2018, the Huijin Bonds held by the Bank are of an aggregate face value of RMB38.77 billion
+(31 December 2017: RMB22.75 billion), with terms ranging from 1 to 30 years and coupon rates ranging from 3.12% to
+5.15% per annum. The Huijin Bonds are government-backed, short-term financing bills and medium-term notes. The Bank's
+subscription of the Huijin Bonds was conducted in the ordinary course of business, in compliance with relevant regulatory
+requirements and the corporate governance of the Bank.
+Annual Report 2018
+241
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+The Group entered into banking transactions with Huijin in the ordinary course of business under normal commercial terms
+and at the market rates. Details of the major transactions are as follows:
+Balances at end of the year:
+Debt securities purchased
+Loans and advances to customers
+Due to customers
+2018
+2017
+39,563
+22,215
+27,007
+27,036
+11,499
+(ii) Huijin
+Other related party transactions between the Group and enterprises under the control or joint control of the MOF are
+disclosed in note 49(g) "transactions with state-owned entities in the PRC".
+As at 31 December 2018, the Group holds a series of long-term bonds issued by Huarong, which is under the control of the
+MOF, with an aggregate amount of RMB90,309 million (31 December 2017: RMB90,309 million). The details of the Huarong
+bonds are included in note 24.
+2.10 to 5.41
+Balances at end of the year:
+The PRC government bonds and the special government bond
+2018
+2017
+1,097,055
+927,432
+2018
+2017
+Transactions during the year:
+The MOF
+Subscription of the PRC government bonds
+Interest rate ranges during the year:
+Bond investments
+682,923
+351,138
+322,489
+37,795
+%
+184,792
+31,366
+%
+2.13 to 5.41
+Redemption of the PRC government bonds
+Interest income on the PRC government bonds
+5,607
+Annual Report 2018
+1,383,145
+808
+21,683
+15,628
+13,077
+14,049
+Operating lease commitments - Lessor
+At the end of the reporting period, the Group leased certain aircraft and vessels to third parties under operating lease
+arrangements, and the total future minimum lease receivables in respect of non-cancellable operating leases with its tenants
+were as follows:
+Within one year
+Over one year but within five years
+Over five years
+Group
+2018
+Net fee and commission income
+16,068
+10,551
+62,722
+42,806
+88,258
+35,255
+167,048
+714
+1,011
+2,331
+Over five years
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+(b) Operating lease commitments
+Operating lease commitments - Lessee
+At the end of the reporting period, the Group and the Bank leased certain office properties under operating lease
+arrangements, and the total future minimum lease payments in respect of non-cancellable operating leases were as follows:
+Group
+Bank
+2018
+2017
+2018
+88,612
+2017
+6,546
+5,451
+4,877
+4,961
+Over one year but within five years
+12,806
+9,166
+7,486
+8,280
+Within one year
+871,289
+3,476,117
+(c) Credit commitments
+The Group provides letters of credit and financial guarantees to guarantee the performance of customers to third parties.
+Bank acceptances comprise undertakings by the Group to pay bills of exchange drawn on customers. The Group expects
+most acceptances to be settled simultaneously with the reimbursement from the customers.
+42,918
+37,353
+37,657
+34,556
+162,801
+153,182
+159,470
+147,524
+With an original maturity of under one year
+151,927
+With an original maturity of one year or over
+1,061,666
+Undrawn credit card limit
+1,037,861
+3,229,512
+234,675
+1,439,090
+902,217
+3,510,936
+141,488
+221,628
+987,856
+1,005,493
+3,195,270
+362,367
+431,974
+337,930
+405,155
+The contractual amounts of credit commitments by category are set out below. The amounts disclosed in respect of loan
+commitments and undrawn credit card limit are under the assumption that the amounts will be fully advanced. The amounts
+for bank acceptances, letters of credit and guarantees represent the maximum potential losses that would be recognised at
+the end of the reporting period had the counterparties failed to perform as contracted.
+Group
+Bank
+2018
+Bank acceptances
+263,038
+2017
+245,542
+2018
+2017
+At any given time, the Group has outstanding commitments to extend credit. These commitments are in the form of
+approved loans and undrawn credit card limits.
+259,392
+Guarantees issued:
+- Financing letters of guarantees
+- Non-financing letters of guarantees
+Sight letters of credit
+Usance letters of credit and other commitments
+Loan commitments:
+104,146
+160,947
+171,940
+215,556
+240,052
+2018
+2017
+Transactions during the year:
+265
+Interest expense on amounts due to banks and other financial institutions
+2,643
+1,262
+2,432
+1,566
+%
+%
+Fee and commission income
+Interest rate ranges during the year:
+Financial investments
+Due from banks and other financial institutions
+Loans and advances to customers
+Due to banks and other financial institutions
+0 to 4.00
+0.01 to 4.50
+0.20 to 6.15
+-0.20 to 5.50
+0.50 to 4.00
+-0.42 to 105.00
+0.25 to 6.15
+-0.36 to 105.00
+The major balances and transactions with subsidiaries have been eliminated in the consolidated financial statements.
+(c) Associates and affiliates
+Balances at end of the year:
+1,033
+Interest income on loans and advances to customers
+147
+1,186
+1,802
+757
+Due to banks and other financial institutions
+420,539
+383,376
+Derivative financial liabilities
+Reverse repurchase agreements
+Repurchase agreements
+Credit commitments
+985
+4,353
+Due from banks and other financial institutions
+4,479
+27,349
+151,512
+5,913
+144,810
+2018
+2017
+Transactions during the year:
+Interest income on financial investments
+155
+Interest income on amounts due from banks and other financial institutions
+1,235
+2,059
+Loans and advances to customers
+Due to banks and other financial institutions
+120
+55
+Interest expense on amounts due to banks and other financial institutions
+Interest expense on amounts due to customers
+323
+133
+1
+2
+Interest rate ranges during the year:
+Loans and advances to customers
+Due to banks and other financial institutions
+Due to customers
+%
+%
+Due from banks and other financial institutions
+0 to 14.00
+1.20 to 4.37
+0 to 2.67
+0 to 0.72
+0 to 14.00
+0.50 to 4.28
+0 to 8.54
+0 to 2.30
+16
+53
+Interest income on amounts due from banks and other financial institutions
+Interest income on loans and advances to customers
+Transactions during the year:
+Due to customers
+Derivative financial liabilities
+Credit commitments
+2018
+2017
+135
+3,075
+3,399
+1,667
+Derivative financial assets
+1,558
+15,887
+17,535
+166
+121
+433
+1,178
+65
+2018
+2017
+1,238
+Derivative financial assets
+37,385
+49,532
+Debt securities purchased
+Due from banks and other financial institutions
+Loans and advances to customers
+Derivative financial assets
+Due to banks and other financial institutions
+Derivative financial liabilities
+Due to customers
+Credit commitments
+2018
+2017
+523,519
+135,694
+211
+6,335
+650,186
+128,185
+691
+6,431
+123,288
+157,412
+6,988
+933
+13,974
+6,023
+580
+Balances at end of the year:
+Huijin has equity interests in certain other banks and financial institutions under the direction of the Government. The
+Group enters into transactions with these banks and financial institutions in the ordinary course of business under normal
+commercial terms. Management considers that these banks and financial institutions are competitors of the Group. Details
+of major transactions during the year conducted with these banks and financial institutions are as follows:
+0.30 to 1.76
+0.30 to 2.18
+Interest income on debt securities purchased
+Interest income on loans and advances to customers
+Interest expense on amounts due to customers
+Net loss on financial liabilities designated as at FVTPL
+Interest rate ranges during the year:
+Debt securities purchased
+Loans and advances to customers
+Due to customers
+1,211
+672
+15,954
+1,207
+192
+202
+26
+%
+%
+3.12 to 5.15
+3.16 to 4.98
+3.92 to 4.75
+3.92 to 4.75
+603
+2018
+2017
+Transactions during the year:
+0 to 3.90
+0 to 10.00
+2.31 to 4.13
+0 to 9.07
+0 to 7.20
+The interest rates disclosed above vary across product groups and transactions depending on the maturity date, credit
+risk of counterparty and currency. In particular, given local market conditions, the spread of certain major or long dated
+transactions can vary across the market.
+0 to 7.50
+4.13 to 6.18
+0 to 8.17
+242
+ICBC
+(b) Subsidiaries
+Notes to the Financial Statements
+Due to customers
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+2017
+Balances at end of the year:
+Financial investments
+27,638
+14,478
+Due from banks and other financial institutions
+428,902
+387,233
+Loans and advances to customers
+2018
+243
+Due to banks and other financial institutions
+0.13 to 7.67
+Interest income on debt securities purchased
+19,866
+23,758
+Interest income on amounts due from banks and other financial institutions
+Interest income on loans and advances to customers
+538
+418
+26
+8
+Interest expense on amounts due to banks and other financial institutions
+Loans and advances to customers
+1,517
+Interest expense on amounts due to customers
+12
+10
+Debt securities purchased
+Interest rate ranges during the year:
+Due from banks and other financial institutions
+%
+%
+0 to 7.00
+911
+3,907
+412,271
+27,704
+Rim
+China
+China
+China
+3,700,969
+4,085,516
+2,758,294
+3,530,531
+1,120,364
+Overseas and
+others
+3,695,699
+Total
+27,641,165
+Including: Investments in associates and
+joint ventures
+29,124
+29,124
+Property and equipment
+12,038
+31,408
+11,332
+Eliminations
+(6,914,407)
+18,605
+Northeastern
+Central
+2,339
+Capital expenditure
+2,655
+3,133
+1,767
+3,838
+2,410
+2,801
+975
+Western
+54,976
+(i)
+Including net trading income, net gain on financial investments and other operating income (net).
+As at 31 December 2018
+Mainland China (HO and domestic branches)
+Assets by geographical areas
+Head Office
+9,803,222
+Yangtze
+River Delta
+5,860,977
+Pearl
+River Delta
+Bohai
+72,555
+202
+18,359
+9,650
+(6,914,407)
+25,268,698
+85,959
+Total liabilities
+25,354,657
+Other segment information:
+Credit commitments
+1,140,804
+652,201
+879,687
+372,549
+231,154
+82,387
+720,824
+(926,942)
+3,229,512
+(i)
+Including long-term receivables, intangible assets, goodwill, long-term deferred expenses and other non-current assets.
+ICBC
+248
+544,264
+22,807
+1,134,009
+6,639,630
+166,205
+290,404
+Other non-current assets (i)
+11,606
+5,839
+3,458
+3,926
+6,750
+10,449
+2,733,284 3,378,285
+1,581
+47,846
+Unallocated assets
+58,375
+Total assets
+27,699,540
+Liabilities by geographical areas
+7,532,137
+6,166,615
+3,719,458
+4,237
+86
+Unallocated liabilities
+280
+27,958
+57,021
+(288)
+725,121
+Operating expenses
+(18,802)
+(29,196)
+(21,976)
+(31,779)
+108,518
+(28,482)
+(11,960)
+(19,192)
+288
+(194,203)
+Impairment losses on assets
+(29,087)
+(19,899)
+(20,268)
+(29,537)
+(33,104)
+(23,683)
+88,192
+94,375
+335
+23,785
+17,258
+20,869
+4,644
+8,850
+145,301
+Other (expense)/income, net (i)
+(5,114)
+136,799
+(605)
+(148)
+20
+(442)
+15,028
+(288)
+7,302
+Operating income
+86,395
+126,151
+(654)
+(21,005)
+(495)
+(7,679)
+Income tax expense
+(73,690)
+Profit for the year
+298,723
+Other segment information:
+Depreciation
+1,825
+1,786
+1,231
+372,413
+2,006
+2,690
+1,113
+13,407
+Amortisation
+809
+233
+198
+(10,436)
+196
+2,352
+33,239
+404
+54,409
+5,562
+(161,594)
+38,506
+77,056
+52,131
+Operating profit
+36,027
+54,409
+5,562
+30,150
+75,483
+52,131
+369,324
+75,483
+77,056
+38,506
+36,027
+3,089
+3,089
+Share of profits of associates and joint ventures
+Profit before taxation
+2,161,775
+Total maximum credit risk exposure
+2,742,782
+2,245,743
+2,816,954
+Credit commitments
+11,274,794
+160,755
+522,667
+332,232
+417,287
+250,303
+3,473,846
+756,918
+75,541
+1,047,736
+2,951,179
+18,130
+166,363
+25,637
+22,827
+2,494,007
+59,701
+90,710
+13,720
+284,409
+10,227,058
+4,519,182
+27,297
+61,931
+3,383
+2,393
+2,038
+395
+50,796
+Others
+3,160,069
+China
+3,067,257
+Total
+Balances with central banks
+3,065,933
+59,322
+34,559
+115,233
+26,569
+33,744
+9,270
+194,028
+3,538,658
+Due from banks and other financial
+institutions
+24,694
+582,618
+and others
+China
+China
+Bohai Rim
+832,459
+3,050,831
+422,991
+3,473,822
+26,953,240
+3,229,512
+30,182,752
+The compositions of each geographical distribution above are set out in note 50(b).
+31 December 2017
+2,406,498
+North
+Yangtze
+River Delta
+Pearl River
+Central
+Western
+eastern
+Overseas
+Delta
+Head
+Office
+3,997,484
+Derivative financial assets
+-Financial investments measured
+institutions
+561,322
+15,052
+1,857
+427
+222
+599
+103
+382,867
+962,449
+29,741
+2,095
+849
+358
+130
+Due from banks and other financial
+3,302,529
+176,155
+10,447
+2,854
+Delta
+Delta
+Bohai Rim
+China
+China
+China
+241
+and others
+Balances with central banks
+2,870,736
+82,669
+32,256
+80,490
+17,367
+32,409
+Total
+at amortised cost
+109
+71,335
+520
+685
+174
+42,206
+750,957
+-Financial investments measured at FVOCI
+857,356
+34,529
+18,218
+174,673
+16,997
+21,665
+432
+276,374
+1,400,244
+6,016
+914
+1,219
+699,223
+Reverse repurchase agreements
+505,600
+228,449
+734,049
+Loans and advances to customers
+687,466
+2,763,624
+37,812
+2,020,113
+2,148,413
+2,668,607
+731,538
+1,571,763
+15,046,132
+Financial investments
+-Financial investments measured at FVTPL
+2,454,608
+1,128
+2,849,198
+210
+2,966,387
+84,106
+824,555
+410,475
+3,259,673
+3,510,936
+28,878,520
+The compositions of each geographical distribution above are set out in note 50(b).
+Annual Report 2018
+255
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Bank
+31 December 2018
+Yangtze
+North
+Head
+2,288,579
+River
+371,775
+25,367,584
+20,255
+14,593
+3,773
+56,872
+288,090
+Credit commitments
+Total maximum credit risk exposure
+9,829,955
+911,612
+10,741,567
+2,711,616
+579,997
+3,291,613
+1,940,230
+414,893
+2,355,123
+2,633,747
+517,276
+3,151,023
+2,067,777
+2,594,612
+740,449
+Office
+220,802
+Pearl River
+Central
+Western
+3,249,421
+Due from banks and other financial
+institutions
+785,442
+16,429
+2,243
+427
+222
+599
+103
+225,937
+1,031,402
+Derivative financial assets
+30,266
+2,182
+123,047
+10,447
+32,409
+17,367
+eastern
+Overseas
+Office
+Delta
+Delta
+Bohai Rim
+China
+18,148
+China
+and others
+Total
+Balances with central banks
+2,870,736
+82,669
+32,256
+80,490
+China
+13,558
+32,024
+128,867
+647
+1,889
+2,228
+306
+1,467
+194
+47,872
+89,013
+Reverse repurchase agreements
+738,433
+248,198
+986,631
+Loans and advances to customers
+606,492
+2,542,533
+34,410
+Derivative financial assets
+353,601
+17,473
+1,251
+123
+258,793
+847,611
+Financial assets held for trading
+60,072
+18,470
+1,842,347
+78,542
+333,921
+557
+373
+563
+253
+370
+91
+Financial assets designated as at FVTPL
+634
+2,277,473
+2,451,071
+68,913
+12,677
+216,380
+3,542,184
+- Available-for-sale financial assets
+933,376
+45,079
+24,088
+193,388
+17,417
+22,933
+1,279
+235,599
+1,473,159
+Others
+44,699
+24,344
+22,004
+28,576
+712,922
+1,505,600
+13,892,966
+Financial investments
+- Receivables
+221,242
+24
+1,954,528
+284
+3,540
+270
+120
+49,913
+277,129
+-Held-to-maturity investments
+3,124,591
+1,736
+Overseas
+3,112
+Western
+(5,560,058)
+571,676
+1,069,369
+3,164,294
+2,624,956
+5,568,370
+3,692,171
+5,564,511
+7,179,622
+Liabilities by geographical areas
+26,087,043
+Total assets
+48,392
+Unallocated assets
+43,610
+23,874,911
+4,273
+Unallocated liabilities
+Total liabilities
+Annual Report 2018
+Including long-term receivables, intangible assets, goodwill, long-term deferred expenses and other non-current assets.
+3,510,936
+(585,683)
+690,097
+89,923
+433,536
+254,474
+558,078
+466,598
+657,602
+946,311
+Credit commitments
+Other segment information:
+23,945,987
+71,076
+1,430
+7,603
+5,371
+(5,560,058)
+3,382,006
+1,078,047
+3,113,759
+2,529,871
+3,710,656
+3,356,039
+5,327,071
+9,101,260
+Assets by geographical areas
+Total
+Eliminations
+Overseas and
+others
+China
+Northeastern
+26,038,651
+Including: Investments in associates and
+joint ventures
+32,441
+3,974
+4,172
+5,762
+11,025
+Other non-current assets (i)
+247,744
+125,642
+249
+9,900
+18,588
+17,080
+10,955
+30,359
+12,166
+Property and equipment
+32,441
+23,054
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+EAD refers to the total amount of on-and off-balance sheet exposures in the event of default and is determined based on
+the historical repayment records.
+LGD is the magnitude of the likely loss if there is a default in light of forward-looking information. The LGD is depending
+on the type of counterparty, the method and priority of the recourse, and the type of collaterals, with taking the
+forward-looking information into account;
+PD is the possibility that a customer will default on its obligation within a certain period of time in light of forward-looking
+information. The Group's PD is adjusted based on the results of the Internal Rating-Based Approach under the New Basel
+Capital Accord, taking the forward-looking information into account and deducting the prudential adjustment to reflect the
+debtor's point-in-time (PIT) PD under the current macroeconomic environment;
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+251
+Annual Report 2018
+Expected credit losses ("ECL") for a financial instrument is measured at an amount equal to 12-month ECL or lifetime ECL
+depending on whether a significant increase in credit risk on that financial instrument has occurred since initial recognition
+or whether an asset is considered to be credit-impaired. The loss allowance for loans and advances to customers, other than
+those corporate loans and advance to customers which are credit-impaired, is measured using the risk parameters method.
+The key parameters include Probability of Default ("PD"), Loss Given Default ("LGD"), and Exposure at Default ("EAD"),
+considering the time value of money. Related definitions are as follows:
+Description of parameters, assumptions, and estimation techniques
+There are other objective evidences that the financial asset is impaired.
+•
+Due to serious financial difficulties, the financial asset cannot continue to be traded in an active market;
+•
+The borrower is probable to be insolvent or carry out other financial restructurings;
+The assumptions underlying the ECL calculation, such as how the PDs and LGDs of different maturity profiles change are
+monitored and reviewed on a quarterly basis by the Group.
+There have been no significant changes in estimation techniques or significant assumptions made during the year.
+The impairment loss on credit-impaired corporate loans and advance to customers applied cash flow discount method, if
+there is objective evidence that an impairment loss on a loan or advance has incurred, the amount of the loss is measured as
+the difference between the asset's gross carrying amount and the present value of estimated future cash flows discounted
+at the asset's original effective interest rate. The allowance for impairment loss is deducted in the carrying amount. The
+impairment loss is recognised in the statement of profit or loss. In determining allowances on an individual basis, the
+following factors are considered:
+•
+The Group sometimes modifies the terms of loans provided to customers due to commercial renegotiations, or for distressed
+loans, with a view to maximising recovery.
+Contractual modification of financial assets
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+252
+The Group writes off financial assets when it has exhausted practical recovery efforts and has concluded there is no
+reasonable expectation of recovery.
+•
+Write-off policy
+Forward-looking information contained in ECL
+It may not be possible to identify a single, or discrete events that result in the impairment, but it may be possible to identify
+impairment through the combined effect of several events. The impairment losses are evaluated at the end of each reporting
+period, unless unforeseen circumstances require more careful attention.
+The timing of the expected cash flows.
+The availability of other financial support and the realisable value of collateral; and
+The estimated recoverable cash flows from projects and liquidation;
+The borrower's ability to improve performance once a financial difficulty has arisen;
+The sustainability of the borrower's business plan;
+The calculation of ECL incorporates forward-looking information. The Group has performed historical analysis and identified
+the key economic variables, including Gross Domestic Product ("GDP"), Consumer Price Index ("CPI"), Purchasing Managers'
+Index ("PMI"), M2, Industrial Added Value and Real Estate Climate Index, impacting ECL for each portfolio. The impact of
+these economic variables on the PD and LGD has been determined by performing statistical regression analysis to understand
+the correlations among the historical changes of the economic variables, PD and LGD. Forecasts of these economic variables
+are provided quarterly by the Group at least and provide the best estimate view of the economy over the next year.
+When calculating the weighted average ECL, the optimism, neutral and pessimism scenarios and its weightings determined
+by a combination of macro-statistical analysis and expert judgment are taken into account by the Group.
+Western
+China
+In light of economic, legal or other factors, the Group has made concessions to a borrower in financial difficulties,
+which would otherwise have been impossible under normal circumstances;
+It has been overdue for more than 90 days;
+250
+Refer to Note 3(6) Impairment of the financial assets for the definition of the three risk stages.
+The Group classifies financial instruments into three risk stages and makes provisions for expected credit losses accordingly,
+depending on whether credit risk on that financial instrument has increased significantly since initial recognition.
+Stage of financial instruments
+Credit risk assessment method
+The Group is also exposed to credit risk in other areas in addition to the credit risk arising from the Group's loans, due
+from banks and other financial institutions and financial investments. The credit risk arising from derivative financial
+instruments is limited to derivative financial assets recorded in the statement of financial position. In addition, the Group
+provides guarantees for customers and may therefore be required to make payments on their behalf. These payments will be
+recovered from customers in accordance with the terms of the agreement. Therefore, the Group assumes a credit risk similar
+to that arising from loans and applies the same risk control procedures and policies to reduce risks.
+Credit risk is the risk of loss arising from a borrower or counterparty's failure to perform its obligations. Operational failures
+which result in unauthorised or inappropriate guarantees, financial commitments or investments by the Group may also give
+rise to credit risk. The Group's credit risk is mainly attributable to its loans, due from banks and other financial institutions
+and financial investments.
+Definition and scope
+(a) Credit risk
+The Bank maintains a dual-reporting line structure at the branch level for risk management purposes. Under this structure,
+the risk management departments of the branches report to both the corresponding risk management departments at the
+Head Office and management of the relevant branches.
+The Group has also assigned departments monitoring financial risks within the Group, including the Credit Management
+Department to monitor credit risk, the Risk Management Department together with the Asset and Liability Management
+Department to monitor market and liquidity risks, and the Internal Control and Compliance Department to monitor
+operational risk. The Risk Management Department is primarily responsible for coordinating and establishing a
+comprehensive risk management framework, preparing consolidated reports on credit risk, market risk and operational risk
+and reporting directly to the Chief Risk Officer.
+The President supervises the risk management strategies and reports directly to the Board. He chairs two management
+committees including the Risk Management Committee and the Asset and Liability Management Committee. These two
+committees formulate and make recommendations in respect of risk management strategies and policies through the
+President to the Risk Management Committee of the Board. The Chief Risk Officer assists the President to supervise and
+manage various risks.
+The board of directors (the "Board") has the ultimate responsibility for risk management and oversees the Group's risk
+management functions through the Risk Management Committee and the Audit Committee of the Board.
+A description and an analysis of the major risks faced by the Group are as follows:
+51. FINANCIAL INSTRUMENTS RISK MANAGEMENT
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Significant increase in credit risk
+•
+Generally, a financial asset is considered to be credit-impaired if:
+Impairment assessment
+(iii) The Group considers the borrower is unlikely to pay its credit obligations to the Group in full.
+The principal or interest of loan is past due more than 90 days to the Group;
+Write-offs;
+(ii)
+(i)
+•
+The Group defines a retail business borrower as in default when single credit assets of borrowers meets one or more of the
+following criteria:
+The corporate borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to
+actions such as liquidation against collateral;
+The principal or interest of loan is past due more than 90 days to the Group;
+(ii)
+(i)
+The Group defines a corporate borrower as in default when it meets one or more of the following criteria at the timing
+of recognition:
+Definition of default
+The assessment of significant increase since initial recognition in the credit risk is performed at least on a quarterly basis for
+financial instruments held by the Group. The Group takes into consideration all reasonable and supportable information
+(including forward-looking information) that reflects significantly change in credit risk for the purposes of classifying financial
+instruments. The main considerations are regulatory and operating environment, internal and external credit risk gradings,
+debt-servicing capacity, operating capabilities, contractual terms, and repayment records. The Group compares the risk of
+default of a single financial instrument or a portfolio of financial instruments with similar credit risk characteristics as at the
+end of the reporting period and its risk of default at the date of initial application to determine changes in the risk of default
+during the lifetime of a financial instrument or a portfolio of financial instruments. In determining whether credit risk of a
+financial instrument has increased significantly since initial recognition, the Group considers factors indicating whether the
+probability of default has risen sharply, whether the financial instrument has been past due for more than 30 days, whether
+the market price has been falling to assess deterioration.
+(iii) The corporate borrower has the above matters in other financial institutions refers to (i), (ii)
+Central
+China
+Rim
+Bohai
+1,031,402
+930,593
+38,295
+521,393
+14,211,777
+53,856
+750,763
+13,125,401
+Financial investments
+Financial investments measured at FVTPL
+750,957
+432,143
+- Financial investments measured at FVOCI
+Financial investments measured
+1,400,244
+709,262
+1,217,762
+398,329
+at amortised cost
+4,519,182
+847,611
+89,013
+986,631
+13,892,966
+15,046,132
+Loans and advances to customers
+962,449
+71,335
+734,049
+As at the end of the reporting period, the maximum credit risk exposure of the Group and of the Bank without taking
+account of any collateral and other credit enhancements is set out below:
+Group
+Bank
+2018
+2017
+2018
+2017
+4,362,174
+Balances with central banks
+3,538,658
+3,249,421
+3,477,828
+Due from banks and other
+financial institutions
+Derivative financial assets
+Reverse repurchase agreements
+3,302,529
+Maximum exposure to credit risk without taking account of any collateral and other credit
+enhancements
+- Available-for-sale financial assets
+1,473,159
+3,542,184
+(ii) Risk concentrations
+Credit risk is often greater when counterparties are concentrated in one single industry or geographic location or have
+comparable economic features. In addition, different geographic areas and industrial sectors have their unique characteristics
+in terms of economic development, and could present a different credit risk.
+254
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+By geographical distribution
+The following tables set out the breakdown of the Group's and the Bank's maximum credit risk exposure without taking
+account of any collateral and other credit enhancements, as categorised by geographical distribution:
+Group
+31 December 2018
+Head
+Yangtze
+River
+North
+Pearl River
+Central
+27,447,539
+28,653,527
+3,476,117
+3,195,270
+1,324,817
+3,439,471
+― Receivables
+277,129
+231,631
+Others
+166,363
+– Held-to-maturity investments
+288,090
+238,733
+Credit commitments
+Total maximum credit risk exposure
+26,953,240
+3,229,512
+30,182,752
+25,367,584
+3,510,936
+28,878,520
+25,458,257
+23,971,422
+116,771
+eastern
+(i)
+Financial Statements for the year ended 31 December 2018
+88
+352
+285
+169
+181
+240
+627
+Amortisation
+13,873
+386
+1,155
+2,856
+2,452
+2,079
+1,323
+172
+2,114
+Capital expenditure
+1,512
+Pearl
+River Delta
+Yangtze
+River Delta
+Head Office
+Mainland China (HO and domestic branches)
+As at 31 December 2017
+(i)
+Including net trading income, net gain on financial investments and other operating income (net).
+1,918
+(i)
+22,050
+787
+2,830
+2,011
+1,539
+1,303
+3,639
+35,671
+(In RMB millions, unless otherwise stated)
+1,704
+Other segment information:
+849
+1,989
+2,903
+1,618
+Collaterals and other credit enhancements
+The amount and type of collateral required depend on the assessment of the credit risk of the counterparty. Guidelines are
+in place specifying the types of collateral and valuation parameters which can be accepted.
+Reverse repurchase business is mainly collateralised by bills, loans or investment securities. As part of the reverse repurchase
+agreements, the Group has received securities that it is allowed to sell or repledge in the absence of default by their owners.
+Corporate loans and discounted bills are mainly collateralised by properties or other assets. As at 31 December 2018, the
+gross carrying amount of corporate loans and discounted bills amounted to RMB9,783,331 million (31 December 2017:
+RMB9,287,990 million), of which credit exposure covered by collateral amounted to RMB3,208,571 million (31 December
+2017: RMB3,335,404 million).
+Retail loans are mainly collateralised by residential properties. As at 31 December 2018, the gross carrying amount of retail
+loans amounted to RMB5,636,574 million (31 December 2017: RMB4,945,458 million), of which credit exposure covered by
+collateral amounted to RMB4,913,432 million (31 December 2017: RMB4,313,125 million).
+The Group prefers more liquid collateral with relatively stable market value and does not accept collateral that is illiquid,
+with difficulties in registration or high fluctuations in market value. The value of collateral should be assessed and confirmed
+by the Group or valuation agents identified by the Group. The value of collateral should adequately cover the outstanding
+balance of loans. The loan-to-value ratio depends on types of collateral, usage condition, liquidity, price volatility and
+realisation cost. All collateral has to be registered in accordance with the relevant laws and regulations. The credit officers
+inspect the collateral and assess the changes in the value of collateral regularly.
+Management monitors the market value of collateral periodically and requests additional collateral in accordance with the
+underlying agreement when it is considered necessary.
+It is the Group's policy to dispose of repossessed assets in an orderly manner. In general, the Group does not occupy
+repossessed assets for business use.
+During the reporting period, the Group took possession of collateral held as security with a carrying amount of
+RMB1,774 million (31 December 2017: RMB2,099 million).
+Annual Report 2018
+253
+Notes to the Financial Statements
+included in above
+2,590
+5,083
+5,158
+287,451
+(77,190)
+364,641
+40,273
+10,812
+47,694
+32,659
+Depreciation
+66,818
+Bank
+2018
+2017
+2018
+2017
+Rescheduled loans and advances to customers
+Impaired loans and advances to customers
+7,211
+Group
+358
+Delta
+241
+78,542
+59,777
+1,466,995
+3,542,184
+226,235
+5,373,733
+Bank
+31 December 2018
+Financial
+investments
+Financial
+Financial
+investments
+investments
+measured at
+measured at
+332,393
+measured at
+17,898
+241,879
+196,793
+15,779
+100
+220,295
+Banks and other
+financial institutions
+8,452
+6,966
+307,105
+72,985
+123,237
+518,745
+Corporate entities
+38,724
+8,539
+25,353
+FVTPL
+FVOCI
+amortised cost
+602,595
+Corporate entities
+14,203
+176,687
+219,012
+1,197,156
+18,477
+4,299,307
+209,367
+5,715,475
+Financial
+assets
+held for
+Financial
+31 December 2017
+Available-
+assets
+designated
+for-sale
+236,395
+242,056
+124,144
+Banks and other financial institutions
+Total
+Governments and central banks
+24,153
+380,287
+3,555,980
+3,960,420
+Policy banks
+2,953
+49,290
+484,456
+736,533
+Public sector entities
+7,222
+195,339
+3,999
+206,560
+202,787
+4,670
+Public sector entities
+996,669
+Policy banks
+49,291
+223,877
+501,564
+774,732
+Public sector entities
+7,284
+201,183
+8,555
+217,022
+Banks and other financial institutions
+Corporate entities
+126,420
+302,685
+264,645
+693,750
+4,073,702
+3,617,465
+413,941
+42,296
+351,126
+14,233,448
+353,277
+14,577,906
+349,024
+13,455,417
+The following tables present an analysis of debt securities (excluding accrued interest) by types of issuers and investments:
+Group
+Financial
+investments
+measured at
+18,458
+31 December 2018
+Financial
+investments
+measured at
+investments
+measured at
+FVTPL
+FVOCI
+amortised cost
+Total
+Governments and central banks
+Financial
+financial
+235,641
+289,870
+assets investments
+Receivables
+Total
+Governments and central banks
+24,468
+10,590
+514,597
+2,670,976
+85,000
+3,305,631
+Policy banks
+2,228
+30,729
+206,621
+757,091
+as at FVTPL
+trading
+maturity
+Held-to-
+243,749
+1,377,327
+4,428,000
+6,049,076
+Annual Report 2018
+257
+Notes to the Financial Statements
+35,771
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Financial
+31 December 2017
+Available-
+assets
+assets
+held for
+designated
+for-sale
+financial
+Financial
+Held-to-
+maturity
+trading
+as at FVTPL
+714
+905
+(1,650)
+Other (expense)/income, net (i)
+139,625
+(15)
+7,904
+4,596
+19,383
+17,548
+23,282
+24,415
+36,449
+6,063
+Net fee and commission income
+924
+247
+851
+719
+(15,739)
+Operating expenses
+675,654
+(54)
+59,445
+28,632
+100,795
+(5,115)
+81,341
+88,516
+117,132
+73,841
+Operating income
+13,951
+(39)
+11,280
+126,006
+(28,487)
+7,876
+13,526
+Rim
+River Delta
+River Delta
+Head Office
+Overseas and
+Northeastern
+Western
+Central
+Bohai
+Pearl
+Yangtze
+Mainland China (HO and domestic branches)
+Year ended 31 December 2017
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+China
+China
+China
+others Eliminations
+73,129
+15,958
+28,970
+(142,941)
+Internal net interest (expense)/income
+522,078
+45,376
+8,597
+15,441
+50,020
+28,671
+47,429
+50,808
+212,369
+External net interest income
+Total
+71,964
+364,437
+15,419,905
+(21,383)
+(27,495)
+Banks and other
+financial institutions
+7,957
+6,966
+259,547
+Corporate entities
+37,927
+6,766
+60,072
+47,414
+198,421
+1,324,817
+90,532
+4,478
+3,439,471
+126,653
+17,898
+229,651
+491,655
+265,490
+205,220
+100
+7,684
+189,865
+assets investments
+Receivables
+Governments and central banks
+7,371
+487,915
+Policy banks
+2,199
+5,101,425
+30,729
+2,608,717
+728,060
+85,000
+Total
+3,189,003
+950,057
+Public sector entities
+4,618
+2,953
+189,069
+(30,653)
+258
+47,561
+(127,769)
+(3,980)
+(5,650)
+(20,922)
+(21,187)
+(28,535)
+(19,572)
+(17,012)
+(10,911)
+Impairment losses on assets
+(186,194)
+54
+(18,142)
+(12,170)
+(32,179)
+Operating profit
+47,191
+71,633
+47,561
+71,633
+47,191
+2,950
+2,950
+Profit for the year
+Income tax expense
+Profit before taxation
+ICBC
+joint ventures
+361,691
+1
+37,323
+10,812
+47,694
+32,659
+66,818
+Share of profits of associates and
+130
+Total for loans and advances to customers
+4,843,049
+China
+Balances with central banks
+3,065,933
+59,322
+34,559
+115,233
+26,569
+33,744
+9,270
+and others
+133,198
+Total
+3,477,828
+Due from banks and other financial
+institutions
+728,091
+China
+2,884
+China
+Delta
+3,073,824
+841,164
+1,574,168 28,653,527
+The compositions of each geographical distribution above are set out in note 50(b), except that "overseas and others" does
+not include domestic and overseas subsidiaries.
+31 December 2017
+Yangtze
+North
+Head
+River Pearl River
+Central
+Western
+eastern
+Overseas
+Office
+The following table includes carrying amount of rescheduled loans and advance to customers:
+Bohai Rim
+8,179
+634
+210
+1,889
+2,228
+306
+1,467
+194
+10,687
+53,856
+Reverse repurchase agreements
+739,950
+10,813
+750,763
+Loans and advances to customers
+613,792
+2,542,533
+1,842,347
+647
+36,438
+Derivative financial assets
+338,257
+1,264
+123
+189,208
+930,593
+Financial assets held for trading
+60,072
+60,072
+2,412,087
+Financial assets designated as at FVTPL
+557
+373
+563
+253
+370
+91
+2,129
+333,921
+3,749,225
+3,195,270
+25,458,257
+1,219
+914
+568,522
+520
+685
+174
+512
+709,262
+-Financial investments measured at FVOCI
+857,356
+34,529
+18,218
+174,673
+16,997
+21,665
+136,716
+-Financial investments measured at FVTPL
+Financial investments
+14,211,777
+109
+4,160
+38,295
+Reverse repurchase agreements
+508,264
+13,129
+521,393
+432
+Loans and advances to customers
+2,763,624
+2,020,113
+2,468,536
+2,148,413
+2,670,233
+739,954
+706,138
+694,766
+2,294,258
+93,892
+- Financial investments measured
+Credit commitments
+Total maximum credit risk exposure
+1,107,011
+11,015,897
+2,952,700
+537,087
+3,489,787
+2,162,168
+3,319,220
+2,245,746
+2,818,584
+335,207
+2,497,375
+430,005
+166,341
+255,240
+765,336
+75,828
+1,285,617
+288,551
+9,908,886
+116,771
+4,362,174
+117,916
+886
+at amortised cost
+4,006,969
+24,694
+25,637
+22,827
+59,701
+90,710
+1,217,762
+13,720
+18,371
+27,354
+61,938
+3,387
+2,396
+2,042
+397
+Others
+1,954,528
+2,451,071
+719,126
+public utility management
+786,803
+676,573
+771,973
+656,895
+Wholesale and retail
+626,059
+702,151
+583,254
+658,745
+Finance
+295,271
+295,919
+207,383
+204,903
+Water, environment and
+597,547
+677,177
+739,783
+1,622,263
+1,518,030
+1,572,794
+Leasing and commercial services
+1,145,342
+1,017,887
+1,094,756
+Construction
+961,509
+gas and water
+1,004,744
+971,938
+976,464
+947,100
+Real estate
+850,038
+Production and supply of electricity, heating,
+1,569,387
+265,149
+247,209
+8,263,344
+Personal mortgage and business loans
+4,805,944
+4,154,899
+4,725,728
+4,088,754
+Others
+830,630
+790,559
+789,810
+754,295
+Subtotal for personal loans
+5,636,574
+4,945,458
+5,515,538
+8,709,091
+8,936,864
+9,418,894
+Subtotal for corporate loans
+231,493
+Mining
+234,976
+262,262
+207,360
+230,195
+Science, education, culture and sanitation
+249,244
+196,046
+174,180
+130,874
+Others
+374,537
+384,070
+293,678
+304,901
+146,074
+Discounted bills
+Manufacturing
+1,957,627
+106,669
+3,439,471
+-Available-for-sale financial assets
+936,338
+45,079
+24,088
+193,388
+17,417
+22,933
+1,279
+84,295
+1,324,817
+Others
+129,073
+32,068
+12,677
+68,913
+44,699
+24,344
+707,746
+13,125,401
+Financial investments
+- Receivables
+225,657
+24
+284
+13,565
+1,736
+270
+120
+231,631
+-Held-to-maturity investments
+3,131,589
+28,576
+22,004
+3,540
+1,766,388
+18,156
+14,598
+256
+ICBC
+By industry and issuers distribution
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+The composition of the Group's and of the Bank's gross loans and advances to customers (excluding accrued interest) by
+industry is analysed as follows:
+Group
+Bank
+2018
+2017
+2018
+2017
+Transportation, storage and postal services
+2,070,542
+1,868,700
+The compositions of each geographical distribution above are set out in note 50(b), except that "overseas and others" does
+not include domestic and overseas subsidiaries.
+23,971,422
+1,251,987
+291,082 3,476,117
+1,543,069 27,447,539
+830,932
+3,773
+7,242
+238,733
+10,000,854
+Credit commitments
+Total maximum credit risk exposure
+937,147
+10,938,001
+20,258
+2,711,690
+596,587
+3,308,277
+2,650,540
+530,239
+3,180,779
+2,067,780
+227,552
+2,295,332
+2,594,630
+746,653
+380,078
+84,279
+2,974,708
+1,947,288
+429,153
+2,376,441
+Such rescheduling activities include extended payment term arrangements, payment holidays and payment forgiveness.
+Rescheduling policies and practices are based on indicators or criteria which, in the judgment of management, indicate that
+payment will most likely continue. These policies are kept under continuous review. This is only the case for assets which
+have performed in accordance with the new terms for six consecutive months or more.
+4,277
+268
+40,120
+24,795
+5,585,639
+Personal loans
+(320,196)
+(74,298) (136,499)
+(109,399)
+9,436,249
+194,637
+527,291
+8,714,321
+loans and advances
+Including: Corporate
+(412,731)
+(81,406) (173,241)
+(158,084)
+15,097,012
+234,777
+552,086
+5,650,554
+14,310,149
+(48,670)
+(36,722)
+Total
+Precious metal leasing
+(2,483)
+(125)
+(854)
+(1,504)
+4,521,665
+161
+4,793
+4,516,711
+Financial investments
+(35)
+(20)
+(15)
+10,209
+20
+10,189
+Discounted bills
+(92,500)
+(7,108)
+103,110
+23,816,254
+to customers
+(40)
+Book value
+Stage 2
+Stage 1
+31 December 2018
+at amortised cost
+Financial assets measured
+Group
+As at 31 December 2018, the Group's and the Bank's credit risk stages of financial instruments are as follows:
+(iii) Analysis on the credit quality of financial instruments
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+260
+5,101,425
+42,039
+63,159
+32,634
+2,605,145
+2,358,448
+265,490
+Stage 3
+Loans and advances
+Total
+Provision for expected credit losses
+Stage 2
+Stage 3
+(40)
+559,295
+559,295
+agreements
+Reverse repurchase
+(1,015)
+(22)
+(993)
+963,464
+9,051
+954,413
+institutions
+and other financial
+Due from banks
+3,372,576
+3,372,576
+with central banks
+Cash and balances
+Total
+Stage 1
+750
+566,680
+329 104,189
+235,267 24,618,201
+Notes to the Financial Statements
+261
+Annual Report 2018
+(562) (34,715)
+(5,342)
+(28,811)
+3,229,512
+754
+53,160
+3,175,598
+Credit commitments
+(2,356)
+(444)
+(92)
+(1,820)
+1,760,727
+248
+1,802
+1,758,677
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Total
+Bank
+at amortised cost
+(931)
+1,032,333
+1,032,333
+institutions
+and other financial
+Due from banks
+3,313,748
+3,313,748
+with central banks
+Cash and balances
+Total
+Stage 3
+Provision for expected credit losses
+Stage 2
+Stage 1
+Total
+Stage 3
+Book value
+Stage 2
+Stage 1
+31 December 2018
+Financial assets measured
+(1,910)
+(196)
+(92)
+360,234
+to customers
+Loans and advances
+FVOCI
+Total
+Provision for expected credit losses
+Stage 1
+Stage 2
+Stage 3
+Total
+Stage 3
+Carrying amount
+Stage 2
+Stage 1
+31 December 2018
+Financial assets measured at
+Note: As simplified approach of impairment allowance is applied to other financial assets measured at amortised cost,
+three-stage model is not applicable.
+(417,227)
+(173,568)
+(958)
+(202)
+(226)
+(530)
+(161,151) (82,508)
+1
+248
+360,483
+(198)
+(1,622)
+1,400,244
+1,801
+1,398,443
+Financial investments
+(433)
+(248)
+(185)
+354,228
+10,380
+248
+353,979
+(13)
+(13)
+6,255
+6,255
+loans and advances
+Discounted bills
+Including: Corporate
+(446)
+(248)
+1
+(931)
+9,806
+212,228
+3,305,631
+14,866
+9,878
+10,524
+1,589
+2,949
+981,501
+110
+Public sector entities
+Policy banks
+6,502
+2,014,051
+1,260,334
+Governments and central banks
+of issuers):
+Debt securities (analysed by type
+Total
+Below A
+A
+31 December 2017
+AA
+AAA
+106
+Unrated
+996,669
+118
+2,431,795
+332,393
+26,660
+36,350
+14,462
+220,870
+34,051
+Corporate entities
+Total assets
+43,583
+55,336
+17,072
+246,955
+155,799
+financial institutions
+Banks and other
+220,295
+20
+15,786
+204,261
+2,689,086
+6,049,076
+156,862
+11,894
+965
+2,289
+758,698
+130
+Public sector entities
+15,840
+5,217
+2,557,514
+1,479,735
+Governments and central banks
+Policy banks
+Total
+Below A
+A
+31 December 2018
+AA
+AAA
+Unrated
+Debt securities (analysed by type
+of issuers):
+Group
+Distribution of debt securities investments (excluding accrued interest) analysed by rating
+The Group adopts a credit rating approach to manage the credit risk of the debt securities portfolio held. The ratings are
+obtained from Bloomberg Composite, or major rating agencies where the issuers of debt securities are located. The carrying
+amounts of debt securities investments analysed by rating as at the end of the reporting period are as follows:
+15,396
+886
+111,495
+4,073,702
+204,822
+289,870
+36,579
+44,650
+9,030
+32,940
+146,240
+3,223,493
+2,524,286
+53,371
+Corporate entities
+693,750
+58,634
+72,531
+17,605
+312,628
+232,352
+financial institutions
+Banks and other
+217,022
+11,947
+123
+774,732
+39,743
+127,874
+85,235 5,373,733
+3,189,003
+5,531
+2,053
+3,680
+1,961,866
+1,215,873
+Governments and central banks
+of issuers):
+Debt securities (analysed by type
+Total
+Below A
+A
+31 December 2017
+AA
+AAA
+Unrated
+5,715,475
+54,270
+77,059
+25,537
+Policy banks
+3,150,933
+Public sector entities
+2,919
+20,160
+Corporate entities
+491,655
+26,031
+34,894
+14,331
+233,129
+183,270
+financial institutions
+Banks and other
+205,220
+20
+9,969
+118
+195,003
+950,057
+77
+6,437
+1,589
+939,035
+110
+2,407,676
+209,367
+14,292
+3,960,420
+7,439
+6,438
+2,519,288
+1,422,978
+Governments and central banks
+of issuers):
+Debt securities (analysed by type
+Total
+Below A
+A
+31 December 2018
+AA
+AAA
+Unrated
+Bank
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+259
+Annual Report 2018
+Policy banks
+728,911
+965
+6,575
+13,411
+7,982
+139,692
+33,990
+Corporate entities
+602,595
+32,457
+42,796
+12,190
+12,916
+293,355
+financial institutions
+Banks and other
+206,560
+7,839
+123
+198,598
+Public sector entities
+736,533
+82
+221,797
+Reverse repurchase
+agreements
+521,430
+897,537
+153,907
+Due from banks and other financial institutions (*)
+3,372,576
+2,801,101
+7,303
+564,172
+Cash and balances with central banks
+Assets:
+Total
+(***)
+Undated
+More than
+five years
+One to
+five years
+Three
+months to
+one year
+three
+months
+Less than
+one month
+on demand
+One to
+257,859
+Overdue/
+repayable
+316,762
+577
+Financial investments
+15,046,132
+70,888
+7,249,737
+3,567,565
+2,600,254
+621,648
+914,097
+21,943
+Loans and advances to customers
+71,335
+6,534
+11,645
+24,278
+15,369
+13,448
+61
+Derivative financial assets
+1,696,498
+69,856
+-Financial investments measured at FVTPL
+- Financial investments measured at FVOCI
+-Financial investments measured at
+31 December 2018
+The Group's and the Bank's expected the remaining maturity of its financial instruments may vary significantly from the
+following analysis. For example, demand deposits from customers are expected to maintain a stable or increasing balance
+although they have been classified as repayable on demand in the following tables.
+(105)
+3,439,471
+3,439,576
+229,656
+(5)
+229,651
+13,125,401
+(330,016)
+Less: Allowance for impairment losses
+13,455,417
+24
+68,313
+214,646
+Impaired
+Past due but not impaired
+47,414
+60,072
+1,324,956
+3,439,552
+as at FVTPL
+trading
+assets
+designated
+1,324,956
+(139)
+Group
+60,072
+1,324,817
+Analysis of the remaining maturity of the assets and liabilities is set out below:
+(i)
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+263
+Annual Report 2018
+in terms of liquidity of the branches, maintaining an efficient internal fund transfer mechanism.
+•
+projecting cash flows and evaluating the level of current assets; and
+maintaining the stability of the deposit base;
+optimising the structure of assets and liabilities;
+•
+•
+The Group manages its liquidity risk through the Asset and Liability Management Department and aims at:
+Liquidity risk is the risk that funds will not be sufficient or will not be raised at a reasonable cost in a timely manner to meet
+the need of asset growth or repayment of debts due, although remaining solvent. This may arise from amount or maturity
+mismatches of assets and liabilities.
+(b) Liquidity risk
+47,414
+60,072
+47,414
+6,164
+44,236
+44,671
+510,830
+302,505
+310,489
+31,569
+44,569
+2,329,296
+Certificates of deposit
+60,071
+126,157
+140,227
+14,450
+449
+341,354
+Due to customers
+11,578,642
+919,716
+1,337,250
+4,978,718
+2,582,550
+1,129,334
+12,058
+Due to banks and other financial institutions (**)
+5,635
+Liabilities:
+Due to central banks
+71
+410
+481
+Financial liabilities designated as at FVTPL
+67,859
+478
+382
+5,570
+11,334
+1,777
+87,400
+Derivative financial liabilities
+415
+14,081
+15,570
+28,094
+9,778
+73,573
+21,408,934
+Debt securities issued
+19,689
+1,459,953
+2,473,116
+415,725
+130,695
+39,686
+Investments in associates and joint ventures
+amortised cost
+1,430,163
+28,952
+272,032
+775,046
+244,232
+57,803
+52,098
+805,347
+62,918
+131,963
+405,552
+109,843
+4,519,182
+29,124
+29,124
+290,404
+7,021
+65,335
+238,450
+Property and equipment
+27,699,540
+3,322,986
+9,159,036
+438,779
+39,599
+held for
+38,240
+3,734,309
+1,147,417
+2,010,666
+1,004,170
+15,912
+19,372
+49,564
+257,916
+290,404
+18,176
+7,320,956
+financial
+maturity
+investments
+Receivables
+229,656
+Stage 1
+Total
+Stage 3
+Provision for expected credit losses
+Carrying amount
+Stage 2
+Stage 1
+31 December 2018
+Financial assets measured at
+Note: As simplified approach of impairment allowance is applied to other financial assets measured at amortised cost, three-
+stage model is not applicable.
+(79,580) (169,341) (404,688)
+(155,767)
+(958)
+(202)
+(226)
+(530)
+104,189
+23,603,662
+329
+228,255
+496,723
+750
+Stage 2
+103,110
+22,878,684
+Stage 3
+FVOCI
+(432)
+(248)
+(0)
+(184)
+343,827
+248
+1
+343,578
+Including: Discounted bills
+(432)
+(248)
+(0)
+(184)
+343,827
+248
+1
+343,578
+to customers
+Loans and advances
+Total
+Total
+Precious metal leasing
+(2,288)
+(309,051)
+(132,684)
+8,729,212 (104,732) (71,635)
+188,130
+469,341
+8,071,741
+loans and advances
+Including: Corporate
+(400,474)
+(169,073)
+14,267,500 (152,877) (78,524)
+227,825
+492,973
+13,546,702
+to customers
+Loans and advances
+(37)
+(37)
+521,430
+Personal loans
+5,465,531
+23,632
+39,675
+(66)
+(830)
+(1,392)
+4,364,462
+101
+3,000
+4,361,361
+Financial investments
+(35)
+Financial investments
+(20)
+9,450
+20
+9,430
+Discounted bills
+(91,388)
+(36,369)
+(6,889)
+(48,130)
+5,528,838
+(15)
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+1,216,742
+1,217,762
+226,235
+13,892,966
+226,240
+(5)
+(340,482)
+Less: Allowance for impairment losses
+14,233,448
+281
+83
+220,988
+Impaired
+79,483
+Past due but not impaired
+59,777
+78,542
+1,467,059
+3,542,268
+226,240
+13,932,977
+Neither past due nor impaired
+3,542,351
+(167)
+3,542,184
+as at FVTPL
+1,467,340
+59,777
+13,172,458
+ICBC
+Neither past due nor impaired
+customers
+advances to
+assets
+assets
+Financial
+Financial
+Available-
+for-sale
+Held-to-
+Loans and
+Debt securities
+31 December 2017
+Bank
+59,777
+78,542
+1,466,995
+(345)
+78,542
+trading
+assets
+investments
+(28,189)
+3,195,270
+952
+62,795
+3,131,523
+Credit commitments
+(2,125)
+(444)
+(90)
+(1,591)
+1,561,589
+248
+1,021
+1,560,320
+Total
+(1,693)
+(196)
+(90)
+(1,407)
+(5,337)
+(562)
+(34,088)
+262
+Receivables
+customers
+assets
+designated
+Financial
+held for
+financial
+maturity
+assets
+for-sale
+1,020
+Held-to-
+Financial
+Available-
+Debt securities
+31 December 2017
+Group
+As at 31 December 2017, the analysis of the overdue situation of loans and advances to customers and bond investments of
+the Group and the Bank is as follows:
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+Loans and
+advances to
+Notes to the Financial Statements
+518,745
+301,230
+(**) Includes repurchase agreements.
+(***) Includes loans and advances to customers and financial investments that are impaired or not impaired but overdue for more
+than one month.
+266
+ICBC
+31 December 2017
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Overdue/
+Less
+One to
+Three
+repayable
+than one
+three
+months to
+One to More than
+Undated
+on demand
+month
+months
+one year
+five years
+five years
+(***)
+Total
+Includes reverse repurchase agreements.
+(*)
+2,247,865
+23,824,295
+98,307
+117,404
+14,450
+449
+281,380
+Due to customers
+11,400,958
+694,147
+1,189,630
+4,793,308
+2,557,518
+11,367
+Assets:
+20,646,928
+Others
+Total liabilities
+Net liquidity gap
+19,536
+8,320
+156,604
+45,960
+31,854
+12,727,669 1,132,647 1,602,273
+(11,862,183) 703,808 (582,184)
+44,808
+149,606
+277,021
+499,291
+8,591
+83,554
+5,307,946 2,760,143 293,617
+(1,741,961) 4,058,110 8,458,971 3,213,304
+3,731
+330,294
+Debt securities issued
+50,770
+Cash and balances with central banks
+7,598
+15,916
+25,104
+1,983
+781
+53,856
+Loans and advances to customers
+36,293
+879,979
+742,641
+2,536,478
+2,926,940
+5,922,029
+81,041
+13,125,401
+Financial investments
+80,427
+164,815
+446,438
+2,662,587
+1,641,652
+33,985
+5,029,904
+Investments in subsidiaries and associates
+154,543
+154,543
+10,072
+Derivative financial assets
+338,257
+4,621
+14,578
+14,650
+3,026,571
+3,548,996
+Due from banks and other
+financial institutions (*)
+784,273
+230,954
+296,497
+64,657
+3,745
+1,681,356
+485,599
+Financial assets held for trading
+5,871
+44,397
+4,170
+510
+60,072
+Financial assets designated as at FVTPL
+4,786
+1,630
+1,715
+147,805
+149,146
+28,554
+5,124
+Certificates of deposit
+1,945,135
+21,103
+1,552,795
+Derivative financial assets
+7,709
+10,080
+18,176
+1,249
+1,081
+38,295
+Loans and advances to customers
+12,777
+903,927
+573,073
+2,496,675
+3,225,042
+6,933,254
+67,029
+14,211,777
+Financial investments
+-Financial investments measured at FVTPL
+6,080
+41,236
+44,088
+96,962
+392,581
+123,395
+4,298
+99,673
+332,108
+229,712
+One to
+Three
+repayable
+than one
+three
+months to
+One to
+on demand
+month
+months
+one year
+five years
+36,303
+More than
+five years
+(***)
+Total
+Assets:
+Cash and balances with central banks
+533,689
+7,303
+2,772,756
+3,313,748
+Due from banks and other
+financial institutions (*)
+126,758
+760,246
+Undated
+740,645
+-Financial investments measured at FVOCI
+45,788
+28,241
+325,989
+8,752,588
+3,213,304
+26,072,160
+Liabilities:
+Due to central banks
+410
+410
+Financial liabilities designated as at FVTPL
+67,257
+4,363
+30,352
+7,117
+Derivative financial liabilities
+8,349
+10,065
+21,309
+1,348
+1,049
+42,120
+Due to banks and other financial institutions (**)
+1,102,850
+313,885
+264,097
+243,200
+78,737
+Property and equipment
+15,253
+6,818,253
+1,836,455 1,020,089
+50,630
+224,701
+675,993
+220,650
+28,075
+1,245,837
+-Financial investments measured
+at amortised cost
+7
+29,792
+104,760
+379,595
+10,465
+3,565,985
+2,408,462 1,439,558
+Investments in subsidiaries and associates
+156,352
+156,352
+Property and equipment
+124,548
+124,548
+Others
+186,175
+47,757
+7,746
+Total assets
+865,486
+4,362,174
+122,387
+122,387
+Others
+1,045,478
+2,048,051
+1,379,098
+4,549,264 10,380,218
+13,332,476
+1,016 343,014
+3,127,293 35,861,878
+(*)
+Includes reverse repurchase agreements.
+(**) The maturity profile of the renegotiated loans' contractual undiscounted cash flows is determined according to the
+negotiated terms.
+(***) Includes loans and advances to customers and financial investments that are impaired or not impaired but overdue for
+more than one month.
+31 December 2018
+Overdue/
+repayable
+on demand
+Less than
+one month
+One to
+three
+months
+Three
+months to
+one year
+One to
+five years
+More than
+five years
+Undated
+Total
+Non-derivative cash flows:
+Financial liabilities:
+Due to central banks
+71
+688
+6,639
+5,497
+12,285
+Financial investments
+-Financial investments measured at FVTPL
+5,844
+44,867
+46,378
+118,910
+417,216
+152,175
+-Financial investments measured at FVOCI
+196
+52,536
+59,844
+410
+270,134
+-Financial investments measured at amortised cost
+106
+40,020
+136,471
+504,023
+2,904,342
+321,176
+1,681,478
+63,225 848,615
+23,757 1,601,635
+5,266,440
+Others
+297,855
+19,034
+873,992
+481
+Financial liabilities designated as at FVTPL
+69,065
+490,724
+925,569
+15,164
+3,082,911
+6,453
+308,088
+574,257
+25,733,045
+Derivative cash flows:
+Derivative financial instruments settled on net basis
+Derivative financial instruments settled on gross basis
+Including: Cash inflow
+(1,675)
+54
+65
+317,424
+3
+(283)
+Cash outflow
+23,964 1,825,500 1,206,634 2,562,995
+(18,965) (1,786,499) (1,188,652) (2,547,242)
+4,999 39,001 17,982 15,753
+182,370
+(161,666)
+38,339
+(37,690)
+5,839,802
+(5,740,714)
+20,704
+649
+99,088
+(*)
+Includes repurchase agreements.
+1,270
+1,820,021
+22,605,796
+10,896 86,316
+11,949
+1,719
+2,418
+1,545,295 1,830,287 5,635,911
+Others
+Due to banks and other financial institutions (*)
+1,129,795
+Certificates of deposit
+Due to customers
+11,595,139
+484
+514,886
+60,697
+937,070
+389
+5,674
+13,173
+1,848
+90,633
+310,656
+270,385
+13,064,384
+321,458
+61,249
+127,262
+144,261
+14,952
+569
+1,379,365
+5,075,713
+2,685,178
+13,414
+2,374,654
+347,741
+21,685,879
+Debt securities issued
+20,209
+36,610
+Less
+238,194
+101,025
+6,077,004 11,176,249
+11,548
+19,410
+1,401
+818
+46,682
+Due to banks and other financial institutions (**)
+938,654
+882,839
+221,053
+355,043
+8,862
+391
+2,406,842
+Certificates of deposit
+44,283
+72,616
+92,464
+11,830
+296
+221,489
+Due to customers
+10,505,305
+841,168
+1,261,067
+3,745,921
+13,505
+Derivative financial liabilities
+73,852
+8,087
+280,580
+65,707
+19,116
+54,465
+36,283
+44,295
+29,894
+530,340
+Total assets
+1,108,488
+1,834,810
+1,195,606
+2,527,671
+3,565,834
+7,641,566
+3,453,042
+24,645,112
+Liabilities:
+Due to central banks
+404
+404
+Financial liabilities designated as at FVTPL
+60,175
+719
+46
+4,825
+5,845,766
+13,315
+18,894,447
+Debt securities issued
+Three
+repayable
+Less than
+three
+months to
+One to
+on demand
+one month
+months
+one year
+five years
+More than
+five years
+One to
+Undated
+Total
+564,172
+Due from banks and other financial institutions (*)
+154,798
+902,607
+Loans and advances to customers (**)
+22,507
+988,987
+3,781
+318,728
+801,611 3,301,244
+7,303
+2,801,101 3,376,357
+342,153
+(***)
+710
+Overdue/
+Financial assets:
+Others
+Total liabilities
+Net liquidity gap
+191,349
+11,695,483
+(10,586,995)
+6,733
+8,191
+68,903
+59,266
+1,858,150 1,633,787
+(23,340) (438,181)
+132,587
+14,842
+127,169
+52,957
+4,359,674 2,743,799 294,818
+(793,840) 3,101,967 7,346,748 3,453,042
+273,922
+436,275
+6,076
+505,720
+22,585,711
+Cash and balances with central banks
+2,059,401
+Includes reverse repurchase agreements.
+(**) Includes repurchase agreements.
+(***) Includes loans and advances to customers and financial investments that are impaired or not impaired but overdue for
+more than one month.
+(ii) Maturity analysis of contractual undiscounted cash flows
+The tables below summarise the maturity profile of the Group's and of the Bank's financial instruments based on the
+contractual undiscounted cash flows. The balances of some items in the tables below are different from the balances on the
+statement of financial position as the tables incorporate all cash flows relating to both principal and interest. The Group's
+and the Bank's expected cash flows on these instruments may vary significantly from the following analysis. For example,
+demand deposits from customers are expected to maintain a stable or increasing balance although they have been classified
+as repayable on demand in the following tables.
+Annual Report 2018
+267
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Group
+31 December 2018
+Non-derivative cash flows:
+(*)
+Overdue/
+Others
+Bank
+4,786
+Financial assets designated as at FVTPL
+87,337
+8,795
+6,799
+7,089
+50,873
+6,099
+7,682
+Financial assets held for trading
+1,630
+1,834,242
+60,936
+299,346
+213,862
+900,047
+359,750
+Due from banks and other financial institutions (*)
+3,613,872
+3,047,539
+14,650
+14,578
+301
+1,715
+157,414
+151,689
+173,033
+100,504
+Financial investments
+13,892,966
+82,301
+6,195,484
+3,244,181
+2,643,941
+780,058
+906,587
+40,414
+Loans and advances to customers
+89,013
+5,424
+12,171
+34,609
+21,188
+15,459
+162
+Derivative financial assets
+353,601
+6,082
+30,285
+7,598
+529,507
+Cash and balances with central banks
+Assets:
+4,412,116
+25,354,657
+365,101
+2,908,840
+5,619,108
+(1,884,799)
+(674,702)
+432,760
+1,822,119
+1,577,906
+13,061,583
+(12,057,413)
+Net liquidity gap
+Total liabilities
+495,777
+13,266
+20,299
+90,604
+33,234
+53,041
+285,333
+Others
+617,842
+287,347
+31 December 2018
+8,793,935
+505,890
+3,322,986
+(*)
+Total
+(***)
+Undated
+More than
+five years
+five years
+One to
+months to
+one year
+months
+one month
+on demand
+three
+Less than
+Three
+One to
+Overdue/
+repayable
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+31 December 2017
+ICBC
+264
+(***) Includes loans and advances to customers and financial investments that are impaired or not impaired but overdue for more
+than one month.
+Includes repurchase agreements.
+Includes reverse repurchase agreements.
+2,344,883
+2,803,426
+(**)
+23,294
+284,294
+200,826
+22,870
+11,620
+7,330
+Debt securities issued
+19,562,936
+13,514
+2,549,415
+3,895,490
+1,387,688
+1,014,915
+10,701,914
+Due to customers
+260,274
+296
+12,049
+102,316
+95,928
+49,685
+Certificates of deposit
+2,752,887
+45,908
+526,940
+22,698
+Others
+319,177
+12,066,934
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+1,709,619
+Notes to the Financial Statements
+265
+Annual Report 2018
+(***) Includes loans and advances to customers and financial investments that are impaired or not impaired but overdue for more
+than one month.
+(**) Includes repurchase agreements.
+Includes reverse repurchase agreements.
+(*)
+2,141,056
+3,488,301
+7,619,544
+23,945,987
+374,070
+674,577
+22,589
+132,359
+4,593,394 2,868,270
+(829,587) 3,452,159
+61,384
+1,830,609
+(595,509)
+(200,327)
+(10,793,525)
+Net liquidity gap
+2,212,710
+77,587
+Total liabilities
+401,526
+61,481
+1,043,392
+3,488,301
+7,993,614
+6,320,429
+3,763,807
+1,235,100
+2,012,383
+1,273,409
+Total assets
+620,061
+40,105
+45,702
+26,087,043
+40,937
+24,567
+338,790
+Others
+247,744
+247,744
+Property and equipment
+32,441
+32,441
+254,170
+5,315,766
+Investments in associates and joint ventures
+57,084
+Liabilities:
+72,876
+18,013
+5,659
+8,628
+27,290
+Due to banks and other financial institutions (**)
+18,752
+214
+Derivative financial liabilities
+78,556
+89,361
+985,193
+12,769
+1,810
+1,796
+1,027
+60,436
+Financial liabilities designated as at FVTPL
+456
+404
+20
+10
+22
+11,523
+Due to central banks
+Three
+months to
+one year
+months
+One to
+five years
+505,720
+1,633
+Undated
+(***)
+Total
+Non-derivative cash flows:
+Financial assets:
+Cash and balances with central banks
+on demand one month
+485,599
+7,598
+18,664
+More than
+five years
+three
+Includes repurchase agreements.
+repayable
+1,389,661 1,058,088 2,407,099
+89,060
+(1,387,210) (1,055,535) (2,401,389) (81,818)
+2,553
+5,710
+4,945,541
+14,650
+(1,764)
+(4,927,716)
+7,242
+(131)
+Less than
+17,825
+270
+ICBC
+31 December 2017
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Overdue/
+One to
+(*)
+3,026,571
+Debt securities issued
+Due from banks and other financial institutions (*)
+265,489
+18,894,447
+77,705
+13,431
+512,443
+18,290,868
+Due to customers
+149,032
+221,489
+6,854
+133,840
+18,973
+Certificates of deposit
+2,451
+2,406,842
+88,479
+61,822
+3,553,082
+667
+436,275
+301,494
+786,537
+234,601
+305,769
+68,413
+4,504
+1,701,318
+21,087
+Financial assets held for trading
+5,996
+8,219
+4,863
+30,756
+461,882
+Total liabilities
+Others
+5,232
+Cash outflow
+4,404
+(188)
+Non-derivative cash flows:
+Financial liabilities:
+Due to central banks
+410
+410
+Financial liabilities designated as at FVTPL
+67,257
+Total
+8,838
+Due to banks and other financial institutions (*)
+1,103,256
+Certificates of deposit
+317,618
+51,316
+271,059
+252,250
+22,990
+80,499
+1,967,173
+Undated
+One to
+five years
+43,260
+246,663
+907,662 1,859,197 1,242,061 4,313,546
+9,698,497
+12,736,320
+3,066,959
+33,824,242
+More than
+five years
+(*) Includes reverse repurchase agreements.
+(***) Includes loans and advances to customers and financial investments that are impaired or not impaired but overdue for more
+than one month.
+31 December 2018
+Overdue/
+repayable
+on demand
+Less than
+one month
+One to
+three
+months
+Three
+months to
+one year
+(**) The maturity profile of the renegotiated loans' contractual undiscounted cash flows is determined according to the
+negotiated terms.
+Derivative financial instruments settled on gross basis
+Including: Cash inflow
+99,198
+14,952
+12,719,592
+1,084,375
+1,599,494
+5,315,429
+1,870
+2,919,301
+2,308
+152,466
+634,852
+344,798
+Derivative cash flows:
+Derivative financial instruments settled on net basis
+(425)
+16
+62
+6
+153
+23,982,989
+121,031
+329,271
+62,251
+540
+569
+287,066
+Due to customers
+11,402,025
+694,898
+1,219,474
+4,874,953
+213,718
+2,656,523
+20,860,523
+Debt securities issued
+20,064
+Others
+147,054
+479
+9,548
+215
+12,650
+466,803
+Credit commitments
+Due to banks and other financial institutions (**)
+15,850
+581,922
+2,456,418
+923
+2,247,865
+188,923
+34,674
+141,080
+44,938
+Net position
+23,824,295
+381,891
+66,185
+1,408,596
+21,967,623
+330,294
+1,979,330
+9,881
+3,195,270
+Includes reverse repurchase agreements.
+to RMB)
+to RMB)
+(equivalent
+Total
+Others
+(equivalent
+HKD
+(equivalent
+(*)
+(equivalent
+to RMB)
+USD
+31 December 2017
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+277
+Annual Report 2018
+(**) Includes repurchase agreements.
+RMB
+to RMB)
+820
+268,586
+1,945,135
+127,347
+41,883
+383,985
+1,391,920
+Due to banks and other financial institutions (**)
+42,120
+Certificates of deposit
+2,608
+6,388
+33,109
+Derivative financial liabilities
+78,737
+58,673
+8,582
+11,482
+15
+51,007
+26,178
+9,026
+Total liabilities
+Others
+499,291
+27,297
+1,013
+206,751
+264,230
+188,586
+Debt securities issued
+98,087
+13,428
+563,297
+19,972,116
+Due to customers
+281,380
+57,590
+20,646,928
+1,808,300
+Assets:
+3,346,117
+Total assets
+530,340
+210,920
+450
+13,991
+304,979
+Others
+22,638,865
+122,387
+10
+216
+121,972
+Property and equipment
+154,543
+66,193
+44,820
+189
+11,897
+1,326,697
+582,646
+46,682
+1,346
+36
+5,583
+39,717
+Derivative financial liabilities
+73,852
+96,904
+61,145
+10,757
+Financial liabilities designated as at FVTPL
+404
+404
+Due to central banks
+Liabilities:
+24,645,112
+1,950
+Cash and balances with central banks
+31,633
+5,029,904
+Financial assets designated as at FVTPL
+60,072
+214
+1,817
+58,041
+Financial assets held for trading
+1,681,356
+336,128
+37,577
+308,257
+1,317,126
+Due from banks and other financial institutions (*)
+3,548,996
+48,040
+1,751
+153,088
+18,396
+Investments in subsidiaries and associates
+523
+338,257
+57,988
+12,983
+185,927
+4,773,006
+Financial investments
+13,125,401
+154,703
+1,606
+18,492
+12,309,925
+Loans and advances to customers
+53,856
+5,216
+2
+8,700
+39,938
+642,281
+69
+272,959
+1,648,977
+3,617,986
+Due from banks and other financial institutions (*)
+360,594
+903,213
+217,389
+308,631
+64,958
+308
+1,855,093
+Financial assets held for trading
+7,880
+6,284
+52,330
+12,003
+12,429
+3,047,539
+14,650
+18,692
+7,598
+One to
+repayable
+Less than
+three
+on demand one month
+months
+Three
+months to
+one year
+8,713
+One to
+More than
+five years
+Undated
+(***)
+Total
+Financial assets:
+Cash and balances with central banks
+529,507
+five years
+99,639
+Financial assets designated as at FVTPL
+4,955
+631,417
+3,319,794
+Others
+328,444
+28,573
+29,028
+4,665
+197,328
+6,271
+23,878 6,294,555
+303
+398,212
+1,264,894
+2,032,905
+1,414,157
+4,378,003 8,968,670
+2,012,391
+928
+Overdue/
+109,323
+Financial investments
+1,741
+2,007
+137,453
+157,443
+31,276
+4,996
+339,871
+424
+Loans and advances to customers (**)
+974,577
+943,429
+3,228,857
+5,408,201
+9,294,094
+235,552
+20,125,680
+40,970
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+Non-derivative cash flows:
+4,250,781
+64,633
+6,044
+40,716
+4,362,174
+Investments in subsidiaries and associates
+31,633
+- Financial investments measured at amortised cost
+12,526
+67,372
+156,352
+Property and equipment
+124,071
+208
+9
+260
+44,821
+124,548
+1,245,837
+152,074
+410
+38,295
+Loans and advances to customers
+13,384,194
+645,532
+25,184
+156,867
+30,179
+14,211,777
+-Financial investments measured at FVTPL
+737,716
+2,787
+142
+740,645
+- Financial investments measured at FVOCI
+1,063,584
+Financial investments
+11,351,426
+Others
+172,925
+11,090
+552,981
+2,793,605
+Credit commitments
+2,059,401
+262,439
+27,793
+118,441
+26,290
+Net position
+22,585,711
+320,207
+69,111
+1,300,407
+20,895,986
+31 December 2017
+1,742,879
+Total assets
+3,476,117
+Includes reverse repurchase agreements.
+20,025
+1,729
+131,310
+325,989
+23,946,953
+1,453,534
+100,859
+(*)
+570,814
+Liabilities:
+Due to central banks
+2
+408
+ICBC
+278
+(**) Includes repurchase agreements.
+26,072,160
+3,320,981
+32,731,036
+(*)
+More than
+five years
+Undated
+(***)
+Total
+533,689
+3,743
+7,303
+five years
+2,772,756
+Due from banks and other financial institutions (*)
+126,903
+762,308
+290,240
+357,687
+131,115
+5,919
+3,317,491
+1,674,172
+one year
+one month
+Annual Report 2018
+269
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Bank
+31 December 2018
+Non-derivative cash flows:
+months
+Financial assets:
+Overdue/
+repayable
+One to
+Less than
+three
+Three
+months to
+One to
+on demand
+Cash and balances with central banks
+Includes repurchase agreements.
+Loans and advances to customers (**)
+965,693
+247,053
+758,610
+256,583
+23,125
+1,383,999
+-Financial investments measured at amortised cost
+37
+52,415
+30,070
+464,803
+Others
+228,381
+13,354
+3,713
+177
+2,831,131
+46
+109,817
+13,262
+46,017
+-Financial investments measured at FVOCI
+736,487
+3,131,617
+5,577,768
+10,684,505
+234,253
+21,343,585
+Financial investments
+196
+-Financial investments measured at FVTPL
+41,755
+45,646
+104,906
+399,827
+140,267
+35,902
+773,497
+5,194
+5,084,835
+(*)
+4,494,233
+(4,462,992)
+457
+Financial liabilities designated as at FVTPL
+Due to banks and other financial institutions (*)
+63,375
+985,556
+1,000
+965
+10,462
+404
+14,291
+1,046,611
+257,957
+411,610
+26,343
+62,692
+92,471
+2,790,769
+Certificates of deposit
+2,378
+Due to customers
+21
+22
+Includes reverse repurchase agreements.
+(**) The maturity profile of the renegotiated loans' contractual undiscounted cash flows is determined according to the
+negotiated terms.
+(***) Includes loans and advances to customers and financial investments that are impaired or not impaired but overdue for
+more than one month.
+31 December 2017
+Overdue/
+repayable
+on demand
+Less than
+one month
+10
+One to
+three
+months
+five years
+One to More than
+five years
+Undated
+Total
+Non-derivative cash flows:
+Financial liabilities:
+Due to central banks
+Three
+months to
+one year
+31,241
+10,711,266
+Others
+Derivative cash flows:
+Derivative financial instruments settled on net basis
+779
+141
+3,780
+3,098
+249
+23,930,902
+8,047
+- Cash inflow
+- Cash outflow
+73
+10,846 1,337,254
+(10,773) (1,330,028)
+7,226
+6,499
+913,371 2,032,741 151,844
+(906,872) (2,019,388) (149,409)
+13,353
+2,435
+48,177
+(46,522)
+1,655
+Derivative financial instruments settled on gross basis
+Debt securities issued
+437,334
+5,732
+260,409
+12,020,606
+49,886
+1,024,078
+7,536
+13,301
+2,142,434
+96,506
+103,895
+12,395
+323
+1,430,458
+296,126
+3,975,296
+15,087
+263,005
+19,802,526
+12,946
+1,996
+2,671
+1,800,838 4,544,940
+40,985
+351,122
+685,548
+12,017
+2,984,750
+2,646,341
+Financial liabilities designated as at FVTPL
+Repayable
+on demand
+4,557
+58,567
+341,354
+Due to customers
+20,059,293
+823,474
+313,342
+212,825
+13,115
+21,408,934
+273,881
+301,010
+4,125
+38,826
+617,842
+Others
+Total liabilities
+Debt securities issued
+242,586
+27,086
+Certificates of deposit
+Financial liabilities designated as at FVTPL
+11,698
+11,374
+64,328
+87,400
+Derivative financial liabilities
+32,412
+31,708
+1,752
+7,701
+73,573
+Due to banks and other financial institutions (**)
+1,475,121
+677,109
+27,341
+149,725
+2,329,296
+376,027
+481
+91,201
+18,406
+Annual Report 2018
+275
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+31 December 2017
+Assets:
+USD
+(**) Includes repurchase agreements.
+(equivalent
+Others
+(equivalent
+Total
+(equivalent
+RMB
+to RMB)
+to RMB)
+to RMB)
+HKD
+(equivalent
+Includes reverse repurchase agreements.
+(*)
+3,229,512
+495,777
+22,255,520
+2,178,462
+369,818
+550,857
+25,354,657
+Net position
+2,016,966
+109,292
+49,605
+169,020
+2,344,883
+Credit commitments
+2,476,089
+551,927
+65,563
+135,933
+10,143
+479
+2
+Due to central banks
+26,561
+57,606
+1,696,498
+Derivative financial assets
+29,939
+28,169
+4,817
+621,782
+8,410
+Loans and advances to customers
+13,537,076
+882,110
+341,564
+285,382
+15,046,132
+Financial investments
+71,335
+990,549
+Due from banks and other financial institutions (*)
+3,372,576
+Group
+31 December 2018
+Assets:
+USD
+(equivalent
+HKD
+(equivalent
+RMB
+to RMB)
+to RMB)
+Others
+(equivalent
+to RMB)
+Total
+(equivalent
+to RMB)
+Cash and balances with central banks
+3,157,631
+121,780
+8,121
+85,044
+― Financial investments measured at FVTPL
+763,190
+29,984
+2,641
+149,249
+754
+1,288
+290,404
+Others
+Total assets
+Liabilities:
+186,738
+110,120
+6,360
+135,561
+438,779
+24,272,486
+2,287,754
+419,423
+719,877
+27,699,540
+139,113
+to RMB)
+Property and equipment
+26,610
+9,532
+805,347
+- Financial investments measured at FVOCI
+1,112,791
+253,590
+4,011
+59,771
+1,430,163
+- Financial investments measured at amortised cost
+4,354,632
+89,283
+24,594
+50,673
+4,519,182
+Investments in associates and joint ventures
+827
+1,687
+29,124
+A breakdown of the assets and liabilities analysed by currency is as follows:
+Cash and balances with central banks
+161,857
+Total liabilities
+584,016
+65,228
+10,120
+15,213
+674,577
+21,178,647
+Others
+1,949,100
+500,347
+23,945,987
+Net position
+1,769,181
+101,705
+17,501
+252,669
+317,893
+526,940
+31,440
+669
+120,522
+2,752,887
+Certificates of deposit
+20,218
+164,308
+11,518
+64,230
+260,274
+Due to customers
+18,377,621
+722,852
+262,791
+199,672
+19,562,936
+Debt securities issued
+266,870
+227,961
+2,141,056
+28,831
+Credit commitments
+505,943
+3,148,061
+111,034
+1,860
+52,793
+3,313,748
+Due from banks and other financial institutions (*)
+1,003,670
+Cash and balances with central banks
+439,972
+87,957
+1,552,795
+Derivative financial assets
+30,318
+4,743
+16
+3,218
+21,196
+Assets:
+Total
+(equivalent
+to RMB)
+Others
+(equivalent
+to RMB)
+43,071
+144,248
+3,510,936
+(*)
+Includes reverse repurchase agreements.
+(**) Includes repurchase agreements.
+276
+ICBC
+Bank
+31 December 2018
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+USD
+(equivalent
+RMB
+to RMB)
+HKD
+(equivalent
+to RMB)
+2,817,674
+734,390
+1,869,144
+Due to banks and other financial institutions (**)
+Derivative financial assets
+38,019
+38,278
+6,828
+5,888
+89,013
+Loans and advances to customers
+353,601
+12,460,372
+263,423
+274,669
+13,892,966
+Financial investments
+4,921,646
+280,390
+26,117
+894,502
+1,620
+1,403
+12,302
+18,834
+78,734
+3,613,872
+Due from banks and other financial institutions (*)
+1,302,946
+474,008
+12,961
+44,327
+1,834,242
+Financial assets held for trading
+66,930
+4,355
+45,691
+16,052
+87,337
+Financial assets designated as at FVTPL
+338,276
+87,613
+5,315,766
+Investments in associates and joint ventures
+1,651
+26,087,043
+Liabilities:
+Due to central banks
+20
+436
+456
+Financial liabilities designated as at FVTPL
+20,895
+7,314
+61,152
+89,361
+Derivative financial liabilities
+39,863
+27,047
+3,964
+7,682
+78,556
+753,016
+3,354,447
+335,394
+22,947,828
+907
+1,498
+28,385
+32,441
+Property and equipment
+134,446
+111,188
+736
+1,374
+247,744
+Others
+329,095
+73,018
+3,594
+214,354
+620,061
+Total assets
+2,050,805
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Derivative financial assets
+ICBC
+(***) Includes loans and advances to customers and financial investments that are impaired or not impaired but overdue for more
+than one month.
+(**) The maturity profile of the renegotiated loans' contractual undiscounted cash flows is determined according to the negotiated
+terms.
+Includes reverse repurchase agreements.
+(*)
+30,969,820
+3,294,697
+10,839,160
+31 December 2017
+8,348,705
+1,369,037
+1,856,902
+1,112,688
+331,203
+5,952,253
+19,047,183
+322,730
+4,148,631
+Overdue/
+repayable
+on demand
+Less than
+one month
+Due to customers
+Certificates of deposit
+60,175
+939,006
+Due to banks and other financial institutions (*)
+Financial liabilities designated as at FVTPL
+404
+404
+Due to central banks
+Financial liabilities:
+Non-derivative cash flows:
+Total
+Undated
+More than
+five years
+five years
+One to
+Three
+months to
+one year
+One to
+three
+months
+3,633
+10,506,313
+28,455
+8,886,493 229,954
+1,919,091 34,239
+42
+300
+658
+62,051
+575
+Notes to the Financial Statements
+Repayable
+on demand
+Total
+1,167,456
+143,694
+Financial assets designated as at FVTPL
+236,602
+873,022
+194,676
+3,229,512
+Three
+Less than
+one month
+One to
+three months
+months to
+614,062
+4,675
+1,741
+2,007
+23,444
+22,566
+283,889
+Others
+566,079
+187,406
+88,538
+214
+Financial investments
+4,964,245
+3,088,065
+896,919
+944,690
+36,817
+Loans and advances to customers (**)
+154,500
+127,719
+3,156,686
+304
+722
+885,647
+44,459
+847,693
+51
+4,948
+(74)
+631
+(3,798,059)
+(1,551)
+(77,407)
+3,813,684
+1,477
+15,625
+78,038
+(365)
+1,028,853
+(1,029,218)
+- Cash outflow
+- Cash inflow
+Derivative financial instruments settled on gross basis
+2,275
+28
+827,776 1,877,540
+(822,752) (1,867,131)
+5,024
+10,409
+(*)
+Includes repurchase agreements.
+Annual Report 2018
+Less than
+one month
+One to
+months to
+One to
+three months
+one year
+five years
+31 December 2017
+Credit commitments
+31 December 2018
+More than
+five years
+Management does not expect all of the commitments will be drawn before the expiry of the commitments.
+Group
+(iii) Analysis of credit commitments by contractual expiry date
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+271
+287
+1,018
+336
+606
+19,083,444
+14,858
+2,607,674
+3,810,738
+1,296,168
+224,000
+323
+12,176
+93,918
+73,124
+2,422,443
+469
+9,084
+363,811
+224,426
+75,887
+9,991
+Debt securities issued
+One to
+6,891
+132,813
+Derivative financial instruments settled on net basis
+Derivative cash flows:
+22,529,056
+357,297
+4,304,685 2,836,157
+1,789,389 1,603,221
+11,638,307
+142,322
+2,903
+1,414
+788
+580,556
+338,744
+195,414
+30,482
+9,025
+427
+3,977
+Others
+one year
+Three
+More than
+five years
+Total portfolio VaR
+Commodity risk
+Currency risk
+15
+42
+28
+32
+66
+Interest rate risk
+Highest
+Average
+31 December 2018
+2018
+A summary of VaR by risk type of the Bank's trading portfolios is as follows:
+VaR analysis is a statistical technique which estimates the potential maximum losses that could occur on risk positions taken
+due to movements in interest rates, foreign exchange rates or prices over a specified time horizon and at a specified level
+of confidence. The Bank adopts a historical simulation model to calculate and monitor trading portfolio VaR with 250 days'
+historical market data (with a 99% confidence level, and one-day holding period) on a daily basis.
+(i) VaR
+Lowest
+64
+115
+43
+25
+Lowest
+Repayable
+on demand
+1,146,931
+Average
+31 December 2017
+2017
+Total portfolio VaR
+Commodity risk
+Interest rate risk
+Currency risk
+52
+113
+74
+88
+7
+39
+23
+7
+Sensitivity analysis, interest rate repricing gap analysis and foreign exchange risk concentration analysis are the major market
+risk management tools used by the Group. The Bank monitors market risk separately in respect of trading and other non-
+trading portfolios. The Value-at-risk ("VaR") analysis is a major tool used by the Bank to measure and monitor the market
+risk of its trading portfolios. The following sections include a VaR analysis by risk type of the Group's trading portfolios of the
+parent company and a sensitivity analysis based on the Group's currency risk exposure and interest rate risk exposure (both
+trading and non-trading portfolios).
+54
+The Group considers the market risk arising from stock prices fluctuations in respect of its investment portfolios as
+immaterial.
+Notes to the Financial Statements
+One to
+three months
+Less than
+one month
+Repayable
+on demand
+Total
+3,195,270
+199,415
+895,156
+604,926
+Three
+months to
+233,170
+More than
+five years
+five years
+one year
+One to
+Three
+months to
+One to
+three months
+five years
+115,672
+One to
+More than
+one year
+ICBC
+272
+The Group's currency risk mainly results from the risk arising from exchange rate fluctuations on its foreign exchange
+exposures. Foreign exchange exposures include the mismatch of foreign exchange assets and liabilities, and off-balance
+sheet foreign exchange positions arising from derivative transactions.
+The Group is primarily exposed to structural interest rate risk arising from commercial banking and position risk arising from
+treasury transactions. Interest rate risk is inherent in many of its businesses and largely arises from mismatches between
+the repricing dates of interest-generating assets and interest-bearing liabilities. The analysis of the interest rate risk in the
+banking book is disclosed in note 51(d).
+Market risk is the risk of loss, in respect of the Group's on and off-balance sheet activities, arising from adverse movements
+in market rates including interest rates, foreign exchange rates, commodity prices and stock prices. Market risk arises from
+both the Group's trading and non-trading businesses.
+(c) Market risk
+3,476,117
+370,334
+1,027,429
+657,496
+283,876
+97,993
+1,038,989
+Credit commitments
+Total
+five years
+five years
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+120
+Highest
+54
+66
+56
+2017
+Effect on equity
+2018
+2017
+Effect on profit
+before taxation
+2018
+Change in
+currency rate
+HKD
+Currency
+USD
+Bank
+(297)
+(1,026)
+(1,298)
+307
+17
+-1%
+HKD
+(332)
+22
+82
+23
+(44)
+(35)
+Total
+Credit commitments
+1,043,584
+123,905
+281,759
+649,759
+1,040,917
+371,012
+3,510,936
+Bank
+31 December 2018
+Credit commitments
+31 December 2017
+274
+While the tables above indicates the effect on profit before taxation and equity of 1% depreciation of USD and HKD, there
+will be an opposite effect with the same amount if the currencies appreciate by the same percentage.
+-1%
+-1%
+(25)
+(37)
+44
+366
+USD
+(3)
+(2)
+(1) VaR does not reflect liquidity risk. In the VaR model, a one-day holding period assumes that it is possible to hedge or
+dispose of positions within that period without restriction, the price of the financial instruments will fluctuate in the
+specified range, and the correlation between these market prices will remain unchanged. This may not fully reflect
+the market risk arising at times of severe illiquidity, when a one-day holding period may be insufficient to liquidate or
+hedge all positions fully;
+-1%
+VaR for each risk factor is the derived largest potential loss due to fluctuations solely in that risk factor. As there is a
+diversification effect due to the correlation amongst the risk factors, the individual VaR does not add up to the total
+portfolio VaR.
+62
+360
+Even though positions may change throughout the day, VaR only represents the risk of the portfolios at the close of
+each business day, and it does not account for any losses that may occur beyond the 99% confidence level; and
+136
+4
+46
+23
+15
+49
+314
+111
+62
+VaR relies heavily on historical data to provide information and may not clearly predict the future changes and
+modifications of the risk factors, especially those of an exceptional nature due to significant market moves.
+Although VaR is an important tool for measuring market risk under normal market environment, the assumptions on which
+the model is based do give rise to some limitations, mainly including the following:
+273
+2017
+2018
+2017
+Annual Report 2018
+Effect on equity
+Effect on profit
+before taxation
+Change in
+currency rate
+Currency
+2018
+The tables below indicate a sensitivity analysis of exchange rate changes of the currencies to which the Group had significant
+exposure on its monetary assets and liabilities and its forecasted cash flows. The analysis calculates the effect of a reasonably
+possible movement in the currency rates against RMB, with all other variables held constant, on profit before taxation and
+equity. A negative amount in the table reflects a potential net reduction in profit before taxation or equity, while a positive
+amount reflects a potential net increase. This effect, however, is based on the assumption that the Group's and the Bank's
+foreign exchange exposures as at the year end are kept unchanged and, therefore, have not incorporated actions that would
+be taken by the Group and the Bank to mitigate the adverse impact of this currency risk.
+Notes to the Financial Statements
+Group
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Less than
+one month
+The Group conducts its businesses mainly in RMB, with certain transactions denominated in USD, HKD and, to a lesser
+extent, other currencies. Transactions in foreign currencies mainly arise from the Group's treasury operations, foreign
+exchange dealings and overseas investments.
+The exchange rate of RMB to USD is managed under a floating exchange rate system. The HKD exchange rate has been
+pegged to USD and therefore the exchange rate of RMB to HKD has fluctuated in line with the changes in the exchange rate
+of RMB to USD.
+The Group manages its currency risk through various methods, including limitation management and risk hedging to hedge
+currency risk, and performing currency risk sensitivity analysis and stress testing regularly.
+(ii) Currency risk
+4,826
+3,936
+355,697
+other financial institutions (**)
+Due to banks and
+46,682
+46,682
+Derivative financial liabilities
+73,852
+60,174
+7,672
+2,039,083
+24,645,112
+at FVTPL
+32,153
+151,173
+Debt securities issued
+20,646,928
+538,927
+10,777
+281,380
+38,944
+449
+4,523,686
+13,020,881
+Due to customers
+1,945,135
+5,438
+14,235
+240,926
+110,252
+873
+2,552,657
+169,806
+277,021
+Others
+(*)
+N/A
+N/A
+1,525,310
+956,856
+(120,128)
+Interest rate mismatch
+499,291
+23,824,295
+288,247
+2,614,236
+4,911,380
+15,026,396
+Total liabilities
+330,294
+330,294
+984,036
+Certificates of deposit
+1,684,536
+other financial institutions (**)
+325,989
+325,989
+Others
+124,548
+124,548
+Property and equipment
+156,352
+Total assets
+156,352
+Investments in subsidiaries and
+4,362,174
+1,433,558
+2,344,397
+386,087
+198,132
+- Financial investments measured
+at amortised cost
+associates
+Liabilities:
+14,906,268
+4,666,430
+Due to banks and
+42,120
+42,120
+Derivative financial liabilities
+78,737
+67,257
+7,117
+4,363
+410
+410
+at FVTPL
+Financial liabilities designated as
+Due to central banks
+26,072,160
+1,114,813
+1,813,557
+3,571,092
+Includes reverse repurchase agreements.
+1,180
+(**) Includes repurchase agreements.
+Annual Report 2018
+Investments in subsidiaries and
+5,029,904
+33,985
+1,627,327
+2,560,880
+13,125,401
+50,879
+associates
+58,639
+4,091,956
+460,613
+347,099
+Financial investments
+8,758,429
+Loans and advances to customers
+53,856
+53,856
+165,498
+Derivative financial assets
+154,543
+Property and equipment
+404
+404
+Financial liabilities designated as
+Due to central banks
+Liabilities:
+1,346,007
+1,713,120
+154,543
+2,913,584
+13,631,399
+Total assets
+530,340
+530,340
+Others
+122,387
+122,387
+5,041,002
+338,257
+9,406
+26,796
+Cash and balances with central banks
+Assets:
+Total
+bearing
+five years
+five years
+interest-
+3,164,066
+More than
+Non-
+Three
+months to
+one year
+Less than
+three
+months
+31 December 2017
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+283
+One to
+384,930
+3,548,996
+Due from banks and
+147,140
+147,805
+7,110
+at FVTPL
+Financial assets designated as
+60,072
+358
+3,639
+44,397
+11,678
+Financial assets held for trading
+1,681,356
+5,681
+36,427
+296,231
+1,343,017
+other financial institutions (*)
+The above table lists the data including the trading book.
+(244,950)
+1,096,868
+2,406,842
+Reverse repurchase
+71,335
+960
+65,356
+5,019
+12,971
+584
+8,469
+3,918
+Commodity derivatives and others
+16,222
+88
+15,623
+511
+Interest rate contracts
+measured at FVTPL
+174,794
+174,794
+Loans and advances to customers
+Equity investments
+243,749
+34,727
+205,220
+3,802
+Debt securities
+Financial investments measured at FVTPL
+42,142
+360,483
+11,023
+measured at FVOCI
+Loans and advances to customers
+1,368
+444
+924
+measured at FVTPL
+349,460
+288
+41,264
+590
+Loans and advances to customers
+Structured products are mainly valued using dealer's quotations.
+Derivatives valued using a valuation technique with market observable inputs are mainly interest rate swaps, foreign
+exchange forwards, swaps and options, etc. The most frequently applied valuation techniques include discounted cash flow
+model and Black-Scholes model. The models incorporate various inputs including foreign exchange spot and forward rates,
+foreign exchange rate volatility, interest rate yield curves, etc.
+Derivatives
+A majority of the debt securities classified as level 2 are RMB bonds. The fair value of these bonds are determined based on
+the valuation results provided by China Central Depository & Clearing Co., Ltd., which are determined based on a valuation
+technique for which all significant inputs are observable market data.
+Financial investments valued using valuation techniques consist of debt securities and asset-backed securities. The Group
+values such securities in use of a discounted cash flow analysis which incorporates either only observable data or both
+observable and non-observable data. Observable inputs include assumptions regarding current interest rates; unobservable
+inputs include assumptions regarding expected future default rates, prepayment rates and market liquidity discounts.
+Financial investments
+The loans and advances to customers valued by the valuation technology are mainly the bill business and the discounted
+cash flow model is used. For the bank acceptance bill, based on the different credit risk of the acceptor, the interest rate
+curve is set up with the actual transaction data in the market as the sample; for the commercial bill, based on the interbank
+offered rate, the interest rate curve is constructed according to the credit risk and liquidity point difference adjustment.
+The following is a description of the fair value of the financial instruments recorded at fair value which are determined using
+valuation techniques. These incorporate the Group's estimate of assumptions that a market participant would make when
+valuing the instruments.
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+286
+valuation techniques which use inputs which have a significant effect on the recorded fair value that are not
+based on observable market data.
+Level 3:
+valuation techniques for which all inputs which have a significant effect on the recorded fair value are
+observable, either directly or indirectly; and
+The Group has established policies and internal controls with respect to the measurement of fair values, specify the framework of
+fair value measurement of financial instrument, fair value measurement methodologies and procedures. Fair value measurement
+policies specify valuation techniques, parameter selection and relevant concepts, models and parameter solutions. Operating
+procedures specify measurement operating procedures, valuation date, market parameter selection and corresponding allocation
+of responsibilities. In the process of fair value measurement, front office is responsible for daily transactions management. Financial
+Accounting Department plays a lead role of developing accounting policies of fair value measurement, valuation methodologies
+and system implementation. Risk Management Department is responsible for verifying trade details and valuation models.
+7,475
+Other liabilities designated as at fair value through profit or loss
+Annual Report 2018
+Exchange rate contracts
+Derivative financial asset
+fair value on a recurring basis:
+Financial assets which are measured at
+Total
+Level 3
+Level 2
+For unquoted other liabilities designated as at FVTPL, the discounted cash flow model is used based on current yield curve
+appropriate for the remaining term to maturity adjusted for market liquidity and credit spreads; and Heston model is applied
+based on yield curves, foreign exchange forward rates, foreign exchange rate volatilities, etc., which is calibrated by active
+market quotes of standard European options with the same underlying.
+Level 1
+Group
+The following tables show an analysis of financial instruments recorded at fair value by level of the fair value hierarchy:
+(a) Financial instruments recorded at fair value
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+287
+31 December 2018
+Level 2:
+408
+27,990
+42,193
+245
+41,713
+235
+Exchange rate contracts
+Derivative financial liabilities
+87,400
+1,372
+85,898
+130
+6,369
+1,372
+4,867
+130
+2,285
+Interest rate contracts
+86
+15,705
+730
+288
+ICBC
+1,012,620
+3,546
+1,004,958
+4,116
+73,573
+2,285
+2,174
+3,986
+14,859
+1,199
+9,995
+3,665
+Commodity derivatives and others
+16,521
+67,413
+67,266
+67,266
+11,480
+9,727
+703
+Equity investments
+1,119,222
+280,572
+Debt securities
+Financial investments measured at FVOCI
+143
+19,489
+805,347
+568,300
+30,700
+533,608
+151,513
+362,672
+19,423
+Funds and other investments
+206,347
+20,107
+1,399,937
+281,275
+328,017
+11,480
+851,647
+851,647
+Others
+Other debt securities issued
+precious metals
+Financial liabilities related to
+Other investments
+Wealth management products
+Due to customers
+fair value on a recurring basis:
+Financial liabilities which are measured at
+1,430,163
+2,843,490
+29,919
+307
+307
+19,939
+227,690
+1,128,949
+2,287,783
+Financial liabilities designated as at FVTPL
+8,126
+quoted (unadjusted) prices in active markets for identical assets or liabilities;
+Fair value estimates are generally subjective in nature, and are made as of a specific point in time based on the characteristics
+of the financial instruments and relevant market information. The Group uses the following hierarchy for determining and
+disclosing the fair value of financial instruments:
+The Group calculates the following core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy
+ratio in accordance with Regulation Governing Capital of Commercial Banks (Provisional) and relevant requirements. The
+requirements pursuant to these regulations may have certain differences comparing to those applicable in Hong Kong and
+other jurisdictions.
+From 1 January 2013, the Group commenced to calculate the capital adequacy ratios in accordance with Regulation
+Governing Capital of Commercial Banks (Provisional) and other relevant regulations. In April 2014, the former CBRC officially
+approved the Bank to adopt advanced capital management approaches. Within the scope of the approval, the foundation
+internal ratings-based (IRB) approach is adopted to corporate credit risk, the IRB approach to retail credit risk, the internal
+model approach (IMA) to market risk, and the standardized approach to operational risk meeting regulatory requirements.
+Domestic commercial banks should meet the requirements of capital adequacy ratios by the end of 2018 in accordance
+with Regulation Governing Capital of Commercial Banks (Provisional). For domestic systemically important banks, minimum
+core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio should reach 8.50%, 9.50% and
+11.50%, respectively. For non-systemically important banks, corresponding minimum ratios should reach 7.50%, 8.50% and
+10.50%, respectively. In addition, overseas entities are directly regulated by local banking regulatory commissions, and the
+requirements of capital adequacy ratios differ by countries.
+The Group's Management monitors the capital adequacy ratios regularly based on regulations issued by the CBIRC. The
+required information is respectively filed with the CBIRC by the Group and the Bank semi-annually and quarterly.
+The Group manages its capital structure and makes adjustments in light of changes in economic conditions and the risk
+profile of its activities. In order to maintain or adjust the capital structure, the Group may adjust its profit distribution
+policy, issue or repurchase own shares, qualifying other tier 1 capital instruments, qualifying tier 2 capital instruments and
+convertible bonds, etc.
+Make reasonable use of various capital instruments, continuously enhance capital strengths, refine capital structure,
+improve capital quality, reduce capital cost, and maximize shareholder returns.
+Adopt the advanced measurement approaches, improve the internal capital adequacy assessment process (ICAAP),
+disclose information on capital management, cover all types of risks, and ensure the stable operation of the Group;
+Integrate the quantified results of various risks into daily management, establish a bank value management system
+with economic capital as the core tool, improve the policy, process and application management system, strengthen
+the capital constraint and incentive mechanism, enhance the product pricing and decision-making capabilities, and
+improve the capital allocation efficiency; and
+Maintain reasonable capital adequacy ratio to continuously meet regulatory requirements on capital. Keeping stable
+capital base to ensure the Group's business growth and the implementation of business development and strategic
+plan in order to achieve comprehensive, coordinated and sustainable development;
+•
+•
+•
+The Group's objectives on capital management are:
+(e) Capital management
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+The capital adequacy ratios and related components of the Group are calculated in accordance with the statutory financial
+statements of the Group prepared under PRC GAAP. During the year, the Group has complied in full with all its externally
+imposed capital requirements.
+Annual Report 2018
+285
+Notes to the Financial Statements
+261,636
+Surplus reserve
+151,952
+151,968
+Valid portion of capital reserve
+356,407
+356,407
+284
+Paid-in capital
+2,247,021
+Core tier 1 capital
+31 December 2017
+31 December 2018
+The capital adequacy ratios calculated after implementation of the advanced capital management approaches are as follows:
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+2,044,390
+The above table lists the data including the trading book.
+(**) Includes repurchase agreements.
+Includes reverse repurchase agreements.
+75,120
+11,682
+75,551
+Debt securities issued
+18,894,447
+13,315
+2,525,217
+273,922
+3,743,406
+Due to customers
+221,489
+296
+3,092
+87,351
+130,750
+Certificates of deposit
+12,311,870
+232,660
+436,275
+505,720
+(*)
+N/A
+N/A
+1,425,587
+298,143
+838,040
+(927,035)
+Others
+Interest rate mismatch
+921,341
+287,533
+2,615,441
+4,202,962
+14,558,434
+Total liabilities
+505,720
+22,585,711
+Level 1:
+General reserve
+264,850
+Significant minority investments in tier 2 capital instruments issued by
+500
+Tier 2 capital deductions
+3,303
+1,991
+Valid portion of minority interests
+71,736
+127,990
+Surplus provision for loan impairment
+222,321
+202,761
+Valid portion of tier 2 capital instruments and related premium
+297,360
+332,742
+Tier 2 capital
+financial institutions that are not subject to consolidation
+Net capital base
+Risk-weighted assets (i)
+Core tier 1 capital adequacy ratio
+52. FAIR VALUE OF FINANCIAL INSTRUMENTS
+15.14%
+15.39%
+13.27%
+13.45%
+12.77%
+12.98%
+2,110,060
+15,902,801
+2,406,920
+2,644,885
+500
+Refers to risk-weighted assets after capital floor and adjustments.
+(i)
+Capital adequacy ratio
+Tier 1 capital adequacy ratio
+17,190,992
+2,312,143
+Net tier 1 capital
+577
+Other intangible assets other than land use rights
+8,478
+8,820
+Goodwill
+14,282
+14,988
+(61,063)
+1,927
+(11,646)
+3,752
+Core tier 1 capital deductions
+Others
+Valid portion of minority interests
+1,245,837
+1,205,924
+Retained profits
+2,716
+278,980
+1,532
+that are not fair valued on the balance sheet
+735
+Valid portion of minority interests
+79,375
+79,375
+Additional tier 1 capital instruments and related premium
+79,952
+80,110
+Cash flow hedge reserves that relate to the hedging of items
+Additional tier 1 capital
+2,232,033
+Net core tier 1 capital
+7,980
+7,980
+Investments in core tier 1 capital instruments issued by financial
+institutions that are under control but not subject to consolidation
+(3,708)
+(3,739)
+2,030,108
+28,075
+8,795
+634,044
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+280
+39,408
+3,636
+(37,319)
+(3,636)
+Total
+457
+(117)
+(457)
+The interest rate sensitivities set out in the tables above are for illustration only and are based on simplified scenarios. The
+figures represent the effect of the pro forma movements in net interest income and equity based on the projected yield
+curve scenarios and the Group's and the Bank's current interest rate risk profile. This effect, however, does not incorporate
+actions that would be taken by management to mitigate the impact of interest rate risk. The projections above also assume
+that interest rates of all maturities move by the same amount and, therefore, do not reflect the potential impact on net
+interest income and equity in the case where some rates change while others remain unchanged.
+117
+97
+(97)
+HKD
+2,842
+860
+(2,841)
+(860)
+USD
+36,109
+2,796
+(34,021)
+(2,796)
+Others
+The tables below summarise the contractual repricing or maturity dates, whichever is earlier, of the Group's assets and
+liabilities:
+31 December 2018
+Less than
+three
+3,723,420
+10,876,334
+Loans and advances to customers
+71,335
+71,335
+Derivative financial assets
+1,696,498
+56,740
+573
+66,142
+313,451
+1,259,592
+other financial institutions (*)
+Due from banks and
+3,372,576
+331,521
+3,041,055
+Cash and balances with central banks
+Assets:
+Total
+interest-
+bearing
+five years
+More than
+One to
+five years
+Non-
+Three
+months to
+one year
+months
+RMB
+equity
+net interest income
+equity
+equity
+net interest income
+equity
+net interest income
+Currency
+Effect on
+Decreased by 100 basis points
+Effect on
+Effect on
+Increased by 100 basis points
+Effect on
+2018
+Bank
+44,688
+4,271
+(42,300)
+(4,271)
+826
+(90)
+(825)
+90
+(495)
+495
+5,578
+1,911
+(5,574)
+(1,911)
+Total
+Others
+RMB
+207,848
+(3,242)
+3,242
+net interest income
+Currency
+Effect on
+Decreased by 100 basis points
+Effect on
+Effect on
+Effect on
+Increased by 100 basis points
+2017
+33,259
+3,293
+(31,058)
+(3,293)
+Total
+383
+(624)
+(383)
+624
+Others
+175
+(175)
+HKD
+2,502
+500
+(2,501)
+(500)
+USD
+30,374
+(28,174)
+HKD
+181,472
+15,046,132
+(133,897)
+Interest rate mismatch
+2,716,540
+5,205,901
+617,842
+283,047
+105,509
+1,452
+52,694
+354
+176,592
+7,935
+15,854,114
+Total liabilities
+Others
+Debt securities issued
+(391,953)
+21,408,934
+11,468
+2,577,977
+4,709,018
+13,519,006
+Due to customers
+341,354
+449
+873
+132,971
+207,061
+Certificates of deposit
+2,329,296
+591,465
+1,058,350
+1,467
+340,564
+1,684,757
+484,569
+1,237,538
+N/A
+3,613,872
+388,976
+3,224,896
+Cash and balances with central banks
+Assets:
+Total
+bearing
+five years
+five years
+interest-
+More than
+One to
+Non-
+Three
+months to
+one year
+Less than
+three
+months
+31 December 2017
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+281
+Annual Report 2018
+The above table lists the data including the trading book.
+(**) Includes repurchase agreements.
+Includes reverse repurchase agreements.
+(*)
+N/A
+25,354,657
+495,777
+14,297
+44,133
+20,996
+306,350
+Property and equipment
+29,124
+29,124
+ventures
+Investments in associates and joint
+4,519,182
+1,454,633
+2,402,746
+421,975
+239,828
+- Financial investments measured
+at amortised cost
+1,430,163
+28,952
+261,355
+715,623
+245,075
+179,158
+at FVOCI
+― Financial investments measured
+805,347
+70,027
+127,288
+382,531
+109,835
+115,666
+-Financial investments measured
+at FVTPL
+Financial investments
+290,404
+57,058
+290,404
+8,584
+1,943,520
+other financial institutions (**)
+Due to banks and
+73,573
+73,573
+Derivative financial liabilities
+87,400
+73,634
+9,323
+4,443
+at FVTPL
+481
+410
+71
+Financial liabilities designated as
+Due to central banks
+Liabilities:
+27,699,540
+1,365,164
+2,025,321
+3,774,890
+4,813,948
+15,720,217
+Total assets
+438,779
+430,003
+192
+Others
+213,159
+USD
+2,945
+296
+260,274
+Due to customers
+12,748,893
+3,891,544
+2,547,149
+13,514
+361,836
+19,562,936
+Debt securities issued
+Others
+84,631
+2,218
+3,309
+20,919
+278,960
+526,940
+99
+406
+410
+671,444
+674,577
+Total liabilities
+15,280,385
+4,451,161
+2,717,791
+299,237
+142,430
+97,204
+159,465
+Certificates of deposit
+1,892,599
+1,503,987
+26,087,043
+Liabilities:
+Due to central banks
+Financial liabilities designated as
+at FVTPL
+32
+20
+404
+1,180
+7,395
+10,374
+456
+70,412
+89,361
+Derivative financial liabilities
+78,556
+78,556
+Due to banks and
+other financial institutions (**)
+2,283,966
+433,980
+13,719
+6,057
+15,165
+2,752,887
+1,197,413
+23,945,987
+Interest rate mismatch
+(951,368)
+331,360
+91,203
+485
+21,066
+1,552,795
+Derivative financial assets
+38,295
+38,295
+Loans and advances to customers
+10,354,973
+3,625,912
+130,998
+47,558
+52,336
+14,211,777
+Financial investments
+― Financial investments measured
+at FVTPL
+111,281
+97,766
+370,450
+118,797
+42,351
+740,645
+- Financial investments measured
+at FVOCI
+145,254
+225,305
+1,108,681
+3,165,525
+other financial institutions (*)
+3,313,748
+744,754
+447,734
+1,593,362
+N/A
+N/A
+(*)
+Includes reverse repurchase agreements.
+(**) Includes repurchase agreements.
+The above table lists the data including the trading book.
+282
+ICBC
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+The tables below summarise the contractual repricing or maturity dates, whichever is earlier, of the Bank's assets and
+liabilities:
+31 December 2018
+Less than
+three
+months
+Three
+months to
+one year
+Non-
+One to
+five years
+More than
+five years
+interest-
+bearing
+Total
+Assets:
+Cash and balances with central banks
+2,987,947
+325,801
+Due from banks and
+38,284
+5,195,915
+Total assets
+USD
+33,093
+3,281
+(30,513)
+(3,281)
+RMB
+equity
+net interest income
+equity
+net interest income
+Currency
+Effect on
+HKD
+Decreased by 100 basis points
+Effect on
+Increased by 100 basis points
+Effect on
+2018
+Group
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+279
+Annual Report 2018
+The effect of the net interest income is the effect of the assumed changes in interest rates on the net interest income,
+arising from the financial assets and financial liabilities held at year end that are subject to repricing within the coming year,
+including the effect of hedging instruments. The effect of equity is the effect of the assumed changes in interest rates on
+other comprehensive income, calculated by revaluing fixed rate available-for-sale financial assets held at year end, including
+the effect of any associated hedges.
+The following tables demonstrate the sensitivity to a reasonably possible change in interest rates, with all other variables
+held constant, of the Group's and the Bank's net interest income and equity. The following table lists the data including the
+trading book.
+revenue.
+A principal part of the Group's management of interest rate risk is to monitor the sensitivity of projected net interest income
+under varying interest rate scenarios (simulation modeling). The Group aims to mitigate the impact of prospective interest
+rate movements which could reduce future net interest income, while balancing the cost of such hedging on the current
+Derivative trading: using interest rate derivatives for hedging management in a timely manner.
+Effect on
+Others
+Total
+(1,645)
+(35,901)
+(2,945)
+RMB
+equity
+net interest income
+equity
+net interest income
+Currency
+Effect on
+Decreased by 100 basis points
+Effect on
+Effect on
+Effect on
+Increased by 100 basis points
+2017
+39,467
+4,049
+(36,882)
+(4,049)
+691
+59
+(690)
+(59)
+(936)
+936
+5,683
+1,645
+(5,679)
+Quota management: optimising the positions of interest-generating assets and interest-bearing liabilities and control
+the impact on profit and loss and equity; and
+Pricing management: managing the deviation of the pricing of interest-generating assets and the benchmark interest
+rates or market interest rates;
+Duration management: optimising the differences in timing between contractual repricing (maturities) of interest-
+generating assets and interest-bearing liabilities;
+Interest rate prediction: analysing the macroeconomic factors that may impact on the PBOC benchmark interest rates
+and market interest rates;
+89,013
+Loans and advances to customers
+9,243,369
+4,163,670
+265,147
+163,052
+57,728
+13,892,966
+Financial investments
+384,969
+524,266
+2,688,511
+1,694,726
+23,294
+5,315,766
+Investments in associates and
+joint ventures
+32,441
+32,441
+Property and equipment
+247,744
+247,744
+Others
+6,277
+141
+613,643
+620,061
+89,013
+14,329,017
+Derivative financial assets
+10,927
+•
+•
+.
+The Group manages the interest rate risk of banking book through the Asset and the Liability Management Department,
+following methods have been adopted:
+(d) Interest rate risk in the banking book
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+Due from banks and
+other financial institutions (*)
+1,446,100
+300,248
+56,177
+291
+31,426
+1,834,242
+Financial assets held for trading
+14,834
+51,087
+6,008
+6,613
+87,337
+Financial assets designated as
+at FVTPL
+8,572
+156,503
+149,682
+27,917
+353,601
+Interest rate risk in the banking book is defined as the risk of loss in the overall gain and economic value of the banking
+book arising from adverse movements in interest rate and term structure, etc. This risk may occur in the following situations:
+when the interest rate fluctuates, because the repricing period of different financial instruments is different, the debt interest
+rate repricing date is earlier than the asset interest rate when interest rate rising and vice versa. The bank will face to the risk
+of reduced or even negative spreads over certain period of time; when the pricing benchmark interest rates are different, the
+changes in the benchmark interest rates are inconsistent; when there are embedded option terms or implied options in the
+business of holding options derivatives or banking book's on and off balance sheet business; and due to changes in expected
+default levels or market liquidity, the market's assessment of the credit quality of financial instruments changes, leading to
+changes in credit spreads.
+300,639
+In RMB millions, except for percentages
+Corporate loans rose by RMB482,030 million or 5.4% from the end of last year, mainly because the Bank continuously
+reinforced the financing support for enterprises in the high-end manufacturing sector, and supported the investment and
+financing demands of key projects, livelihood projects and projects under construction in fields such as interconnection
+among transportation infrastructure, urban infrastructure and public services, centering on major strategic planning such as
+three supporting belts, Xiongan New Area and Guangdong-Hong Kong-Macau Greater Bay Area.
+100.0
+8,936,864
+100.0
+9,418,894
+68.6
+6,134,322
+73.4
+6,914,401
+31.4
+2,802,542
+26.6
+2,504,493
+(%)
+Amount
+(%)
+Amount
+20
+Percentage
+20
+Discussion and Analysis
+Debt securities issued
+4.4
+1,046,338
+2.0
+514,801
+Repurchase agreements
+7.1
+1,706,549
+7.2
+1,814,495
+Due to banks and other financial institutions
+81.7
+(%)
+Amount
+19,562,936
+84.4
+21,408,934
+Due to customers
+ICBC
+617,842
+Percentage
+At 31 December 2017
+Amount
+(%)
+Amount
+9,418,894
+Percentage
+Percentage
+At 31 December 2017
+In RMB millions, except for percentages
+At 31 December 2018
+Total
+Personal loans
+Discounted bills
+Corporate loans
+Item
+DISTRIBUTION OF LOANS BY BUSINESS LINE
+Personal loans
+Discounted bills
+2018
+(%)
+At 31 December 2018
+61.0
+62.8
+In RMB millions, except for percentages
+Total
+Medium to long-term corporate loans
+Short-term corporate loans
+Item
+DISTRIBUTION OF CORPORATE LOANS BY MATURITY
+100.0
+34.7
+4,945,458
+14,233,448
+100.0
+15,419,905
+36.6
+5,636,574
+2.5
+351,126
+2.4
+364,437
+8,936,864
+2017
+Corporate loans
+2.4
+2.2
+5,505,236
+Time deposits
+Personal deposits
+54.7
+10,705,465
+53.6
+11,481,141
+Subtotal
+31.0
+6,069,804
+29.9
+6,405,136
+Demand deposits
+23.7
+4,635,661
+23.7
+5,076,005
+25.7
+Time deposits
+4,748,525
+Demand deposits
+1.0
+222,461
+Accrued interest
+1.5
+288,554
+1.3
+268,914
+Other deposits(2)
+43.8
+8,568,917
+44.1
+9,436,418
+Subtotal
+19.5
+3,820,392
+18.4
+3,931,182
+24.3
+526,940
+Corporate deposits
+Amount
+83,029
+Unit: RMB100 millions
+Due to Customers
+Due to customers is the Bank's main source of funds. As at the
+end of 2018, due to customers (excluding accrued interest) was
+RMB21,186,473 million, RMB1,623,537 million or 8.3% higher than
+that at the end of the previous year. In terms of customer structure,
+corporate deposits increased by RMB775,676 million or 7.2%; and
+personal deposits increased by RMB867,501 million or 10.1%. In terms
+of maturity structure, time deposits increased by RMB1,197,055 million
+or 12.8%, while demand deposits increased by RMB446,122 million
+or 4.5%. In terms of currency structure, RMB deposits stood at
+RMB19,841,403 million, an increase of RMB1,463,782 million or
+8.0% over the end of the previous year. Foreign currency deposits
+were equivalent to RMB1,345,070 million, an increase of RMB159,755
+million or 13.5%.
+Due to Customers
+2,365
+2,885
+2,225
+2,689
+100.0
+23,945,987
+100.0
+4.6
+1,103,224
+4.0
+998,585
+25,354,657
+Total liabilities
+Others
+95,745
+Percentage
+(%)
+24
+94,364
+At 31 December 2017
+In RMB millions, except for percentages
+Discussion and Analysis
+Percentage
+(%)
+Amount
+At 31 December 2018
+Item
+DISTRIBUTION OF DUE TO CUSTOMERS BY BUSINESS LINE
+Accrued interest
+Other deposits
+Corporate deposits Personal deposits
+2018
+2017
+2016
+107,055
+114,811
+85,689
+ICBC
+2016
+81,407
+89,369
+3.76%
+10,140
+Policy bank bonds 2012
+14 January 2019
+5.75%
+10,410
+Policy bank bonds 2014 (2)
+22 February 2021
+4.62%
+10,505
+Policy bank bonds 2011
+27 July 2020
+21 August 2019
+3.94%
+10,580
+Policy bank bonds 2012
+3.51%
+11,050
+Policy bank bonds 2012
+Policy bank bonds 2010
+9,770
+Policy bank bonds 2010
+Benchmark interest rate refers to the interest rate of one-year time deposits applied by PBC on the each value date of each
+interest-bearing period.
+The bonds had been repaid on the maturity date.
+(3)
+(2)
+Notes: (1) Excludes stage 1 allowance for impairment losses set aside in accordance with the New Financial Instrument Standards.
+rate (3) plus 0.59%
+17 April 2020
+25 February 2020
+Benchmark interest
+9,450
+Policy bank bonds 2010
+4.20%
+9,500
+Commercial bank bonds 2017
+23 April 2019
+26 March 2020
+13 July 2019
+3.65%
+9,700
+4.32%
+1 Financial bonds refer to the debt securities issued by financial institutions on the bond market, including bonds issued by policy banks,
+banks and non-bank financial institutions but excluding debt securities related to restructuring and central bank bills.
+impairment
+losses (1)
+4.04%
+Held-to-maturity investments
+26.0
+1,496,453
+Available-for-sale financial assets
+66.9
+4,519,182
+Financial investments measured at amortised
+cost
+21.2
+1,430,163
+Financial investments measured at fair value
+through other comprehensive income
+7.7
+(%)
+Percentage
+440,938
+11.9
+Amount
+At 31 December 2017
+3,542,184
+Maturity date
+25 June 2022
+61.5
+277,129
+11,400
+Policy bank bonds 2012
+Annual
+interest rate
+value
+Debt securities
+Nominal
+for
+Allowance
+In RMB millions, except for percentages
+TOP 10 FINANCIAL BONDS HELD BY THE BANK
+As at the end of 2018, the Group held RMB1,378,173 million of financial bonds', including RMB774,732 million of policy
+bank bonds and RMB603,441 million of bonds issued by banks and non-bank financial institutions, accounting for 56.2%
+and 43.8% of financial bonds, respectively.
+100.0
+5,756,704
+100.0
+6,754,692
+Total
+4.8
+Receivables
+Annual Report 2018
+23
+Discussion and Analysis
+3.0
+829,642
+3.8
+986,631
+2.6
+734,049
+Total assets
+Others
+Reverse repurchase agreements
+institutions
+3.2
+847,611
+3.5
+962,449
+Due from banks and other financial
+13.9
+3,613,872
+989,259
+12.2
+3.8
+100.0
+94,189
+7,200
+3,511
+3,644
+49,455
+56,366
+41,962
+Unit: RMB100 millions
+Total Loans
+In 2018, the Bank proactively integrated into the social reform and
+development, and evidently supported the major areas and key links
+of the real economy focusing on the supply-side structural reform and
+replacement of old growth drivers with new ones. As a result, the Bank
+achieved balanced and orderly credit granting for the whole year and
+further optimized its credit structure. Moreover, benchmarking to the
+requirements of high-quality economic development, the Bank further
+upgraded its financial services for private enterprises and small and micro
+enterprises, mainly backed the funding demands of the major national
+infrastructure and supported the rational financing demands of resident
+households for owner-occupied houses. As at the end of 2018, total
+loans amounted to RMB15,419,905 million, RMB1,186,457 million or
+8.3% higher compared with the end of the previous year, of which RMB
+denominated loans of domestic branches were RMB13,591,421 million,
+RMB1,160,095 million or 9.3% higher than that at the end of 2017.
+Loan
+Discussion and Analysis
+19
+Annual Report 2018
+Note: (1) Please see "Note 23. to the Financial Statements: Loans and Advances to Customers".
+100.0
+26,087,043
+27,699,540
+3,372,576
+Cash and balances with central banks
+22.1
+Item
+ASSETS DEPLOYMENT
+As at the end of 2018, total assets of the Bank amounted to RMB27,699,540 million, RMB1,612,497 million or 6.2% higher
+than that at the end of the previous year. Specifically, total loans and advances to customers (collectively referred to as
+"total loans") increased by RMB1,186,457 million or 8.3% to RMB15,419,905 million, investment increased by RMB997,988
+million or 17.3% to RMB6,754,692 million, and cash and balances with central banks decreased by RMB241,296 million or
+6.7% to RMB3,372,576 million.
+Assets Deployment
+In 2018, in response to the complicated development trends externally, the Bank adhered to the prudent and steady
+business strategy based on the macroeconomic policies, sources of funds, performance of the real economy and state of risk
+control, and promoted the moderate growth and continuous structure optimization of total assets and liabilities. In addition,
+the Bank made active efforts to support the development of the real economy, appropriately expanded the scale of loan
+issuance and bond investment, and cemented the foundation for deposit business development, thereby ensuring a stable
+and sustainable growth of funding sources.
+Balance Sheet Analysis
+Discussion and Analysis
+Percentage
+Percentage
+(%)
+Amount
+Item
+At 31 December 2017
+At 31 December 2018
+In RMB millions, except for percentages
+LIABILITIES
+As at the end of 2018, total liabilities reached RMB25,354,657 million, an increase of RMB1,408,670 million or 5.9%
+compared with the end of last year.
+Liabilities
+Total loans and advances to customers
+Add: Accrued interest
+Less: Allowance for impairment losses on
+loans and advances to customers
+measured at amortised cost
+At 31 December 2018
+5,756,704
+24.4
+6,754,692
+53.2
+13,892,966
+54.3
+15,046,132
+Net loans and advances to customers (1)
+Investment
+Total
+(%)
+340,482
+Amount
+14,233,448
+In RMB millions, except for percentages
+At 31 December 2017
+412,731
+38,958
+Amount
+15,419,905
+(%)
+Percentage
+Percentage
+21,408,934
+DISTRIBUTION OF PERSONAL LOANS BY PRODUCT LINE
+19,562,936
+100.0
+5,373,733
+100.0
+In terms of distribution by issuers, government bonds increased by RMB754,227 million or 22.9% over the end of last
+year; central bank bills increased by RMB13,844 million or 73.2%; policy bank bonds went down by RMB221,937 million
+or 22.3%; and other bonds increased by RMB129,209 million or 12.1%. In order to support the development of the real
+economy, the Bank stepped up the allocation to government bonds based on the bond market supply.
+DISTRIBUTION OF INVESTMENT IN BONDS BY REMAINING MATURITY
+Remaining maturity
+Undated (1)
+Less than 3 months
+3 to 12 months
+1 to 5 years
+Total
+Note: (1) Refers to overdue bonds.
+In RMB millions, except for percentages
+At 31 December 2017
+At 31 December 2018
+Percentage
+Amount
+6,049,076
+(%)
+19.9
+19.8
+(%)
+Amount
+(%)
+4,040,956
+66.9
+3,286,729
+100.0
+61.2
+32,746
+0.5
+18,902
+0.4
+774,732
+12.8
+996,669
+18.5
+1,200,642
+1,071,433
+Amount
+Amount
+(%)
+100.0
+DISTRIBUTION OF INVESTMENT IN BONDS BY CURRENCY
+Item
+RMB-denominated bonds
+USD-denominated bonds
+Other foreign currency bonds
+Total
+In RMB millions, except for percentages
+At 31 December 2017
+At 31 December 2018
+Percentage
+Percentage
+Amount
+(%)
+Amount
+(%)
+5,547,079
+5,373,733
+Percentage
+100.0
+31.8
+54
+0.0
+255,716
+4.2
+281,658
+5.2
+660,914
+10.9
+561,566
+10.5
+3,319,674
+54.9
+2,819,961
+52.5
+1,812,718
+30.0
+1,710,548
+6,049,076
+Percentage
+Percentage
+At 31 December 2018
+4.4
+Credit card overdrafts
+626,468
+11.1
+534,776
+10.8
+Total
+5,636,574
+100.0
+4,945,458
+100.0
+Personal loans increased by RMB691,116 million or 14.0% from the end of last year. Specifically, residential mortgages grew
+by RMB651,272 million or 16.5%, mainly because the Bank supported the residents' financing needs for owner-occupied
+houses; credit card overdrafts increased by RMB91,692 million or 17.1%, primarily due to the continuous development of
+credit card installment business and steady growth in the consumption trading volume of credit cards.
+Please see the section headed "Discussion and Analysis - Risk Management" for detailed analysis of the Bank's loans and
+their quality.
+Investment
+In 2018, the Bank augmented its efforts in supporting the real economy, moderately expanded investment scale
+and enhanced capital usage efficiency. As at the end of 2018, investment (excluding accrued interest) amounted to
+RMB6,670,331 million, RMB913,627 million or 15.9% higher compared with the end of the previous year.
+INVESTMENT
+Item
+216,210
+Bonds
+3.8
+Personal business loans
+At 31 December 2018
+Percentage
+Item
+Residential mortgages
+Amount
+(%)
+Amount
+Percentage
+(%)
+4,589,961
+81.5
+3,938,689
+79.6
+Personal consumption loans
+204,162
+3.6
+255,783
+5.2
+215,983
+Equity instruments
+Funds and others (1)
+Accrued interest (2)
+6,754,692
+100.0
+5,756,704
+100.0
+Notes: (1) Includes assets invested by funds raised by the issuance of principal-guaranteed wealth management products by the Bank.
+(2) Please see "Note 24. to the Financial Statements: Financial Investments" for details.
+Bonds rose by RMB675,343 million or 12.6% from the end of the previous year to RMB6,049,076 million. Funds and others
+grew by RMB199,448 million or 54.8% to RMB563,346 million.
+Annual Report 2018
+21
+Discussion and Analysis
+DISTRIBUTION OF INVESTMENT IN BONDS BY ISSUERS
+Item
+Government bonds
+Central bank bills
+Policy bank bonds
+Other bonds
+Total
+In RMB millions, except for percentages
+At 31 December 2017
+1.2
+84,361
+6.3
+363,898
+Total
+In RMB millions, except for percentages
+At 31 December 2017
+At 31 December 2018
+Percentage
+Percentage
+Amount
+(%)
+6,049,076
+91.7
+89.6
+(%)
+93.4
+57,909
+0.9
+19,073
+0.3
+563,346
+8.3
+Amount
+5,373,733
+4,945,340
+Over 5 years
+356,034
+Shareholders' Equity
+Discussion and Analysis
+25
+Annual Report 2018
+Repurchase agreements were RMB514,801 million, a decrease of RMB531,537 million or 50.8% from the end of last year,
+mainly because the Bank appropriately adjusted the size of funds raised based on its internal and external liquidity status.
+Repurchase Agreements
+100.0
+19,562,936
+100.0
+21,408,934
+Total
+4.0
+788,744
+4.2
+908,346
+Overseas and others
+5.3
+1,033,381
+5.2
+As at the end of 2018, shareholders' equity amounted to RMB2,344,883 million in aggregate, RMB203,827 million or 9.5%
+higher than that at the end of the previous year. Equity attributable to equity holders of the parent company recorded an
+increase of RMB202,510 million or 9.5% to RMB2,330,001 million. Please refer to the "Financial Statements: Consolidated
+Statement of Changes in Equity" for details.
+For details on off-balance sheet items, please refer to "Note 45. to the Financial Statements: Commitments and Contingent
+Liabilities; Note 46. to the Financial Statements: Designated Funds and Loans".
+Analysis on Statement of Cash Flows
+92.0
+postal services
+23.8%
+Transportation, storage and
+Unit: RMB100 millions
+Corporate Deposits
+Domestic Corporate Loans by Industry
+At the end of 2018, the number of corporate customers increased by 762 thousand over the end of the previous
+year to 7,033 thousand. The balance of corporate loans reached RMB9,418,894 million, representing an increase of
+RMB482,030 million or 5.4%. The balance of corporate deposits hit RMB11,481,141 million, representing an increase
+of RMB775,676 million or 7.2%.
+The Bank continued to grow corporate deposits consistently. All-round efforts, e.g. tapping the source, setting deposit
+rates flexibly, offering innovative products and strengthening management, secured a sound growth momentum in
+corporate deposits. The whole Bank launched co-marketing campaigns with the utilization of information systems and
+big data sharing technology, targeting at high-quality listed company customers and industrial funds, as well as key
+funding sources, e.g. bond underwriting & offering, M&A and restructuring and QR code payment.
+The Bank vigorously supported the development of private economy. It headed the Chinese banking industry in
+efficiently completing the "Head Office & Headquarters" agreement-signing with key private enterprises. It established
+relationship with distinctive private enterprises and developed a white list of high-quality and backbone private
+enterprises. It completed the creation of and investment in the first state-owned large banks' private enterprise bond
+financing support tools and promoted the debt-for-equity swap of private enterprises in a steady way.
+1,105,344
+The Bank steadily progressed in credit restructuring. It retained a good balance in the relationships between direction
+and amount of lending, frequency and structure, return and risk. The "One plus Three" credit layout, with One
+referring to the basic industrial sectors, and Three referring to a triple of sectors, i.e. happiness industries, advanced
+manufacturing and connectivity of the internet of things, made notable progress. All four sectors recorded fast
+growth. Under a more reasonable regional layout, the Bank actively enlarged the share in the credit markets of
+Xiongan New Area, Hainan Free Trade Zone, Guangdong-Hong Kong-Macau Greater Bay Area and Yangtze River
+Delta. Besides, the construction of financial service centers for science and technology innovation enterprises in
+Shenzhen and Shanghai were underway in a bid to support the new economy and enter new markets with fresh
+mechanisms and models.
+Z
+To address the customer demand, the Bank made further headway in promoting the "full-spectrum corporate" banking
+strategy, picked up pace in product innovation and marketing service system transformation by adopting FinTech, supported
+the development of small and micro enterprises, prioritized the provision of financial services for "agriculture, rural areas and
+farmers" and enhanced the quality and efficiency of serving the real economy to a new high.
+Corporate Banking
+Discussion and Analysis
+BUSINESS OVERVIEW
+ICBC
+26
+Net cash outflows from financing activities amounted to RMB35,924 million, of which, cash inflows were RMB1,045,871
+million, mainly due to the issuance of debt securities by overseas institutions; and cash outflows were RMB 1,081,795 million,
+mainly due to the repayment of debt securities.
+Net cash outflows from investing activities amounted to RMB731,745 million. Specifically, cash inflows were RMB1,501,388
+million, representing a decrease of RMB657,295 million, mainly due to the decreased cash received from the recovery of
+bond investment; and cash outflows were RMB2,233,133 million, representing a decrease of RMB414,808 million, mainly
+due to the decrease in cash payment for bond investment.
++
+50,760
+Northeastern China
+3,236,441
+60,261
+0.3
+56,304
+Head Office
+(%)
+Amount
+(%)
+Amount
+Item
+Percentage
+Percentage
+At 31 December 2017
+At 31 December 2018
+In RMB millions, except for percentages
+DISTRIBUTION OF DUE TO CUSTOMERS BY GEOGRAPHIC AREA
+Please see "Note 34. to the Financial Statements: Due to Customers".
+Includes outward remittance and remittance payables.
+(2)
+Notes: (1)
+100.0
+0.3
+Yangtze River Delta
+4,032,866
+18.8
+16.8
+3,591,835
+Western China
+14.2
+2,780,882
+14.3
+3,064,753
+Central China
+26.6
+16.6
+5,203,857
+5,922,781
+Bohai Rim
+14.0
+2,736,614
+12.7
+2,726,705
+Pearl River Delta
+19.0
+3,722,756
+27.7
+Manufacturing
+Net cash inflows from operating activities amounted to RMB724,133 million, representing a decrease of RMB46,731 million
+as compared to last year, mainly attributable to cash outflows resulted from the drop of repurchase agreements which
+resulted in cash inflows in the previous year. Specifically, cash outflows of operating assets dropped by RMB559,032 million
+and cash inflows of operating liabilities dropped by RMB671,055 million.
+At 31 December 2018
+ICBC
+Science, education, culture
+and sanitation
+2.3%
+Mining
+2.9%
+Construction
+52,717
+60,698
+64,051
+6.1%
+Wholesale and retail
+7.4%
+Real estate
+utility management
+(%)
+9.7%
+Water, environment and public
+2.1%
+11.5%
+2016
+Lodging and catering
+The Bank carried forward the cooperation with other banks on a steady footing. It signed comprehensive cooperative
+agreements with Agricultural Development Bank of China, GF Securities Co. Ltd., China Life Insurance Company
+Limited and the People's Insurance Company of China, among other industry-leading customers.
+The Bank made further progress in cooperation with the government. It actively marketed key reform departments
+to open accounts, having the largest market share for central government-affiliated customers. It earnestly provided
+financial services supporting pension insurance reform for governmental agencies and administrative institutions,
+maintaining the largest market share in basic pension insurance accounts. Aligning itself with the fiscal reform of
+China, the Bank supported the e-reform of income and expenditure of national treasury, enhanced the capabilities
+of serving fiscal departments and budgetary units at all levels, and still topped the banking industry in terms of the
+number of regions and customers for launching the fiscal e-payment agency service and e-collection of non-tax
+revenue agency service, as well as the relevant business volumes under agency. The Bank deepened the cooperation
+with veteran affairs departments in different places and continued to improve financial service capabilities for veterans.
+As governmental agencies and administrative institutions were key customers, the Bank researched, developed and
+promoted systems and applications such as "ICBC Campus Cloud", "Religion Cloud Platform" and "Cloud Platform
+for the Party, League and Labor Union" for the purpose of strengthening customer expansion, service upgrade and
+product penetration.
++
+Institutional Banking
+The Bank pushed forward financial services for agriculture, rural areas and farmers in an all-round manner, and set
+up inclusive finance promotion committees at the levels of the Head Office and tier-one branches to take on the
+responsibilities in relation to the implementation and overall management of agro-related credit policy in an effort
+to promote financial services for agriculture, rural areas and farmers across the board. At the end of 2018, farmer
+business loans and small and micro enterprise loans for agriculture, rural areas and farmers which belonged to the
+scope of inclusive loans combined to RMB89,134 million, representing an increase of RMB9,547 million or 12.0% over
+the beginning of the year. There were 55 thousand loan customers, up 21 thousand over the beginning of the year.
+The average interest rate of loans granted in 2018 decreased by 0.34 percentage points over the prior year to 5.03%.
+The Bank strongly expanded the small and micro enterprise financial service market, and rolled out serial campaigns
+to bring inclusive financial services to small and micro enterprises. It visited and established in-depth cooperative
+relationships with thousands of offline specialized markets, E-commerce platforms and leading enterprises, and
+signed cooperation deepening agreements with many local governments, industry associations, industrial parks and
+specialized markets to further diversify inclusive financial services. As at the end of 2018, the loans to small and
+micro enterprises with the total loans of no more than RMB10 million for each enterprise was RMB321,685 million,
+representing an increase of RMB49,203 million or 18.1% over the beginning of the year. There were 308 thousand
+micro and small enterprise loan customers, up 91 thousand over the beginning of the year. The average interest rate
+of loans granted in 2018 decreased by 0.26 percentage points over the prior year to 4.95%.
+The Bank actively developed a service network which was integrated on- and off-line to increase the coverage and
+convenience of inclusive financial services. Online, the Bank improved the ICBC Small and Micro Finance Platform and
+the comprehensive inclusive financial service system consisting of Quick Lending for Operation, Online Revolving Loan
+and Online Supply Chain. Offline, the Bank actively pushed forward the construction of specialized inclusive financial
+institutions at all levels and strengthened the function of small and micro enterprise banking centers as the marketing
+organization center, business processing center, risk control center and 020 business service center. At the end of
+2018, there were 258 small and micro enterprise banking centers.
++
+Inclusive Finance
+Discussion and Analysis
+27
+Annual Report 2018
+2.4%
+Others
+2018
+Time deposits
+Demand deposits
+1.2%
+2017
+electricity, heat, gas and water
+Production and supply of
+43,028
+295,590
+5.5
+145,963
+2.4
+132,803
+2.5
+6,049,076
+100.0
+The Bank launched a fresh model of alleviating poverty with joined-up efforts from banks, insurers and futures
+companies, thus beefing up targeted poverty relief in a joint and effective way. Specifically, on the basis that insurers
+and futures companies provided farmers with risk management service, the Bank increased and underscored services
+such as credit facility, e-commerce sales, premium donation and linked wealth management product issuance to enrich
+and improve the financial anti-poverty product and service system.
+100.0
+In terms of currency structure, RMB-denominated bonds rose by RMB601,739 million or 12.2%. During the reporting period,
+the Bank balanced the risks and returns of foreign currency bond investment portfolios and increased the investment in
+USD-denominated bonds. USD-denominated bonds added by RMB60,444 million or 20.4%; other foreign currency bonds
+increased by an equivalent of RMB 13,160 million or 9.9%.
+22
+ICBC
+DISTRIBUTION OF INVESTMENT BY MEASURING METHOD
+5,373,733
+In RMB millions, except for percentages
+Discussion and Analysis
+Leasing and commercial services
+46,357
+17.4%
+Percentage
+13.2%
+28
+Financial investments measured at fair value
+through profit or loss
+Amount
+5.9
+Item
+At 31 December 2017
+805,347
+(ii)
+The fair values of financial investments measured at amortised cost relating to the restructuring of the Bank are
+estimated on the basis of the stated interest rates and the consideration of the relevant special clauses of the
+instruments evaluated in the absence of any other relevant observable market data, and the fair values approximate
+to their carrying amounts. The fair values of financial investments measured at amortised cost irrelevant to the
+restructuring of the Bank are determined based on the available market values. If quoted market prices are not
+available, then fair values are estimated on the basis of pricing models or discounted cash flows.
+The fair values of subordinated bonds and tier 2 capital notes are determined with reference to the available market
+values. If quoted market prices are not available, then fair values are estimated on the basis of pricing models or
+discounted cash flows.
+All of the above-mentioned assumptions and methods provide a consistent basis for the calculation of the fair values of
+the Group and the Bank's assets and liabilities. However, other institutions may use different assumptions and methods.
+Therefore, the fair values disclosed by different financial institutions may not be entirely comparable.
+296
+31 December
+2018
+Notes to the Financial Statements
+53. COMPANY-LEVEL STATEMENT OF FINANCIAL POSITION
+ASSETS
+Notes
+ICBC
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+31 December
+2017
+Cash and balances with central banks
+13,125,401
+24
+6,348,656
+5,428,233
+Financial investments measured at FVTPL
+Financial investments measured at FVOCI
+― Financial investments measured at amortised cost
+- Available-for-sale financial assets
+Held-to-maturity investments
+Receivables
+740,645
+398,329
+1,245,837
+4,362,174
+1,358,802
+14,211,777
+(i)
+23
+Loans and advances to customers
+19
+3,313,748
+3,548,996
+Due from banks and other financial institutions
+20
+1,031,402
+930,593
+Derivative financial assets
+21
+38,295
+53,856
+Reverse repurchase agreements
+22
+521,393
+750,763
+Financial investments
+Subject to the existence of an active market, such as an authorised securities exchange, the market value is the best
+reflection of the fair value of financial instruments. As there is no available market value for certain of the financial assets
+and financial liabilities held and issued by the Group, the discounted cash flow method or other valuation methods described
+below are adopted to determine the fair values of these financial assets and financial liabilities:
+Notes to the Financial Statements
+261,922
+276,512
+273,299
+276,512
+276,512
+276,512
+3,671,102
+231,129
+231,631
+17,716
+3,351,438
+3,439,471
+Level 3
+Level 2
+Level 1
+Annual Report 2018
+Fair value
+amount
+Carrying
+2017
+Receivables
+Held-to-maturity investments
+Financial assets
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+273,299
+261,922
+Subordinated bonds and Tier 2 Capital Notes
+182,906
+261,922
+269,143
+261,922
+269,143
+Subordinated bonds and Tier 2 Capital Notes
+Financial liabilities
+182,062
+181,960
+102
+3,333,620
+49,169
+3,382,789
+17,716
+3,582,567
+295
+3,439,471
+4,362,174
+4,402,359
+39,120
+4,180,333
+182,906
+4,362,174
+4,402,359
+39,120
+4,180,333
+Financial liabilities
+231,631
+79,375
+Investments in associates
+39
+79,375
+38
+356,407
+356,407
+37
+TOTAL EQUITY AND LIABILITIES
+TOTAL EQUITY
+22,585,711
+23,824,295
+700,637
+436,376
+36
+436,275
+499,291
+35
+Retained profits
+Reserves
+Other equity instruments
+Share capital
+EQUITY
+TOTAL LIABILITIES
+247,348
+610,299
+1,111,446
+1,013,320
+Financial investments measured at amortised cost
+ICBC
+298
+The financial statements were approved and authorised for issue by the board of directors on 28 March 2019.
+56. APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTS
+Certain comparative amounts have been reclassified to conform with the current year's presentation.
+55. COMPARATIVE AMOUNTS
+On 28 March 2019, the Board of Directors of the Bank reviewed and approved the Proposal on the Issuance of Undated
+Additional Tier 1 Capital Bonds. The Bank plans to issue write-down undated additional tier 1 capital bonds with the total
+amount up to RMB80.0 billion in China's national inter-bank bond market. All funds raised will be used to bolster the Bank's
+additional tier 1 capital. The undated additional tier 1 capital bonds issuance plan is still subject to the review and approval
+by the Shareholders' General Meeting of the Bank, after which it is further subject to the approval by the relevant regulatory
+authorities.
+Issuance of Undated Additional Tier 1 Capital Bonds
+According to the capital planning and capital replenishment planning, the Bank publicly issued the tier 2 capital bonds of
+RMB55.0 billion in March 2019 in China's national inter-bank bond market. The funds raised will be used to replenish the
+Bank's tier 2 capital in accordance with the applicable laws as approved by relevant regulators.
+Issuance of Tier 2 Capital Bonds
+The Board of Directors of the Bank reviewed and approved the Proposal on the Establishment of ICBC Wealth Management
+Co., Ltd. at the meeting of the Board of Directors convened on 26 November 2018. The proposal is to establish a
+wholly-owned subsidiary ICBC Wealth Management Co., Ltd. by contributing no more than RMB16.0 billion of the Bank's
+proprietary funds. On 15 February 2019, CBIRC officially approved the Bank's establishment of ICBC Wealth Management
+Co., Ltd.
+Establishment of Wealth Management Subsidiary
+A final dividend of RMBO.2506 per share after the appropriation of statutory surplus reserve and general reserve, was
+approved at the board of directors' meeting held on 28 March 2019, and is subject to the approval of the Bank's
+shareholders at the forthcoming annual general meeting. Based on the number of ordinary shares issued as at 31 December
+2018, the final dividend amounted to approximately RMB89,315 million. The dividend payable was not recognised as a
+liability as at 31 December 2018.
+The profit distribution plan
+54. AFTER THE REPORTING PERIOD EVENT
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+297
+Annual Report 2018
+24,645,112
+2,059,401
+2,247,865
+26,072,160
+Other liabilities
+Investments in subsidiaries
+Debt securities issued
+82,946
+LIABILITIES
+24,645,112
+26,072,160
+483,090
+269,769
+29
+47,250
+56,220
+28
+122,387
+Due to central banks
+124,548
+34,242
+34,242
+26
+120,301
+122,110
+25
+TOTAL ASSETS
+Other assets
+Deferred income tax assets
+Property and equipment
+27
+410
+404
+Financial liabilities designated as at FVTPL
+Income tax payable
+18,894,447
+20,646,928
+34
+Due to customers
+221,489
+281,380
+33
+Certificates of deposit
+810,610
+300,988
+32
+Repurchase agreements
+1,596,232
+1,644,147
+31
+Due to banks and other financial institutions
+46,682
+42,120
+21
+73,852
+78,737
+30
+69,344
+Financial assets
+Derivative financial liabilities
+Level 2
+Interest rate contracts
+(728)
+(302)
+Commodity derivatives and others
+(663)
+387
+(3,011)
+(35)
+15
+Financial assets:
+Derivative financial assets
+2017
+Total
+gains/(losses)
+recorded in
+profit or loss
+(193)
+299
+99
+6
+(1,372)
+1 January
+(60)
+(271)
+Derivative financial liabilities
+(19)
+19,489
+Other investments
+(32)
+339
+307
+189,586
+45
+Exchange rate contracts
+617
+(99,344)
+(10,344)
+(7,893)
+227,690
+Financial liabilities:
+Financial liabilities designated as at FVTPL
+(1,349)
+(135)
+155,023
+16,232
+2
+49
+Transfer out of
+level 3
+31 December
+2017
+Exchange rate contracts
+320
+28
+23
+(9)
+(11)
+Settlements
+(22)
+Interest rate contracts
+412
+(100)
+1
+(4)
+(81)
+10
+238
+329
+20
+Disposals
+comprehensive
+income
+(245)
+(51)
+77
+191
+83
+(730)
+(1,032)
+1
+Additions
+108
+(1,336)
+80
+510
+246
+(3,546)
+Total gains/
+(losses)
+recorded
+in other
+(1,199)
+649
+2,627
+Equity investments
+Exchange rate contracts
+329
+(5)
+63
+(2)
+(47)
+(50)
+288
+2018
+Interest rate contracts
+111
+34
+(77)
+(176)
+Commodity derivatives and others
+533
+(149)
+226
+238
+(26)
+31 December
+Settlements
+Annual Report 2018
+291
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+(b) Movement in level 3 financial instruments measured at fair value
+The following table shows a reconciliation of the opening and closing balance of level 3 financial assets and financial
+liabilities which are recorded at fair value and the movement during the year:
+Group
+Transfer out of
+level 3
+Financial assets:
+Total gains/
+1 January
+2018
+Total
+gains/(losses)
+recorded in
+profit or loss
+(losses)
+recorded
+in other
+comprehensive
+income
+Additions
+Disposals
+Derivative financial assets
+པེ'
+(42)
+88
+(157)
+'
+20,107
+Funds and other investments
+170,240
+(320)
+92,119
+(98,512)
+14,445
+(8,759)
+151,513
+Financial investments measured at FVOCI
+Debt securities
+1,853
+143
+(882)
+(971)
+143
+(3,255)
+297
+5,522
+Equity investments
+584
+Loans and advances to customers
+measured at FVTPL
+410
+44
+10
+(10)
+1
+HHH
+444
+Financial investments measured at FVTPL
+Debt securities
+7,834
+67
+31,422
+(551)
+(470)
+(3,575)
+34,727
+Commodity derivatives and others
+67
+510
+(8)
+209
+5
+Financial investments measured at FVTPL
+Debt securities
+7,073
+(76)
+27,845
+(527)
+(153)
+(3,570)
+Funds and other investments
+155,788
+(1,007)
+84,683
+(95,412)
+(7,510)
+(3,255)
+133,287
+30,745
+Financial investments measured at FVOCI
+(20)
+(1)
+1 January
+recorded in
+comprehensive
+2018
+profit or loss
+income
+Additions
+Disposals
+55
+Settlements
+31 December
+2018
+Exchange rate contracts
+Interest rate contracts
+155
+193
+(19)
+55
+154
+Transfer out of
+Level 3
+Debt securities
+918
+(3)
+20
+(209)
+Interest rate contracts
+(154)
+1
+(5)
+153
+(5)
+(55)
+(347)
+(60)
+173
+(214)
+1 January
+2017
+Total
+gains/(losses)
+recorded in
+profit or loss
+Total losses
+recorded
+in other
+20
+19
+(193)
+Exchange rate contracts
+3
+143
+(270)
+(648)
+143
+Equity investments
+1,082
+21,108
+22,190
+164,126
+(1,106)
+1,085
+133,839
+(95,939)
+(7,953)
+(7,473)
+186,579
+Financial liabilities:
+Derivative financial liabilities
+in other
+454,448
+recorded
+Total
+6,336
+(10)
+(197)
+5,440
+Equity investments
+148
+5,287
+5,435
+(1,918)
+159,550
+(1,770)
+66,526
+(60,366)
+(1,598)
+(2,443)
+169,915
+Financial liabilities:
+Financial liabilities designated as at FVTPL
+Level 3
+(2,101)
+(35)
+Debt securities
+(39)
+3
+533
+Financial assets held for trading
+191
+39
+497
+(86)
+1,264
+641
+157,296
+9,574
+54,382
+(60,335)
+(1,184)
+(2,434)
+157,299
+Available-for-sale financial assets
+Financial assets designated as at FVTPL
+(81)
+18
+(437)
+(503)
+21
+1,485
+5135
+(5)
+(271)
+(728)
+(3)
+(115)
+(663)
+(3,011)
+292
+ICBC
+Bank
+Financial assets:
+Derivative financial assets
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Total gains
+(7)
+(3,892)
+81
+8
+1,270
+(1,349)
+Derivative financial liabilities
+Exchange rate contracts
+(310)
+49
+(23)
+9
+9
+Interest rate contracts
+(1,308)
+451
+(1)
+4
+125
+Commodity derivatives and others
+(173)
+(534)
+(42)
+gains/(losses)
+comprehensive
+income
+347
+2,507
+271
+50,194
+Interest rate contracts
+91
+14,136
+728
+14,955
+Commodity derivatives and others
+49,429
+8,169
+663
+13,407
+8,754
+68,140
+1,662
+78,556
+11,267
+490,226
+4,575
+3,011
+494
+Derivative financial liabilities
+Others
+336,587
+336,587
+10,758
+10,758
+60,183
+60,183
+1,950
+Exchange rate contracts
+6,242
+563
+8,316
+1,349
+10,228
+2,513
+85,499
+1,349
+89,361
+8,192
+Other debt securities issued
+504,504
+289
+1,044
+-
+1,333
+36,748
+214
+1,044
+38,295
+Loans and advances to customers
+Commodity derivatives and others
+measured at FVTPL
+924
+Loans and advances to customers
+measured at FVOCI
+343,827
+343,827
+Financial investments measured at FVTPL
+Debt securities
+2,822
+924
+Annual Report 2018
+1,659
+1,139
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Bank
+31 December 2018
+Level 1
+Level 2
+Level 3
+Total
+5
+Financial assets which are measured at
+Derivative financial asset
+Exchange rate contracts
+818
+34,565
+209
+35,592
+Interest rate contracts
+515
+fair value on a recurring basis:
+precious metals
+Financial liabilities related to
+Wealth management products
+Financial assets designated as at FVTPL
+Debt securities
+3,862
+54,476
+1,439
+59,777
+Other debt instruments
+1,462
+87,337
+30,600
+51,908
+Others
+105,902
+136,014
+241,916
+5,324
+190,978
+157,299
+19,846
+353,601
+641
+9,615
+31 December 2017
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Level 1
+Level 2
+Level 3
+Total
+Financial assets which are measured at
+fair value on a recurring basis:
+77,081
+Financial assets held for trading
+Equity investments
+3,033
+74,868
+641
+78,542
+6,582
+2,213
+8,795
+Debt securities
+Derivative financial asset
+Exchange rate contracts
+640
+Equity investments
+14,456
+401
+5,435
+20,292
+Other debt instruments
+6,164
+6,164
+1,466,995
+234,205
+257,118
+1,596,369
+10,875
+169,915
+1,493,451
+2,023,402
+Financial liabilities which are measured at
+fair value on a recurring basis:
+Due to customers
+Financial liabilities designated as at FVTPL
+1,248,371
+5,440
+1,241,806
+219,749
+51,335
+329
+52,304
+Interest rate contracts
+493
+15,424
+238
+16,155
+Commodity derivatives and others
+6,841
+13,180
+533
+20,554
+7,974
+79,939
+1,100
+89,013
+Available-for-sale financial assets
+Debt securities
+185,445
+30,745
+219,012
+Equity investments
+154
+1,451
+Commodity derivatives and others
+5,169
+5,169
+2,786
+50,723
+347
+807
+53,856
+Debt securities
+118,831
+1,201,565
+4,421
+Equity investments
+1,502
+120,333
+31,915
+1,233,480
+Available-for-sale financial assets
+4,421
+490
+47,236
+47,414
+Other debt instruments
+30,600
+19,846
+50,446
+Others
+104,455
+135,942
+Interest rate contracts
+240,397
+180,535
+155,788
+338,257
+Derivative financial assets
+Exchange rate contracts
+2,296
+44,747
+193
+1,934
+1,324,817
+33,417
+1,358,234
+127,084
+1,522,779
+Derivative financial liabilities
+Exchange rate contracts
+460
+44,079
+193
+44,732
+Interest rate contracts
+97
+7:
+73,852
+863
+1,114
+Commodity derivatives and others
+836
+836
+557
+45,778
+347
+46,682
+154
+2,919
+60,175
+60,
+160,556
+1,810,419
+Financial liabilities which are measured at
+fair value on a recurring basis:
+Due to customers
+Financial liabilities designated as at FVTPL
+Wealth management products
+Financial liabilities related to
+precious metals
+Other debt securities issued
+333,914
+10,758
+60,175
+1,950
+969
+1,950
+71,902
+333,914
+10,758
+45,480
+451,594
+1,934
+Financial assets designated as at FVTPL
+28,075
+22,333
+1,245,837
+144,934
+2,038,015
+186,579
+2,369,528
+Financial liabilities which are measured at
+1,217,762
+fair value on a recurring basis:
+Financial liabilities designated as at FVTPL
+Wealth management products
+Financial liabilities related to
+precious metals
+848,453
+11,480
+67,257
+78,737
+Due to customers
+848,453
+143
+22,190
+139,688
+1,018
+274
+1,292
+Funds and other investments
+73
+386,981
+133,287
+520,341
+5,558
+1,083,816
+3,913
+164,032
+740,645
+Financial investments measured at FVOCI
+Debt securities
+139,361
+1,078,258
+Equity investments
+327
+572,700
+11,480
+67,257
+78,737
+290
+ICBC
+31 December 2017
+Notes to the Financial Statements
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Level 1
+Level 2
+Level 3
+969,310
+Total
+fair value on a recurring basis:
+Financial assets held for trading
+Debt securities
+60,072
+60,072
+2,031
+58,041
+2,031
+58,041
+Financial assets which are measured at
+214
+968,249
+847
+Derivative financial liabilities
+Exchange rate contracts
+732
+34,812
+209
+35,753
+Interest rate contracts
+115
+1,291
+5
+1,411
+Commodity derivatives and others
+4,956
+-
+4,956
+847
+41,059
+214
+42,120
+Debt securities
+Additions
+10,016
+160,556
+Gains or losses on level 3 financial instruments included in the statement of net profit or loss for the year comprise:
+(In RMB millions, unless otherwise stated)
+Financial Statements for the year ended 31 December 2018
+Notes to the Financial Statements
+293
+Annual Report 2018
+(347)
+65
+(23)
+130
+(519)
+2
+(2)
+Commodity derivatives and others
+(193)
+(154)
+63
+134
+2018
+Realised
+Group
+Unrealised
+Realised
+9,901
+(185)
+Total
+Bank
+Unrealised
+Realised
+Total
+Group
+Unrealised
+Realised
+10,086
+(351)
+Net gains/(losses) for the year
+Total
+(1,086)
+(3,018)
+1,932
+10
+(2,005)
+2,015
+Net gains/(losses) for the year
+Bank
+Unrealised
+2017
+Interest rate contracts
+(23)
+(4)
+(2)
+2
+Commodity derivatives and others
+154
+193
+(63)
+(134)
+351
+Financial assets designated as at FVTPL
+Interest rate contracts
+4
+166
+Exchange rate contracts
+Financial assets:
+Derivative financial assets
+31 December
+2017
+Transfer out of
+Level 3
+Settlements
+Disposals
+23
+9,639
+153,792
+52,814
+(166)
+Exchange rate contracts
+Derivative financial liabilities
+Financial liabilities:
+(65)
+(60,137)
+58,976
+(1,919)
+9,319
+9,189
+4,421
+6,139
+(1,919)
+201
+Debt securities
+Available-for-sale financial assets
+155,788
+(60,137)
+154,512
+(320)
+Total
+(c) Transfers between levels
+276,551
+277,129
+52,723
+3,453,155
+3,542,184
+Level 3
+Level 2
+Level 1
+9,319
+Fair value
+285,834
+285,834
+2017
+Receivables
+Held-to-maturity investments
+Financial assets
+285,834
+282,459
+Carrying
+amount
+285,834
+1,377
+3,819,313
+Level 1
+Fair value
+amount
+Carrying
+274,307
+274,307
+2018
+Bank
+230,674
+274,307
+274,307
+281,108
+Subordinated bonds and Tier 2 Capital Notes
+Financial liabilities
+232,051
+3,444,932
+52,723
+3,729,706
+281,108
+282,459
+3,399,055
+45,877
+Financial liabilities
+Group
+No significant difference between the carrying amount and the fair value of the financial assets and financial liabilities not
+measured at fair value, except for the following items:
+(e) Fair value of financial assets and liabilities not carried at fair value
+Financial Statements for the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Notes to the Financial Statements
+ICBC
+As at 31 December 2018, the effects of changes in significant unobservable assumptions to reasonably possible alternative
+assumptions were immaterial.
+Financial instruments valued with significant unobservable inputs are primarily certain structured derivatives, certain debt
+securities and asset-backed securities. These financial instruments are valued using cash flow discount model. The models
+incorporate various non-observable assumptions such as discount rate and market rate volatilities.
+2018
+(d) Valuation of financial instruments with significant unobservable inputs
+As at the end of the reporting period, certain financial instruments were transferred out from level 3 to level 2 of the fair
+value hierarchy for financial assets and liabilities when significant inputs used in their fair value measurements, which was
+previously unobservable became observable.
+(ii) Transfers between level 2 and level 3
+During the year, the transfers between level 1 and level 2 of the fair value hierarchy for financial assets and liabilities of the
+Group were immaterial.
+Due to changes in market conditions for certain securities, quoted prices in active markets were no longer available for
+these securities. However, there was sufficient information available to measure the fair values of these securities based on
+observable market inputs. Therefore, these securities were transferred from level 1 to level 2 of the fair value hierarchy as at
+the end of the reporting period.
+Due to changes in market conditions for certain securities, quoted prices in active markets were available for these securities.
+Therefore, these securities were transferred from level 2 to level 1 of the fair value hierarchy as at the end of the reporting
+period.
+Transfers between level 1 and level 2
+(i)
+Subordinated bonds and Tier 2 Capital Notes
+During the year, certain derivatives financial instruments were transferred out from level 3 to level 2 of the fair value
+hierarchy when significant inputs used in their fair value measurements such as market price volatility, which was previously
+unobservable became observable.
+Carrying
+294
+4,280,407
+213,101
+amount
+67,225
+4,560,733
+4,519,182
+213,101
+67,225
+4,560,733
+4,519,182
+4,280,407
+Financial investments measured at amortised cost
+Financial assets
+Level 3
+Level 2
+Level 1
+Fair value
+73,573
+Financial liabilities measured at FVTPL
+Derivative financial liabilities
+78,556
+89,359
+89,361
+87,399
+87,400
+73,573
+491,948
+1,214,601
+486,249
+486,249
+institutions
+Placements from banks and other financial
+1,214,601
+456
+1,328,246
+78,556
+1,328,246
+491,948
+Repurchase agreements
+Taxes payable
+513,495
+95,678
+82,550
+95,318
+456
+32,820
+33,142
+33,351
+33,636
+Employee benefits payable
+514,801
+19,564,945
+21,410,976
+21,408,934
+260,274
+260,274
+341,354
+341,354
+Certificates of deposit
+1,044,481
+1,046,338
+19,562,936
+481
+27,699,540
+Due to banks and other financial institutions
+3,613,872
+3,372,576
+3,372,576
+Derivative financial assets
+other financial institutions
+Placements with banks and
+Precious metals
+3,613,872
+institutions
+Cash and balances with central banks
+Assets
+consolidation*
+scope of
+under
+regulatory
+Balance sheet
+Balance sheet
+as in published
+financial
+statements*
+Due from banks and other financial
+384,646
+374,509
+370,074
+986,631
+733,460
+734,049
+Reverse repurchase agreements
+89,013
+89,013
+71,335
+71,335
+477,537
+477,537
+577,803
+577,803
+238,714
+238,714
+181,292
+181,292
+363,278
+Consolidated
+981,553
+scope of
+consolidation*
+Balance sheet
+81
+X04
+61,799
+120,224
+Valid cap of surplus provision for loan impairment in
+tier 2 capital under the internal ratings-based approach
+Capital instruments subject to phase-out arrangements
+Valid cap to core tier 1 capital instruments for
+80
+79
+the current period due to phase-out arrangements
+Excluded from core tier 1 capital due to cap
+X03
+393,682
+tier 2 capital under the weighted approach
+Surplus provision for loan impairment under the internal
+ratings-based approach
+78
+X02
+9,937
+7,766
+Valid cap of surplus provision for loan impairment in
+322,539
+82
+Valid cap to additional tier 1 capital instruments for the
+current period due to phase-out arrangements
+83
+financial
+statements*
+Balance sheet
+as in published
+Consolidated
+31 December 2018 31 December 2018 31 December 2017 31 December 2017
+(ii) Consolidated financial statements
+For the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+ICBC
+306
+due to cap
+46,822
+67,102
+101,425
+81,140
+Excluded from additional tier 1 capital due to cap
+Valid cap to tier 2 capital instruments for the current
+period due to phase-out arrangements
+Excluded from tier 2 capital for the current period
+85
+84
+under
+regulatory
+481
+Loans and advances to customers
+15,045,239
+(*)
+25,979,568
+26,087,043
+27,589,328
+82,502
+Total assets
+318,891
+Prepared in accordance with PRC GAAP.
+335,012
+200,910
+Other assets
+48,392
+48,392
+58,097
+58,375
+Deferred income tax assets
+186,769
+Annual Report 2018
+307
+Unaudited Supplementary Financial Information
+Due to central banks
+Liabilities
+consolidation*
+scope of
+financial
+statements*
+under
+regulatory
+Balance sheet
+Balance sheet
+as in published
+Consolidated
+31 December 2017 31 December 2017
+scope of
+consolidation*
+under
+regulatory
+31 December 2018 31 December 2018
+Balance sheet
+Balance sheet
+as in published
+financial
+statements*
+Consolidated
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2018
+29,531
+15,046,132
+29,531
+35,081
+1,408,749
+1,430,163
+FVOCI
+Financial investments measured at
+440,912
+440,938
+772,191
+Financial investments measured at
+amortised cost
+805,347
+_
+5,669,906
+13,892,372
+13,892,966
+5,756,704
+6,662,605
+6,754,692
+Financial investments
+Financial investments measured at
+FVTPL
+4,519,182
+4,481,665
+- Available-for-sale financial assets
+216,088
+216,156
+253,460
+253,525
+40,421
+32,441
+37,104
+29,124
+227,216
+277,129
+1,465,021
+3,536,757
+1,496,453
+3,542,184
+Construction in progress
+Fixed assets
+Long-term equity investments
+― Receivables
+Held-to-maturity investments
+35,079
+Debt securities issued
+(123,433)
+617,842
+49
+Including: Invalid portion to tier 2 capital after the
+transition period
+856
+1,051
+50
+51
+Valid portion of surplus provision for loan impairment
+Tier 2 capital before regulatory adjustments
+127,990
+332,742
+71,736
+297,360
+X27
+X02+X04
+52
+53
+54
+54
+55
+Direct or indirect investments in own tier 2 instruments
+Reciprocal cross-holdings in tier 2 capital between banks
+or between banks and other financial institutions
+Deductible portion of non-significant minority investment
+in tier 2 capital instruments issued by financial
+institutions that are not subject to consolidation
+Significant minority investments in tier 2 capital
+instruments issued by financial institutions that are not
+subject to consolidation
+56a
+Investments in tier 2 capital instruments issued by
+financial institutions that are under control but not
+subject to consolidation
+Tier 2 capital: Regulatory adjustments
+3,303
+1,991
+Valid portion of minority interests
+Others that should be deducted from additional tier 1 capital
+Undeducted shortfall that should be deducted from tier 2
+capital
+Total regulatory adjustments to additional tier 1
+capital
+31 December
+2018
+31 December
+2017
+Reference
+44
+Additional tier 1 capital
+80,110
+45
+Tier 1 capital (core tier 1 capital + additional tier 1
+capital)
+2,312,143
+79,952
+2,110,060
+Tier 2 capital:
+46
+Tier 2 capital instruments and related premium
+202,761
+222,321
+X17
+47
+Invalid instruments to tier 2 capital after the transition
+period
+81,140
+101,425
+48
+56b
+Shortfall in additional tier 1 capital instruments issued
+by financial institutions that are under control but not
+subject to consolidation
+Shortfall in tier 2 capital instruments issued by financial
+institutions that are under control but not subject to
+consolidation
+X31
+15.39%
+15.14%
+64
+Institution specific buffer requirement
+4.0%
+3.5%
+569
+65
+Including: Capital conservation buffer requirement
+2.5%
+Capital adequacy ratio
+2.5%
+Including: Countercyclical buffer requirement
+Annual Report 2018
+305
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Item
+67
+Including: G-SIB buffer requirement
+68
+66
+63
+13.27%
+13.45%
+--
+56c
+Others that should be deducted from tier 2 capital
+57 Total regulatory adjustments to tier 2 capital
+58
+Tier 2 capital
+332,742
+500
+296,860
+59
+Total capital (tier 1 capital + tier 2 capital)
+2,644,885
+2,406,920
+60
+Total risk-weighted assets
+17,190,992
+15,902,801
+Requirements for capital adequacy ratio and reserve capital
+61
+Core tier 1 capital adequacy ratio
+12.98%
+12.77%
+62
+Tier 1 capital adequacy ratio
+500
+Investments in additional tier 1 capital instruments issued
+by financial institutions that are under control but not
+subject to consolidation
+43
+42
+86,051
+Capital reserve
+151,968
+151,968
+151,952
+151,952
+Other comprehensive income
+(11,875)
+(11,646)
+(62,058)
+86,051
+(61,063)
+261,720
+261,636
+232,703
+232,660
+General reserve
+279,064
+278,980
+264,892
+264,850
+Retained profits
+Surplus reserve
+86,051
+86,051
+Other equity instruments
+526,940
+526,940
+Deferred income tax liabilities
+77
+1,217
+1,024
+433
+233
+Other liabilities
+365,246
+261,639
+Total liabilities
+25,354,657
+25,250,947
+558,452
+23,945,987
+456,349
+23,843,464
+Equity
+Share capital
+356,407
+356,407
+356,407
+356,407
+1,206,666
+1,205,924
+1,097,544
+1,096,868
+80,110
+79,952
+36 Additional tier 1 capital before regulatory
+adjustments
+Additional tier 1 capital: Regulatory adjustments
+37
+Direct or indirect investments in own additional tier 1
+instruments
+38
+Reciprocal cross-holdings in additional tier 1 capital
+between banks or between banks and other financial
+institutions
+39
+Deductible amount of non-significant minority
+investment in additional tier 1 capital instruments
+issued by financial institutions that are not subject to
+consolidation
+40
+Significant minority investments in additional tier 1
+capital instruments issued by financial institutions that
+are not subject to consolidation
+304
+ICBC
+Item
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+41a
+41b
+41c
+Including: Invalid portion to additional tier 1 capital
+after the transition period
+617,842
+35
+577
+Equity attributable to equity holders of the
+parent company
+2,330,001
+Minority interests
+14,882
+Total equity
+2,344,883
+2,329,320
+9,061
+2,338,381
+2,127,491
+2,127,725
+13,565
+2,141,056
+8,379
+2,136,104
+(*) Prepared in accordance with PRC GAAP.
+308
+ICBC
+Including: Portion classified as liabilities
+33
+Invalid instruments to additional tier 1 capital after the
+transition period
+34
+Valid portion of minority interests
+735
+X26
+X01
+14,988
+19,049
+(d) Loans and advances to customers (excludes accrued interest)
+(i) Analysis by location of the counterparties
+Mainland China
+Asia Pacific (excluding Mainland China)
+of which attributed to Hong Kong
+North and South America
+Europe
+Africa
+(ii) Overdue loans and advances to customers
+2018
+2017
+14,411,937
+13,139,958
+629,955
+673,839
+428,442
+467,601
+149,910
+180,746
+152,352
+143,907
+75,751
+94,998
+15,419,905
+14,233,448
+2018
+For the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+ICBC
+300
+Non-bank
+private
+sector
+sector
+Others
+Total
+Asia Pacific
+449,111
+200,396
+1,015,836
+85,642
+1,750,985
+of which attributed to Hong Kong
+North and South America
+2017
+40,545
+16,143
+112,257
+283,624
+79,305
+419,617
+130,222
+12,511
+307,277
+501,398
+312,653
+1,146,058
+98,153
+2,058,262
+52,287
+Gross loans and advances to customers of the Group which have been overdue
+with respect to either principal or interest for periods of:
+Between 3 and 6 months
+35,323
+Bohai Rim
+Western China
+Central China
+Pearl River Delta
+Yangtze River Delta
+Northeastern China
+Overseas and others
+(iv) Rescheduled loans and advances to customers
+Rescheduled loans and advances
+Less: Rescheduled loans and advances
+overdue for more than three months
+Rescheduled loans and advances overdue
+for less than three months
+Head Office
+2018
+35,846
+28,509
+57,177
+56,270
+39,165
+49,380
+39,223
+39,839
+33,137
+38,161
+24,994
+33,658
+2017
+Official
+(iii) Overdue loans and advances to customers by geographical distribution
+For the year ended 31 December 2018
+24,122
+Between 6 and 12 months
+48,523
+44,087
+Over 12 months
+94,933
+110,648
+178,779
+178,857
+As a percentage of the total gross loans and advances to customers:
+Between 3 and 6 months
+0.23%
+(In RMB millions, unless otherwise stated)
+0.17%
+0.31%
+0.31%
+Over 12 months
+0.62%
+0.78%
+1.16%
+1.26%
+The definition of overdue loans and advances to customers is set out as follows:
+Loans and advances with a specific repayment date are classified as overdue when the principal or interest is overdue.
+For loans and advances repayable by regular instalments, if part of the instalments is overdue, the whole amounts of these
+loans and advances would be classified as overdue.
+Annual Report 2018
+301
+Unaudited Supplementary Financial Information
+Between 6 and 12 months
+Banks and
+other
+financial
+institutions
+31 December 2017
+2,340,175
+There are no differences between the profit attributable to equity holders of the parent company under PRC GAAP and IFRSS
+for the year ended 31 December 2018 (2017: no differences). There are no differences between the equity attributable to
+equity holders of the parent company under PRC GAAP and IFRSS as at 31 December 2018 (As at 31 December 2017: no
+differences).
+(a) Illustration of differences between the financial statements prepared under IFRSS and
+those prepared in accordance with PRC GAAP
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2018
+Unaudited Supplementary Financial Information
+30,251
+36,489
+Net structural position
+106,152
+(269)
+27,898
+133,781
+(b) Foreign currency concentrations
+Spot assets
+Forward purchases
+Forward sales
+Net option position
+31 December 2017
+USD
+HKD
+1,938,710
+333,160
+(1,915,913)
+(317,406)
+Others
+723,257
+(500,347)
+Total
+2,995,127
+(2,733,666)
+Spot liabilities
+2,303,473
+31 December 2018
+HKD
+Net (short)/long position
+(10,280)
+(417)
+1,705
+(11,568)
+Net option position
+(4,443,841)
+(866,993)
+(103,944)
+(3,472,904)
+Forward sales
+4,296,474
+USD
+756,539
+3,357,899
+(3,053,330)
+3,247,466
+Total
+Others
+691,979
+(550,857)
+(368,795)
+(2,133,678)
+418,669
+2,136,818
+Forward purchases
+Spot liabilities
+Spot assets
+182,036
+26,474
+208,462
+(160,053)
+A country or geographical area is reported where it constitutes 10% or more of the aggregate amount of international
+claims, after taking into account any risk transfers. Risk transfers are only made if the claims are guaranteed by a party in a
+country which is different from that of the counterparty or if the claims are on an overseas branch of a bank whose Head
+Office is located in another country.
+31 December 2018
+Banks and
+other
+financial
+institutions
+Official
+Non-bank
+private
+sector
+sector
+Others
+Total
+Asia Pacific
+762,391
+205,372
+International claims refer to the sum of cross-border claims in all currencies and local claims in foreign currencies, including
+loans and advances to customers, balances with central banks, amounts due from banks and other financial institutions and
+debt investments.
+954,651
+76,766
+15,483
+251,239
+51,155
+111,012
+813,546
+316,384
+136,851
+1,091,502
+111,393
+54,698
+7,350
+2,033,807
+398,186
+306,368
+118,743
+― of which attributed to Hong Kong
+North and South America
+(2,317,162)
+(c) International claims
+For the year ended 31 December 2018
+450,962
+(653,429)
+2,962,897
+(3,130,644)
+(40,225)
+998
+214
+(39,013)
+(31,117)
+65,161
+20,657
+54,701
+78,908
+(In RMB millions, unless otherwise stated)
+1,747
+Net (short)/long position
+Net structural position
+110,414
+The net option position is calculated using the delta equivalent approach required by the Hong Kong Monetary Authority.
+The net structural position of the Group includes the structural positions of the Bank's overseas branches, banking
+subsidiaries and other subsidiaries substantially involved in foreign exchange. Structural assets and liabilities include:
+•
+property and equipment, net of depreciation charges;
+•
+capital and statutory reserves of overseas branches; and
+investments in overseas subsidiaries, associates and joint ventures.
+Annual Report 2018
+299
+Unaudited Supplementary Financial Information
+29,759
+23,596
+13,916
+16,662
+21
+22
+23
+24
+25
+Deferred tax assets arising from temporary differences
+(amount above 10% threshold, net of deferred tax
+liabilities)
+Deductible amount exceeding the 15% threshold for
+significant minority capital investments in core tier 1
+capital instruments issued by financial institutions
+that are not subject to consolidation and undeducted
+portion of deferred tax assets arising from temporary
+differences (net of deferred tax liabilities)
+Including: Deductible amount of significant minority
+investments in core tier 1 capital
+instruments issued by financial institutions
+Including: Deductible amount of mortgage servicing
+rights
+Including: Deductible amount in deferred tax assets
+arising from temporary differences
+31 December
+2018
+Core tier 1 capital adequacy ratio
+31 December
+2017
+Reference
+Item
+N/A
+26a
+Investment in core tier 1 capital instruments issued by
+financial institutions that are under control but not
+subject to consolidation
+7,980
+7,980
+X11
+26b
+Shortfall in core tier 1 capital instruments issued by
+financial institutions that are under control but not
+subject to consolidation
+26c
+27
+Others that should be deducted from core tier 1 capital
+Undeducted shortfall that should be deducted from
+N/A
+additional tier 1 capital and tier 2 capital
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+12
+Cash flow hedge reserves that relate to the hedging of
+items that are not fair valued on the balance sheet
+Shortfall of provision for loan impairment
+(3,739)
+(3,708)
+X20
+13
+Gain on sale related to asset securitisation
+14
+Unrealised gains and losses due to changes in own credit
+risk on fair valued liabilities
+15
+Defined-benefit pension fund net assets (net of deferred
+For the year ended 31 December 2018
+tax liabilities)
+17
+67
+18
+Direct or indirect investments in own ordinary shares
+Reciprocal cross-holdings in core tier 1 capital between
+banks or between banks and other financial institutions
+Deductible amount of non-significant minority
+investment in core tier 1 capital instruments issued
+by financial institutions that are not subject to
+consolidation
+--
+19
+20
+Deductible amount of significant minority investment
+in core tier 1 capital instruments issued by financial
+institutions that are not subject to consolidation
+Mortgage servicing rights
+N/A
+N/A
+Annual Report 2018
+303
+16
+11
+28
+129,671
+5.0%
+6.0%
+6.0%
+8.0%
+8.0%
+72
+73
+Undeducted portion of non-significant minority
+investments in capital instruments issued by financial
+institutions that are not subject to consolidation
+Undeducted portion of significant minority investments
+in capital instruments issued by financial institutions
+that are not subject to consolidation
+64,004
+35,059
+X05+X07+X08+
+X09+X12+X29+X30
+32,215
+5.0%
+28,353
+74
+Mortgage servicing rights (net of deferred tax liabilities)
+N/A
+N/A
+75
+Deferred tax assets arising from temporary differences
+(net of deferred tax liabilities)
+57,073
+48,158
+Valid caps of surplus provision for loan impairment in
+tier 2 capital
+76
+Provision for loan impairment under the weighted approach
+X06+X10+X13
+Total regulatory adjustments to core tier 1 capital
+7.77%
+1.0%
+29
+Core tier 1 capital
+2,232,033
+14,282
+2,030,108
+Additional tier 1 capital:
+30
+Additional tier 1 capital instruments and related premium
+79,375
+79,375
+31
+Including: Portion classified as equity
+79,375
+7.98%
+79,375
+32
+69
+70
+Tier 1 capital adequacy ratio
+71 Capital adequacy ratio
+Amounts below the thresholds for deduction
+31 December
+31 December
+2018
+2017
+Reference
+1.5%
+X28
+17,943
+excluding those arising from temporary differences (net
+of deferred tax liabilities)
+10
+0.00%
+0.00%
+(f) Exposures to Mainland China non-bank entities
+2018
+2017
+On-balance sheet exposure
+Off-balance sheet exposure
+18,946,049
+2,902,524
+17,106,967
+3,220,988
+21,848,573
+20,327,955
+Allowance for impairment losses of lifetime ECL credit-impaired financial assets
+Individually assessed allowance for impairment losses
+Over 12 months
+172,719
+In addition to those disclosed above, exposures to other non-bank counterparties outside Mainland China to which credit is
+granted for use in Mainland China are considered insignificant to the Group.
+302
+ICBC
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+(g) Correspondence between balance sheet in published financial statements and capital
+composition
+The disclosure of correspondence between balance sheet in published financial statements and capital composition is based
+on the Notice on Issuing Regulatory Documents on Capital Regulation for Commercial Banks (Yin Jian Fa, No. 33, 2013)
+Appendix 2 Notice on Enhancing Disclosure Requirements for Composition of Capital.
+(i) Capital composition
+Item
+Core tier 1 capital:
+31 December
+2018
+31 December
+81,707
+2017
+financial institutions:
+16
+269,932
+286,075
+31 December 2018
+31 December 2017
+% of total
+loans and
+% of total
+loans and
+advances
+advances
+7,211
+0.05%
+5,158
+0.04%
+As a percentage of total gross placements with banks and other
+(1,143)
+(1,374)
+(0.01%)
+6,068
+0.04%
+3,784
+0.03%
+Percentage of core tier 1 capital meeting buffers to
+(e) Overdue placements with banks and other financial institutions
+2018
+2017
+The Group's gross placements with banks and other financial institutions which
+have been overdue with respect to either principal or interest for a period of:
+Over 12 months
+16
+(0.01%)
+Deferred tax assets that rely on future profitability
+Reference
+Paid-in capital
+X19
+3b
+Others
+(11,646)
+(61,063)
+X24
+Valid portion to core tier 1 capital during the transition
+period (only applicable to non-joint stock companies.
+Fill in 0 for joint stock banks)
+56
+Valid portion of minority interests
+3,752
+2,716
+X25
+151,952
+Core tier 1 capital before regulatory adjustments
+2,044,390
+7
+Core tier 1 capital: Regulatory adjustments
+Prudential valuation adjustments
+8
+Goodwill (net of deferred tax liabilities)
+8,820
+9
+Other intangible assets other than land use rights (net of
+deferred tax liabilities)
+1,927
+8,478
+1,532
+X16
+X14-X15
+2,247,021
+1
+151,968
+04
+2
+Retained earnings
+356,407
+1,746,540
+356,407
+X18
+1,594,378
+2a
+Surplus reserve
+261,636
+232,660
+X21
+2b
+За Capital reserve
+General reserve
+264,850
+X22
+2c
+Retained profits
+1,205,924
+1,096,868
+X23
+3
+Accumulated other comprehensive income (and other
+140,322
+90,889
+public reserves)
+278,980
+Due to customers
+Domestic minima for regulatory capital
+risk-weighted assets
+For the year ended 31 December 2018
+18 November 2020
+Yes
+dividend stopper
+Including: Fully discretionary,
+Fully
+Fully
+discretionary
+discretionary
+Partially
+discretionary
+Partially
+discretionary
+Partially
+discretionary
+Partially
+discretionary
+partially discretionary or
+mandatory cancellation of
+Including: Redemption
+incentive mechanism
+Including: Non-cumulative
+or cumulative
+Convertible or non-convertible
+No
+Non-cumulative
+No
+Non-cumulative
+No
+Non-cumulative
+No
+coupons/dividends
+4.5% (dividend
+rate) before
+6% (dividend
+rate) before
+10 December 2019
+Yes
+6% (dividend
+rate) before
+10 December 2021
+Yes
+Main features of regulatory
+Ordinary shares
+capital instrument
+(A share)
+Ordinary shares
+(H share)
+Preference
+shares (Offshore)
+Preference
+shares (Offshore)
+Preference
+shares (Offshore)
+Preference
+shares (Domestic)
+Coupons/dividends
+Including: Fixed or floating
+Floating
+Floating
+Fixed to floating
+Fixed to floating
+Fixed to floating
+Fixed to floating
+dividend/coupon
+Including: Coupon rate and
+N/A
+N/A
+any related index
+6% (dividend
+rate) before
+Including: Existence of a
+N/A
+N/A
+10 December 2019
+Yes
+Non-cumulative
+No
+Non-cumulative
+No
+958,599
+Secured lending (including reverse repos and securities borrowing)
+17
+Cash inflows
+6,625,544
+Total cash outflows
+16
+127,123
+3,183,889
+Other contingent funding obligations
+15
+58,837
+488,036
+59,213
+14
+223,176
+2,737,116
+Credit and liquidity facilities
+13
+Outflows related to loss of funding on debt products
+12
+1,223,431
+1,223,431
+Outflows related to derivative exposures and other collateral requirements
+11
+1,446,607
+Other contractual funding obligations
+18
+Inflows from fully performing exposures
+1,457,392
+Non-cumulative
+Including: If convertible,
+ICBC
+318
+As at 31 December 2018, the NSFR of the Group was 126.62%, the available stable finding (ASF) was RMB18,647,495
+million and the required stable finding (RSF) was RMB14,726,640 million.
+126.66%
+3,886,173
+(j) Net Stable Funding Ratio (NSFR)
+Data of the above table are all the simple arithmetic means of the 92 natural days' figures of the recent quarter.
+Liquidity coverage ratio (%)
+23
+Total net cash outflows
+22
+Total HQLA
+21
+4,921,335
+value
+Total adjusted
+2,739,371
+3,638,321
+Total cash inflows
+20
+1,216,322
+1,222,330
+Other cash inflows
+19
+1,035,013
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+311
+Annual Report 2018
+Including: Post-transition
+Core tier 1 capital
+Core tier 1 capital
+arrangement of Regulation
+Additional tier
+1 capital
+High-quality liquid assets
+Additional tier
+1 capital
+Additional tier
+1 capital
+Governing Capital of Commercial
+Banks (Provisional)
+Including: Eligible to the parent
+company/group level
+Parent company/
+Additional tier
+1 capital
+Parent company/
+Instrument type
+Group
+Core tier 1
+capital instrument
+Group
+Amount recognised in regulatory
+capital (in millions, as at the
+latest reporting date)
+Par value of instrument (in millions)
+Accounting treatment
+Original date of issuance
+Perpetual or dated
+Including: Original maturity date
+Issuer call (subject to prior
+Parent company/
+Additional tier
+1 capital
+Additional tier
+1 capital
+Additional tier
+1 capital
+Governing law(s) of the instrument
+The Bank
+601398
+Securities Law of the
+People's Republic of
+China/China
+(H share)
+The Bank
+1398
+Securities and Futures
+Ordinance of Hong
+Kong/Hong Kong,
+Preference
+shares (Offshore)
+The Bank
+4603
+China
+The creation and
+issue of the Offshore
+Preference Shares
+and the rights
+and obligations
+(including non-
+contractual rights
+and obligations)
+attached to them are
+governed by, and
+shall be construed in
+accordance with,
+PRC law
+Preference
+shares (Offshore)
+The Bank
+4604
+The creation and
+issue of the Offshore
+Preference Shares
+and the rights
+and obligations
+(including non-
+contractual rights
+and obligations)
+attached to them are
+governed by, and
+shall be construed in
+accordance with,
+PRC law
+Preference
+shares (Offshore)
+The Bank
+84602
+The creation and
+issue of the Offshore
+Preference Shares
+and the rights
+and obligations
+(including non-
+contractual rights
+and obligations)
+attached to them are
+governed by, and
+shall be construed in
+accordance with,
+PRC law
+Preference
+shares (Domestic)
+The Bank
+360011
+Company Law of the
+People's Republic
+of China, Securities
+Law of the People's
+Republic of China,
+Guidance of the
+State Council on
+Launch of Preference
+Shares Pilot, Trial
+Administrative
+Measures on
+Preference Shares,
+Guidance on
+the Issuance of
+Preference Shares of
+Commercial Banks
+to Replenish Tier 1
+Capital/China
+Regulatory treatment
+Including: Transition arrangement
+Core tier 1 capital
+Core tier 1 capital
+of Regulation Governing Capital
+of Commercial Banks (Provisional)
+supervisory approval)
+Including: Optional call date,
+contingent call dates and
+redemption amount
+10 December 2014
+Perpetual
+No maturity date
+Yes
+Yes
+RMB45,000
+Other equity
+18 November 2015
+Perpetual
+No maturity date
+Yes
+Including: Subsequent call dates,
+if applicable
+The First
+Redemption Date
+is 10 December
+2019, in full or
+The First
+Redemption Date
+is 10 December
+2021, in full or
+NA
+N/A
+N/A
+partial amount
+10 December in
+each year after the
+First Redemption
+Date
+partial amount
+10 December in
+each year after the
+First Redemption
+Date
+The First
+Redemption Date
+is 10 December
+2019, in full or
+partial amount
+10 December in
+each year after the
+First Redemption
+Date
+The First
+Redemption Date
+is 18 November
+2020, in full or
+partial amount
+Commences on the
+First Redemption
+Date (18 November
+2020) and ends
+on the completion
+date of redemption
+or conversion of
+all the Domestic
+Preference Shares
+10 December 2014
+Perpetual
+No maturity date
+3,960,547
+No maturity date
+Yes
+No
+RMB339,126
+RMB269,612
+Share capital,
+Capital reserve
+19 October 2006
+Perpetual
+RMB86,795
+Share capital,
+Capital reserve
+19 October 2006
+Perpetual
+N/A
+N/A
+Core tier 1
+capital instrument
+RMB169,202
+Group
+Additional tier 1
+capital instrument
+RMB equivalent
+17,928
+USD2,940
+Other equity
+Parent company/
+Parent company/
+Parent company/
+Group
+Additional tier 1
+capital instrument
+RMB equivalent
+Group
+Group
+Additional tier 1
+capital instrument
+RMB11,958
+Additional tier 1
+capital instrument
+RMB44,947
+4,542
+EUR 600
+Other equity
+RMB12,000
+Other equity
+10 December 2014
+Perpetual
+No maturity date
+No maturity date
+No
+Additional requirements, of which:
+10
+25,354
+2,000,174
+(14,282)
+28,084,967
+Leverage Ratio, Net Tier 1 Capital, Balance of Adjusted On- and Off-balance Sheet Assets and Related
+Information
+31 December
+S/N
+Item
+2018
+31 December
+2017
+1
+On-balance sheet items (excluding derivatives and SFTS,
+27,120,956
+57,693
+25,174,171
+2
+3
+4
+Less: Asset amounts deducted in determining Basel III Tier 1 capital
+Balance of adjusted on-balance sheet assets (excluding derivatives and SFTs)
+Replacement cost associated with all derivatives transactions (i.e. net of
+eligible cash variation margin)
+(14,988)
+27,105,968
+(14,282)
+25,159,889
+76,179
+93,955
+56
+7
+Add-on amounts for PFE associated with all derivatives transactions
+Gross-up for derivatives collateral provided where deducted from the
+balance sheet assets pursuant to the operative accounting framework
+Less: Deductions of receivables assets for cash variation margin provided
+in derivatives transactions
+but including collateral)
+61,814
+68,114
+35,125
+2,002,299
+(14,988)
+29,679,878
+26,087,043
+(107,475)
+N/A
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+(h) Disclosure of Leverage Ratio
+The following information is disclosed in accordance with the Administrative Measures for Leverage Ratio of Commercial
+Banks (Revised) (CBRC No.1, 2015) Appendix 3 Disclosure Templates of Leverage Ratio.
+Comparison of Regulatory Leverage Ratio Items and Accounting Items
+S/N
+Item
+1
+Total consolidated assets as per published financial statements
+2
+345
+Consolidated adjustments for accounting purposes but outside the scope
+of regulatory consolidation
+Adjustments for fiduciary assets
+Adjustments for derivative financial instruments
+Adjustment for securities financing transactions
+6
+Adjustment for off-balance sheet items
+7
+Other adjustments
+8
+Balance of adjusted on- and off-balance sheet assets
+31 December
+2018
+31 December
+2017
+27,699,540
+(110,212)
+63,890
+63,145
+8
+9
+18
+Less: Adjustments for conversion to credit equivalent amounts
+(2,397,811)
+(2,211,697)
+19
+Balance of adjusted off-balance sheet assets
+2,002,299
+2,000,174
+20
+Net tier 1 capital
+2,312,143
+2,110,060
+21
+Balance of adjusted on- and off-balance sheet assets
+29,679,878
+28,084,967
+22
+Leverage ratio
+7.79%
+7.51%
+Annual Report 2018
+317
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+(i) Quantitative Information Disclosure of Liquidity Coverage Ratio Using Advanced
+Approaches
+S/N Item
+4,211,871
+present bonds
+No
+4,400,110
+17
+Less: Exempted CCP leg of client-cleared trade exposures
+Effective notional amount of written credit derivatives
+(20,180)
+44,968
+(25,768)
+46,496
+10
+11
+Less: Adjusted effective notional deductions for written credit derivatives
+Total derivative exposures
+(25,408)
+(27,001)
+139,449
+150,827
+12
+Gross SFT assets (with no recognition of netting), after adjusting for sale
+accounting transactions
+397,037
+716,384
+13
+Less: Netted amounts of cash payables and cash receivables of gross
+SFT assets
+14
+CCR exposure for SFT assets
+35,125
+57,693
+15
+Agent transaction exposures
+16
+Total securities financing transaction exposures
+432,162
+774,077
+Off-balance sheet exposure at gross notional amount
+N/A
+No
+ICBC
+Total
+weighted
+value
+value
+un-weighted
+N/A
+N/A
+N/A
+름름
+N/A
+N/A
+름름증
+No
+N/A
+름름
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+Yes
+Non-viability
+of the Bank
+1
+Yes
+Total high-quality liquid assets (HQLA)
+Cash outflows
+Secured funding
+9
+75,301
+75,301
+Unsecured debt
+8
+2,219,647
+5,061,928
+Non-operational deposits (all counterparties)
+7
+1,669,869
+6,881,028
+Operational deposits (excluding those generated from correspondent
+banking activities)
+3,964,817
+12,018,257
+Unsecured wholesale funding, of which:
+1,001,013
+10,010,133
+Less stable deposits
+1,793
+48,891
+Stable deposits
+3456
+1,002,806
+10,059,024
+Retail deposits and deposits form small business customers, of which:
+2
+4,921,335
+Unique identifier
+Whichever occurs
+earlier: (i) CBIRC
+having decided that
+a write-down is
+necessary, without
+which the Issuer
+would become
+is necessary, without
+which the Issuer
+would become
+non-viable
+general creditor, pari
+passu with other
+subordinated debts
+Full write-down
+Full write-down
+Full write-down
+Permanent
+write-down
+N/A
+Permanent
+write-down
+N/A
+Permanent
+write-down
+N/A
+Subordinated to
+depositor and
+general creditor, pari
+passu with other
+subordinated debts
+Subordinated to
+depositor and
+general creditor,
+but senior to equity
+capital, other tier 1
+capital instruments
+and hybrid capital
+bonds; pari
+passu with other
+subordinated debts
+that have been issued
+by the Issuer and
+are pari passu with
+the present bonds;
+and pari passu with
+other tier 2 capital
+instruments that will
+possibly be issued in
+the future and are
+pari passu with the
+present bonds
+Subordinated to
+depositor and
+general creditor,
+but senior to equity
+capital, other tier 1
+capital instruments
+and hybrid capital
+bonds; pari
+passu with other
+subordinated debts
+that have been issued
+by the Issuer and
+are pari passu with
+the present bonds;
+and pari passu with
+other tier 2 capital
+instruments that will
+possibly be issued in
+the future and are
+pari passu with the
+Non-compliant transitioned
+features
+Including: If yes, specify
+No
+No
+N/A
+N/A
+non-compliant features
+316
+Subordinated to
+depositor and
+non-viable; or (ii) any
+relevant authority
+having decided
+that a public sector
+injection of capital or
+equivalent support
+write-down
+N/A
+Tier 2 capital bonds Tier 2 capital bonds Tier 2 capital bonds Tier 2 capital bonds
+Full write-down
+Yes
+Yes
+Whichever occurs
+Whichever occurs
+earlier: (i) CBIRC
+having decided that
+a write-down is
+necessary, without
+which the Issuer
+would become
+non-viable; or (ii) any
+relevant authority
+having decided
+that a public sector
+injection of capital or
+equivalent support
+is necessary, without
+which the Issuer
+would become
+non-viable
+earlier: (i) CBIRC
+having decided that
+a write-down is
+necessary, without
+which the Issuer
+would become
+non-viable; or (ii) any
+relevant authority
+having decided
+that a public sector
+injection of capital or
+equivalent support
+is necessary, without
+which the Issuer
+would become
+non-viable
+Annual Report 2018
+315
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Main features of regulatory
+capital instrument
+Including: If write-down, full
+or partial
+Including: If write-down,
+permanent or temporary
+Including: If temporary
+write-down,
+description of write-up
+mechanism
+Position in subordination
+hierarchy in liquidation
+(specify instrument type
+immediately senior to
+instrument)
+Permanent
+Issuer
+Additional tier
+1 capital
+Ordinary shares
+(A share)
+The Bank
+Rule 144A
+ISIN: US455881AD47
+Regulation S
+ISIN: USY39656AC06
+The Notes and
+the Fiscal Agency
+Agreement shall be
+governed by, and
+shall be construed
+in accordance with,
+New York law, except
+that the provisions
+of the Notes relating
+to subordination
+shall be governed
+by, and construed in
+accordance with,
+PRC law
+The Bank
+1728021
+Governed by the
+Commercial Banking
+Law of the People's
+Republic of China,
+the Regulation
+Governing Capital
+of Commercial
+Banks (Provisional)
+and the Measures
+for Administration
+of Financial Bond
+Issuance in China's
+Inter-bank Bond
+Market, as well as
+other applicable
+laws, regulations and
+normative documents
+The Bank
+1728022
+Governed by the
+Commercial Banking
+Law of the People's
+Republic of China,
+the Regulation
+Governing Capital
+of Commercial
+Banks (Provisional)
+and the Measures
+for Administration
+of Financial Bond
+Issuance in China's
+Inter-bank Bond
+Market, as well as
+other applicable
+laws, regulations and
+normative documents
+Regulatory treatment
+Including: Transition
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+arrangement of
+Regulation Governing
+Group
+Parent company/
+Parent company/
+Group
+Group
+Parent company/
+Capital of Commercial
+Securities Law of the
+People's Republic of
+China/China
+Regulation Governing
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Banks (Provisional)
+Capital of Commercial
+Including: Post-transition
+arrangement of
+The Bank
+1428009
+Tier 2 capital bonds Tier 2 capital bonds Tier 2 capital bonds Tier 2 capital bonds
+Governing law(s) of the
+instrument
+No
+Domestic Preference
+Shares, pari passu
+with the holders of
+Parity Obligations
+Subordinated to all
+liabilities of the Bank
+and instruments
+issued or guaranteed
+by the Bank ranking
+senior to the
+senior to the
+Offshore Preference
+Shares, pari passu
+with the holders of
+Parity Obligations
+Subordinated to all
+liabilities of the Bank
+and instruments
+issued or guaranteed
+by the Bank ranking
+senior to the
+Offshore Preference
+Shares, pari passu
+with the holders of
+Parity Obligations
+No
+and instruments
+issued or guaranteed
+by the Bank ranking
+senior to the
+Offshore Preference
+Shares, pari passu
+with the holders of
+Parity Obligations
+Subordinated to all
+liabilities of the Bank
+and instruments
+issued or guaranteed
+by the Bank ranking
+름증
+No
+No
+shareholders
+Subordinated to all
+liabilities of the Bank
+Parent company/
+Group
+N/A
+N/A
+Unique identifier
+Issuer
+capital instrument
+Main features of regulatory
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2018
+N/A
+Unaudited Supplementary Financial Information
+No
+313
+Annual Report 2018
+N/A
+No
+N/A
+N/A
+Subordinated to
+depositor, general
+creditor, creditor of
+the subordinated
+debts, and preference debts, and preference
+shareholders
+Tier 2 capital
+Tier 2 capital
+instrument
+RMB equivalent
+13,626
+Yes
+5 August 2019,
+N/A
+8 November 2022,
+22 November 2022,
+in full amount
+in full amount
+in full amount
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Main features of regulatory
+capital instrument
+Including: Subsequent call
+Tier 2 capital bonds Tier 2 capital bonds Tier 2 capital bonds Tier 2 capital bonds
+N/A
+N/A
+N/A
+4.45%
+4.45%
+4.875%
+5.80%
+Including: Coupon rate and
+dividend/coupon
+Yes
+Fixed
+Fixed
+Fixed
+Including: Fixed or floating
+Coupons/dividends
+dates, if applicable
+N/A
+Fixed
+No
+Yes
+22 November 2027
+Original date of issuance
+Accounting treatment
+Par value of instrument
+(in millions)
+reporting date)
+(in millions, as at the latest
+regulatory capital
+RMB20,000
+Amount recognised in
+the parent
+company/group level
+Including: Eligible to
+Banks (Provisional)
+instrument
+RMB44,000
+Tier 2 capital
+Tier 2 capital
+instrument
+RMB44,000
+Instrument type
+instrument
+RMB19,994
+Debt securities issued
+Including: Original
+8 November 2027
+21 September 2025
+Debt securities issued
+20 November 2017
+Dated
+RMB44,000
+Debt securities issued
+6 November 2017
+Dated
+RMB44,000
+Perpetual or dated
+Debt securities issued
+21 September 2015
+Dated
+USD2,000
+ICBC
+314
+supervisory approval)
+Including: Optional call date,
+contingent call dates
+and redemption amount
+Issuer call (subject to prior
+maturity date
+4 August 2014
+Dated
+5 August 2024
+Subordinated to
+depositor, general
+creditor, creditor of
+the subordinated
+N/A
+N/A
+The initial
+conversion price
+is equal to the
+average trading
+price of the H
+shares of the
+Bank for the
+20 trading days
+preceding 25 July
+2014, the date of
+publication of the
+Board resolution
+in respect of the
+issuance plan
+Mandatory
+Yes
+Additional Tier 1
+Capital Trigger
+Event or Tier 2
+Capital Trigger
+Event
+Fully or partially
+convertible when
+an Additional Tier
+1 Capital Trigger
+Event occurs; fully
+convertible when
+a Tier 2 Capital
+Trigger Event
+occurs
+The initial
+conversion price
+is equal to the
+average trading
+price of the A
+shares of the
+Bank for the
+20 trading days
+preceding 25 July
+2014, the date of
+publication of the
+Board resolution
+in respect of the
+issuance plan
+Mandatory
+Including: If convertible,
+Including: If convertible,
+type convertible into
+specify instrument
+Core tier 1 capital
+Core tier 1 capital
+Core tier 1 capital
+occurs
+Core tier 1 capital
+N/A
+Including: If convertible,
+conversion
+mandatory or optional
+N/A
+N/A
+N/A
+Fully or partially
+convertible when
+an Additional Tier
+1 Capital Trigger
+Event occurs; fully
+convertible when
+a Tier 2 Capital
+Trigger Event
+issuance plan
+Mandatory
+is equal to the
+average trading
+price of the H
+shares of the
+Bank for the
+20 trading days
+preceding 25 July
+2014, the date of
+publication of the
+Board resolution
+in respect of the
+Event or Tier 2
+Event or Tier 2
+Additional Tier 1
+Capital Trigger
+Capital Trigger
+Additional Tier 1
+N/A
+Capital Trigger
+N/A
+Yes
+Yes
+No
+No
+conversion trigger(s)
+(iii) Description of related items
+Yes
+N/A
+Additional Tier 1
+Capital Trigger
+Event or Tier 2
+Capital Trigger
+Including: If convertible,
+fully or partially
+occurs
+The initial
+conversion price
+an Additional Tier
+1 Capital Trigger
+Event occurs; fully
+convertible when
+a Tier 2 Capital
+Trigger Event
+Fully or partially
+convertible when
+Capital Trigger
+Event
+issuance plan
+Mandatory
+is equal to the
+average trading
+price of the H
+shares of the
+Bank for the
+20 trading days
+preceding 25 July
+2014, the date of
+publication of the
+Board resolution
+in respect of the
+Event
+The initial
+conversion price
+Event
+Fully or partially
+convertible when
+an Additional Tier
+1 Capital Trigger
+Event occurs; fully
+convertible when
+a Tier 2 Capital
+Trigger Event
+N/A
+N/A
+Including: If convertible,
+conversion trigger(s)
+N/A
+N/A
+occurs
+N/A
+The Bank
+The Bank
+non-compliant features
+Including: If yes, specify
+features
+Non-compliant transitioned
+(specify instrument type
+immediately senior to
+instrument)
+hierarchy in liquidation
+름름름
+Position in subordination
+description of write-up
+Including: If temporary write-down,
+permanent or temporary
+Including: If write-down,
+full or partial
+Including: If write-down,
+mechanism
+write-down trigger(s)
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+름름
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+any related index
+N/A
+N/A
+Preference
+Preference
+Ordinary shares
+Ordinary shares
+(A share)
+capital instrument
+Main features of regulatory
+Preference
+For the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+ICBC
+312
+instrument it converts into
+specify issuer of
+The Bank
+The Bank
+Unaudited Supplementary Financial Information
+N/A
+Preference
+shares (Offshore)
+N/A
+N/A
+N/A
+Including: If write-down,
+No
+No
+(H share)
+No
+No
+No
+Write-down feature
+shares (Domestic)
+shares (Offshore)
+shares (Offshore)
+3
+Including: Existence of a
+No
+dividend stopper
+capital instruments issued by financial institutions
+that are not subject to consolidation
+Long-term equity investments
+Including: Investment in core tier1 capital instruments issued by financial
+institutions that are under control but not subject to consolidation
+Including: Undeducted portion of non-significant minority
+investments in capital instruments issued by
+financial institutions that are not subject to consolidation
+Including: Undeducted portion of significant minority investments in
+capital instruments issued by financial institutions that
+are not subject to consolidation
+37,104
+7,980
+X11
+98
+X12
+28,298
+X13
+Annual Report 2018
+309
+Unaudited Supplementary Financial Information
+For the year ended 31 December 2018
+19,301
+2,624
+186,769
+Reference
+Other receivables
+Including: Land use rights
+X31
+Intangible assets
+Other assets
+Item
+consolidation
+scope of
+31 December 2018
+Balance sheet
+under regulatory
+(In RMB millions, unless otherwise stated)
+Interest receivable
+Including: Significant minority investments in tier 2
+capital instruments issued by financial institutions that
+are not subject to consolidation
+X30
+772,191
+X04
+120,224
+X03
+393,682
+X02
+89
+7,766
+19,049
+Reference
+15,457,970
+15,045,239
+consolidation
+capital instruments issued by financial institutions that
+are not subject to consolidation
+X01
+X14
+X05
+X06
+2,108
+4,481,665
+Financial investments measured at amortised cost
+Including: Non-significant minority investments in tier 2
+X29
+5,963
+X10
+34
+3,883
+5,845
+1,408,749
+X08
+45,164
+X07
+4,737
+X09
+Including: Significant minority investments in core tier 1
+capital instruments issued by financial institutions that
+are not subject to consolidation
+Including: Non-significant minority investments in tier 2
+17,374
+145,678
+(1,150)
+(22,253)
+Others
+(262)
+Surplus reserve
+261,636
+X21
+General reserve
+278,980
+X22
+Retained profits
+1,205,924
+X23
+Minority interests
+9,061
+Including: Valid portion to core tier 1 capital
+3,752
+capital instrument
+Main features of regulatory
+For the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Financial Information
+(iv) Main features of eligible capital instruments
+ICBC
+Changes in share of other owners' equity of associates and joint ventures
+Foreign currency translation reserve
+310
+1,991
+Including: Valid portion to tier 2 capital
+X26
+735
+Including: Valid portion to additional tier 1 capital
+X25
+X27
+X20
+(3,739)
+Including: Cash flow hedge reserves that relate to the hedging of
+items that are not fair valued on the balance sheet
+X17
+202,761
+617,842
+Including: Valid portion of tier 2 capital instruments and their premium
+Debt securities issued
+(2,504)
+Share capital
+9,366
+X16
+8,820
+Others
+Repossessed assets
+Long-term deferred expenses
+Goodwill
+3,484
+X15
+Other equity instruments
+Capital reserve
+(3,804)
+15,823
+X24
+(11,646)
+X19
+151,968
+Including: Preference shares
+X28
+86,051
+X18
+356,407
+Reserve for cash flow hedging
+Reserve for changes in fair value of financial assets
+Other comprehensive income
+79,375
+Ordinary shares
+Including: Non-significant minority investments in core tier 1
+capital instruments issued by financial institutions that
+are not subject to consolidation
+capital instruments issued by financial institutions that
+are not subject to consolidation
+type convertible into
+Including: If convertible,
+optional conversion
+Including: If convertible,
+specify instrument
+mandatory or
+N/A
+N/A
+N/A
+름름증
+N/A
+No
+Cumulative
+No
+conversion trigger(s)
+Including: If convertible,
+Financial investments measured at FVOCI
+Including: If convertible,
+specify issuer of
+Including: If convertible,
+fully or partially
+Including: If convertible,
+Convertible or non-convertible
+Including: Non-cumulative or
+cumulative
+incentive mechanism
+coupons/dividends
+Including: Redemption
+partially discretionary or
+mandatory cancellation of
+Including: Fully discretionary,
+Mandatory
+Mandatory
+No
+No
+Mandatory
+No
+Mandatory
+conversion trigger(s)
+instrument it converts into
+Fourth-quarter 2018
+Total
+Including: If write-down,
+Unaudited Supplementary Financial Information
+Write-down feature
+For the year ended 31 December 2018
+(In RMB millions, unless otherwise stated)
+31 December 2018
+Balance sheet
+under regulatory
+scope of
+Item
+Loans and advances to customers
+Total loans and advances to customers
+Less: Provision for loan impairment under the internal ratings-based approach
+Including: Valid cap of surplus provision for loan impairment in tier 2
+capital under the internal ratings-based approach
+Financial investments
+Financial investments measured at FVTPL
+Including: Non-significant minority investments in core tier 1
+capital instruments issued by financial institutions that
+are not subject to consolidation
+Including: Significant minority investments in core tier 1
+Less: Provision for loan impairment under the weighted approach
+Including: Valid cap of surplus provision for loan impairment in tier 2
+capital under the weighted approach
+Including: Non-significant minority investments in additional tier 1
+capital instruments issued by financial institutions that
+are not subject to consolidation
+No
+capital instruments issued by financial institutions that
+are not subject to consolidation
+Cumulative
+Cumulative
+No
+write-down trigger(s)
+Cumulative
+No
+No
+No
+N/A
+N/A
+Including: Non-significant minority investments in tier 2
+름름증
+Brand Communication Case Award of the Year
+Brand Marketing Case Award of the Year
+New Media Promotion Case Award of the Year
+China Securities Journal
+Golden Bull Investment Bank Award
+Securities Times
+Microvideo Competition
+"Jun Ding Award" for Comprehensive Investment Bank in China
+"Jun Ding Award" for Financial Advisory Bank in China
+"Jun Ding Award" for China Credit Card Brand
+China Banking
+Best Production Award in the First China Banking
+Microvideo Competition
+Best Brand Publicity Award in the First China Banking
+China Financial Publishing House
+Chinese Financial Brand of the Year
+"Jun Ding Award" for China's Private Banking Brand
+21st Century Annual Finance Summit of Asia
+Best Commercial Bank in Asia
+Corporate Business Bank of the Year
+Internet Marketing Committee of China
+Consumer Financial Innovation Technology Product
+Award of the Year
+21st Century Media
+Responsible Enterprises of the Year
+China News Service
+Top 20 Bank Digital Model List
+CFRI
+Best Marketing Practice Award of China Customer Contact Center
+Best Employee Management Award of China Customer
+Contact Center
+Best Customer Contact Center in China
+Customer Contact Center Standard
+Excellent Examples of FinTech Innovation Application in China
+FinTech Innovation List — “Search by Heart"
+Internet Society of China Internet Finance Committee, FinTech
+League, China Academy of Information and Communications
+Technology
+Golden Web Awards
+Best Performance Award
+Wealth Plus
+Excellent Corporate Citizens of the Year
+Industry Contribution Award
+China Fund
+Best Brand Publicity Award
+The Economic Observer
+China Excellent Finance Award "Excellent Social Contribution
+Bank of the Year"
+Financial News
+Best Poverty Alleviation Bank of the Year
+Financial Money
+"Golden Pixiu Award” —Excellent Contribution Award for Gold
+Retail Banks of the Year
+"Golden Pixiu Award" -Gold Innovative Financial Products
+Award of the Year
+"Golden Pixiu Award" - Gold Brand E-Banking of the Year
+Best Digital Brand Building Products in Asia-Pacific
+Best Physical Channel Operation Award
+"Golden Pixiu Award" - Excellent Contribution Award for Gold
+Custodian Banks of the Year
+Outstanding Contribution Award for Scientific and
+Technological Innovation in Financial Industry
+Directors & Boards
+Golden Round Table - Enterprise Excellent in Corporate
+Governance
+Gold Round Table - Most Innovative Board Secretary
+China Times
+"Golden Cicada Award" - Mobile Banking of the Year
+Social Responsibility Bank of the Year
+Annual Report 2018
+321
+2018 Ranking and Awards
+Financial Computerizing
+Best Project Award
+Retail Banking
+The Most Characteristic Credit Card
+China Business Journal
+State-owned Commercial Bank with Excellent Competitiveness
+China Economic Weekly
+Top 100 China's Own Brands during the Last 40 Years
+"Ying Hua Award" for China Fund Industry- Best Fund
+Sales Bank
+China Report
+Outstanding Contribution Award for Overseas Image of
+Chinese Enterprises
+Top 20 Overseas Image of Chinese Enterprises
+Good News Spread Overseas Award in State-owned Enterprises
+"Golden Censer Prize" - Excellent Private Bank of the Year
+The Chinese Banker
+Top 10 Financial Product Innovation Award (Personal Business)
+Top 10 FinTech Innovation Award
+Top 10 Banking Intelligent Network Innovation Award
+Investor Journal Weekly
+Trustworthy Corporate Banks
+Southern Weekly
+Best Chinese State-owned Listed Companies on Corporate
+Social Responsibilities
+Best Responsibility Report of the Year
+Nanfang Metropolis Daily
+"Golden Brick Award"
+Top 10 Financial Product Innovation Award (Corporate
+Business)
+National Business Daily
+Tel: 0591-88087819/88087000
+Fax: 0591-83353905/83347074
+Banking e-Finance Innovation Award - Excellent Award in
+e-Finance Retail Business
+Excellent Risk Monitoring and Control Award of the Year
+VISA International
+Bronze Award for Best Offshore Customer Center
+Hong Kong Call Centre Association
+International Card Manufacturers Association
+Élan Awards
+Middle East&Africa Resource Deal of the Year
+Middle East&Africa Oil & Gas Deal of the Year
+Global Multilateral Deal of the Year
+Best Bank in Asia-Pacific
+Project Finance International
+Best Transaction Bank for Domestic Cash Management
+Best Transaction Bank for Bond Financing
+(Middle East and Africa)
+Best Bank for Infrastructure/Project Finance in the Region
+Regional Bank of the Year for BRI (South East Asia)
+Regional Bank of the Year for BRI (Central and Eastern Europe
+& Central and West Asia)
+Best Green Commercial Bank in China
+Asiamoney
+Best National Custodian, China
+Best Insurance Custodian, China
+Best Global Coordinator of Bank Capital
+Best Wealth Management Organization in China
+Best Bond Advisor Domestic China
+Best Business Growth Award
+MasterCard Worldwide
+Best Risk Monitoring and Control Award
+Most Innovative Partner
+Outstanding Contribution Entity of Trade and Finance
+Professional Committee
+Advanced Unit of Legal Risk Management
+in Popularizing Financial Knowledge
+Best Social Responsibility Financial Institution Award of the Year
+The Best Effectiveness Award of China's Banking Industry
+China Banking Association
+2018 Ranking and Awards
+319
+Annual Report 2018
+Corporate Award Platinum Award
+Best Private Bank in China
+Award for Information Technology Risk Management in
+Banking Industry
+Banking Technological Development Award of PBC
+PBC
+DOMESTIC AWARDS
+Outstanding Contribution Award for Foreign Card Acquiring
+JCB Brand
+Best Innovative Acquiring Bank
+American Express
+Most Influential Acquiring Bank
+CBIRC
+Outstanding Contribution Award for Civilized and Standardized
+Service of China Banking Industry
+The Asset
+Best Bank in China
+The 4th place among the Top 500 Enterprises of China
+Ranking in terms of operating income
+China Enterprise Confederation
+The 22nd place among the Top 100 Most Valuable Global Brands
+(The 2nd place among the brands of financial institutions)
+Ranking in terms of brand value
+Millward Brown
+The 1st place among the Top 500 Banking Brands
+Ranking in terms of brand value of a bank
+Brand Finance
+(The 1st place on the sub-list of commercial banks)
+Ranking in terms of operating income
+The 26th place among the Global 500
+Fortune
+The 1st place among the Top 1000 World Banks
+Ranking in terms of tier 1 capital of a bank
+The Banker
+Ranking in terms of combination of sales, profit,
+assets and market value
+The 1st place among the Global 2000
+Forbes
+2018 Ranking
+2018 Ranking and Awards
+Best Private Bank in China
+2018 Awards
+OVERSEAS AWARDS
+Euromoney
+Best Bank in China
+Finance Asia
+The Best Payments Initiative, Application or Programme
+in China ICBC e-Payment
+The Best Productivity, Efficiency and Automation Initiative,
+Application or Programme in China - GYJ Financial
+Service Platform
+Application or Programme in China - Suijunxing
+The Best Customer Centric Initiative,
+Best Cloud Based Initiative Application or Programme
+The Best Digital Brand Initiative, Application or
+Programme- - ICBC Xiaobai
+Best (Mega) Cash Management Bank in China
+Best Green Bond in China
+Best (Mega) Transaction Bank in China
+The Custodian Bank of the Year in Asia-Pacific
+Bank Leadership Achievement of the Year in Asia-Pacific
+Best Bank in Asia-Pacific
+The Asian Banker
+Best Corporate Bank in China
+Global Finance
+Best Private Bank in China
+The Banker
+Best (Mega) Private Bank in China
+Comprehensive Model Entity of China Banking Industry
+Customer Service Center
+Outstanding Award for Research Achievements of
+China Banking Industry Development
+Insurance Association of China
+China Advertising Association
+Outstanding Financial Products Award of the Year
+Organizing Committee of China International Financial
+Services Exhibition
+Cutting-edge Award for Asset Securitization of the Year
+Outstanding Institutional Award for Asset Securitization
+of the Year
+― Best
+China Securitization Forum
+Golden List Award of China Electronic Banking
+Personal Mobile Banking Award
+Golden List Award of China Electronic Banking Best
+Electronic Banking Award
+China Financial Certification Authority
+Contribution Award for UnionPay Technical Cooperation
+China UnionPay
+Bank with Good Futures Settlement Business
+Best International Business Service Bank
+Dalian Commodity Exchange
+Special Award for Excellent Financial Institution Members
+Special Contribution Award in Bidding Market
+Excellent Market Makers in the Interbank Inquiry Market
+Special Contribution Award for International Business
+Special Contribution Award for Personal Agency Business
+Shanghai Gold Exchange
+Excellent Underwriters of Local Government Bonds
+Advertiser Award • Brand Shaping Case Award of the Year
+China Public Relations Association
+Gold Award in Enterprise Product Communication of the
+China Golden Awards for Excellence in Public Relations
+Bronze Award in Social Media Communication of the
+China Golden Awards for Excellence in Public Relations
+International E-Commerce Innovation Association
+Most Innovative Brand Award (ICBC Mobile) in the
+Business Innovation Industry List of ECI Award
+Financial Internet Branch of China Computer Users
+Association, China e-Finance Union
+National Commercial Enterprise Management Modernization
+Innovation Achievement Award
+Association of China Commercial Enterprise Management
+Union
+Best Marketing Service Innovation Award of China e-Finance
+"My Million Dreams" Theme Marketing Activities
+China e-Finance Union
+2018 Ranking and Awards
+ICBC
+Shenzhen Stock Exchange
+320
+China Committee of Corporate Citizenship of China Association
+of Social Workers
+Center Leadership Alliance
+Excellence Service Award for Asia-Pacific Contact
+Asia-Pacific Contact Center Association
+China M&A Service Awards Best M&A Transaction Award
+China Mergers & Acquisitions Association
+Best Customer Contact Center Award for Customer
+Reputation of the Year
+China Electronics Chamber of Commerce
+Top 10 Contact Center of the Year
+Excellent Corporate Citizens in China
+Excellent Underwriters of Local Government Bonds
+Shanghai Stock Exchange
+Outstanding Collective Achievements in Anti-counterfeit
+Currency Work
+Excellent Clearing Participant
+Shanghai Clearing House
+Excellent Banking Underwriter Award
+Excellent Custodian Agent Award of the Year
+Excellent Settlement Agent Award
+Excellent Institution Award for Over-the-counter Debt Business
+Index Component Securities
+Excellent Underwriters Award for China Bond Green
+Excellent Settlement Participant
+Excellent Proprietary Trading Institution Award
+China Central Depository & Clearing Co., Ltd.
+Excellent Financial Bond Issuer
+Excellent Credit Default Swap Tentative Quotation
+Institution of the Year
+Interbank Bond Market
+Excellent Market Maker of Credit Debts in the
+Interbank Bond Market
+Excellent Market Maker of Interest Rate Bonds in the
+National Association of Financial Market Institutional Investors
+Excellent Comprehensive Market Making Institutions in the
+Interbank Bond Market
+Best Partner of Bank Insurance in China
+Excellent ABS Sponsor
+Best Consumer Finance Risk Control Award of e-Finance Union
+Excellent Custodian Bank
+China Foreign Exchange Trading System
+Joint Meeting of the State Council on Anti-counterfeiting
+Money Work
+Pioneer Award for Self-discipline
+Best Contribution Award
+National Foreign Exchange Market Self-discipline Mechanism
+Contribution Award for Opening up - - Excellent Settlement
+Agent
+Outstanding Contribution Award for Opening up
+Excellent Market Trader of Derivatives in the Interbank Local
+Currency Market
+Active Trader in the Interbank Local Currency Market
+Best Foreign Currency Borrowing Members in the Interbank
+Foreign Exchange Market
+Excellent Award for Proprietary Foreign Exchange Clearing
+Interbank Local Currency Market
+National Interbank Funding Center
+Best Foreign Currency Pairs Market Making Award
+Best Non-US Trading Award
+Best Forward Swap Transaction Award
+Best Spot Trading Award
+Best Deal Award
+Best Market Making Award
+Best Market Maker
+Excellent Market Trader of Bonds in the
+Trade Finance
+Organizing Committee of ROI
+CCTV Finance
+Email: admin@vn.icbc.com.cn
+Tel: +84-2462698888
+Fax: +84-2462699800
+SWIFT: ICBKVNVN
+Industrial and Commercial Bank
+of China Limited, Hanoi Branch
+Address: 3rd Floor Daeha Business
+Center, No.360, Kim Ma
+Str., Ba Dinh Dist., Hanoi,
+Vietnam
+SWIFT: ICBKTHBK
+Fax: +66-26639888
+Tel: +66-26295588
+11th-13th Fl., Sukhumvit
+Road, Khlong Ton, Khlong
+Toei, Bangkok, Thailand
+Address: 622 Emporium Tower
+Industrial and Commercial Bank
+of China (Thai) Public Company
+Limited
+Industrial and Commercial Bank
+of China Limited, Ho Chi Minh
+City Representative Office
+Address: 12th floor Deutsches Haus
+building, 33 Le Duan
+Email: info@ph.icbc.com.cn
+Tel: +63-22803300
+Fax: +63-24032023
+SWIFT: ICBKPHMM
+Industrial and Commercial
+Bank of China Limited,
+Manila Branch
+Address: 24F, The Curve,
+Fax: +603-23013388
+SWIFT: ICBKMYKL
+Email: icbcmalaysia@my.icbc.com.cn
+Tel: +603-23013399
+Industrial and Commercial Bank
+of China (Malaysia) Berhad
+Address: Level 10, Menara Maxis,
+Kuala Lumpur City Centre,
+50088 Kuala Lumpur,
+Malaysia
+32nd Floor, Jl. M.H.
+Thamrin No. 81, Jakarta
+Pusat 10310, Indonesia
+Email: cs@ina.icbc.com.cn
+Tel: +62-2123556000
+Fax: +62-2131996016
+SWIFT: ICBKIDJA
+PT. Bank ICBC Indonesia
+Address: The City Tower
+Fax: +65-65381370
+SWIFT: ICBKSGSG
+Email: icbcsg@sg.icbc.com.cn
+Tel: +65-65381066
+32nd Street Corner,
+3rd Ave, BGC, Taguig City,
+Manila 1634, Philippines
+Address: 6 Raffles Quay #12-01,
+Singapore 048580
+Street, District 1,
+Annual Report 2018
+Bank of China Limited,
+Yangon Branch
+Industrial and Commercial
+Fax: +855-23965268
+SWIFT: ICBKKHPP
+Tel: +855-23955880
+Email: icbckh@kh.icbc.com.cn
+Street 106, Phnom Penh,
+Cambodia
+Square, No. 19-20,
+Address: 17th Floor, Exchange
+Ho Chi Minh City, Vietnam
+Email: luugiabuu@vn.icbc.com.cn
+Tel: +84-2835208993
+Industrial and Commercial Bank
+of China Limited, Phnom Penh
+Branch
+Tel: +856-21258888
+Email: icbcvte@la.icbc.com.cn
+Lao PDR
+No.358, Unit 12,
+Sibounheuang Village,
+Chanthabouly District,
+Vientiane Capital,
+Address: Asean Road, Home
+Industrial and Commercial Bank
+of China Limited, Vientiane
+Branch
+List of Domestic and Overseas Branches and Offices
+325
+Fax: +856-21258897
+SWIFT: ICBKLALA
+Address: ICBC Center, Crystal
+Tower, Kyun Taw Road,
+Industrial and Commercial Bank
+of China Limited, Singapore
+Branch
++976-77106677
+ICBC International Holdings
+Limited
+Fax: +852-28051166
+SWIFT: UBHKHKHH
+Tel: +852-35108888
+Email: enquiry@icbcasia.com
+3 Garden Road, Central,
+Hong Kong
+Industrial and Commercial Bank
+of China (Asia) Limited
+Address: 33/F, ICBC Tower,
+Fax: +852-25881160
+SWIFT: ICBKHKHH
+Tel: +852-25881188
+Address: 37/F, ICBC Tower,
+Email: icbchk@icbcasia.com
+Address: 33/F, ICBC Tower,
+Industrial and Commercial Bank
+of China Limited, Hong Kong
+Branch
+HONG KONG AND MACAU
+Overseas Institutions
+List of Domestic and Overseas Branches and Offices
+ICBC
+324
+Fax: 0573-85139626
+3 Garden Road, Central,
+Hong Kong
+Fax: +976-77108866
+3 Garden Road, Central,
+Hong Kong
+Tel: +852-26833888
+Email: mgdbcgw@dccsh.icbc.com.cn
+Tel: +976-77108822,
+9th floor, Central Tower,
+Sukhbaatar Square,
+Khoroo 8, Sukhbaatar
+district, Ulaanbaatar,
+Mongolia
+Industrial and Commercial Bank
+of China Limited, Mongolia
+Representative Office
+Address: Suite 910 and 911,
+Email: busanadmin@kr.icbc.com.cn
+Tel: +82-514638868
+Fax: +82-514636880
+SWIFT: ICBKKRSE
+Industrial and Commercial Bank
+of China Limited, Busan Branch
+Address: 1st Floor, ABL Life Bldg.,
+#640 Jungang-daero,
+Busanjin-gu, Busan 47353,
+Korea
+Email: icbcseoul@kr.icbc.com.cn
+Tel: +82-237886670
+Fax: +82-27553748
+SWIFT: ICBKKRSE
+Bldg., #73 Sejong-daero,
+Jung-gu, Seoul 100-767,
+Korea
+Industrial and Commercial Bank
+of China Limited, Seoul Branch
+Address: 16th Floor, Taepyeongno
+Email: info@icbci.com.hk
+SWIFT: ICBKJPJT
+Tel: +813-52232088
+Email: icbctokyo@icbc.co.jp
+Industrial and Commercial Bank
+of China Limited, Tokyo Branch
+Address: 2-1 Marunouchi 1-Chome,
+Chiyoda-Ku Tokyo,
+100-0005, Japan
+ASIA-PACIFIC
+Tel: +853-28555222
+Fax: +853-28338064
+SWIFT: ICBKMOMX
+Email: icbc@mc.icbc.com.cn
+Industrial and Commercial Bank
+of China (Macau) Limited
+Address: 18th Floor, ICBC Tower,
+Macau Landmark, 555
+Avenida da Amizade,
+Macau
+Fax: +852-26833900
+SWIFT: ICBHHKHH
+Fax: +813-52198502
+Tel: 0573-85139616
+Kamayut Township,
+Yangon, Myanmar
+Fax: +95-019339278
+SWIFT: ICBKMMMY
+Email: info@nz.icbc.com.cn
+Tel: +64-93747288
+Industrial and Commercial Bank
+of China (New Zealand) Limited
+Address: Level 11, 188 Quay Street,
+Auckland 1010,
+New Zealand
+List of Domestic and Overseas Branches and Offices
+ICBC
+326
+SWIFT: ICBKAU2S
+Fax: +612-82885878
+Tel: +612-94755588
+Fax: +64-93747287
+Email: info@icbc.com.au
+International Towers,
+Address: Level 42, Tower 1,
+Industrial and Commercial
+Bank of China Limited, Sydney
+Branch
+SWIFT: ICBKKWKW
+Fax: +965-22281799
+Tel: +965-22281777
+Email: info@kw.icbc.com.cn
+Block3, Kuwait City,
+Kuwait
+100 Barangaroo Avenue,
+Sydney NSW 2000
+Australia
+Al-Soor Street, Al-Morqab,
+SWIFT: ICBKNZ2A
+Industrial and Commercial Bank
+of China Limited, Frankfurt
+Branch
+B.P.278 L-2012
+L-2449 Luxembourg,
+Address: 32, Boulevard Royal,
+of China (Europe) S.A.
+Industrial and Commercial Bank
+SWIFT: ICBKLULL
+Fax: +352-26866666
+Tel: +352-2686661
+EUROPE
+Email: office@eu.icbc.com.cn
+L-2449 Luxembourg,
+Address: 32, Boulevard Royal,
+Industrial and Commercial Bank
+of China Limited, Luxembourg
+Branch
+SWIFT: ICBKDEFF
+Fax: +49-6950604708
+Tel: +49-6950604700
+Email: icbc@icbc-ffm.de
+Address: Bockenheimer Anlage 15,
+60322 Frankfurt am Main,
+Germany
+B.P.278 L-2012
+Luxembourg
+Tel: +95-019339258
+Tower), Floor 7&8,
+Industrial and Commercial
+Bank of China Limited, Kuwait
+Branch
+Industrial and Commercial Bank
+of China Limited, Dubai (DIFC)
+Branch
+Fax: +91-2271110353
+SWIFT: ICBKINBB
+Address: 801, 8th Floor, A Wing,
+One BKC, C-66, G
+Block, Bandra Kurla
+Complex, Bandra East,
+Mumbai-400051, India
+Email: icbcmumbai@india.icbc.com.cn
+Tel: +91-2271110300
+Bank of China Limited, Mumbai
+Branch
+Industrial and Commercial
+Fax: +92-2135208930
+SWIFT: ICBKPKKA
+Tel: +92-2135208988
+Email: service@pk.icbc.com.cn
+Address: Floor 5&6, Gate Village
+Building 1, Dubai
+Pakistan.P.C:75600
+Ocean Tower, G-3,
+Block-9, Scheme # 5,
+Main Clifton Road,
+Address: 15th & 16th Floor,
+Industrial and Commercial
+Bank of China Limited Karachi
+Branch
+SWIFT: ICBKKZKX
+Fax: +7-7272377070
+Tel: +7-7272377085
+Best Deal Bank
+Industrial and Commercial Bank
+of China (Almaty) Joint Stock
+Company
+Karachi,
+Address: Building 2A(Al-Tijaria
+International Financial
+Center, Dubai, United
+Arab Emirates
+Email: dboffice@dxb.icbc.com.cn
+Tel: +971-47031111
+Fax: +971-47031199
+SWIFT: ICBKAEAD
+Email: service@sa.icbc.com.cn
+Tel: +966-112899800
+Fax: +966-112899879
+SWIFT: ICBKSARI
+Unit No.:95, Kingdom of
+Saudi Arabia
+Address: Level 4&8, A1 Faisaliah
+Tower Building No:
+7277-King Fahad Road Al
+Olaya, Zip Code: 12212,
+Additional No.: 3333,
+Industrial and Commercial
+Bank of China Limited, Riyadh
+Branch
+SWIFT: ICBKQAQA
+Fax: +974-44072751
+Tel: +974-44072758
+Email: ICBCDOHA@doh.icbc.com.cn
+P.O.Box: 506856
+P.O. BOX: 11217
+Address: Level 20, Burj Doha, Al
+Corniche Street, West Bay,
+Industrial and Commercial Bank
+of China Limited, Doha (QFC)
+Branch
+Email: dboffice@dxb.icbc.com.cn,
+Tel: +971-24998600
+Fax: +971-24998622
+SWIFT: ICBKAEAA
+P.O. Box 62108
+Arab Emirates
+5208 and 5209, Al Reem
+Island, Abu Dhabi, United
+Address: Addax Tower Offices 5207,
+Industrial and Commercial Bank
+of China Limited, Abu Dhabi
+Branch
+Doha, Qatar
+Postcode: 314200
+Zhejiang Province, China
+Address: No.258 Chengnan West
+Road, Pinghu City,
+Postcode: 010060
+Autonomous Region, China
+City, Inner Mongolia
+Xincheng District, Hohhot
+Address: No. 10 East 2nd Ring Road,
+BRANCH
+AUTONOMOUS REGION
+INNER MONGOLIA
+Tel: 0471-6940323/6940297
+Fax: 0471-6940048
+Fax: 024-23491609
+Postcode: 110001
+Address: No. 88 Nanjing North Road,
+Heping District, Shenyang
+City, Liaoning Province,
+China
+LIAONING PROVINCIAL BRANCH
+Fax: 0791-86695230
+Tel: 0791-86695682/86695018
+Postcode: 330008
+Jiangxi Province, China
+Road, Nanchang City,
+Tel: 024-23491600
+Address: No. 233, Fuhe North
+Annual Report 2018
+List of Domestic and Overseas Branches and Offices
+QINGHAI PROVINCIAL BRANCH
+Tel: 0532-85809988-621031
+Fax: 0532-85814711
+Postcode: 266071
+Address: No. 25 Shandong Road,
+Shinan District, Qingdao
+City, Shandong Province,
+China
+QINGDAO BRANCH
+Fax: 0951-5042348
+Tel: 0951-5029200
+Postcode: 750002
+323
+Road, Jinfeng District,
+Yinchuan City, Ningxia
+Autonomous Region, China
+REGION BRANCH
+NINGXIA AUTONOMOUS
+Fax: 0574-87361190
+Tel: 0574-87361162
+Postcode: 315010
+West Road, Ningbo City,
+Zhejiang Province, China
+Address: No. 218 Zhongshan
+NINGBO BRANCH
+Address: No. 901 Huanghe East
+Address: No. 2 Shengli Road, Xining
+City, Qinghai Province,
+China
+JIANGXI PROVINCIAL BRANCH
+Tel: 025-52858000
+Tel: 0898-65303138/65342829
+Fax: 0898-65303138
+Postcode: 570203
+HAINAN PROVINCIAL BRANCH
+Address: No. 54 Heping South
+Road, Haikou City, Hainan
+Province, China
+Tel: 0851-88620004/88620018
+Fax: 0851-85963911
+Postcode: 550001
+GUIZHOU PROVINCIAL BRANCH
+Address: No. 200 Zhonghua North
+Road, Yunyan District,
+Guiyang City, Guizhou
+Province, China
+Fax: 0771-5316617/2806043
+Tel: 0771-5316617
+HEBEI PROVINCIAL BRANCH
+Address: Tower B, Zhonghua
+Postcode: 530022
+GUANGXI AUTONOMOUS
+REGION BRANCH
+Postcode: 510120
+Tel: 020-81308130
+Fax: 020-81308789
+Guangdong Province, China
+Address: No. 123 Yanjiangxi Road,
+Guangzhou City,
+GUANGDONG PROVINCIAL
+BRANCH
+Fax: 0931-8435166
+Postcode: 730030
+Tel: 0931-8434172
+Postcode: 350005
+Address: No. 15-1 Jiaoyu Road,
+Nanning City, Guangxi
+Autonomous Region,
+China
+Fax: 025-52858111
+Shangwu Tower, No. 188
+Zhongshan West Road,
+Shijiazhuang City, Hebei
+Province, China
+Tel: 0311-66001999/66000001
+Fax: 0311-66001889/66000002
+Postcode: 210006
+South Road, Nanjing City,
+Jiangsu Province, China
+JIANGSU PROVINCIAL BRANCH
+Address: No. 408 Zhongshan
+Tel: 0431-89569718/89569712
+Fax: 0431-88923808
+Postcode: 130022
+JILIN PROVINCIAL BRANCH
+Address: No. 9559 Renmin Avenue,
+Changchun City, Jilin
+Province, China
+Tel: 0731-84428833/84420000
+Fax: 0731-84430039
+Postcode: 410011
+Postcode: 050051
+HUNAN PROVINCIAL BRANCH
+Address: No. 619 Furong Middle
+Road Yi Duan, Changsha
+City, Hunan Province,
+China
+HUBEI PROVINCIAL BRANCH
+Address: No. 31 Zhongbei Road,
+Wuchang District, Wuhan
+City, Hubei Province, China
+Postcode: 430071
+Tel: 0451-84668023/84668577
+Fax: 0451-84698115
+Postcode: 150010
+Address: No. 218 Zhongyang Street,
+Daoli District, Harbin City,
+Heilongjiang Province,
+China
+HEILONGJIANG PROVINCIAL
+BRANCH
+Tel: 0371-65776888/65776808
+Fax: 0371-65776889/65776988
+Postcode: 450011
+HENAN PROVINCIAL BRANCH
+Address: No. 99 Jingsan Road,
+Zhengzhou City, Henan
+Province, China
+Tel: 027-69908676/69908658
+Fax: 027-69908040
+Postcode: 810001
+Tel: 0971-6169722/6152326
+Fax: 0971-6152326
+Postcode: 100033
+ICBC Credit Suisse Asset
+Management Co., Ltd.
+Address: Tower A, Xinsheng Plaza,
+No. 5 Financial Street,
+Xicheng District, Beijing,
+China
+Fax: 0571-87808207
+Tel: 0571-87803888
+Postcode: 310009
+ZHEJIANG PROVINCIAL BRANCH
+Address: No. 150 Zhonghe Middle
+Road, Hangzhou City,
+Zhejiang Province, China
+Fax: 0871-63134637
+Tel: 0871-65536313
+Tel: 010-66583333
+Postcode: 650021
+YUNNAN PROVINCIAL BRANCH
+Address: Bank Mansion, No. 395
+Tel: 0891-6898019/6898002
+Fax: 0891-6898001
+Postcode: 850000
+Lhasa, Tibet Autonomous
+Region
+Address: No. 31 Jinzhu Mid-Rd.,
+TIBET AUTONOMOUS REGION
+BRANCH
+Tel: 0991-5981888
+Fax: 0991-2337527
+Postcode: 830002
+Qingnian Road, Kunming
+City, Yunnan Province,
+China
+Address: No. 231 Remin Road,
+Tianshan District, Urumqi,
+Xinjiang Autonomous
+Region, China
+Fax: 010-66583158
+No. 20 Plaza East Road,
+Economic Development
+Zone, Tianjin, China
+Zhejiang Pinghu ICBC Rural
+Bank Co., Ltd.
+Fax: 023-85297709
+Tel: 023-85297704
+Postcode: 402760
+Chongqing, China
+Address: No.1 Aokang Avenue,
+Bishan District,
+Bank Co., Ltd.
+Chongqing Bishan ICBC Rural
+ICBC Financial Leasing Co., Ltd.
+Address: E5AB, Finance Street,
+Tel: 025-58172219
+Address: 19-20/F, Tower B, Yang
+Zi S&T Innovation Center
+Phase I, Jiangbei New
+Area, No. 211 Pubin Road,
+Nanjing City, Jiangsu
+Province, China
+ICBC Financial Asset Investment
+Co., Limited
+Fax: 021-5879-2299
+Tel: 021-5879-2288
+Postcode: 200120
+ICBC-AXA Assurance Co., Ltd.
+Address: 19/F Mirae Asset Tower,
+No. 166 Lujiazui Ring
+Road, Pudong New Area,
+Shanghai, China
+Tel: 022-66283766/010-66105888
+Fax: 022-66224510/010-66105999
+Postcode: 300457
+Postcode: 211800
+XINJIANG AUTONOMOUS
+Fax: 0592-5054663
+Tel: 0592-5292000
+Address: No. 9 Pudong Avenue,
+SHANGHAI MUNICIPAL BRANCH
+Fax: 029-87602999
+Tel: 029-87602608/87602630
+Postcode: 710004
+Province, China
+Address: No. 395 Dongxin Street,
+Xi'an City, Shaanxi
+SHAANXI PROVINCIAL BRANCH
+Pudong New District,
+Fax: 0351-6248004
+Postcode: 030001
+SHANXI PROVINCIAL BRANCH
+Address: No. 145 Yingze Street,
+Taiyuan City, Shanxi
+Province, China
+Fax: 0531-87941749
+Tel: 0531-66681622
+Postcode: 250001
+Address: No. 310 Jingsi Road, Jinan
+City, Shandong Province,
+China
+BRANCH
+SHANDONG PROVINCIAL
+Tel: 0351-6248888/6248011
+Shanghai, China
+Postcode: 200120
+Tel: 021-58885888
+Postcode: 361012
+Address: No. 17 Hubin North
+Road, Xiamen City, Fujian
+Province, China
+XIAMEN BRANCH
+Fax: 022-28400123/022-28400647
+Tel: 022-28400648
+Postcode: 300074
+TIANJIN MUNICIPAL BRANCH
+Address: No. 123 Weidi Road, Hexi
+District, Tianjin, China
+Fax: 028-82866025
+Tel: 028-82866000
+Postcode: 610000
+Jinjiang District, Chengdu
+City, Sichuan Province,
+China
+SICHUAN PROVINCIAL BRANCH
+Address: No. 35 Zongfu Road,
+Tel: 0755-82246400
+Fax: 0755-82246247
+Postcode: 518015
+Shennan East Road, Luohu
+District, Shenzhen City,
+Guangdong Province,
+China
+Center, No. 5055
+Address: North Block Financial
+SHENZHEN BRANCH
+Fax: 021-58886888
+Luxembourg
+Email: office@eu.icbc.com.cn
+Address: 150/230, Abai/Turgut
+Ozal Street, Almaty,
+Kazakhstan. 050046
+Email: office@kz.icbc.com.cn
+REGION BRANCH
+Address: 725 Fifth Avenue,
+of China Limited, New York
+Branch
+Industrial and Commercial Bank
+AMERICAS
+SWIFT: ICBKATWW
+Tel: +43-1-9395588
+Email: generaldept@at.icbc.com.cn
+1090 Vienna,
+Austria
+Address: Kolingasse 4,
+ICBC Austria Bank GmbH
+SWIFT: ICBKCHZZ
+Fax: +41-58-9095577
+Tel: +41-58-9095588
+Email: service@ch.icbc.com.cn
+CH-8001, Zurich,
+Switzerland
+Address: Nüschelerstrasse 1,
+Zurich Branch
+Industrial and Commercial
+Bank of China Limited, Beijing,
+SWIFT: ICBKBRSP
+Tel: +55-1123956600
+Email: bxgw@br.icbc.com.cn
+Address: Av. Brigadeiro Faria Lima,
+3477-Block B-6 andar-SAO
+PAULO/SP-Brasil
+Industrial and Commercial Bank
+of China (Brasil) S.A.
+SWIFT: ICBKUS3N
+Fax: +1-2122193211
+Tel: +1-2122388208
+Email: info@us.icbc.com.cn
+Industrial and Commercial Bank
+of China
+28th Floor, New York,
+NY 10019
+Financial Services LLC
+Address: 1633 Broadway,
+Email: info@icbkus.com
+Representative Office
+Industrial and Commercial
+Bank of China Limited, African
+SWIFT: ICBKMXMM
+Email: info@icbc.com.mx
+Tel: +52-5541253388
+Col. Juarez, C.P.06600,
+Del. Cuauhtemoc,
+Ciudad de Mexico
+Industrial and Commercial Bank
+of China Mexico S.A.
+Address: Paseo de la Reforma 250,
+Piso 18,
+SWIFT: ICBKUS33
+Fax: +1-2128386688
+Tel: +1-2128387799
+Email: info-nyb@us.icbc.com.cn
+NY 10022,
+USA
+20th Floor, New York,
+AFRICA
+Fax: +54-1148201901
+SWIFT: ICBKARBA
+Email: gongwen@ar.icbc.com.cn
+Tel: +54-1148203784
+Buenos Aires,
+Argentina
+Industrial and Commercial Bank
+of China (Argentina) S.A.
+Address: Blvd. Cecilia Grierson 355,
+(C1107 CPG)
+Email: perugw2@pe.icbc.com.cn
+Tel: +51-16316801
+Fax: +51-16316803
+SWIFT: ICBKPEPL
+Address: Calle Las Orquideas 585,
+Oficina 501, San Isidro,
+Lima, Peru
+ICBC PERU BANK
+Tel: +1-4163665588
+Fax: +1-4166072000
+SWIFT: ICBKCAT2
+Email: info@icbk.ca
+Bay Adelaide Centre,
+333 Bay Street,
+Toronto, Ontario,
+M5H 2R2,
+Canada
+Industrial and Commercial Bank
+of China (Canada)
+Address: Unit 3710,
+SWIFT: ICBKUS33FIN, ICBKUS3F
+Fax: +1-2129937349
+Tel: +1-2129937300
+28th Floor, New York,
+NY, 10019,
+USA
+of China (USA) NA
+Address: 1633 Broadway,
+Industrial and Commercial Bank
+SWIFT: ICBKCZPP
+Serebryanicheskaya
+Address: Building 29,
+Bank ICBC (joint stock
+company)
+Tel: +44-2031455000
+Fax: +44-2031895000
+SWIFT: SBLLGB2L
+icbcstandard.com
+Email: londonmarketing@
+London, United Kingdom,
+EC2V 7JE
+ICBC Standard Bank PLC
+Address: 20 Gresham Street,
+Address: 81 King William Street,
+London EC4N 7BG, UK
+Email: admin@icbclondon.com
+Tel: +44-2073978888
+Fax: +44-2073978890
+SWIFT: ICBKGB3L
+Industrial and Commercial
+Bank of China Limited, London
+Branch
+Address: 81 King William Street,
+London EC4N 7BG, UK
+Email: admin@icbclondon.com
+Tel: +44-2073978888
+Fax: +44-2073978899
+SWIFT: ICBKGB2L
+ICBC (London) PLC
+SWIFT: ICBKESMM
+Fax: +34-912168866
+Address: Paseo de recoletos, 12,
+28001, Madrid, España
+Email: icbcspain@es.icbc.com.cn
+Tel: +34-902195588
+Industrial and Commercial Bank
+of China (Europe) S.A. Sucursal
+en España
+Email: hradmin@it.icbc.com.cn
+Tel: +39-0200668899
+Fax: +39-0200668888
+SWIFT: ICBKITMM
+Milano, Italy
+Address: Via Tommaso Grossi 2,
+Industrial and Commercial Bank
+of China (Europe) S.A. Milan
+Branch
+Email: info@be.icbc.com.cn
+Tel: +32-2-5398888
+Fax: +32-2-5398870
+SWIFT: ICBKBEBB
+Address: 81, Avenue Louise, 1050
+Brussels, Belgium
+Industrial and Commercial Bank
+of China (Europe) S.A. Brussels
+Branch
+Tel: +31-205706666
+Fax: +31-206702774
+SWIFT: ICBKNL2A
+Tel: +352-2686661
+Fax: +352-26866666
+SWIFT: ICBKLULU
+Industrial and Commercial
+Bank of China (Europe) S.A.
+Amsterdam Branch
+Address: Johannes Vermeerstraat
+7-9, 1071 DK,
+Amsterdam,
+embankment,
+Moscow, Russia
+Federation 109028
+Email: info@ms.icbc.com.cn
+Fax: +420-237762899
+Tel: +420-237762888
+Email: info@cz.icbc.com.cn
+Czech Republic
+14000 Prague 4 - Nusle,
+Na Strži 1702/65,
+Address: 12F City Empiria,
+Branch, odštěpný závod
+Industrial and Commercial
+Bank of China Limited, Prague
+List of Domestic and Overseas Branches and Offices
+327
+Annual Report 2018
+Email: gongwen@tr.icbc.com.cn
+Tel: +90-2123355011
+SWIFT: ICBKTRIS
+the Netherlands
+Dereboyu, 2 Caddesi
+No:13 34398 Sariyer,
+İSTANBUL
+ICBC Turkey Bank Anonim
+Şirketi
+SWIFT: ICBKPLPW
+Email: info@pl.icbc.com.cn
+Tel: +48-222788066
+Fax: +48-222788090
+Address: Plac Trzech Krzyży 18,
+00-499, Warszawa,
+Poland
+Industrial and Commercial Bank
+of China (Europe) S.A. Poland
+Branch
+SWIFT: ICBKFRPP
+Fax: +33-140065899
+Email: administration@fr.icbc.com.cn
+Tel: +33-140065858
+Address: 73 boulevard haussmann,
+75008, Paris
+Industrial and Commercial Bank
+of China (Europe) S.A. Paris
+Branch
+SWIFT: ICBKRUMM
+Fax: +7-4952873098
+Tel: +7-4952873099
+Address: Maslak Mah.
+Constantia, Cape Town,
+South Africa, 7806
+Address 1: 47 Price Drive,
+Email: icbcafrica@afr.icbc.com.cn
+Best Use Award of Big Data in Electronic Commerce
+GANSU PROVINCIAL BRANCH
+Address: No. 408 Qingyang Road,
+Chengguan District,
+Lanzhou City, Gansu
+Province, China
+Return on Investment
+JRJ.com
+Outstanding Chinese-funded Bank Brand
+Outstanding Cash Management Bank Award
+Outstanding Small and Micro Enterprise Financial
+Services Award
+Outstanding Smart Bank Award
+Outstanding Mobile Banking Award
+Outstanding Popular Credit Card Brand Award
+Outstanding Custodian Bank
+www.51Callcenter.com
+Golden Voice Prize "China Best Contact Center Award —
+Customer Service"
+Juwai.com
+Analysys Think Tank
+Most Popular Digital APP of the Year
+ATA
+HR Selection Awards In Greater China
+58 China HR
+Top 50 Best Employer for Chinese College Students
+Top 10 Intelligent Employer of Best Employer for
+Chinese College Students
+Top 15 Best Employer in Financial Industry for
+Chinese College Students
+Zhaopin.com
+China Best Employer of the Year
+322
+ICBC
+List of Domestic and Overseas Branches and Offices
+Domestic Institutions
+ANHUI PROVINCIAL BRANCH
+Address: No. 189 Wuhu Road,
+Best Digital Application of the Year of Analysys
+Star Mobile Bank
+Hefei City, Anhui Province,
+China
+Enterprise Best Practices of the Year of Sustainable
+Development Goals
+Mawards
+Top Ten listed Company of the Year
+Sina Finance.com
+Best State-owned Commercial Bank
+Best Brand Image Bank
+The Paper
+Inclusive Finance Award of the Year
+Caixin Insight
+Best Domestic Bond Market Bank in China
+Caixin Media
+Caixin
+SGCX ESG50 Index Enterprise
+Eastmoney.com
+Best Custodian Bank
+Global Compact Network China
+Best Private Bank
+www.caishiv.com
+Jiefu Award of ABS - Best Service Organization
+Jiefu Award of ABS Best Market-influential Housing
+Mortgage Loan Asset Securitization Product
+Jiefu Award of ABS - Best Scale Non-performing Loan Asset
+Securitization Product
+China Limited Partners Association
+100 LP Cases for the 10th Anniversary of 2008-2018
+Best M&A Service Award
+www.cebnet.com.cn
+Super IP Ecological Conference Super Finance IP Top 10
+Lemon Awards - Bronze Award for Super IP Business
+Applications Award
+www.gsdata.cn
+New Media Communication Award for Listed Companies
+Meihua.info
+Best Mobile Banking
+Address 2: T11, 2nd Floor East,
+30 Baker Street,
+Rosebank, Johannesburg,
+Gauteng, South Africa,
+2196
+Postcode: 230001
+BEIJING MUNICIPAL BRANCH
+Tel: +27-117215950
+Fax: +27-212008012
+328
+ICBC
+Tel: 0551-62869178/62868101
+Fax: 0551-62868077
+Fuzhou City, Fujian
+Province, China
+FUJIAN PROVINCIAL BRANCH
+Address: No. 108 Gutian Road,
+Tel: 0411-82378888/82378000
+Fax: 0411-82808377
+Postcode: 116001
+Email: icbcamsterdam@nl.icbc.com.cn
+DALIAN BRANCH
+CHONGQING MUNICIPAL
+BRANCH
+Fax: 010-66410579
+Tel: 010-66410579
+Postcode: 100031
+Address: No. 5 Zhongshan Square,
+Dalian City, Liaoning
+Province, China
+Address: No. 9 Jiangnan Road,
+Nan'an District,
+Chongqing, China
+Postcode: 400060
+Tel: 023-62918002
+Fax: 023-62918059
+Address: Tower B, Tianyin Mansion,
+No. 2 Fuxingmen South
+Street, Xicheng District,
+Beijing, China
+中國北京市西城區復興門內大街55號 郵編:100140
+No.55 Fuxingmennei Avenue, Xicheng District, Beijing, China Post Code: 100140
+wwww.icbc.com.cn, wwww.icbc-ltd.com
+ICBC
+田
+The customer base of international banking was further expanded. The Bank worked out the integrated and joint
+development mechanism of the Guangdong-Hong Kong-Macau Greater Bay Area to exert the region's synergy effect.
+It launched the special marketing campaign over the enterprises in the customs system for the purpose of stimulating
+customer expansion and quality improvement in a multi-pronged approach.
+The Bank actively provided financial services for the First China International Import Expo ("CIIE") and offered a service
+platform for matchmaking the transactions of exhibitors. Leveraging the Belt and Road Inter-bank Regular Cooperation
+Mechanism, the Bank hosted the Belt & Road Trade Finance Cooperation and Innovation Forum during the CIIE, as an
+opportunity for customer marketing and business expansion.
+The transformation and innovation in relation to putting business online was accelerated. The Bank launched the
+Phase | Project of Connection with the Customs System, and was among the first partner banks of single-window
+financial services, providing more convenient services for cross-border trade. After the roll-out of the Cross-border
+Remittance System under the New-generation Corporate Internet Banking, the Bank could better meet individualized
+demands on the basis of electronically processing all business documents. The Bank launched the non-local
+presentation of documents in the Bank-Enterprise Interlink System and the SWIFT direct connection, among other
+functions, for key customers, which enhanced the service response efficiency.
+4
+The Bank built up the advantages of the Corporate Payment Service Platform. It researched and developed the Global
+Cash Management Platform integrating financial services, IT and treasury management of enterprises. It actively promoted
+the application of the Small and Micro Enterprise Financial Service Platform and changed it to a comprehensive financial
+service platform allowing one-click access to shore up the practice in inclusive finance. By connecting the financial services
+of the "ICBC Pooling" Platform with the financial demands of customers, the Bank realized an effective customer on-
+boarding model via "transaction plus finance".
+International Settlement and Trade Finance
+At the end of 2018, the Bank maintained 8,319 thousand corporate settlement accounts, representing an increase of
+11.1% over the end of the previous year, and the volume of settlements reached RMB2,600 trillion, up 1.4%. There were
+1,375 thousand cash management customers, and 7,282 global cash management customers, representing an increase
+of 14.0%.
+In 2018, domestic branches disbursed an aggregate of USD53,045 million in international trade finance. International
+settlements amounted to USD2,908,418 million, of which USD1,161,942 million was handled by overseas institutions.
+The Bank propelled the innovation and transformation of basic settlement services. It promoted the services of Industrial
+and Commercial Enterprise Link, ICBC e Payment and Large-amount Fund Flow Monitoring Platform, and saw a stable rise
+of the accounts. It sharpened the competitiveness of prestigious wealth management centers and wealth management
+centers in corporate banking which stimulated the corporate customer service capabilities of all the outlets. The customer
+service maintenance mechanism combining "outlet and remote service" and "intelligence and manual service" took initial
+shape.
++
+4
+Settlement and Cash Management
+Discussion and Analysis
++
+Investment Banking
+While attaching importance to product innovation, the Bank actively expanded merger and acquisition advisory
+business, debt financing advisory business and equity financing advisory business. It offered the product mix of "M&A
+loan and M&A bond", marketed the asset-backed security ("ABS") business among corporate customers at a faster
+pace, and enhanced the capability of fund-raising for equity investment business and project operation. The liquidity
+debt financing business was given the 2018 "Top 10 Financial Product Innovation Award (Corporate Business)" by The
+Chinese Banker magazine.
+4
+Personal Loans
+ICBC
+30
+At the end of 2018, personal financial assets totaled RMB13.51 trillion. The personal deposits arrived at
+RMB9,436,418 million, representing an increase of RMB867,501 million or 10.1%. The personal loans stood at
+RMB5,636,574 million, representing an increase of RMB691,116 million or 14.0%. The Bank's personal customers
+increased by 39.67 million to 607 million, including 13.29 million personal loan customers, up 1.03 million.
+The Bank encouraged the transformation of agency sales. It updated the Al investment platform and introduced the
+Al Index, realizing the intelligent and professional services such as "One-click Investment" and "One-click Holdings
+Adjustment" of fund products. It debuted an online one-stop auto owner service platform "Intelligent Travel
+around the World", enabling auto owners to buy auto insurance across the bank channel online. In 2018, funds
+under agency sales amounted to RMB768.1 billion, sales of treasury bonds under agency arrangement were valued at
+RMB68.4 billion, and personal insurance products under agency sales reported at RMB100.9 billion.
+The Bank provided convenient and efficient personal financing services. It introduced a mortgage direct connection
+system and integrated residential mortgage application acceptance channels into business scenarios. It was the first
+in the banking industry to get connected with the systems of government agencies, allowing the exchange of data on
+house deals, mortgage registrations and loan applications, which improved the business efficiency and brought more
+convenience to customers.
+The Bank continued to strengthen the innovation of deposit products and developed a mix of personal deposit
+products including basic, inclusive, structured, exclusive and prestigious series. It offered a suite of innovative products
+"Merchant Benefit", "Happy Deposit" and "Freewill Deposit" for different customer groups to improve the customer
+experience, and launched deposit products exclusively for customers in county areas to resuscitate higher-quality
+financial services.
+The Bank strengthened the safety of customer accounts and funds. The Bank upgraded the "ICBC Intelligent
+Defender" account security service which integrated account security detection, account security lock, transaction limit
+customization and other personalized functions, and built a complete "cloud plus application" intelligent prevention
+and control system on the basis of "Monitoring Cloud" to provide all-round and intelligent security protection for
+customers' account transactions and capital security.
+The Bank enhanced intelligent service capabilities and tailor-made financial services for different customers. It launched
+intelligent asset allocation business and shifted the wealth management business from single product sales to the
+combined, intelligent and expert-level prestigious wealth management service model; constructed an intelligent
+marketing service platform for personal customers and realized the online, automatic and intelligent precise marketing
+services.
++
+The Bank introduced innovative models of online channel services and extended the service boundary, released ICBC
+e Wallet, co-worked with the third-party platforms in sectors such as the people's well-being, internet firms and new
+countryside construction, embedded financial services including e-account, fund management, payment & settlement,
+investment & wealth management and petty financing into the scenarios of partners, and rendered basic financial
+services for the users of partners' platforms. It improved the offline intelligent service level, innovated customer
+expansion services, and expanded the use of portable intelligent terminal.
++
+In 2018, capturing the development opportunities of residents' consumption structure upgrade and demand increase, as
+well as further popularization of FinTech, the Bank actively promoted the intelligent transformation of retail banking, and
+created novel models, services and channels which were more intelligent through the deep integration of retail banking and
+FinTech, achieving the all-round enhancement of core business competitiveness.
+Personal Banking
+In 2018, the Bank acted as the lead underwriter for 1,600 Chinese and foreign bond projects with a total value of
+RMB1,324,818 million, preserving its No. 1 position in the market in terms of domestic leading underwriting scale.
+The Bank was ranked for the fifth year in a row as the No. 1 M&A financial advisor in China and Asia Pacific by
+number of deals advised according to the "List of Completed Deals with China's Participation" promulgated by
+REFINITIV; and the Bank remained as the global top financial advisor in terms of the number of deals completed for
+Chinese outbound acquisition transactions according to the ranking of "Advisors for Chinese Outbound Acquisition
+Transactions" promulgated by REFINITIV.
+Discussion and Analysis
+29
+Annual Report 2018
+The Bank placed greater focus on leading the market with new value-oriented investment research model and worked
+harder to build the "ICBC Investment Banking Research" brand. The investment banking research team got the first
+place in the "Vision Cup" global market forecasts of the Securities Market Weekly in 2018.
++
++
+At the end of 2018, the number of ICBC Mobile customers reached 313 million. ICBC Mobile further strengthened its
+industry-dominance in customer size, customer loyalty and activeness.
+41,962
+1,850
+2,017
+178,045
+182,777
+Hong Kong and Macau
+At the end
+of 2017
+At the end
+of 2018
+2017
+2018
+of 2017
+of 2018
+Item
+104
+At the end At the end
+Profit before taxation
+(in USD millions)
+(in USD millions)
+Assets
+MAJOR INDICATORS FOR OVERSEAS INSTITUTIONS
+At the end of 2018, the Bank established 426 institutions in 47 countries and regions and indirectly covered
+20 African countries as a shareholder of Standard Bank Group. The Bank also established correspondent banking
+relationships with 1,502 overseas banking institutions in 145 countries and regions, making its service network
+covering six continents and important international finance centers around the world. Among which, the Bank
+maintained 131 institutions in 21 countries and regions along the Belt and Road.
+In 2018, the Bank's cross-border RMB business volume reached RMB4.60 trillion. The Bank extended credit to 83
+"Going Global" and Belt and Road projects additionally, totaling USD19.1 billion of loans extended.
+The Bank continued to improve its global network. Zurich Branch, Manila Branch, Ho Chi Minh City Representative
+Office and ICBC Almaty Astana Representative Office officially opened, and ICBC (Austria) was granted a license.
+The Bank proactively advanced the cross-border RMB business. It worked harder to develop cross-border RMB trade
+financing, cut down financing costs of enterprises and increase the use of RMB in cross-border trade. The cross-
+border RMB financing for the Belt and Road projects and RMB pricing & settlement of oil trade were wrapped up.
+The Bank accelerated the innovation-driven development of FTZ business, established a separate accounting system
+in the Hainan FTZ, and launched massive campaigns at the issuance of "panda bonds" and foreign institutions'
+investment in China's inter-bank bond market in accordance with the financial opening policy. The Bank actively
+supported the steady development of RMB internationalization to promote the use of RMB in surrounding countries
+and Africa.
++
+Internationalized Operation
+Internationalized and Diversified Operation
+The Bank implemented the laws, regulations and regulatory requirements on the consumer protection, and further
+standardized the charging of service fees so as to ensure efficient and high-quality financial products and services
+with reasonable price. With a focus on the deficiencies in key and specialized fields that were easily complained by
+customers, the Bank facilitated the root-out of such deficiencies. It paid close attention to improving products and
+services from the perspective of consumers, thereby achieving the harmony of economic benefits and social value.
+Taking initiatives to adapt itself to the diversification of consumer demands for financial literacy, the Bank launched
+targeted financial literacy publicity and education for consumers, kept enriching and perfecting the means and
+contents of publicity and education, and raised the anti-risk awareness and sense of responsibility of consumers.
++
+Number of institutions
+106
+Asia-Pacific Region
+98,766
+(44,757)
+(34,100)
+Eliminations
+1
+1
+Africa Representative Office
+142
+149
+586
+553
+66,745
+56,948
+America
+81
+81
+273
+134
+69,933
+76,127
+Europe
+Macau)
+(except Hong Kong and
+89
+91
+783
+1,025
+84,346
+Consumer Protection
+Discussion and Analysis
+37
+Annual Report 2018
+The Bank worked harder to build "Quick Lending for Operation", "Online Revolving Loan" and "Online Supply
+Chain", and the "Small and Micro Enterprise e Loan" product system took initial shape. The Bank increased the efforts
+in R&D of the "Quick Lending for Operation" product, allowing it to provide the big data-based financing services
+in all kinds of production and operation scenarios of small and micro customers; improved the Online Revolving
+Loan business system and introduced the innovation product "e Mortgage Quick Loan" which made it possible to
+perform online assessment of property and intelligent approval of loan; continued to perfect the online supply chain
+financing product system, used blockchain technology to create "ICBC e Credit", a cross-level credit flow tool for
+core enterprises, covered the financing demands of whole-industry-chain customers, and actively expanded the online
+supply chain business for key sectors like modern agriculture, IT & communications, aviation & military, construction &
+installation.
+-
++
+Digital Inclusive Finance
+The Bank enriched the product features, cooperation models and scenario applications of ICBC e-Loan in a bid to
+enhance the customers' experience with internet-based financing. It continued to expand the application scenarios
+of "Credit Granting in Seconds" and "Payment in Seconds", and achieved online real-time credit granting and real-
+time lending by importing external credible data such as credit reference information, provident fund and personal tax
+information and adopting risk control methods such as face recognition.
+Consumer Finance
+In compliance with the requirements of new regulations on the third-party payment business, the Bank actively
+promoted the connection NetsUnion platform, the governance of payment channels and the control of P2P channel
+and perfected the centralized deposit of reserves for the purpose of further standardizing the third-party payment
+business development.
++
+Discussion and Analysis
+35
+Annual Report 2018
+The Bank newly launched "e-Business Dream Plan" to build a highly recognizable brand of comprehensive financial
+services for the merchants, and with e-Payment acquiring as the entry point, provided merchants with a full package
+of financial solutions, e.g. fund collection and payment, deposit and wealth management, credit and financing, private
+banking and precious metals. The function was applied in scenarios such as specialized markets and demonstration
+streets for the benefit of the people during the reporting period.
+The Bank further improved the aggregation payment function of e-Payment, applied the function in public
+transportation, education and medical care, and accelerated the construction of e-Payment scenarios such as
+"Intelligent Campus", "Intelligent Sightseeing Spot" and "Intelligent Traffic".
+The Bank continued to improve and update ICBC e Payment for better experience of fee collectors and payers. The
+Bank successively rolled out "ICBC Campus Connect", "Smart Property" and "Party Membership Fee Cloud" modules,
+which provided functions such as payee information management, bill import, accounting and report statistics to
+enterprises, public institutions and merchants with diversified fee charging and collection demands.
++
++
+Payment
+Development of Key Business Lines
+At the end of 2018, ICBC Link had 150 million registered users.
+The Bank positioned ICBC Link as the main bearer of scenarios and the main portal of users to create an online and
+offline user interaction services platform. It launched a comprehensive upgrade and revision of ICBC Link with a focus
+on improving functions such as customized message push, user expansion and service scenarios sharing.
+ICBC Link
+In 2018, ICBC Mall achieved an accumulative transaction amount of RMB1.11 trillion.
+The Bank devoted itself to developing high-quality e-commerce and building a one-stop commercial & financial
+services platform with e-commerce as the core and finance as the foundation. Targeting the "famous merchants,
+commodities and stores", ICBC Mall highlighted characteristic development and covered more merchants and brands;
+and the Bank worked harder to promote ICBC e Procurement, ICBC e Travel, ICBC e Assets, ICBC e Cross-border and
+ICBC e Charity brand building.
++
++
+ICBC Mall
+Unit: RMB100 millions
+Building of a Financial Ecosphere
+Subtotal
++
+4
+By establishing a new post system at outlets with "compatible posts, universal use of personnel, diversification of
+services and safe operation", the Bank launched the duty integration of tellers and customer service managers, removed
+the barriers between tellers and non-teller staff, business handling and customer maintenance, raised the service
+marketing level and human resource utilization efficiency, and improved the service experience of customers. In further
+improving the online and offline operational processes, the Bank enabled medium and small enterprise customers
+to receive one-stop services including online application, offline account opening and basic payment and settlement
+products, which significantly reduced customers' bank visits, tellers' information entries and business handling time.
+With the launch of the "Ten Actions to Enhance Services", the Bank devoted itself to building a "bank to the
+satisfaction of customers". It solidified the foundation of service management, tried to root out the problems
+affecting customer experience, continued to build star outlets for good services, promoted the high-quality service
+experience and optimized the customer experience indicators. The Bank perfected an all-round service monitoring
+system featuring online and offline coordination, internal and external supplementation and combination of routine
+monitoring and special research. To enable customers to experience warm and valuable services, the five branches
+in Shanghai, Chengdu, Guangzhou, Beijing and Wuhan kicked off a "Warm Service throughout Hundreds of Cities"
+campaign at the same time with the theme of "bringing warm services to ICBC customers everywhere". In 2018,
+nearly 200 city branches and sub-branches were involved in the campaign to pass down warm services.
++
++
+Service Enhancement
+At the end of 2018, the Bank had 16,004 outlets, 26,786 self-service banks and 89,646 ATMs whose trading volume
+amounted to RMB10,452.2 billion. In 2018, the internet financial transaction amount hit RMB679.82 trillion; the
+proportion of internet financial transactions rose by 2.8 percentage points from the end of last year to 97.7%.
+The Bank diversified the applications of entrances of new channels. It further diversified the entrances of new channels
+and related tools such as QR code, outlet WiFi and WeChat, and expanded the service functions and application
+scenarios of such new channels.
+The Bank shifted the Cloud Banking towards the positioning as the
+"all-channel service center, sharing connection center and cloud
+marketing center". Depending on the scientific and technological
+strengths and professional services, the Bank focused on system integration and upgrade and intelligent customer
+service improvement, and extended the use of intelligent customer service in more than 20 service channels such as
+ICBC Mobile, ICBC Link and WeChat.
+2018
+Note: The proportion of internet financial transactions refers to the
+number of internet financial transactions divided by the total
+number of transactions of the bank.
+2017
+94.9
+97.7
+2016
+92.0
+%
+Proportion of Internet Financial Transaction
+Outlet improvement continued. Aimed mainly at adjusting the outlet
+structure, controlling the outlet number and enhancing the outlet
+efficiency, the Bank made the outlet number and business mix more
+reasonable, covered more core areas and high-quality customer
+groups, and gradually built a new outlet system featuring the
+"leading role of top-end business formats, support of middle-level
+business formats and firmness of basic business formats". Outlet
+renovation made further headway which effectively improved the
+customer experience and outlets' service capacity. The Bank
+continued to deepen outlet transformation and competitiveness
+enhancement, promoted the intelligent service models at outlets,
+enhanced the functions of intelligent services, streamlined business
+processes and raised processing efficiency on the basis of sound risk
+control. At the end of 2018, the Bank completed the intelligent
+transformation of 15,410 outlets, put in place 75,756 intelligent
+devices and covered 255 personal and corporate business items
+with intelligent services.
+Channel Development
+The Bank always put improvement of customer service experience in the first place. Orienting towards provision of
+convenient services, intelligent services and inclusive financial services, the Bank pursued scientific and technological
+innovation, made unremitting efforts to push forward channel transformation and development, and continued to deepen
+the integration of online and offline channels through perfecting the offering of "intelligent plus manual, online plus offline,
+cloud and near-field" services.
+Channel Development and Service Enhancement
+Discussion and Analysis
+ICBC
+36
+With ICBC e Life as the core, the Bank built a consumer finance ecosphere covering all the scenarios, e.g. clothing,
+eating, housing, travel, entertainment, learning and medical care, that gathered bank, customers and merchants.
+And it launched Smart Credit, Online Installment and other financing products. The Bank improved the benefits for
+customers such as VIP lounge, account security lock, account security insurance and bonus point redemption, and
+offered services in more scenarios such as provident fund inquiry and hospital appointment & registration.
+The Bank launched an innovative B2B2C service model based on the ICBC e Wallet products, providing customers
+with easy-to-access, scenario-triggered financial services. Customers were allowed to apply for e-accounts of the Bank
+through the online channels of partners, while financial products and services were seamlessly integrated into the
+scenarios in the people's well-being, internet platforms, consumer finance, compensation management, membership
+management and quasi-margin. The "ICBC Xiaobai" digital bank developed and operated in association with JD
+Finance was awarded the "Best Digital Brand Innovation Award" by The Asian Banker.
+While centering the development of scenarios in key sectors, the Bank made the scenarios cover public service,
+travel, education, medical care, business and life service. In the field of public services, the Bank launched social
+security, provident fund and taxation scenarios and improved the full-featured ecological chain covering identity
+authentication and personal information inquiry, message push and bill payment; in the field of transportation
+and travel, the Bank independently developed the "ICBC Car License Payment" product, and won the bids for the
+expressway toll contactless payment projects in Jilin, Sichuan, etc.; in the field of education, "ICBC Campus Connect"
+met the requirements of school staff on flexibly managing students' registration information and various types of
+education costs; in the field of medical care, the Bank actively promoted the development of the medical supply chain
+collaboration platform "Commercial & Medical Connect".
+The Bank strengthened the innovation of basic platforms and infrastructure, and continued to enhance the strategic
+supporting capabilities needed for the development of internet-based finance. It focused on the users as the core, set
+up scenario guidance and built an ecosphere of financial services by relying on the "scenario-embedded and finance-
+exporting" API open platform, ICBC Finance Cloud platform featured with "green deployment and agile launching"
+and the "Ju Fu Tong" platform with a cluster of premium online financial products and functions.
+4
+380,518
++
+3,729
+Discussion and Analysis
++
+Celestial Constellation Credit Card won the "Élan Award" from the International Card Manufacturers Association.
+At the end of 2018, the Bank issued 991 million bank cards, representing an increase of 82.59 million cards from
+the end of the previous year. Specifically, 840 million debit cards and 151 million credit cards were issued. Overdraft
+balance of credit cards rose by RMB91,692 million or 17.1% from the end of previous year to RMB626,468 million. In
+2018, banks cards registered a consumption volume of RMB7.0 trillion, including RMB4.1 trillion of consumptions with
+debit cards and RMB2.9 trillion of consumptions with credit cards.
+Asset Management Services
+The Bank actively responded to the challenges and opportunities brought by the release of the New Rules on Asset
+Management, and carried forward the implementation of the mega asset management strategy as a whole. The Bank pushed
+forward the transformation of asset management business and products in a steady manner and comprehensively enhanced
+investment management and research capabilities. The Bank established a mega asset management business system allowing
+allocation of capital in all markets and value creation across the whole value chain by relying on the strength of the Group's
+asset management, custody and pension businesses, and the functions of its comprehensive subsidiaries specialized in fund,
+insurance, leasing and investment banking, and to provide diversified, integrated and specialized services for the clients.
+Wealth Management Services
++
++
+The Bank steadily pushed forward the net worth-based transformation of wealth management products, offering
+innovative wealth management products such as "Xin De Li", "Xin Wen Li", "Tian Li Bao" and "Bogu Tongli".
+The Bank deepened system and mechanism innovation and reform, and continued to enhance the overall
+management level of mega asset management in statistics, products, investment research, sales and risk control.
+The development of the overseas asset management platforms was steadily boosted. ICBC Asset Management (Global)
+Company Limited has established a relatively complete product system with global layout and customized solutions.
+At the end of 2018, the balance of non-principal-guaranteed wealth management products stood at RMB2,575,857 million.
+Asset Custody Services
++
+31
++
++
++
+Assets under custody grew steadily, further consolidating the Bank's status as the largest custodian bank in China. In
+response to the changes in external regulatory environment, the Bank, leveraging its expertise and experience in the
+operation of net-worth products, upgraded the custody size of insurance assets, wealth management products and
+mutual funds. Grasping the opportunity of the pension insurance system reform, the Bank grabbed more share in the
+enterprise annuity, occupational annuity and pension insurance fund custody market.
+The Bank steadily promoted the application for depository and custodian qualification of Chinese Depository Receipt
+("CDR") under the "Shanghai-London Stock Connect" programme, and fully put value-added custody of "Fund
+Connect" into service; it took custody of three strategic allocation funds of China Southern Asset Management,
+ChinaAMC and China Universal.
+The Bank held an asset custody summit, and strengthened external publicity and customer marketing, further
+enhancing the reputation of "ICBC Custody" brand.
+The Bank was awarded the "Custodian Bank of the Year in Asia Pacific" by The Asian Banker, and the "Best National
+Custodian, China" and the "Best Insurance Custodian, China" by The Asset.
+At the end of 2018, the total net value of assets under the Bank's custody reported at RMB16.30 trillion.
+32
+ICBC
+Discussion and Analysis
+Pension Services
++
++
+Annual Report 2018
+e
+The branding of the installment business has been further developed. The Bank unified the brands of credit card
+installment business under a new brand named "Happy Installment", and offered an innovative product
+Installment while at the same time expanding traditional installment business in an orderly manner.
+354,312
+49,455
+56,366
+2016
+2017
+2018
+Discussion and Analysis
+Personal Deposits
+Unit: RMB100 millions
+94,364
+85,689
+83,029
+2016
+2017
+2018
+Private Banking
++
++
++
+The Bank leveraged on its overall advantages in retail, asset management, investment banking and technology, etc. to
+provide customers with a whole package of all-round, full-view, full-process, comprehensive and specialized services of
+private banking.
+In installing an intelligent platform, the Bank perfected the intelligent investment system of private banking, provided
+customers with intelligent asset allocation service and realized the intelligent transformation of customer services.
+The Bank organized an exhibition of financial culture themed "A Man of Honor Marches Forward with His Partners".
+It acted in cooperation with its business partners and also sponsored a charity project with them to make the private
+banking brand more influential.
+The Bank was awarded the "Best Private Bank in China" by The Banker and "Best (Mega) Private Bank in China" by
+The Asian Banker.
+Bank Card Business
++
++
+Debit card products saw further innovation. Customization of debit card face could meet the personalized demands of
+customers. The Bank introduced Kylin Debit Cards which combined traditional Chinese culture with financial payment
+instrument with special technology, with "Kylin Treasury Card" targeting at medium and high-end customers and
+"Kylin Birth Card" targeting at the teenagers and the youth. The Bank provided direct mailing service of debit cards
+after online application by customers, the first of its kind in the banking industry.
+The credit card product portfolio became increasingly diverse. There was a stream of new credit card products
+including ICBC Zodiac Card, "Like China" ICBC Endeavor Credit Card, WeChat Co-brand Card, Overseas Student
+Card, Global PLUS Card. The Bank allowed the opening of supplementary cards across the types of credit card
+products. It updated "I GO" promotional campaigns in order to increase the influence of credit card brands.
++
++
+At the end of 2018, the Bank maintained 80,700 private banking customers, representing an increase of 5,200
+or 6.9% from the end of the previous year. The Bank had assets of RMB1.39 trillion under management, up
+RMB58.7 billion or 4.4%.
+The Bank's leading position was further cemented. It successfully obtained the trustee and the custodian business
+contracts of occupational annuities of central and all the local governmental agencies and administrative institutions
+that have completed bid invitations, with the bid-winning rate ranking first among banks.
+The Bank cleared RMB345.5 billion on behalf of the Shanghai Gold Exchange, ranking No. 1.
+34
+ICBC
+Discussion and Analysis
+Internet-based Finance
+The Bank fully implemented the e-ICBC 3.0 strategy for internet-based financial development. It added intelligent content
+into traditional financial services, built an open, cooperative and win-win financial services ecosphere, and shifted towards
+a "bank by your side" of extending universal services, an "open bank" driven by innovation and an "intelligent bank" with
+powerful applications. In 2018, the Bank, aiming to serve customers and create value in internet-based finance, sped up the
+implementation of the e-ICBC 3.0 strategy.
+Advancement of Core Platforms
+ICBC Mobile
++ With a focus on the core functions of finance, the Bank tried to build ICBC Mobile to the main front of online
+financial services. It released Version 4.0 of mobile banking and updated eight functions including account inquiry,
+cloud storage and unsecured lending; it innovatively launched the industry-leading services such as "Inquiry as You
+Wish" and "One-Click Transfer" under Mobile Banking and provided convenient functions such as separation of self-
+registration and card-linking and login-free inquiry of account balance.
+ICBC
+38
+Note: (1) The assets represent the balance of the Bank's investment in Standard Bank and the profit before taxation represents the Bank's
+gain on investment recognized by the Bank during the reporting period.
+419
+426
+3,786
+4,115
+358,597
+384,304
+Total
+Bank(1)
+419
+426
+3,492
+426
+386
+4,285
++
+Investment in Standard
+The Bank became the first and exclusive market maker of Standard Gold Panda Coin Contracts at the Shanghai Gold
+Exchange and was among the first group of market makers of silver enquiry business at the Exchange.
+Seizing the opportunity of launching strategic cooperation with the Palace Museum, the Bank offered a proprietary
+product- - "ICBC New Year Celebration Gold Lucky Year"; and in light of some hot current affairs, the Bank
+developed regionally-featured products, e.g. "Souvenir Badge for Xiongan New Area" and "Success Precious Metals".
+"Stamp & Coin Pavilion" went alive at ICBC Mall, making the Bank the first commercial bank to have an online
+primary market for trading in stamps and coins.
+3,918
++
+The Bank constantly enhanced the service experience and operational efficiency. It set up the strategic allocation
+teams at the Group level for pension services to further improve its asset allocation capacity. Higher quality trustee
+services were provided for customers locally. The Bank lifted its business automation and self-service capacity, carried
+forward account management and custody direct linking projects and continuously optimized the functions of "ICBC e
+Pension" to provide convenient and safe online annuity services for customers.
++
+At the end of 2018, the pension funds under the Bank's trusteeship amounted to RMB115.5 billion; the Bank
+managed 17.87 million individual pension accounts, and the pension funds under the Bank's custody totaled
+RMB546.2 billion. The Bank continued to lead other banks in terms of the scale of enterprise annuity funds under the
+Bank's trusteeship, number of individual enterprise annuity accounts and enterprise annuity funds under the Bank's
+custody.
+Financial Market Business
+Money Market Activities
++
+Investment
++
+4
+With respect to RMB bond investment, the Bank responded to the significant decline of yields in the bond market with
+a suite of actions to raise the return on investment; the Bank actively supported the development of the real economy
+and enterprises' financing needs, and enlarged the proportion of new investments in unsecured bonds of non-financial
+enterprises; the Bank also invested in the Credit Risk Mitigation Warrants which were supportive of private enterprise
+financing and the market's first special-purpose bond for easing financing difficulties of private enterprises.
+In terms of foreign-currency bond investment, the Bank, in the face of the unfavorable situation that the US Federal
+Reserve's interest rate increase caused the foreign-currency capital cost to rise and the bond portfolio's net interest
+margin to narrow, managed the foreign-currency bond portfolio with greater efforts, strictly controlled the portfolio
+duration during the interest rate hike cycle, strengthened the investment in bond products with good credit quality
+and liquidity, and actively increased allocations at the phased high point of the yield to improve the overall rate of
+return of the investment portfolio.
+Annual Report 2018
+33
+The Bank took the following actions in the RMB money market: strengthening fund operation and acting as an
+active lender to the market through reasonable arrangement of business type, maturity and customer structure, and
+enhancing the efficiency of fund operation; facilitating the innovation-driven development of business, participating
+in the first batch of interbank lending night deals in RMB, and expanding the nighttime financing channels of cross-
+border payment and settlement accounts; and actively taking part in the online transaction pilot of non-settlement
+interbank deposit of the National Interbank Funding Center to retain the advantage of firstly debuting the business.
+In relation to the foreign exchange money market: the Bank conducted an in-depth analysis into the market trends,
+scaled up the volume of foreign-currency interbank deposit at an appropriate time, and increased the yield from
+fund operation; engaged actively in deposit business of domestic non-banking institutions to increase the customer
+number and business volume; broadened the operation channels of foreign-currency funds, invested creatively in USD-
+denominated certificates of deposit, expanded the interbank deposit business in non-USD currencies, and continuously
+enhanced the market-making capacity in the domestic interbank deposit market.
+Financing
+Precious Metal Business
+The asset securitization business effectively supported the Bank's revitalization of stock assets and optimization of
+credit structure. In 2018, the Bank issued 26 tranches of credit asset securitization programs totaling RMB216.8 billion
+in the mainland. Specifically, there were 16 tranches of residential mortgage securitization programs worth
+RMB204.2 billion in aggregate, six tranches of non-performing personal loans securitization programs worth
+RMB5.9 billion, three tranches of non-performing credit card asset securitization programs worth RMB1.2 billion, and
+one tranche of corporate loan asset securitization program worth RMB5.5 billion.
+Discussion and Analysis
++
+Asset Securitization Business
+In the area of bond agent trading and settlement business, the Bank established agency trading relationships
+with nearly 200 institutional customers from 39 countries and regions. And the Bank has also won the "Excellent
+Settlement Agent Award" granted by China Central Depository & Clearing Co., Ltd. and "Contribution Award for
+Opening up: Excellent Settlement Agent" granted by National Interbank Funding Center. Meanwhile, the Bank
+continued to promote innovation in the over-the-counter ("OTC") bond business, and cooperated with China
+Development Bank in the distribution of two tranches of OTC poverty-alleviation bonds, based on which the Bank
+received the "Excellent Institution Award for Over-the-counter Debt Business" from China Central Depository &
+Clearing Co., Ltd.
+In actively serving the people's well-being, the Bank offered an all-dimensional and one-stop pension management
+service for all enterprises and public institutions, continuing to be the biggest pension service provider in China. It
+tailor-made the "Ruyi Pension Management" collective enterprise annuity plan products for over 7,000 small and
+medium enterprises and introduced innovation management means to reduce the management fees.
++ In the aspect of franchise foreign exchange settlement and sales and foreign exchange trading, the Bank continued
+to diversify the currencies and business types in active response to the government's Belt and Road Initiative and with
+a focus on serving the real economy. At the end of 2018, the Bank offered 33 currencies for Sale and Purchase of
+Foreign Currencies Against RMB, and close to 90 currencies for foreign exchange trading and Non-Deliverable Forward
+("NDF"). The volume of franchise foreign exchange settlement and sales hit USD449.9 billion in 2018. The trading in
+currencies of countries along the Belt and Road and the emerging markets grew by 63.2% compared with last year.
+With respect to paper commodities trading, the Bank launched targeted marketing strategy to widen the customer
+base; it strengthened business innovation and function optimization and launched the mock-account trading function
+at all channels including internet banking, mobile banking and ICBC financial trading application to increase the
+activeness of paper commodities trading business and its reputation in the market. In 2018, paper commodities
+trading business registered a transaction value of RMB587.1 billion, increasing by 42.8% compared with last year.
+In regard to corporate commodities trading, the Bank kept diversifying the trading business products and further
+consolidated the competitive edges in corporate commodities trading; it constantly improved the functions of the
+corporate commodities trading system and endeavored to satisfy the demands of corporate customers from different
+dimensions, e.g. expertise, timeliness and convenience, thus further enhancing the customer service capabilities.
+Franchise Treasury Business
+For details on the Bank's CDs and debt securities issued, please refer to "Notes to the Financial Statements: 33.
+Certificates of Deposit; 35. Debt Securities Issued".
+In line with its fund operation and liquidity management needs, the Bank reasonably arranged the scale and structure
+of liabilities including interbank borrowing, structured deposits and large-denomination CDs in order to enhance the
+supporting capacity of diverse liabilities to asset business growth.
++
++
+ICBC (Brasil), a wholly-owned subsidiary of the Bank in Brazil, has a paid-up capital of BRL202 million. ICBC (Brasil) offers
+commercial banking and investment banking services such as deposit, loan, trade finance, international settlement, fund
+transaction, franchise wealth management and financial advisory. At the end of 2018, ICBC (Brasil) recorded total assets of
+USD384 million and net assets of USD56 million. It generated a net profit of USD0.20 million during the year.
+ICBC FINANCIAL ASSET INVESTMENT CO., LIMITED
+ICBC-AXA, a subsidiary of the Bank, has a paid-up capital of RMB12,505 million, in which the Bank holds a 60% stake.
+ICBC-AXA engages in a variety of insurance businesses such as life insurance, health insurance and accident insurance, and
+re-insurance of these businesses, businesses in which use of insurance capital is permitted by laws and regulations of the
+State, and other businesses approved by the CBIRC. At the end of 2018, ICBC-AXA recorded total assets of RMB119,041
+million and net assets of RMB13,468 million. It generated a net profit of RMB94 million during the year.
+ICBC-AXA ASSURANCE CO., LTD.
+ICBC Leasing, a wholly-owned subsidiary of the Bank, has a paid-up capital of RMB18.0 billion. It mainly operates the
+financial leasing of large-scale equipment in critical fields such as aviation, shipping, energy and power, rail transit and
+equipment manufacturing. It also engages in various financial and industrial services including leased assets trading,
+securitization of investment assets, assets management and economic consulting. At the end of 2018, ICBC Leasing
+recorded total assets of RMB271,504 million and net assets of RMB32,572 million, and generated a net profit of RMB3,215
+million during the year.
+ICBC FINANCIAL LEASING CO., LTD.
+ICBC Credit Suisse Asset Management, a subsidiary of the Bank, has a paid-up capital of RMB200 million, in which the Bank
+holds an 80% stake. It mainly engages in fund placement, fund distribution, asset management and such other businesses
+as approved by CSRC, and owns many business qualifications including mutual fund, QDII, enterprise annuity, specific asset
+management, domestic and overseas investment manager of social security fund, RQFII, insurance asset management,
+non-listed asset management, occupational annuity, manager of basic pension insurance investment. It is one of the fund
+companies with the most comprehensive qualifications in the industry. ICBC Credit Suisse Asset Management (International)
+and ICBC Credit Suisse Investment Management Co., Ltd. are structured under ICBC Credit Suisse Asset Management Co.,
+Ltd. As of the end of 2018, ICBC Credit Suisse Asset Management managed a total of 122 mutual funds and more than
+520 enterprise annuity accounts and segregated management accounts as well as non-listed assets portfolios, with the
+assets under management amounting to RMB1.31 trillion, and recorded total assets of RMB9, 103 million and net assets of
+RMB7,801 million. It generated a net profit of RMB1,496 million during the year.
+ICBC CREDIT SUISSE ASSET MANAGEMENT CO., LTD.
+ICBC (Argentina), a controlled subsidiary of the Bank in Argentina, has a share capital of ARS1,345 million, in which the
+Bank holds an 80% stake. With the full-functional commercial banking license, ICBC (Argentina) provides a full range of
+commercial banking services including working capital loan, syndicated loan, structured financing, trade finance, personal
+loan, auto loan, spot/forward foreign exchange trading, financial markets, cash management, investment banking, bond
+underwriting, asset custody, leasing, international settlement, E-banking, credit card, asset management, etc. At the end of
+2018, ICBC (Argentina) recorded total assets of USD4,785 million and net assets of USD424 million. It generated a net profit
+of USD138 million during the year.
+ICBC Investment, a wholly-owned subsidiary of the Bank, has a registered capital of RMB12.0 billion and is one of the
+first pilot banks in China to conduct debt-for-equity swap authorized by the State Council. It holds the franchise license of
+non-bank financial institution and is mainly engaged in debt-for-equity swap and the supporting business. In 2018, ICBC
+Investment became the first licensed private equity fund manager to carry out debt-for-equity swap, and it established a
+private equity fund management subsidiary - ICBC Capital Management Co., Ltd. At the end of 2018, ICBC Investment
+recorded total assets of RMB43,307 million and net assets of RMB13,065 million. It generated a net profit of RMB550 million
+during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ARGENTINA) S.A.
+Discussion and Analysis
+Annual Report 2018
+ICBC (Peru), a wholly-owned subsidiary of the Bank in Peru, has a paid-up capital of USD100 million. Holding a full-functional
+commercial banking license, ICBC (Peru) offers corporate deposit, loan, financial leasing, international settlement, trade
+finance, foreign exchange trading, E-banking and other services. At the end of 2018, ICBC (Peru) recorded total assets of
+USD291 million and net assets of USD75 million. It suffered a net loss of USD1.09 million during the year.
+ICBC PERU BANK
+Major Domestic Subsidiaries
+43
+Annual Report 2018
+ICBC
+The Bank enhanced the efficiency and effectiveness of human resources allocation and perfected the talent
+introduction & cultivation mechanism. The 2018-2020 Human Resources Plan of Industrial and Commercial Bank of
+China was developed to strengthen headcount control and staffing optimization. It worked on the building of serial
+brands, e.g. the "ICBC Star Sailor" summer internship program and the "ICBC Star" campus recruitment plan, and
+strengthened the social recruitment of locals for county-based institutions; it intensified the vertical and horizontal
+exchanges and training of management talent; it furthered the optimization of post setup and labor combination at
+outlets, and gained higher efficiency in human resources use of outlets; it constructed a cultivation & growth system
+with the characteristics of ICBC for new entrants; it reinforced the integrated management of foreign employees
+across the Group, and organized the selection and commendation of "Honorary Global Employees". The Bank
+perfected the compensation incentive and guarantee system, and made the use of human resources more effective.
+The organizational structure was constantly optimized. The Bank launched institutional reform of the IT line, merging
+IT Department and Product Innovation Management Department into FinTech Department and merging Data
+Center (Beijing) and Product R&D Center into Business R&D Center. It pushed ahead the human resources reform of
+profitability units, and accelerated the construction of inclusive financial departments at tier-two branches.
+4
++
+Human Resources Management
+Discussion and Analysis
+45
+In 2018, the Bank was granted 43 patents, and the total number of patents owned by the Bank increased to 549,
+including 270 patents for inventions granted by the state and 279 patents for utility model and product design patents
+granted by the state. 2018 marked the fifth consecutive year for the Bank to rank the first in the banking industry in
+the information technology supervisory rating of CBIRC. The Bank had six scientific and technological achievements
+that won the Banking Technological Development Award of PBC and four research findings that won the IT Risk
+Management Research Project Award of CBIRC. The "ICBC Smart and Future Bank" project received the highest
+honor SAIL award from the 2018 Artificial Intelligence World Innovations Competition.
+Production and operation of the whole group were put under stronger management. The Bank put the new-
+generation dual-active architecture of the host into operation and completed its switch and verification, realizing zero
+loss of system-level data and providing more safeguards for the business continuity of the host system. Information
+systems of the whole bank ran smoothly. The Bank consolidated the information security system. It continued
+to improve the information security operation platform (SOC), built an IT big data platform, and provided data
+foundation for security monitoring. It promoted the new-generation document security protection system and was the
+first in the banking industry to achieve a dynamic defense mechanism based on multi-isomers, which improved the
+protection level of information security technology. The Bank continued to carry out information security inspections,
+perfected the anti-attack drill system, and strengthened the day-to-day management and guidance of domestic and
+overseas institutions in terms of information security. Authoritative third parties were engaged to conduct special
+inspections and safety assessments on relevant systems.
+The Bank spurred innovative R&D in key business areas. It realized smart retail service functions of ICBC e-Loan
+including "Credit Granting in Seconds", "Loan Extension in Seconds" and "Payment in Seconds", and premiered
+online and flexible corporate banking services including "Quick Lending for Operation", "Online Revolving Loan" and
+"Online Supply Chain". The development of systems for internationalization and diversification was advanced. The
+Bank completed the roll-out of the core system of FOVA platform version at Manila Branch and ICBC Austria, launched
+the global version of personal mobile banking and other featured products, and improved the core personal insurance
+business system of ICBC-AXA and the investment banking project management system of ICBC International.
+The Ecosystem development project kicked off. With the integration and development of major business architectures
+and the introduction of an open new account service system across all regions and all media, deposit products could
+be configured flexibly and quickly. In-depth IT architecture transformation was launched, completing the migration
+of e-Payment and other hot business functions from host to open platforms; service transformation of applications
+was carried out, with distributed transformation in applications such as Quick Payment. The Bank promoted the cloud
+platforms in an all-round way and effectively realized the rational layout of system resources. While optimizing the
+layout of applications at the Head Office and branches, the Bank completed centralized deployment of applications
+such as self-service terminals, centralized business processing and operation management of outlets. The Bank found
+wider applications of artificial intelligence technology in scenarios like transaction anti-fraud and product precision
+marketing and of face recognition technology in fields such as ATM money withdrawal, business payment and social
+security fund collection. It relied on the internet of things technology to create a smart vault management application
+model and on the blockchain technology to realize the transparent and efficient management of the "1000-year
+Afforestation" and relocation funds in Xiongan New Area.
+Information Technology
+Standard Bank is the largest commercial bank in Africa. Its scope of business covers commercial banking, investment
+banking, life insurance business and other areas. The Bank holds 20.08% ordinary shares of Standard Bank. Based on mutual
+benefit and win-win cooperation, the two sides furthered their cooperation in equity cooperation, customer expansion,
+project financing, product innovation, risk management, IT and people-to-people exchange. At the end of 2018, Standard
+Bank recorded total assets of ZAR2,126,962 million and net assets of ZAR199,063 million. It generated a net profit of
+ZAR27,453 million during the year.
+STANDARD BANK GROUP LIMITED
+Majority Equity Participation Company
+Discussion and Analysis
+44
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (BRASIL) S.A.
+ICBC (Almaty), a wholly-owned subsidiary of the Bank, was incorporated in Kazakhstan with a share capital of KZT8,933
+million. It principally engages in commercial banking services such as deposit, loan, international settlement and trade
+finance, foreign currency exchange, guarantee, account management, internet banking and bank card service. At the end
+of 2018, ICBC (Almaty) recorded total assets of USD429 million and net assets of USD61 million. It generated a net profit of
+USD11.39 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA MEXICO S.A.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (EUROPE) S.A.
+ICBC (New Zealand), a wholly-owned subsidiary of the Bank in New Zealand, has a paid-up capital of NZD234 million. ICBC
+(New Zealand) provides corporate and personal banking services such as account management, transfer and remittance,
+international settlement, trade finance, corporate credit, residential mortgages and credit card business. At the end of 2018,
+ICBC (New Zealand) recorded total assets of USD1,432 million and net assets of USD157 million. It generated a net profit of
+USD1.7 thousand during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (NEW ZEALAND) LIMITED
+Discussion and Analysis
+41
+Annual Report 2018
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ALMATY) JOINT STOCK COMPANY
+ICBC (Europe), a wholly-owned subsidiary bank of the Bank, was incorporated in Luxembourg with a paid-up capital of
+EUR437 million. Paris Branch, Amsterdam Branch, Brussels Branch, Milan Branch, Madrid Branch and Warsaw Branch are
+structured under ICBC (Europe), which mainly offers financial services including loan, trade finance, settlement, treasury,
+investment banking, custody, franchise wealth management, etc. At the end of 2018, ICBC (Europe) recorded total assets of
+USD7,851 million and net assets of USD729 million. It generated a net profit of USD8.71 million during the year.
+ICBC (Thai), a subsidiary of the Bank in Thailand, has a share capital of THB20,132 million, in which the Bank holds a 97.86%
+stake. ICBC (Thai) holds a comprehensive banking license and provides various services including deposit, loan, trade finance,
+remittance, settlement, leasing and consulting. At the end of 2018, ICBC (Thai) recorded total assets of USD7,019 million and
+net assets of USD893 million. It generated a net profit of USD58.94 million during the year.
+ICBC (Malaysia) is a wholly-owned subsidiary of the Bank established in Malaysia. With a paid-up capital of MYR833 million,
+it is able to provide a full range of commercial banking services. At the end of 2018, ICBC (Malaysia) recorded total assets of
+USD1,162 million and net assets of USD266 million. It generated a net profit of USD18.96 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (MALAYSIA) BERHAD
+ICBC (Indonesia) is a full-licensed commercial banking subsidiary of the Bank registered in Indonesia, with a paid-up capital
+of IDR3.69 trillion, in which the Bank holds a 98.61% stake. ICBC (Indonesia) mainly specializes in financial services such as
+deposit, loan, trade finance, settlement, agency services, interbank borrowing and lending and foreign exchange. At the end
+of 2018, ICBC (Indonesia) recorded total assets of USD3,714 million and net assets of USD370 million. It generated a net
+profit of USD27.69 million during the year.
+PT. BANK ICBC INDONESIA
+ICBC (Macau) is the largest local legal banking entity in Macau. It has a share capital of MOP589 million, in which the Bank
+holds an 89.33% stake. ICBC (Macau) mainly engages in comprehensive commercial banking services such as deposit, loan,
+trade finance and international settlement. At the end of 2018, ICBC (Macau) recorded total assets of USD38,517 million
+and net assets of USD2,837 million. It generated a net profit of USD315 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (MACAU) LIMITED
+The efficiency and effectiveness of training were improved in an innovative way. The 2018-2020 Education and
+Training Program of Industrial and Commercial Bank of China was developed. With a focus on building a bank in
+which people enjoy learning and centering around the Group's business transformation and growth and employees'
+needs, the Bank made an overall arrangement for and optimized the trainings of management personnel, professionals
+and frontline employees at the basic level, and brought the role of strategy transmission, discussion & exchange,
+problem-solving and learning & sharing platforms into better play. Mainly for the purpose of solving problems, the
+Bank explored the training for better performance and realized the deep integration of training and strategy. The
+Bank customized trainings for domestic and overseas branches, and deepened the reform of professional qualification
+certification. Throughout 2018, the Bank organized 45 thousand sessions of training for 5.24 million persons, with an
+average of 10.4 days per person.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (THAI) PUBLIC COMPANY LIMITED
+ICBC (Mexico), a wholly-owned subsidiary of the Bank in Mexico, has a paid-up capital of MXN1,597 million. Holding a full-
+functional commercial banking license, ICBC (Mexico) offers corporate deposit, loan, international settlement, trade finance,
+foreign exchange trading and other services. At the end of 2018, ICBC (Mexico) recorded total assets of USD286 million and
+net assets of USD71 million. It generated a net profit of USD30 thousand during the year.
+ICBC (LONDON) PLC
+ICBC STANDARD BANK PLC
+ICBC (Canada) is a subsidiary of the Bank in Canada with a paid-up capital of CAD158.00 million, in which the Bank holds
+an 80% stake. Holding a full-functional commercial banking license, ICBC (Canada) provides corporate and retail banking
+services such as deposit, loan, settlement and remittance, trade finance, foreign exchange trading, funds clearing, cross-
+border RMB settlement, RMB currency notes, cash management, E-banking, bank card and investment and financing
+information consulting service. At the end of 2018, ICBC (Canada) recorded total assets of USD1,445 million and net assets
+of USD202 million. It generated a net profit of USD20.73 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (CANADA)
+ICBCFS, a wholly-owned subsidiary of the Bank in the United States, has a paid-up capital of USD50.00 million. It mainly
+specializes in securities clearing business in Europe and America, and offers securities brokerage services including securities
+clearing and financing for institutional customers. At the end of 2018, ICBCFS recorded total assets of USD27,142 million
+and net assets of USD132 million. It suffered a net loss of USD21.68 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA FINANCIAL SERVICES LLC
+ICBC (USA), a controlled subsidiary of the Bank in the United States, has a paid-up capital of USD369 million, in which the
+Bank holds an 80% stake. Holding a full-functional commercial banking license registered in the UFIQAC, ICBC (USA) is a
+member of Federal Deposit Insurance Corporation, providing corporate and retail banking services such as deposit, loan,
+settlement and remittance, trade finance, cross-border settlement, cash management, E-banking and bank card services. At
+the end of 2018, ICBC (USA) recorded total assets of USD2,893 million and net assets of USD418 million. It generated a net
+profit of USD25.15 million during the year.
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (USA) NA
+ICBC (Austria), a wholly-controlled subsidiary of the Bank in Austria, has a share capital of EUR100 million. It was licensed
+by the European Central Bank in August 2018 and got through local registration in November. ICBC (Austria) provides
+financial services such as corporate deposits, loans, trade finance, international settlement, cash management, cross-border
+RMB business, foreign exchange transactions, and financial advisory for cross-border investment and financing. At the end of
+2018, ICBC (Austria) recorded total assets of USD114 million and net assets of USD114 million.
+ICBC (London), a wholly-owned subsidiary of the Bank, was incorporated in the United Kingdom with a paid-up capital of
+USD200 million, It provides banking services such as deposit and exchange, loan, trade finance, international settlement,
+funds clearing, agency, foreign exchange trading and retail business. At the end of 2018, ICBC (London) recorded total assets
+of USD2,378 million and net assets of USD423 million. It generated a net profit of USD25.42 million during the year.
+ICBC AUSTRIA BANK GmbH
+42
+ICBC
+ICBC (Turkey), a subsidiary of the Bank in Turkey, has a share capital of TRY860 million, in which the Bank holds a 92.84%
+stake. It holds commercial banking, investment banking and asset management licenses, and provides corporate customers
+with comprehensive financial services including deposit, project loan, syndicated loan, trade finance, small and medium-
+sized enterprise loan, investment and financing advisory, securities brokerage and asset management, and renders personal
+customers with financial services such as deposit, consumption loan, residential mortgages, credit card and E-banking. At the
+end of 2018, ICBC (Turkey) recorded total assets of USD3,011 million and net assets of USD228 million. It generated a net
+profit of USD15.63 million during the year.
+ICBC TURKEY BANK ANONIM ŞIRKETI
+Bank ICBC (JSC), a wholly-owned subsidiary of the Bank, was incorporated in Russia with a share capital of RUB10,810
+million. It mainly provides a full spectrum of corporate banking services including corporate and project loan, trade finance,
+deposit, settlement, securities brokerage, custody, franchise treasury business and securities trading, foreign currency
+exchange, global cash management, investment banking and corporate financial consulting, as well as personal banking
+services. At the end of 2018, Bank ICBC (JSC) recorded total assets of USD929 million and net assets of USD175 million. It
+generated a net profit of USD11.00 million during the year.
+BANK ICBC (JOINT STOCK COMPANY)
+ICBC Standard Bank, a subsidiary of the Bank in the United Kingdom, has an issued share capital of USD1,083 million, in
+which the Bank holds a 60% stake directly. ICBC Standard Bank mainly provides global commodity trading businesses such as
+base metals, precious metals, commodities and energy as well as global financial markets businesses such as exchange rate,
+interest rate, credit and equity. At the end of 2018, ICBC Standard Bank recorded total assets of USD24,575 million and net
+assets of USD1,258 million. It suffered a net loss of USD14.78 million during the year.
+Discussion and Analysis
+The leading role of corporate culture was brought into play. The Bank compiled and issued the Corporate Culture
+White Paper, enriched the core value concept of "Integrity Leads to Prosperity", released the core concept of
+"focusing on the source, changing with the times, pursuing innovation with collaboration and retaining permanent
+vitality" for innovation culture, and advocated the "fighter + doer" culture. With a focus on the theme of "ONE ICBC,
+ONE FAMILY", the Bank held a special exhibition on corporate cultures of overseas institutions, and rolled out the
+Phase II of "That's China •That's ICBC" project in a bid to increase cultural integration of overseas institutions. The
+Bank staged an exhibition of grassroots culture "That's ICBC That's we" to inform outlets and customers of the
+excellent cultural concept and showcase the hard-working glamor of employees.
+Primary reporting line
+Secondary reporting line
+ICBC
+First line of defense
+At the level of the Board of Directors
+At the level of Head Office
+At the level of branches
+Internal Audit Sub-bureau
+Internal Audit Bureau
+Operational Risk
+Management Committee
+Market Risk
+Management Committee
+Credit Risk
+Management Committee
+Risk management departments and internal control &
+compliance departments of branches and subsidiaries
+Senior management of subsidiaries
+branches and subsidiaries
+Business departments of
+Management of Branches
+Risk Management
+Committee
+Second line of defense
+ICBC International, a licensed integrated platform for financial services in Hong Kong that is wholly owned by the Bank, has
+a paid-up capital of HKD4,882 million. It mainly renders a variety of financial services, including corporate finance, investment
+management, sales and trading, and asset management. At the end of 2018, ICBC International recorded total assets of
+USD8,175 million and net assets of USD1,112 million. It generated a net profit of USD196 million during the year.
+Third line of defense.
+Risks not mentioned above have been incorporated
+into the enterprise risk management system.
+ICBC
+48
+The Bank emphasized the leading role of credit policy. Focusing on the coordinated regional development strategy, the
+Bank gave priority to the Guangdong-Hong Kong-Macau Greater Bay Area, Xiongan New Area, and three supporting
+belts, provided investment and financing support for major projects, projects for people's wellbeing and projects under
+construction in such key areas as transportation, infrastructure and public service. In a stage of working faster to build China
+into a manufacturer of quality, the Bank supported advanced manufacturing in picking up pace and traditional industries in
+upgrading themselves to foster new drivers of growth. It also kept a firm hold on the projects in healthcare, education, elderly
+care, tourism, culture and other modern service industries to keep up with people's needs for a better life.
+The Bank continued to strengthen the constitution of the credit policy system. It improved the customer-centered credit
+risk management system to push ahead with unified credit risk management of the Group. Further advances have also
+been made in regulating credit businesses pledged by high-quality financial assets, and those guaranteed by high-quality
+financial institutions and sovereign entities. The Bank improved credit risk management framework for financial institutions
+to strengthen credit risk management of financial institutions; intensified off-balance sheet business management to further
+regulate discounted commercial acceptances and better manage loan commitments of corporate customers; upgraded policies
+concerning the guarantee system, and fully implemented regulatory requirements on financing guarantee institutions to
+strengthen management of such institutions.
+◆ Credit Risk Management of Corporate Loans
+According to the regulatory requirement on loan risk classification, the Bank implemented five-category classification
+management in relation to loan quality and classified loans into five categories: pass, special mention, substandard, doubtful
+and loss, based on the possibility of collecting the principal and interest of loans. In order to implement sophisticated
+management of credit asset quality and improve risk management, the Bank implemented the twelve-category internal
+classification system for corporate loans. The Bank applied five-category classification management to personal credit assets
+and ascertained the category of the loans based on the number of months in default, anticipated loss rate, credit rating,
+collateral and other quantitative and qualitative factors.
+The Bank's credit risk management has the following characteristics: (1) Unified risk appetite. Unified credit risk appetite is
+implemented for the Bank's credit risk exposures; (2) Entire-process management. The credit risk management covers the
+entire process including customer investigation, credit rating, loan evaluation, loan review and approval, loan payment and
+post-lending monitoring; (3) System management. It continues to enhance the building of credit information system, and
+improve the tools to manage and control credit risk; (4) Strict management over credits. Strict qualification management is
+enforced on the business institutions and the credit practitioners; and (5) The special institution is set up to conduct unified
+risk monitoring over credit risk businesses.
+Asset & Liability
+Management Committee
+The Bank strictly adheres to regulatory requirements regarding credit risk management, diligently fulfills established
+strategies and objectives under the leadership of the Board of Directors and the Senior Management, and implements
+an independent, centralized and vertical credit risk management mode. The Board of Directors assumes the ultimate
+responsibility for the effectiveness of credit risk management. The Senior Management is responsible for executing the
+strategies, overall policy and system regarding credit risk management approved by the Board of Directors. The Credit Risk
+Management Committee of the Senior Management is the reviewing and decision-making organ of the Bank in respect of
+credit risk management, is responsible for reviewing material and important affairs of credit risk management, and performs
+its duty in accordance with the Working Regulations for the Credit Risk Management Committee. The credit and investment
+management departments at different levels undertake the responsibility of coordinating credit risk management at
+respective levels, and the business departments implement credit risk management policies and standards for their respective
+business areas in accordance with their functions.
+Credit Risk Management
+Credit Risk
+prudent liquidity management strategy, the Bank continued to consolidate the foundation of liquidity risk management system. It better
+employed operational risk management tools, strengthened data quality management, made continuous efforts to manage risks in key
+areas and links, and deepened risk management of the wealth management business in line with the New Rules on Asset Management.
+Discussion and Analysis
+47
+Annual Report 2018
+In 2018, the Bank continued to push for development of the enterprise risk management system, upgraded risk management
+technologies and methods and enhanced the capacity of risk pre-judgment and dynamic adjustment capabilities, so as to make
+enterprise risk management more forward-looking and effective. It improved the enterprise risk management system, established
+a hierarchy risk appetite management system, intensified risk limit management, and enhanced effective risk data aggregation and
+risk reporting on all fronts according to the latest regulatory requirements. The Group's investment and financing risk monitoring
+platform was put in place to better manage cross risks, and the consolidated risk management of the Group was improved to boost
+the risk management capability of non-banking subsidiaries and strengthen regional risk management of overseas institutions. The
+Bank continued to upgrade its risk measurement system for better application, actively advanced FinTech application such as big
+data, improved internal rating and anti-fraud models, and enhanced risk measurement for higher accuracy and stability. It promoted
+the application of internal rating in the credit risk management. The Group's capabilities for market risk management and forward-
+looking analysis were improved to strengthen monitoring over transactions. Advances were also made in the system and mechanism for
+interest rate risk management of the banking book, with further improved strategies, policies and procedures. Following a steady and
+Credit risk is the risk where loss is caused to the banking business when the borrower or counterparty fails to meet its
+contractual obligations. The Bank's credit risks mainly originate from loans, treasury operations (including due from banks,
+placements with banks, reverse repurchase agreements, corporate bonds and financial bonds investment), receivables and
+off-balance sheet credit business (including guarantees, commitments and financial derivatives trading).
+Board of directors of subsidiaries
+Legal Affairs Department
+Legal risk
+Department
+Global Market
+Bank Card
+Department
+Department
+Institutional Banking.
+Personal Banking
+Department
+: Department
+Board of Directors
+Corporate Banking
+Chief Risk Officer
+Senior Executive
+Vice Presidents
+The Bank's organizational structure of risk management comprises the Board of Directors and its special committees, the
+Board of Supervisors, the Senior Management and its special committees, the risk management departments, the internal
+audit departments, etc. The risk management organizational structure is illustrated below:
+Enterprise risk management is a process to effectively identify, assess, measure, monitor, control or mitigate and report risks
+in order to ensure the realization of the Group's operating and strategic objectives by setting up effective and balanced risk
+governance structure, fostering robust and prudent risk culture, formulating unified risk management strategies and risk
+appetite, and implementing the risk limit and risk management policies. The principles of enterprise risk management of the
+Bank include full coverage, matching, independence, perspectiveness and effectiveness, etc.
+Enterprise Risk Management System
+Discussion and Analysis
+RISK MANAGEMENT
+Business departments
+46
+President
+Risk Management Committee
+Office of Steering Group
+for Deepening Reform
+Strategic risk
+Executive Office
+Reputational risk
+Operational risk, compliance risk Compliance Department
+Internal Control &
+Asset & Liability
+Management Department
+Board of Supervisors
+Credit and Investment
+Management Department
+Liquidity risk, interest rate risk
+in the banking book
+Credit risk
+Enterprise risk, market risk,
+country risk
+the Board of Directors
+Risk committee for
+institutions in the US
+of the Board of Directors
+Audit Committee of
+Risk Management
+Department
+ICBC INTERNATIONAL HOLDINGS LIMITED
+E
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ASIA) LIMITED
+3
+Bank ICBC (JSC) (Russia)-
+ICBC Standard Bank (UK).
+1
+London Branch (UK)
+1
+ICBC (London) (UK)---
+1
+Warsaw Branch (Poland)-
+Madrid Branch (Spain)-
+2
+Milan Branch (Italy)------
+2
+Brussels Branch (Belgium) -
+(the Netherlands)-
+ICBC Turkey (Turkey)-
+47
+Prague Branch
+(Czech Republic)-
+Number of
+Institution
+8
+ICBC (Canada) (Canada)
+1
+ICBCFS (USA)
+16
+Amsterdam Branch
+ICBC (USA) (USA)-
+Asia-Pacific Region (except
+E
+1
+New York Branch (USA)-
+ICBC (Austria) (Austria)
+1
+Zurich Branch (Switzerland)-
+Hong Kong and Macau)
+1
+Paris Branch (France)·
+1
+E
+ICBC
+40
+39
+Annual Report 2018
+The establishment of ICBC Wealth Management Co., Ltd. was approved by the CBIRC. Please refer to the section
+headed "Significant Events - Establishment of Wealth Management Subsidiary" for details.
+ICBC Investment actively and steadily promoted the market-oriented debt-for-equity swap business, and led the
+industry in terms of the scale of annual new investment projects. To address the diversified demands of enterprises for
+deleveraging, ICBC Investment innovated business development models, and launched a suite of projects setting good
+examples in the aspects of industry, region and project model.
+E
+ICBC International registered a stable performance and good growth momentum in operating efficiency, asset quality
+and risk management, and its four major businesses, i.e. investment banking, sales and transaction, investment
+management and asset management developed at a high quality. The IPO business underwriting amount was the third
+largest in the Hong Kong main board market; with steady progress in bond underwriting business, ICBC International
+ranked the first in underwriting of EUR bonds among Chinese peers; and it was an active player in the new economic
+equity investment project sector.
+ICBC Credit Suisse Asset Management strictly enforced regulatory requirements, continuously strengthened investment
+research and risk control capabilities, aligned itself with policy guidance and customer needs, deepened coordination
+with the Group, seized new opportunities in pension business, and steadily promoted the development of mutual
+funds and other entrusted investment management businesses. In return, its operation remained stable on the whole.
+ICBC Leasing supported the real economy, promoting the steady development of aviation and shipping leasing
+business, and deepened coordination with the Group, stepping up the efforts to shift the equipment leasing business
+to high-end manufacturing, green energy, infrastructure construction, and other sectors. It laid a solid foundation for
+risk management and control, and meanwhile accelerated the conversion and disposal of risk assets. ICBC Leasing
+successfully increased its registered capital with the retained profit of RMB7.0 billion, and thus became a financial
+leasing company with the largest registered capital in China. On 28 March 2018, ICBC Aviation Leasing Company
+Limited, a wholly-owned subsidiary of ICBC Leasing, was officially established in Hong Kong, which brought the Bank's
+specialized operation in aviation leasing to a new stage.
++
++
+4
+Diversified Operation
+As at the end of 2018, total assets of overseas institutions (including overseas branches, subsidiaries and investments
+in Standard Bank) of the Bank were USD384,304 million, an increase of USD25,707 million or 7.2% from the end of
+the previous year, and they accounted for 9.5% of the Group's total assets, increasing by 0.5 percentage points. Profit
+before tax during the reporting period came in at USD4,115 million, representing an increase of USD197 million or
+5.0% as compared to last year and accounting for 7.6% of the Group's profit before tax, which was 0.6 percentage
+points higher. Total loans amounted to USD207,591 million, and total deposits were USD130,964 million, increasing
+by USD7,867 million or 6.4%.
+Discussion and Analysis
+ICBC-AXA deepened its business structure transformation, and vigorously promoted the development of health
+insurance business; seized the opportunity of personal income tax-deferred endowment policy, and was successfully
+enlisted under the list of companies piloting the tax-deferred endowment products; and was permitted to establish
+ICBC-AXA Asset Management Co., Ltd., the first insurer-affiliated asset management joint venture approved to
+establish in China.
+ICBC (Mexico) (Mexico).
+⑤
+Discussion and Analysis
+1
+(Luxembourg)
+Luxembourg Branch
+institutions
+(country/region)
+Number of
+Institution
+E
+®
+Frankfurt Branch (Germany) -------5
+institutions
+Number of
+(country/region)
+Institution
+Europe
+DISTRIBUTION MAP OF OVERSEAS INSTITUTIONS
+America
+ICBC (Asia) is a wholly-owned Hong Kong registered bank by the Bank, and has an issued share capital of HKD36,379 million.
+It provides comprehensive commercial banking services and the major businesses, including commercial credit, trade finance,
+investment service, retail banking, e-banking, custody, credit card, receiving bank services for IPOs and dividend distribution
+etc. At the end of 2018, ICBC (Asia) recorded total assets of USD114,258 million and net assets of USD14,982 million. It
+generated a net profit of USD1,057 million during the year.
+1
+institutions
+(Hong Kong, China).
+institutions
+1
+1
+Dubai (DIFC) Branch (UAE)-
+Abu Dhabi Branch (UAE).
+Hong Kong Branch
+Number of
+institutions
+(country/region)
+(South Africa).
+Investments in Standard Bank
+(South Africa)
+(country/region)
+Institution
+Africa
+African Representative Office
+1
+Doha Branch (Qatar)---
+1
+ICBC (Asia) (Hong Kong, China)-70
+♦ Overseas Subsidiaries
+Controlled Subsidiaries and Major Equity Participating Company
+Discussion and Analysis
+1
+(New Zealand)-
+ICBC (New Zealand)
+ICBC (Macau) (Macau, China) ---- 24
+1
+4
+9
+(Hong Kong, China).
+1
+Kuwait Branch (Kuwait)-
+ICBC International
+1
+Riyadh Branch (Saudi Arabia)-
+Sydney Branch (Australia)-
+(country/region)
+3
+ICBC (Almaty) (Kazakhstan).
+Karachi Branch (Pakistan)-
+Mumbai Branch (India)
+Singapore Branch (Singapore)-
+ICBC (Indonesia) (Indonesia)
+1
+Office (Mongolia)
+Mongolia Representative
+1
+Busan Branch (South Korea)
+----- 120
+11
+ICBC (Argentina) (Argentina)
+Seoul Branch (South Korea).
+1
+ICBC (Peru) (Peru)-
+3
+Tokyo Branch (Japan)--
+1
+ICBC (Brasil) (Brazil)
+3
+2
+20
+6
+Number of
+Hong Kong and Macau
+Institution
+1
+Yangon Branch (Myanmar)-
+1
+Phnom Penh Branch (Cambodia)
+1
+ICBC (Malaysia) (Malaysia) -
+Vientiane Branch (Lao PDR)-
+Ho Chi Minh City Representative
+Office (Vietnam)-
+1
+Hanoi Branch (Vietnam).
+24
+ICBC (Thai) (Thailand).
+1
+Manila Branch (Philippines)
+1
+ICBC (Europe) (Luxembourg)-
+12.1
+6,250
+As at the end of 2018, the allowance for impairment losses on loans stood at RMB413,177 million, of which RMB412,731
+million at amortised cost, and RMB446 million at fair value through other comprehensive income. Allowance to NPLs was
+175.76%, showing an increase of 21.69 percentage points; allowance to total loans ratio was 2.68%, showing an increase
+of 0.29 percentage points.
+1.30
+2,512,303
+17.7
+38,628
+1.54
+Northeastern China
+759,140
+4.9
+25,186
+3.32
+734,343
+5.2
+19,596
+2.67
+Overseas and others
+Total
+1,578,574
+15,419,905
+10.2
+8,725
+0.55
+1,519,096
+10.7
+7,415
+0.49
+100.0
+235,084
+1.52
+14,233,448
+100.0
+220,988
+35,572
+1.55
+17.7
+Western China
+27,955
+1.08
+Pearl River Delta
+2,072,857
+13.4
+30,480
+1.47
+1,896,063
+13.3
+32,878
+1.73
+Bohai Rim
+2,524,307
+16.4
+54,489
+2.16
+2,339,537
+16.4
+46,903
+2.00
+Central China
+2,202,221
+14.3
+36,401
+1.65
+2,003,202
+14.1
+32,911
+1.64
+2,735,901
+18.2
+MOVEMENTS OF ALLOWANCE FOR IMPAIRMENT LOSSES ON LOANS
+Movements of allowance for impairment losses
+on loans and advances to customers measured
+at amortised cost
+24,083
+85,074
+147,374
+173
+0
+(200)
+(27)
+Write-offs and
+(338)
+(2,294) (106,146)
+(108,778)
+transfer out
+Recoveries of loans
+2,141
+2,141
+and advances
+previously written off
+Other movements
+Balance at
+621
+158,084
+646
+(1,871)
+(604)
+2
+2
+81,406
+173,241
+412,731
+198
+38,217
+In RMB millions
+Charge/(reverse)
+(40,413)
+Movements of allowance for impairment losses
+Item
+Stage 1
+Stage 2
+Stage 3
+Total
+Stage 1
+on loans and advances to customers measured
+at FVOCI
+Stage 2 Stage 3
+Total
+Balance at
+107,961
+111,867
+152,770
+372,598
+23
+448
+471
+1 January 2018
+Transfer:
+to stage 1
+19,393
+(17,976)
+(1,417)
+to stage 2
+(4,901)
+5,493
+(592)
+to stage 3
+(2,869)
+43,282
+0
+2,599,171
+24,195
+52,588
+10.78
+568,011
+7.6
+55,366
+9.75
+Construction
+232,736
+2.9
+3,749
+1.61
+223,484
+3.0
+2,856
+1.28
+Mining
+185,313
+2.3
+3,966
+2.14
+208,675
+2.8
+2,998
+1.44
+Science, education,
+170,315
+2.1
+1,461
+0.86
+6.1
+126,906
+488,031
+2.72
+919,768
+11.5
+2,113
+0.23
+900,484
+12.0
+1,407
+0.16
+of electricity, heat,
+gas and water
+Water, environment
+770,221
+9.7
+1,718
+0.22
+655,533
+8.7
+975
+0.15
+and public utility
+management
+Real estate
+592,031
+7.4
+9,823
+1.66
+501,769
+6.7
+13,631
+Wholesale and retail
+0.86
+1.7
+0.67
+DISTRIBUTION OF LOANS AND NPLS BY GEOGRAPHIC AREA
+At 31 December 2018
+In RMB millions, except for percentages
+At 31 December 2017
+Percentage
+NPL
+Percentage
+NPL
+Item
+Loan
+(%)
+NPLs
+ratio (%)
+Loan
+(%)
+NPLs
+ratio (%)
+Head Office
+723,302
+4.7
+20,036
+2.77
+629,733
+4.4
+14,702
+2.33
+Yangtze River Delta
+2,823,603
+18.4
+Discussion and Analysis
+850
+51
+The increase of NPLs in manufacturing was principally due to the decline in operating profits and increase in defaults on
+loans of some enterprises not meeting the high-quality development standards, as well as enterprises with overcapacities.
+The increase of NPLs in transportation, storage and postal services was mainly caused by defaults on loans by some ports,
+shipping enterprises and private-owned highways.
+culture and sanitation
+Lodging and catering
+95,530
+1.2
+4,951
+5.18
+111,047
+1.5
+3,256
+2.93
+Others
+191,146
+2.4
+4,962
+2.60
+191,651
+2.5
+4,142
+2.16
+Total
+7,973,527
+100.0
+186,416
+2.34
+7,523,000
+100.0
+168,903
+2.25
+In 2018, following the keynote of serving the supply-side structural reform, the Bank adhered to the concept of high-quality
+development, focused on major areas and key links in serving the real economy, and continued to improve the industry's
+credit structure. Loans to transportation, storage and postal services increased by RMB178,863 million, representing a
+growth rate of 10.4%, mainly due to efforts in supporting major national strategies and plans, serving the coordinated
+development of the four regions, three supporting belts and the Guangdong-Hong Kong-Macau Greater Bay Area, and
+providing financing support for developing high-speed railways, expressways, urban rail transit, ports, and airports. Loans
+to leasing and commercial services increased by RMB137,876 million, representing a growth rate of 15.1%, mainly
+for supporting the financing needs of projects for people's wellbeing, projects for strengthening areas of weakness in
+infrastructure, and for infrastructure in such strategic planned areas as national new areas, free trade zones, and industrial
+clusters. Loans to water, environment and public utility management increased by RMB114,688 million, representing a
+growth rate of 17.5%, mainly driven by steady efforts in supporting the investment and financing needs of key projects and
+projects for people's wellbeing in new urbanization, environmental protection and public services.
+Annual Report 2018
+Production and supply
+248
+31 December 2018
+(157,647)
+(22,946)
+(206,760)
+(31,753)
+exchange items, net
+Total foreign exchange exposure, net
+170,270
+24,783
+165,115
+25,358
+Please refer to "Note 51. (c)(ii) to the Financial Statements: Currency Risk" for the exchange rate sensitivity analysis.
+Please refer to the section headed "Market Risk" of the 2018 Capital Adequacy Ratio Report of Industrial and Commercial
+Bank of China Limited issued by the Bank for further information on market risk capital measurement.
+Interest Rate Risk in the Banking Book
+Interest rate risk in the banking book is defined as the risk of loss in the economic value and overall profit of the banking
+book arising from adverse movements in interest rate and maturity structure, etc.
+Management of Interest Rate Risk in the Banking Book
+In 2018, upholding a steady and prudent risk appetite, the Bank heightened the management system and mechanism of
+interest rate risk in the banking book, made positive headway in interest rate risk management strategies, policies and
+procedures, and better applied a combination of quantity, pricing and derivative instruments regarding assets and liabilities.
+Based on interest rate and business trends, the Bank intensified efforts to regulate and control the duration of assets and
+liabilities and interest rate sensitivity gap, so as to effectively control the interest rate risk in the banking book.
+◆ Management System and Governance Structure for Interest Rate Risk in the Banking Book
+The Bank's management system for interest rate risk in the banking book conforms to the system importance, risk status
+and business complexity, and fits the Bank's overall development strategy and the enterprise risk management system. The
+system mainly consists of the following elements: an effective risk governance structure; sound risk management strategies,
+policies and procedures; effective risk identification, measurement, monitoring, control and mitigation that cover all areas; a
+complete internal control and review mechanism; a fully-built risk management system; and adequate information disclosure
+and reporting.
+The Bank strictly complied with regulatory requirements for interest rate risk in the banking book, effectively managed
+interest rate risk in the banking book at the Bank and consolidated level, and developed a sound governance structure for
+interest rate risk in the banking book that is fully built and well-structured, with clearly defined rights and responsibilities.
+The Board of Directors and the Senior Management are vested with the ultimate and executive responsibilities, respectively,
+for managing interest rate risk in the banking book. The Asset & Liability Management Department of the Head Office
+takes the leading role in managing interest rate risk in the banking book, and other departments and institutions play their
+roles in implementing policies and standards concerning interest rate risk in the banking book. The Internal Audit Bureau
+and Internal Control & Compliance Department of the Head Office are responsible for reviewing and evaluating duties in
+respective of interest rate risk in the banking book.
+56
+ICBC
+Discussion and Analysis
+Objective, Strategy and Important Policy of Management of Interest Rate Risk in the Banking Book
+The objective of management of interest rate risk in the banking book: the Bank aims at maximizing the risk-adjusted net
+interest income within the tolerable level of interest rate risk under its risk management and risk appetite.
+The Bank formulated strategies and clarified objectives and modes for managing interest rate risk in the banking book based
+on risk appetite, risk status, macroeconomic and market changes. Based on the pre-judging of the interest rate trend and
+measurement results of the changes in overall profit and economic value, the Bank formulated and put into practice relevant
+management policies, and adopted a coordinated approach to using interest rate risk control tools to mitigate and manage
+risks, so as to ensure the Bank's actual interest rate risks conform to its bearing capability and willingness.
+On the basis of management strategies and objectives, the Bank developed policies and made clear the modes and
+instruments for managing interest rate risk in the banking book. By developing and modifying such methods as on-balance
+sheet adjustment and off-balance sheet hedging to manage interest rate risk, adeptly using quantity, pricing and derivative
+instruments regarding assets and liabilities, and applying limit management system, business plan, performance assessment
+and capital evaluation in all areas for interest rate risk management and assessment, the Bank achieved effective control of
+interest rate risk at the business lines, the branches, the affiliates and the products and portfolios easily affected by interest
+rate risk.
+◆ Stress Testing
+In line with the principles of comprehensiveness, prudence and foresight, the Bank's stress testing on interest rate risk in
+the banking book adopted the interest rate risk exposure measurement approach and standardized duration approach
+to measure the effect of interest rate changes under different stress scenarios on the overall profit and economic value.
+Based on the domestic and overseas regulatory requirements, the bankwide asset and liability business structure, operation
+and management as well as risk appetite, the Bank set stress testing scenarios for interest rate risk in the banking book
+by taking into account the current interest rate level, historical changes and trends, total assets and liabilities and their
+term characteristics, business development strategies, customer behaviors and other factors, and conducted stress testing
+quarterly.
+Analysis on Interest Rate Risk in the Banking Book
+Exposure of off-balance sheet foreign
+♦ Interest Rate Sensitivity Analysis
+exchange items, net
+RMB
+371,875
+For credit risk capital measurement, please refer to the section headed "Credit Risk" of the 2018 Capital Adequacy Ratio
+Report of Industrial and Commercial Bank of China Limited.
+54
+ICBC
+Discussion and Analysis
+Market Risk
+Market risk is defined as the risk of loss to the Bank's on- and off-balance sheet activities caused by adverse movements in
+market rates (including interest rates, exchange rates, stock prices and commodity prices). The Bank is primarily exposed to
+interest rate risk and currency risk (including gold).
+Market risk management is the process of identifying, measuring, monitoring, controlling and reporting market risk for
+the purposes of setting up and enhancing the market risk management system, specifying responsibilities and process,
+determining and standardizing the measurement approaches, limit management indicators and market risk reports,
+controlling and mitigating market risk and improving the level of market risk management. The objective of market risk
+management is to control market risk exposures within a tolerable level and maximize risk-adjusted return according to the
+Bank's risk appetite.
+The Bank strictly complies with regulatory requirements on market risk management, has implemented an independent,
+centralized and coordinated market risk management model, and formed a management organizational structure featuring
+the segregation of the front, the middle and the back offices in the financial market business. The Board of Directors
+assumes the ultimate responsibility for monitoring market risk management. The Senior Management is responsible for
+executing the strategies, overall policy and system concerning market risk management approved by the Board of Directors.
+The Market Risk Management Committee of the Senior Management is the reviewing and decision-making organ of the
+Bank in respect of market risk management, is responsible for reviewing material affairs of market risk management,
+and performs its duty in accordance with the Working Regulations for the Market Risk Management Committee. The
+risk management departments at different levels undertake the responsibility of coordinating market risk management
+at respective levels, and the business departments implement market risk management policies and standards for their
+respective business areas in accordance with their functions.
+In 2018, the Bank continued to improve rules and regulations on market risk at the Group's level, and regulated the entire
+market risk management process management of overseas institutions. The Bank improved the group-wide market risk
+appetite limit transmission mechanism, strengthened the forward-looking analysis on the Group's currency risk and interest
+rate risk, and reinforced the trading behavior monitoring. The Bank pushed forward the overseas expansion and promotion
+of the Global Market Risk Management (GMRM) system and strengthened application of the market risk management
+system and data.
+Management of Market Risk in the Trading Book
+The Bank continued to strengthen trading book market risk management and product control, adopted the value-at-risk
+(VAR), stress testing, sensitivity analysis, exposure analysis, profit/loss analysis, price monitoring and other means to measure
+and manage trading book products. It continued to improve the portfolio-based market risk limit management system,
+refined the limit indicator system and dynamic management mechanism to meet the requirements of new products and
+businesses for timeliness, and realized quick and flexible limit monitoring and dynamic adjustments based on the Global
+Market Risk Management (GMRM) system. For VaR of the trading book, please refer to "Note 51.(c)(i) to the Financial
+Statements: VaR".
+Currency Risk Management
+Currency risk is the risk of adverse movements of exchange rate resulting in losses on the foreign currency exposure, which
+is due to the currency structure's mismatch between foreign currency assets and liabilities. The Bank's objective of currency
+risk management is to control the impact of exchange rate fluctuations on the Bank's financial position and shareholders'
+equity within a tolerable extent. The Bank mitigates such risk principally by limit management and hedging of risks. The Bank
+carries out sensitivity analysis and stress testing of currency risk on a quarterly basis, and submits currency risk reports to the
+Senior Management and the Market Risk Management Committee.
+In 2018, the Bank closely watched the changes in external environment and market conditions, actively took a combination
+of measures such as limit management and hedging of risks to adjust and optimize the aggregate amount and structure of
+foreign exchange assets and liabilities, and strengthened assets and liabilities currency structure management and capital
+fund preservation management of overseas institutions. The currency risk of the Bank was under control.
+Annual Report 2018
+55
+Discussion and Analysis
+FOREIGN EXCHANGE EXPOSURE
+In RMB (USD) millions
+At 31 December 2017
+At 31 December 2018
+USD
+USD
+Item
+RMB
+equivalent
+Exposure of on-balance sheet foreign
+327,917
+47,729
+equivalent
+57,111
+The Bank improved the differentiated management framework for agency investment, developed and revised fundamental
+administrative measures for non-standard agency investment and cooperative institutions, and strengthened management
+of such key businesses as debt-for-equity swap, underwriting and investment of asset-backed securities and public
+entrusted loans. It strengthened entire-process risk management for asset management business, implemented strict pre-
+investment review, and improved bond rating rules and regulations. Compliance review for transaction process was further
+strengthened, with stricter selecting standards and unified quota management for cooperative institutions. Focusing on
+risk resolution, the Bank intensified post-investment management, placed greater focus on inspecting and supervising risk
+projects, and actively applied investment banking disposal methods to speed up work on collecting risk projects.
+Supposing that there is parallel shift of overall market interest rates, and taking no account of possible risk management
+actions taken by the management to mitigate the interest rate risk, the analysis on interest rate sensitivity of the Bank
+categorized by major currencies in 2018 is shown in the following table:
+RMB
+In respect of liquidity risk management, the Bank's governance structure embodies the decision-making system comprising
+the Board of Directors and its special committees as well as the Asset and Liability Management Committee and the Risk
+Management Committee of the Head Office; the supervision system comprising the Board of Supervisors, the Internal Audit
+Bureau and the Internal Control and Compliance Department; and the execution system comprising the Asset and Liability
+Management Department, leading management departments of on- and off-balance sheet businesses, the Information
+Technology Department, operation management departments of the Head Office and relevant departments of branches.
+Each of these systems performs the corresponding functions of decision making, supervision and execution functions
+according to division of responsibilities.
+The Bank's liquidity risk management system conforms to the overall development strategy and the overall risk management
+system of the Bank, and is commensurate with the business scale, business nature, complexity and other aspects of
+the Bank. The system includes the following fundamental elements: effective governance structure for liquidity risk
+management; sound strategy, policy and procedures for liquidity risk management; effective identification, measurement,
+monitoring and control for liquidity risk and a complete management information system.
+Liquidity Risk Management System and Governance Structure
+.
+In 2018, the Bank continued to uphold a steady and prudent liquidity risk management strategy, and kept a close eye on
+factors affecting liquidity risk management. It constantly improved its liquidity risk management system, revised relevant
+management measures and strengthened monitoring over key businesses, customers and funds to ensure sound liquidity risk
+management during payment peak times and critical times. The liquidity risk management system was improved, with more
+automatic supporting system for monitoring, measuring and managing liquidity risks, so as to boost refined management of
+liquidity risk. The Bank made coordinated efforts to manage liquidity risks in both domestic and overseas institutions, in local
+and foreign currencies, and on- and off-balance sheet, and took measures to see that the Group's liquidity is stable and safe.
+Liquidity Risk Management
+Liquidity risk is the risk that the Bank is unable to raise funds on a timely basis or at a reasonable cost to settle liabilities
+as they fall due, or perform other payment obligations and satisfy other funding demands arising from the normal course
+of business. Liquidity risk may arise from the following events or factors: withdrawal of customers' deposits, drawing of
+loans by customers, overdue payment of debtors, mismatch between assets and liabilities, difficulties in assets realization,
+operating losses, derivatives trading risk and risk associated with its affiliates.
+Liquidity Risk
+447,734
+Note: Please refer to "Note 51.(d) to the Financial Statements: Interest Rate Risk in the Banking Book".
+744,754
+1,684,757
+1,593,362
+1,058,350
+Over 5 years
+1 to 5 years
+1 year
+(391,953)
+(133,897)
+(951,368)
+3 months
+3 months to
+Less than
+In RMB millions
+At 31 December 2017
+At 31 December 2018
+INTEREST RATE RISK EXPOSURE
+As at the end of 2018, the Bank had a negative cumulative interest rate sensitivity exposure within one year of RMB525,850
+million, representing an increase of RMB319,236 million from the end of the previous year, mainly caused by the increase in
+repriced or matured due to customers within one year. It had a positive cumulative interest rate sensitivity exposure above
+one year of RMB2,743,107 million, representing an increase of RMB702,011 million, mainly due to the increase in repriced
+or matured bond investments above one year.
+♦ Interest Rate Exposure Analysis
+Discussion and Analysis
+57
+Annual Report 2018
+58
+Currency
+ICBC
+4,049
+USD
+HKD
+Others
+Total
+In RMB millions
+Increased by 100 basis points
+Effect on
+net interest
+Effect on
+Decreased by 100 basis points
+Effect on
+net interest
+Effect on
+income
+equity
+income
+equity
+(3,281)
+(30,513)
+3,281
+33,093
+(1,645)
+(5,679)
+1,645
+5,683
+936
+(936)
+(59)
+(690)
+59
+691
+(4,049)
+(36,882)
+0.69
+446
+The Bank actively implemented the requirements of New Rules on Asset Management, regarded the building of asset
+management risk control system as an important cornerstone of business transformation and development, and endeavored
+to build an enterprise risk management system for asset management business to cover the whole-process all-risk line
+coverage and match the risk and return.
+The Bank actively established and improved the management structure and system for large exposures, formulated
+relevant regulations, and clarified requirements on management structure, related customer management, internal limit
+management, calculation method and statistical report related to large exposures management. Efforts were also made to
+promote the information system to effectively manage the Bank's large exposures.
+1,265,834
+8.9
+2,157,264
+14.0
+2,059,779
+14.5
+4,950,419
+15,419,905
+32.1
+4,427,035
+31.1
+100.0
+14,233,448
+100.0
+In RMB millions, except for percentages
+At 31 December 2018
+At 31 December 2017
+% of total
+% of total
+Amount
+loans
+Amount
+loans
+91,153
+0.59
+107,218
+0.75
+83,846
+0.54
+68,209
+8.1
+0.48
+1,256,196
+6,480,800
+Note: Please see "Note 23. to the Financial Statements: Loans and Advances to Customers" for details.
+Note: Please refer to "Note 51.(d) to the Financial Statements: Interest Rate Risk in the Banking Book".
+52
+ICBC
+DISTRIBUTION OF LOANS BY COLLATERAL
+Item
+Loans secured by mortgages
+Pledged loans
+Guaranteed loans
+Unsecured loans
+Total
+OVERDUE LOANS
+Overdue periods
+Less than 3 months
+3 months to 1 year
+1 to 3 years
+Over 3 years
+Total
+Discussion and Analysis
+In RMB millions, except for percentages
+At 31 December 2017
+At 31 December 2018
+Percentage
+Percentage
+Amount
+(%)
+Amount
+(%)
+7,056,026
+45.8
+45.5
+Risk Management for Asset Management
+63,010
+80,919
+29,398
+0.2
+Borrower E
+Finance
+26,970
+0.2
+Borrower F
+Transportation, storage and postal services
+24,562
+0.2
+Borrower G
+Production and supply of electricity, heat, gas and water
+21,111
+0.1
+Borrower H
+Transportation, storage and postal services
+20,945
+0.1
+Borrower I
+Transportation, storage and postal services
+20,598
+0.1
+Borrower J
+Total
+Transportation, storage and postal services
+20,267
+0.1
+340,765
+2.2
+Large Exposures Management
+0.2
+0.41
+34,922
+Borrower D
+0.57
+31,923
+0.21
+29,729
+0.21
+269,932
+1.75
+286,075
+2.01
+Note: Loans and advances to customers are deemed overdue when either the principal or interest is overdue. For loans and advances to
+customers repayable by installments, the total amount of loans is deemed overdue if part of the installments is overdue.
+Overdue loans stood at RMB269,932 million, representing a decrease of RMB16,143 million from the end of the previous
+year. Among which, loans overdue for over 3 months amounted to RMB178,779 million, representing a decrease of RMB78
+million.
+RESCHEDULED LOANS
+Rescheduled loans and advances amounted to RMB7,211 million, representing an increase of RMB2,053 million as compared
+to the end of the previous year. Rescheduled loans and advances overdue for over 3 months amounted to RMB1,143 million,
+representing a decrease of RMB231 million.
+Annual Report 2018
+53
+Discussion and Analysis
+BORROWER CONCENTRATION
+The total amount of loans granted by the Bank to the single largest customer and top ten single customers accounted
+for 3.8% and 12.9% of the Bank's net capital base respectively. The total amount of loans granted to the top ten single
+customers was RMB340,765 million, accounting for 2.2% of the total loans. The table below shows the details of the loans
+granted to the top ten single borrowers of the Bank as at the end of 2018.
+In RMB millions, except for percentages
+% of total
+loans
+Borrower
+Borrower A
+Borrower B
+Industry
+Transportation, storage and postal services
+Transportation, storage and postal services
+Amount
+101,785
+0.7
+40,207
+0.3
+Borrower C
+Transportation, storage and postal services
+Manufacturing
+commercial services
+39,467
+108,854
+DISTRIBUTION OF LOANS AND NPLS BY BUSINESS LINE
+The key indicators of loan quality were stable. As at the end of 2018, according to the five-category classification, pass
+loans amounted to RMB14,733,891 million, representing an increase of RMB1,283,405 million when compared with the
+end of the previous year and accounting for 95.56% of total loans. Special mention loans stood at RMB450,930 million,
+representing a decrease of RMB111,044 million, and accounting for 2.92% of the total, with a drop of 1.03 percentage
+points. NPLs amounted to RMB235,084 million, showing an increase of RMB14,096 million, and NPL ratio was 1.52%, with
+a drop of 0.03 percentage points.
+100.00
+0.22
+30,925
+14,233,448
+100.00
+15,419,905
+0.23
+35,880
+0.76
+0.59
+90,383
+0.57
+81,209
+0.70
+108,821
+1.55
+In RMB millions, except for percentages
+At 31 December 2018
+At 31 December 2017
+Percentage
+1.97
+175,903
+62.8
+8,936,864
+2.07
+194,696
+61.0
+9,418,894
+220,988
+(%)
+NPL ratio
+Loan
+(%)
+NPLs
+(%)
+Loan
+Item
+Corporate loans
+NPL ratio
+NPLs
+Discounted bills
+1.52
+3.95
+Item
+DISTRIBUTION OF LOANS BY FIVE-CATEGORY CLASSIFICATION
+At the end of 2018, the Bank's maximum exposure to credit risk, without taking into account any collateral and other credit
+enhancements, was RMB30,182,752 million, an increase of RMB1,304,232 million compared with the end of the previous
+year. Please refer to "Note 51. (a)(i) to the Financial Statements: Maximum Exposure to Credit Risk Without Taking Account
+of Any Collateral and Other Credit Enhancements". For mitigated risk exposures of credit risk asset portfolio of the Bank,
+please refer to the section headed "Credit Risk" of the 2018 Capital Adequacy Ratio Report of Industrial and Commercial
+Bank of China Limited.
+Credit Risk Analysis
+Discussion and Analysis
+49
+Annual Report 2018
+Based on the strict implementation of bank-wide, unified credit risk management policy requirements, the Bank strengthened
+pre-investment analysis and post-lending management on credit risk exposed to investment business, and intensified the
+monitoring of existing business in key risk industries. It strictly implemented the regulatory requirements for currency market
+transactions, strengthened pre-access examination and dynamic risk monitor for counterparties, paid close attention to the
+change of counterparties' qualification and collateral value throughout the term of business, and took proactive measures
+to prevent risks. The Bank actively promoted the signing of ISDA, NAFMII and other legal agreements regarding derivatives,
+strictly controlled the counterparty credit line on derivatives through the financial market transaction platform, and
+strengthened dynamic management of margin in franchise transaction.
+◆ Credit Risk Management of Treasury Operations
+The Bank improved policies on credit card risk management and tightened credit financing limit to personal customers. It
+optimized the personal credit extension strategy and implemented dynamic credit limit adjustment. The big data decision-
+making engine was upgraded for faster and smarter approval and decision-making process, and to strengthen early
+monitoring and warning of high-risk customers in the lending process. The Bank strengthened fraud risk prevention, and
+developed a full-process fraud risk prevention and control system. It actively inspected risks with third-party internet platforms.
+Effective ongoing efforts were made on non-performing assets ("NPAS") recovery and disposal by applying more collection
+methods and mitigating NPAs through various channels.
+◆ Credit Risk Management of Credit Card Business
+The Bank continued to upgrade policies on personal loans, tightened access to residential mortgages, and developed
+differentiated regulations on loan access and institutions cooperated with the Bank in residential mortgages business. It
+devoted more energy to increasing the granularity of risk monitoring, made better arrangements for risk monitoring models,
+and closely monitored the entire process of residential mortgages business to stave off risks. There is an improvement in
+the personal loan management system, with a government-bank collaboration platform in place to ensure transaction
+authenticity through interconnection with relevant information system of government departments. The Bank achieved better
+management of cooperative institutions in the business systems, and developed differentiated access approval level for all
+types of developers. Further advances have been made in major post-lending event reporting and default loan collection
+system to improve the Bank's risk management and control capabilities.
+Credit Risk Management of Personal Loans
+.
+The Bank strengthened credit risk management of small enterprises. It established an inclusive financial risk prevention and
+control system covering the whole process including customer access, middle-office approval and post-lending management.
+It strictly controlled the quality of new loans, strengthened research in market segmentation and target customer base
+management, and implemented differentiated due diligence mode based on the characteristics of loans to small and micro
+enterprises. The administrative measures for granting lifetime loans to small and micro enterprises was revised to regulate the
+management mode of small and micro loans. Leveraging the big data platform, the Bank improved its data monitoring model
+and continued to strengthen monitoring on small and micro loan risks from multiple dimensions. It also regularly inspected
+risks in existing loans, and carried out classified risk prevention and mitigation in an effort to strengthen asset quality in all
+areas.
+The Bank strengthened risk management in the real estate industry. It stepped up efforts to guarantee public wellbeing in real
+estate industry, continued to grant loans for selective shantytown renovation projects, and steadily carried out the business
+of loans for housing leasing. The Bank controlled the aggregate of loans for commercial real estate, and on this basis applied
+differentiated regional credit policies. Specifically, it mainly supported ordinary commercial housing projects in first-tier cities
+and second-tier cities with reasonable inventory digestion cycle and sufficient potential demand, prudently granted new loans
+for housing development in third and fourth-tier cities, and strictly controlled loans for commercial property development and
+shantytown renovation projects for commercial use.
+Discussion and Analysis
+Pass
+Special mention
+NPLs
+Substandard
+561,974
+2.92
+450,930
+94.50
+(%)
+Amount
+13,450,486
+95.56
+14,733,891
+235,084
+(%)
+Percentage
+Percentage
+At 31 December 2018
+At 31 December 2017
+In RMB millions, except for percentages
+Total
+Loss
+Doubtful
+Amount
+364,437
+Percentage
+(%)
+268
+1,715,562
+0.79
+15,016
+23.8
+1,894,425
+Transportation, storage
+22.8
+(%)
+(%)
+Loan
+(%)
+NPLs
+(%)
+Loan
+NPLs
+9,568
+2.4
+and postal services
+910,672
+0.60
+6,279
+13.2
+1,048,548
+Leasing and
+4.80
+67,604
+18.6
+1,409,206
+5.76
+79,790
+17.4
+1,385,463
+Manufacturing
+Item
+NPL ratio
+0.56
+NPL ratio
+0.90
+44,560
+34.7
+4,945,458
+0.71
+36.6
+Total
+5,636,574
+0.15
+525
+2.5
+351,126
+0.07
+Percentage
+Personal loans
+15,419,905
+40,120
+235,084
+100.0
+Percentage
+At 31 December 2017
+At 31 December 2018
+In RMB millions, except for percentages
+DISTRIBUTION OF CORPORATE LOANS AND NON-PERFORMING CORPORATE LOANS OF DOMESTIC BRANCHES BY
+INDUSTRY
+ICBC
+50
+Discussion and Analysis
+Corporate NPLs were RMB 194,696 million, showing an increase of RMB18,793 million when compared with the end of the
+previous year, and representing a NPL ratio of 2.07%. Personal NPLs amounted to RMB40, 120 million, showing a decrease
+of RMB4,440 million, and represented a NPL ratio of 0.71%, with a drop of 0.19 percentage points.
+1.55
+220,988
+100.0
+14,233,448
+1.52
+35.7
+2017
+RMB
+>=25.0
+43.8
+41.7
+2016
+Foreign currency
+70.9
+86.2
+82.3
+RMB and foreign
+71.0
+<=10.0
+71.1
+2018
+currency
+>=25.0
+criteria
+Major Regulatory Indicators
+Loan migration ratio (%)
+Loan-to-deposit ratio (%)
+3.8
+Liquidity ratio (%)
+Item
+(829,587)
+REQUIREMENTS
+OTHER INFORMATION DISCLOSED PURSUANT TO REGULATORY
+Discussion and Analysis
+Regulatory
+67
+The Bank will continue to enhance its ability to forestall and defuse risks. We will strike a balance between stable
+growth and risk prevention, and fight against major risks in a proactive manner. We will improve our capability of credit
+risk lifecycle management, with a focus on controlling new "bleeding points", defusing existing risks and disposing of
+non-performing loans, in an effort to cement the momentum of asset quality improvement. Under the principle of "clear
+vision, thorough understanding and good management", we will establish a penetrative panoramic view of risks, a simple
+and transparent business development strategy and a unified risk control system that runs through the Group, strengthen
+comprehensive risk management and prevent interaction and contagion of risks to ensure all risks are under overall control.
+The Bank will continue to deepen its transformation, reform and innovation. We will continue to adopt a combined
+approach to consolidate our foundation and concurrently seek transformation and upgrading. We seek to serve the
+broadest customer base and enhance our competitiveness in terms of deposits through all channels, market-wide mapping,
+extension of value chain and coordination of all business segments. We will foster new growth drivers and "sustainability"
+in a number of strategic segments with large growth potential and strong driving forces, so that all segments will forge
+ahead together for an overall success. We will continue with in-depth and solid reform and innovation. While deepening
+existing reform projects, we will push forward a number of new reform measures in succession to improve development
+quality and innovation vitality. Leveraged on the nature of finance and our strengths in FinTech, we will press ahead with IT
+architecture transformation and smart banking development in every respect, create a new ecosphere of financial services
+and empower our development on all fronts.
+The Bank will continue to serve the real economy more effectively. We will adhere to the integrated development
+strategy of investment and financing, coordinate stock and increment, credit and non-credit, on-balance sheet and off-
+balance sheet businesses as well as domestic and overseas operations, improve the efficiency of resource allocation, and
+utilize all key financial elements to activate energy and vitality. The Bank will properly manage its investment and financing,
+actively support the continuation of the supply-side structural reform under the principle of "Consolidation, Enhancement,
+Improvement and Smoothness" and facilitate the spread of monetary policy and the fulfillment of the "Six Stabilities". In
+particular, we will stay true to the principle of equal credit, continuously improve financial services for private enterprises
+and small and micro enterprises, and better utilize the financial resources to ensure that the real economy is nourished
+through "targeted irrigation".
+2019 marks the 70th anniversary of the founding of the People's Republic of China, and is a crucial year for building a
+moderately prosperous society on all fronts. The Bank will adhere to the overarching principle of seeking progress while
+ensuring stability. In the course of promoting high-quality economic development, the Bank will realize its healthy and
+sustainable development and further enhance its ability to create value, serve customers, control risks and compete in
+the market.
+Percentage of loans to single largest
+customer (%)
+Percentage of loans to top 10
+customers (%)
+Annual Report 2018
+4.9
+83.0
+Pass
+_
+68
+ICBC
+The Bank mainly faces the following challenges: First, trade protectionism and other adverse factors add to the downside
+risks to the global economy, which will weigh on the internationalization of banks. Second, there are concerns over
+increasing difficulties that may arise from changes amid the stable economic performance of China, as some of such changes
+may bring challenges. Such a situation will put pressure on banking, especially on the stability of asset quality. Third, the
+worsening turbulences in the global financial market and the higher resonance risk of the domestic capital markets and bond
+market will challenge a bank's capability of comprehensive risk control. Fourth, the New Rules on Asset Management have
+made transformation an urgent priority for banks.
+1 to 5
+years
+years
+4,412,116 8,793,935
+3,452,159 7,619,544
+Over 5
+Undated
+3,322,986
+3,488,301
+Total
+2,344,883
+2,141,056
+Note: Please refer to "Note 51.(b) to the Financial Statements: Liquidity Risk".
+Operational Risk
+Operational Risk Management
+Operational risk is defined as the risk of loss resulting from insufficient or problematic internal processes, employees and
+IT systems or from external events, including legal risk, but excluding strategic and reputational risk. There are seven major
+types of operational risks faced by the Bank, including internal fraud, external fraud, employment system and workplace
+safety, customers, products and business activities, damage to physical assets, IT system, execution and delivery and process
+management. Among these, external fraud, execution and delivery and process management constitute major sources of
+operational risk losses of the Bank.
+The Bank strictly followed regulatory requirements on operational risk management and adopted the operational risk
+control mode of "integrated management, classified control". The Board of Directors assumes relevant responsibility for
+the effectiveness of the operational risk management according to the Articles of Association, and the Senior Management
+is responsible for implementing the strategy, overall policy and system for operational risk management approved by the
+Board of Directors. The Operational Risk Management Committee under the Senior Management, as the organizer and
+coordinator of operational risk management of the Bank, is responsible for reviewing and approving significant matters
+related to operational risk management according to the Working Regulations for the Operational Risk Management
+Committee. Marketing and product departments at all levels form the first line of defense of operational risk management,
+which assume direct responsibility for operational risk management in each business line. Internal control and compliance
+departments at various levels are comprehensive management departments for operational risk in institutions at various
+levels and assume the duty of operating the second line of defense of operational risk management, which are responsible
+for the arrangement and organization for the establishment and implementation of operational risk management system
+at each level; discipline enforcement, security, human resources, IT, finance and accounting, legal affairs, operation
+management, credit management and risk management departments at all levels are classification control departments
+for operational risk in institutions at various levels, which are responsible for management and control on specific types
+of operational risk. These departments, together with comprehensive management departments, form the second line of
+defense of operational risk management. The internal audit departments are responsible for auditing and evaluating the
+operation of the operational risk management system, and form the third line of defense.
+60
+ICBC
+Discussion and Analysis
+The Bank did not issue any corporate bonds that need to be disclosed as per the "No. 2 Standards on the Content and
+Format of Information Disclosure of Companies with Public Offerings Content and Format of the Annual Report"
+(Revision 2017) or "No. 38 Standards on the Content and Format of Information Disclosure of Companies with Public
+Offerings · Content and Format of the Annual Report of Corporate Bonds".
+Corporate Bonds
+In respect of the financial statements of the Bank prepared under PRC GAAP and those under IFRSS, net profit attributable to
+equity holders of the parent company for the year ended 31 December 2018 and equity attributable to equity holders of the
+parent company as at the end of the reporting period have no differences.
+Reconciliation of Differences between the Financial Statements Prepared under PRC
+GAAP and those under IFRSS
+Special mention
+Substandard
+Doubtful
+12.9
+14.2
+13.3
+1.7
+2.7
+3.4
+4.5
+25.3
+23.5
+38.8
+71.1
+36.8
+25.2
+10.6
+7.4
+Note: The regulatory indicators in the table are calculated in accordance with related regulatory requirements, definitions and accounting
+standards applicable to the current period. The comparative figures are not adjusted or restated.
+23.2
+In 2018, the Bank continued to push the Group's operational risk management to a higher level in line with the regulatory
+focus and operational risk trends. It conducted risk governance in key fields and links on an ongoing basis, and actively
+conducted in-depth crackdown campaign to improve or update policies, procedures, systems and mechanisms and the
+procedure-based hard control over key links. External fraud risk management was strengthened to effectively protect
+customer's funds. Operational risk limit management was reinforced to ensure adequate monitoring and reporting of limit
+indicators. The Bank also improved the operational risk measurement system, intensified large-value operational risk event
+control, and continuously strengthened the application of operational risk management tools and risk data quality. During
+the reporting period, the operational risk management system of the Bank operated smoothly and the operational risk was
+controllable on the whole.
+The Bank mainly faces the following opportunities: First, the development of China continues to be in an important period
+filled with strategic opportunities in which economic fundamentals imbued with huge potential and strong resilience for
+long-term growth remain unchanged. It will create a stable macro environment for us, provide a good foundation and
+reinforce our confidence to do a good job. Second, the ongoing supply-side structural reform, the accelerated economic
+structure upgrading, the further reform and opening-up, and the in-depth implementation of coordinated regional
+development strategy will create ample opportunities for business development and financial innovation. Third, the rapid
+development and wide application of FinTech will give us new momentum and strengths in developing the Bank into a smart
+bank and building a new ecosphere of financial services.
+Discussion and Analysis
+Core capital adequacy ratio
+regulations:
+Calculated in accordance with the Regulation Governing Capital Adequacy of Commercial Banks and related
+15.39%
+15.14%
+15.68%
+15.39%
+Capital adequacy ratio
+13.44%
+13.27%
+13.63%
+13.45%
+Capital adequacy ratio
+Tier 1 capital adequacy ratio
+12.77%
+13.23%
+12.98%
+Core tier 1 capital adequacy ratio
+2,216,707
+2,406,920
+2,419,120
+2,644,885
+Net capital base
+1,935,429
+2,110,060
+2,102,348
+12.88%
+2,312,143
+64
+11.54%
+2,247,021
+In RMB millions, except for percentages
+At 31 December
+2017
+2018
+At 31 December
+Other intangible assets other than land use rights
+Goodwill
+Core tier 1 capital deductions
+Others
+Valid portion of minority interests
+Retained profits
+General reserve
+Surplus reserve
+ICBC
+Valid portion of capital reserve
+Core tier 1 capital
+Item
+CAPITAL ADEQUACY RATIO
+As at the end of 2018, the core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio
+calculated by the Bank in accordance with the Capital Regulation stood at 12.98%, 13.45% and 15.39%, respectively,
+complying with regulatory requirements.
+Discussion and Analysis
+14.67%
+14.56%
+14.34%
+14.11%
+11.96%
+11.65%
+11.89%
+Paid-in capital
+Net tier 1 capital
+1,856,054
+2,030,108
+(674,702)
+432,760
+1 year
+1 to 3 3 months to
+months
+1 month
+demand
+(12,057,413)
+At 31 December 2018
+Less than
+on
+In RMB millions
+Overdue/
+repayable
+LIQUIDITY EXPOSURE ANALYSIS
+(1,884,799)
+The Bank also assessed its liquidity risk profile by using liquidity exposure analysis. As at the end of 2018, the liquidity
+exposure for the less than 1 month category turned from negative to positive, which was mainly due to the decrease of
+repurchase agreements with corresponding term. The negative liquidity exposure for the 3 months to 1 year category
+increased, mainly caused by the increase of due to customers with corresponding term. The positive liquidity exposure
+for the 1 to 5 years category expanded, mainly due to the increase in investments in bonds and loans and advances to
+customers with corresponding term. The positive liquidity exposure for the category of over 5 years increased, which was
+mainly due to increase in loans and advances to customers with corresponding term. Deposits maintained steady growth
+with a high deposition rate, and at the same time the Bank made major investment in highly liquid bond assets, and
+possessed sufficient liquidity reserves. Therefore, the overall liquidity of the Bank maintained at a safe level.
+59
+Annual Report 2018
+The daily average liquidity coverage ratio for the fourth quarter of 2018 was 126.66%, 6.30 percentage points higher than
+the previous quarter, mainly due to adequate available funding in the fourth quarter and the increase in cash inflow within
+30 days. High-quality liquid assets cover cash, available central bank reserve under stress and primary and secondary bond
+assets that can be included in the liquidity coverage ratio under the regulatory requirements. For the quantitative information
+for liquidity coverage ratio based on the Administrative Measures for the Information Disclosure of Liquidity Coverage Ratio
+of Commercial Banks promulgated by the former CBRC, please refer to "Unaudited Supplementary Financial Information".
+Net stable funding ratio aims to ensure commercial banks have sufficient stable sources of funding to meet the needs for
+stable funding of assets and off-balance sheet risk exposures. The net stable funding ratio is the ratio of the available stable
+funding to the required stable funding. The available stable funding refers to the sum of the product of the book value
+of capital and liability items of commercial banks and the corresponding available stable fund coefficient. The required
+stable funding refers to the sum of the product of the book value of asset items of commercial banks and the off-balance
+sheet exposure and the corresponding required stable funding coefficient. As at the end of 2018, the net stable funding
+ratio was 126.62%, the available stable funding was RMB18,647,495 million, and the required stable funding was
+RMB14,726,640 million.
+As at the end of 2018, RMB liquidity ratio and foreign currency liquidity ratio of the Bank were 43.8% and 83.0%
+respectively, both meeting the regulatory requirements. Loan-to-deposit ratio was 71.0%. Please refer to the section headed
+"Discussion and Analysis - Other Information Disclosed Pursuant to Regulatory Requirements" for details.
+Liquidity Risk Analysis
+Following the prudence principle, the Bank employs the scenario analysis and the sensitivity analysis to perform stress testing
+on liquidity risk. The Bank has taken full consideration of various macroscopic and microscopic factors that may influence the
+Bank's liquidity status to set stress scenarios against those products, businesses and institutions with concentrated liquidity
+risk in line with the characteristics and complexity of the Bank's businesses. The Bank performs stress testing on a quarterly
+basis. Where necessary, the Bank may carry out temporary and special stress testing at a particular time in light of changes in
+the external operating environment and regulatory requirements.
+◆ Stress Testing
+The mode of liquidity risk management of the Bank is consolidated liquidity risk management based on management
+of liquidity risk at the bank level. The Head Office manages the liquidity risk of the Bank in a unified and centralized
+manner and ensures liquidity security of the Bank through dynamic adjustment of the aggregate and structure of assets
+and liabilities, whereas the affiliates assume primary responsibilities concerning liquidity risk management of respective
+institution, and undertake corresponding responsibilities as required by the leading liquidity risk management departments
+of the Head Office.
+Liquidity Risk Management Mode
+The Bank's liquidity risk management strategy and policy are formulated in accordance with the liquidity risk appetite, and
+they cover all businesses on- and off-balance sheet, all domestic and overseas business departments and branches that are
+likely to have a material impact on the liquidity risk, and contain the liquidity risk management under normal and stressed
+scenarios. The liquidity risk management strategy specifies the overall objective and mode of liquidity risk management
+and lists major policies and procedures for liquidity risk management. Important policies for liquidity risk management are
+formulated in accordance with external and macro operating environments and business development of the Bank, with a
+view to striking an effective balance among security, liquidity and profitability.
+Objective of liquidity risk management: by establishing and improving the liquidity risk management system, the Bank aims
+at realizing complete identification, accurate measurement, continuous monitoring and effective control of the liquidity risk
+at the Group level, the Bank, the affiliates, the branches and the business lines, and ensuring the liquidity demand is satisfied
+at a reasonable cost in time under the normal business scenario and the stress scenario.
+Discussion and Analysis
+At 31 December 2017
+(10,793,525)
+(200,327)
+2,040,396
+2,232,033
+Net core tier 1 capital
+Calculated in accordance with the Capital Regulation:
+Parent
+Company
+Group
+Parent
+Company
+At 31 December 2018
+Group
+Item
+In RMB millions, except for percentages
+At 31 December 2017
+RESULTS OF CAPITAL ADEQUACY RATIO CALCULATION OF THE GROUP AND PARENT COMPANY
+The Bank calculated its capital adequacy ratios at all levels in accordance with the Capital Regulation. According to the scope
+of implementing the advanced capital management approaches as approved by the former CBRC, the foundation internal
+ratings-based (IRB) approach was adopted for corporate credit risk, the IRB approach for retail credit risk, the internal model
+approach (IMA) for market risk, and the standardized approach for operational risk meeting regulatory requirements. The
+weighted approach was adopted for credit risk uncovered by the IRB approach and the standardized approach for market
+risk uncovered by the IMA.
+Capital Adequacy Ratio and Leverage Ratio
+In 2018, the Bank further deepened the capital management reform, strengthened capital saving and optimization,
+intensified the constraint of economic capital on risk-weighted assets and continued to elevate the capital use efficiency
+and return on capital. It steadily enhanced the supplementation capacity of endogenous capital, and further consolidated
+the bank-wide capital base to reinforce its capacity in supporting the real economy. In 2018, all capital indicators performed
+well, of which capital adequacy ratio was kept at a sound and appropriate level.
+The Bank implements a group-based capital management mechanism, and takes capital as the object and an instrument
+for its management activities, including planning, measurement, allocation, application and operation. The Bank's capital
+management aims at maintaining appropriate capital adequacy ratio and continuously meeting capital supervisory
+regulations and policies; ceaselessly strengthening and enhancing the bank-wide capital base and supporting business
+growth and implementation of strategic planning; establishing a value management system focusing on economic capital,
+reinforcing capital constraint and incentive mechanism and improving capital allocation efficiency; innovating and expanding
+capital replenishment channels, raising capital quality and optimizing capital structure. The Bank's capital management
+covers various operating entities in the Group, and its contents include capital adequacy ratio management, economic capital
+management, capital investment and financing management.
+CAPITAL MANAGEMENT
+Discussion and Analysis
+63
+Annual Report 2018
+In 2018, facing the increasingly complicated international political and economic environment, the Bank strictly abode by
+regulatory requirements and, with consideration of its business development needs, continued to strengthen country risk
+management. The Bank closely observed changes in country risk exposures, constantly tracked, monitored and reported
+country risk, and timely updated and adjusted the country risk rating and limits. It continued to strengthen early warning
+mechanism for country risk, proactively conducted stress testing on country risk and reasonably and effectively controlled
+country risk while pushing ahead with the internationalization strategy.
+The Bank strictly observes regulatory requirements on country risk management. The Board of Directors assumes the ultimate
+responsibility for the effectiveness of country risk management. The Senior Management is responsible for executing the
+country risk management policies approved by the Board of Directors. The Risk Management Committee of the Head Office
+is responsible for reviewing matters regarding country risk management. The Bank manages and controls country risk with
+a series of tools, including country risk assessment and rating, country risk limit, country risk exposure calculation and
+monitoring and stress testing. The Bank reviews the country risk rating and limits at least once every year.
+Country risk is the risk incurred to a bank arising from the inability or refusal by the borrower or debtor to repay bank
+debt, losses suffered by the Bank or its commercial presence in such country or region and other losses due to economic,
+political and social changes and events in a country or a region. Country risk may be triggered by deterioration of economic
+conditions, political and social turmoil, asset nationalization or expropriation, government's refusal to pay external debt,
+foreign exchange control or currency depreciation in a country or a region.
+Country Risk
+Discussion and Analysis
+ICBC
+(595,509)
+2,044,390
+It is generally expected that banks will face a more complex business environment with higher level of uncertainties and risks
+in 2019. The year is a period of both severe challenges and strategic opportunities.
+356,407
+151,968
+Net tier 1 capital
+30 June
+30 September
+31 December
+2018
+Item
+At
+At
+At
+At
+At
+In RMB millions, except for percentages
+LEVERAGE RATIO
+Balance of adjusted on- and
+Please refer to the 2018 Capital Adequacy Ratio Report of Industrial and Commercial Bank of China Limited issued by the
+Bank for further information on capital measurement.
+65
+Annual Report 2018
+15.14%
+15.39%
+13.27%
+13.45%
+12.77%
+12.98%
+15,902,801
+2,406,920
+2,644,885
+17,190,992
+(2) Refers to risk-weighted assets after capital floor and adjustments.
+Discussion and Analysis
+Notes: (1) Please refer to "Note 51. (e) to the Financial Statements: Capital Management".
+2,312,143
+29,679,878
+2018
+OUTLOOK
+ICBC
+66
+The Bank further strengthened its economic capital management in terms of measurement, allocation and assessment,
+improved its economic capital measurement policy and optimized its economic capital measurement standards and system.
+The Bank strictly implemented the measures for quota management, continuously boosted the refined management of
+economic capital, and reinforced the capital constraint on domestic branches, profitability units, overseas institutions and
+subsidiaries. Moreover, the Bank upgraded the economic capital measurement and appraisal policy of credit business and
+proactively facilitated the adjustment of its credit structure. It strengthened trainings on economic capital management for
+institutions at all levels, and vigorously pushed forward the application of economic capital in operational management and
+business front-line.
+Economic capital management of the Bank includes three major aspects: measurement, allocation and application. Economic
+capital indicators include Economic Capital (EC), Risk-Adjusted Return on Capital (RAROC) and Economic Value-added
+(EVA). All of the above are applied in credit resource allocation, quota management, performance assessment, expenditure
+allocation, product pricing and customer management, etc.
+Allocation and Management of Economic Capital
+For details on the issuance of preference shares of the Bank, please refer to the section headed "Details of Changes in Share
+Capital and Shareholding of Substantial Shareholders Preference Shares". For details on relevant fundraising activities,
+please refer to the section headed "Details of Changes in Share Capital and Shareholding of Substantial Shareholders —
+Details of Securities Issuance and Listing".
+On 28 March 2019, the Board of Directors of the Bank reviewed and approved the Proposal on the Issuance of Undated
+Additional Tier 1 Capital Bonds. The Bank plans to issue write-down undated additional tier 1 capital bonds with the total
+amount up to RMB80.0 billion in China's national inter-bank bond market. All funds raised will be used to bolster the Bank's
+additional tier 1 capital. The undated additional tier 1 capital bonds issuance plan is still subject to the review and approval
+by the Shareholders' General Meeting of the Bank, after which it is further subject to the approval by the relevant regulatory
+authorities. Please refer to the announcements published by the Bank on the websites of SEHK and SSE.
+According to the capital planning and capital replenishment planning, the Bank publicly issued the tier 2 capital bonds
+of RMB55.0 billion in March 2019 in China's national inter-bank bond market. The funds raised will be used to replenish
+the Bank's tier 2 capital in accordance with the applicable laws as approved by relevant regulators. Please refer to the
+announcements published by the Bank on the websites of SEHK and SSE.
+On the basis of capital replenishment by retained profits, the Bank proactively expanded the channels for external capital
+replenishment and continuously promoted the issuance of new types of capital instruments.
+Capital Financing Management
+Note: Please refer to "Unaudited Supplementary Financial Information" for details on disclosed leverage ratio information.
+2018
+2,249,959
+30,363,117
+7.51%
+7.35%
+7.41%
+7.79%
+Leverage ratio
+off-balance sheet assets
+28,084,967
+2,110,060
+2,154,625
+28,551,949
+2,161,384
+29,421,922
+2017
+31 December
+31 March
+2018
+7.55%
+Capital adequacy ratio
+Tier 1 capital adequacy ratio
+Core tier 1 capital adequacy ratio
+2,232,033
+Net core tier 1 capital
+institutions that are under control but not subject to consolidation
+Investments in core tier 1 capital instruments issued by financial
+Cash flow hedge reserves that relate to the hedging of items
+that are not fair valued on the balance sheet
+7,980
+7,980
+(3,708)
+(3,739)
+1,532
+1,927
+8,478
+2,030,108
+8,820
+14,988
+(61,063)
+(11,646)
+2,716
+3,752
+1,096,868
+1,205,924
+264,850
+278,980
+232,660
+261,636
+151,952
+14,282
+Additional tier 1 capital
+Additional tier 1 capital instruments and related premium
+80,110
+79,375
+Risk-weighted assets (2)
+Net capital base
+financial institutions that are not subject to consolidation
+500
+Significant minority investments in tier 2 capital instruments issued by
+500
+Tier 2 capital deductions
+3,303
+1,991
+Valid portion of minority interests
+71,736
+127,990
+Surplus provision for loan impairment
+222,321
+202,761
+Valid portion of tier 2 capital instruments and related premium
+297,360
+332,742
+Tier 2 capital
+2,110,060
+2,312,143
+Net tier 1 capital
+577
+735
+Valid portion of minority interests
+79,375
+79,952
+356,407
+Legal Risk
+Discussion and Analysis
+Based on the objective to ensure legal and compliant operation, the Bank always attaches great importance to establishing
+a sound legal risk management system, forming a full-process legal risk prevention and control mechanism to support
+and secure business innovation and market competition, and to prevent and eliminate various potential or practical legal
+risks. The Board of Directors is responsible for reviewing and determining the strategy and policy relating to legal risk
+management, and assumes the ultimate responsibility of legal risk management. The Senior Management is responsible for
+executing the strategy and policy relating to legal risk management, examining and approving relevant important affairs. The
+Legal Affairs Department of the Head Office is in charge of legal risk management across the Group, with relevant business
+departments providing related support and assistance on legal risk prevention and control. The affiliates, domestic and
+overseas branches undertake the responsibility of legal risk management of their respective institutions.
+Legal risk is the risk of incurring legal sanctions, regulatory penalties, financial losses, reputational losses or other negative
+consequences that arises out of or in connection with the failure of the Bank to comply with relevant laws, regulations,
+administrative rules, regulatory provisions or requirements of other relevant rules during the Bank's operation; the
+unfavorable legal defects that exist in products, services or information provided to clients, transactions engaged in, and
+contracts, agreements or other documents executed by the Bank; legal disputes (litigation or arbitration proceedings)
+between the Bank and its clients, counterparties and stakeholders; important changes in relevant laws and regulations,
+administrative rules, regulatory provisions and other relevant rules; and other relevant legal events that occur internally and
+externally.
+• Objective, Strategy and Important Policy of Liquidity Risk Management
+62
+In 2018, the Bank constantly advanced the building of the reputational risk management policies and mechanism, and
+reinforced the prevention, control and management of the reputational risk sources. It stepped up efforts to apply
+information technology in reputational risk management to promote the IT-based reputational risk management. It
+performed reputational risk management and protection of consumer rights and interests by synchronized method, actively
+responded to the comments and suggestions of the public, and continued to increase the reputational risk awareness of
+all the employees. The Bank organized a series of featured reports with greater influence for publicity to enhance its brand
+image. During the reporting period, the Bank's reputational risk was controllable with no material reputational risk event
+occurred.
+The Board of Directors is responsible for reviewing and finalizing bank-wide policies concerning reputational risk
+management that are in line with the strategic objective of the Bank, establishing a bank-wide system of reputational
+risk management, monitoring the overall status and effectiveness of reputational risk management across the Bank and
+assuming the ultimate responsibility for reputational risk management. The Senior Management is responsible for leading
+reputational risk management of the Bank, implementing the strategies and policies established by the Board of Directors,
+reviewing and finalizing the rules, measures and operating procedures for reputational risk management and the plans to
+handle extraordinarily major reputational events and ensuring the proper and effective operation of the reputational risk
+management system. The Bank has established a special reputational risk management team to take charge of the daily
+management of reputational risk.
+Reputational risk is defined as the risk of negative assessment or comments on a commercial bank from stakeholders as a
+result of its operation, management and other behaviors or external events. Reputational risk may arise in any part of the
+Bank's operation and management, and usually co-exists and correlates with credit risk, market risk, operational risk and
+liquidity risk.
+Reputational Risk
+Reputational risk management of the Bank refers to the process and method for ensuring the achievement of the overall
+objective of reputational risk management based on the reputational risk management objective and planning, through
+the establishment and improvement of the reputational risk management system and through daily reputational risk
+management and proper handling of reputational events. Good reputation is central to the operation and management of a
+commercial bank. The Bank highly values its reputation and has incorporated reputational risk management in the corporate
+governance and enterprise risk management system to prevent reputational risk.
+Confronted with complex and severe AML environment both in and outside China, the Bank upheld a "risk-based,
+problem-based, and foundation-oriented approach with a focus on regulatory requirements", and coordinated efforts to
+promote the development of AML policies, systems and teams to shore up the Group's AML management foundation.
+The Bank continued to improve the AML management structure at the Head Office level, intensified AML assessment and
+accountability, and actively cooperated with PBC to carry out FATF mutual evaluations. AML publicity and training activities
+were launched in all areas to strengthen AML responsibility of all staff. Domestic institutions continued to deepen the
+centralized AML processing reform to increase the intelligentization of AML system, strengthened the analysis ability of
+suspicious activity report and cooperated with regulators and competent authorities in AML investigation. Key overseas
+institutions redoubled efforts to strengthen AML management capability, with more energy devoted to prevent and control
+money laundering risks in key areas and critical links, and developed a long-term AML compliance management mechanism.
+In strict compliance with anti-money laundering ("AML") laws and regulations of China and host countries (regions) of
+overseas institutions, the Bank sincerely implemented the "risk-based" regulatory requirements in respect of AML, steadily
+fulfilled the legal obligations and social responsibilities concerning AML, and kept enhancing the Group's management level
+regarding AML and counter-terrorist financing ("CTF").
+Anti-Money Laundering
+Discussion and Analysis
+61
+Annual Report 2018
+In 2018, the Bank continued to strengthen legal risk management, by improving the risk prevention and control capacity
+in legal risk management, ensuring the legal and compliant operation, healthy business development and overall business
+stability of the Group. The Bank improved both the vertical linkage and horizontal coordination mechanism between the
+Head Office and branches. By embedding legal risk prevention and control into business negotiations, product design,
+contract signing and other links, the Bank prevented legal risk in advance and made the legal risk prevention and control
+more prospective, proactive and targeted. Legal risk prevention and control in key areas and links have made headway in
+line with new financial regulatory requirements. The Bank further improved the cross-border coordination and management
+for legal work and strengthened the legal risk management of overseas institutions, actively responding to cross-border legal
+issues emerging in the development of international operations. It applied multiple legal means to improve debt collection
+efficiency. Moreover, the Bank pragmatically strengthened the risk management and control of lawsuit-related risks, thereby
+preventing and mitigating lawsuit-related risks and losses. It assisted with the online judicial inquiry and enforcement,
+and improved the efficiency of providing enforcement assistance. The Bank made smooth progress in implementing
+the seal reform, put in place and improved a procedure-based mechanism for electronic signing system. It standardized
+contract management and reinforced authorization management, related party management, trademark management and
+intellectual property protection, and made continuous efforts to institutionalize risk management and control, and build a
+better-structured system.
+Please refer to the section headed "Operational Risk" of the 2018 Capital Adequacy Ratio Report of Industrial and
+Commercial Bank of China Limited issued by the Bank for further information on operational risk capital measurement.
+356,406,257,089
+269,612,212,539
+75.65
+86,794,044,550
+24.35
+100.00
+Number of Shareholders and Particulars of Shareholding
+Details of Securities Issuance and Listing
+The Bank did not conduct any share issue or issue any convertible bonds during the reporting period.
+For details on the issuance of preference shares of the Bank, please refer to the section headed "Details of Changes in Share
+Capital and Shareholding of Substantial Shareholders Preference Shares".
+For information on other securities issued by the Bank and its subsidiaries, please refer to "Note 35. to the Financial
+Statements: Debt Securities Issued; Note 38. to the Financial Statements: Other Equity Instruments" for details.
+The Bank did not have any employee shares.
+100.00
+Note: "Foreign shares listed overseas", namely H shares, are within the same meaning as defined in the "No. 5 Standards on the Content
+and Format of Information Disclosure of Companies with Public Offerings - Content and Format of the Report of Change in
+Corporate Shareholding" (Revision 2007) of CSRC.
+356,406,257,089
+ordinary shares
+356,406,257,089
+Other
+entities
+―
+Ping An Life Insurance Company
+of China, Ltd. Traditional
+356,406,257,089
+100.00
+1. RMB-denominated
+100.00
+269,612,212,539
+As at the end of the reporting period, the Bank had a total number of 579,040 ordinary shareholders and no holders of
+preference shares with voting rights restored, including 123,028 holders of H shares and 456,012 holders of A shares. As at
+the end of the month immediately before the results announcement date (28 February 2019), the Bank had a total number
+of 562,820 ordinary shareholders and no holders of preference shares with voting rights restored.
+2. Foreign shares listed
+86,794,044,550
+24.35
+overseas
+III. Total number of shares
+75.65
+74
+403,299,770
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+H Share
+HKSCC Nominees Limited/
+None
+123,316,451,864
+34.60
+State-owned A Share
+24.17
+MOF
+123,717,852,951
+34.71
+A Share
+State-owned
+Huijin
+period
+None
+ICBC
+86,151,664,334
+51,813,906
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 ORDINARY SHAREHOLDERS OF THE BANK
+Unit: Share
+Increase/
+Shareholding
+Name of shareholder
+Nature of
+shareholder
+Unknown
+A Share
+873,150,238
+0.24
+A Share
+person
+Hong Kong Securities
+Clearing Company Limited (4)
+Foreign legal
+None
+1.03
+2,416,131,564
+None
+Other
+entities
+Open-End Index Securities
+SSE 50 Exchange Traded
+005L CT001 Hu
+-Ordinary insurance products
+383,007,330
+A Share
+None
+0.21
+A Share
+Other
+entities
+Limited Traditional
+China Life Insurance Company
+―005LFH002 Hu
+745,715,157
+Distribution to Individuals
+0.10
+None
+(4) HKSCC Nominees Limited held 86,151,664,334 H shares and Hong Kong Securities Clearing Company Limited held 873,150,238
+A shares.
+Company Limited. Save as disclosed above, the Bank is not aware of any connected relations or concert party action among the
+afore-mentioned shareholders.
+005LFH002 Hu" and "China Life Insurance
+CT001 Hu" are managed by China Life Insurance
+Company Limited Traditional - Ordinary insurance products ―005L
+_
+Central Huijin Asset Management Co., Ltd. is a wholly-owned subsidiary of Huijin. Both "China Life Insurance Company
+Limited Dividends Distribution Dividends Distribution to Individuals
+366,214,700
+(3)
+(2)
+Notes: (1) The above data are based on the Bank's register of shareholders as at 31 December 2018.
+Co., Ltd.
+Suisse Asset Management
+Investment Fund of ICBC Credit
+366,214,700
+The Bank had no shares subject to restrictions on sales.
+3,687,330,676
+Distribution Dividends
+Limited Dividends
+0.40
+A Share
+State-owned
+Wutongshu Investment
+Co., Ltd.
+legal person
+-1,559,948,322
+1,420,781,042
+None
+0.68
+A Share
+State-owned
+China Securities Finance Co., Ltd.
+- Ordinary insurance products
+-44,000,000
+the reporting
+entities
+None
+Central Huijin Asset
+869,042,907
+None
+1,000,845,252
+0.28
+A Share
+Other
+legal person
+China Life Insurance Company
+Management Co., Ltd.
+None
+1,013,921,700
+0.28
+A Share
+State-owned
+legal person
+Class of
+Unit: Share
+I. Shares subject to
+Leveraging a sound corporate governance framework, the Bank promoted the transformation of operation, offered
+innovative products and services, strove to enhance profitability and risk control level, promoted the reasonable distribution
+of social resources via optimal allocation of financial resources, further stepped up efforts to build a green financial system to
+improve economic, social and ecological benefits and created superior value for all the stakeholders including shareholders,
+customers and employees as well as the society.
+Delivering Excellence
+Taking the social responsibility objective of "Excellence for You Excellent services to clients, Maximum returns to
+shareholders, Real success for our people, Great contribution to society", the Bank is committed to serving the common
+interests of all the stakeholders in economic and social development, promoting sustainable economic development and
+social progress, and maximizing the comprehensive economic, environmental, and social value.
+Social Responsibility
+69
+Annual Report 2018
+Sticking to Our Founding Mission
+1,729,020
+1,631,867
+1,885,349
+169,915
+209,554
+498,644
+432,604
+2,010,668
+Cross-jurisdictional liabilities
+Staying true to our founding mission, the Bank was determined to be rooted in the real economy. It focused on advanced
+manufacturing, cultivated happiness industries, supported connectivity of the internet of things, and served coordinated
+regional development. Moreover, it further built the inclusive financial system to serve the small and micro enterprises and
+private economy. It upheld the fundamental policy of targeted poverty relief and elimination, innovatively pushed ahead with
+poverty relief and kept enhancing its capability in this field, so as to improve the people's livelihood with financial services.
+The Bank upheld and fulfilled the "customer-oriented" operating philosophy and took persistent efforts to build an efficient,
+reputed bank that provides good customer experience. It was dedicated to structuring a service hierarchy that combines
+online and offline operations, manual work and artificial intelligence as well as notification and interaction. The Bank
+endeavoured to provide more efficient, safer and more convenient financial services of better quality and become a trusted,
+reliable, user friendly and first-choice bank.
+Mechanism for poverty relief. The Head Office's Leading Group for Poverty Relief through Finance held a meeting
+to strengthen the leadership and coordination of poverty relief work. The ICBC Work Plan for Targeted Poverty
+Relief through Finance (Version 2018), the Opinions on Effective Work on Targeted Poverty Relief and the Work
+Plan for Supervision and Inspection of Targeted Poverty Relief were formulated, and the Measures for Assessment of
+Effectiveness of Targeted Poverty Relief through Finance was issued to provide a solid policy basis for poverty relief
+work.
+Poverty relief planning and objective. The Bank fully leveraged financial services to lift people in poor areas
+out of poverty, increased credit support to poor areas and provided good financial services for poor areas in an all-
+round way. It concentrated efforts on supporting areas of extreme poverty, helped targeted areas of poverty relief
+to integrate resources and pooled resources from all sides to assist impoverished people in improving production
+and living conditions, supported local people to meet poverty relief objectives to schedule and contributed financial
+wisdom to poverty relief.
+Targeted Poverty Relief Planning
+The Bank took poverty relief as an important part of fulfilling its social responsibilities, insisted on the basic principle
+of targeted poverty relief and elimination, established the leading group for poverty relief, and improved the poverty
+relief mechanism. It took innovative measures to make progress in the fight against poverty, kept enhancing the
+financial support and poverty relief efforts well targeted at the needs of poverty-stricken areas and made endeavors to
+play its due role in anti-poverty.
+Targeted Poverty Relief
+Adhering to the people-oriented philosophy, the Bank took "equal, open, respectful and integrated" attitudes to proactively
+optimize the employment environment, substantially protect the legitimate rights and interests of employees and care about
+their growth. At the same time, the Bank actively supported charity work, encouraged the employees to participate in
+volunteer activities, gave back to the society and fulfilled its corporate social responsibilities in multiple ways, such as helping
+the poor, the elderly and people with disabilities, and providing financial support for education.
+Customers' Favourite
+People-oriented
+ICBC
+70
+The Bank upheld the corporate culture that "Integrity Leads to Prosperity", responded actively to the latest changes in
+financial regulatory requirements and market conditions, defended the bottom line of risks, fortified the lines of defense
+for compliance, pursued safe operation and sound development based on well-established policies and risk control and
+prevention, effectively protected the rights and interests of consumers and safeguarded financial security and stability.
+Security and Prudence
+The Bank vigorously fostered innovation culture, adhered to indigenous innovation, and strengthened protection of
+intellectual property rights. It innovated products and services and continuously strengthened innovation in management in a
+bid to become a leader and driver of the smart finance ecosystem.
+Leading in Innovation
+Social Responsibility
+Summary of Targeted Poverty Relief in 2018
+Cross-jurisdictional claims
+Trading and available-for-sale securities
+1,928,002
+1,717,824
+Intra-financial system assets
+28,084,967
+29,679,878
+Balance of adjusted on- and off-balance sheet assets
+Intra-financial system liabilities
+2018
+2017
+In RMB millions
+Global Systemically Importance Assessment Indicators of Commercial Banks
+Discussion and Analysis
+percentage
+(%)
+Total number of
+shares held
+Indicator
+Level 3 assets
+1,816,041
+Securities and other financing instruments issued
+5,600,701
+7,130,990
+Notional amount of over-the-counter (OTC) derivatives
+1,198,482
+1,266,787
+Underwritten transactions in debt and equity markets
+1,924,926
+15,557,326
+Assets under custody
+361,485,854
+413,391,380
+Payments settled via payment systems or correspondent banks
+3,948,878
+3,947,251
+16,301,370
+shares
+Poverty relief through finance. The Bank sought breakthroughs mainly in credit granting, product innovation and
+service provision, etc., and deeply pushed forward anti-poverty work to cater for the financial demand of poverty
+stricken areas. The hard efforts paid off in the way of finance leveraging and promoting finance-supported targeted
+poverty relief in the new era.
+Annual Report 2018
+ICBC
+In view of the development plan of the poor regions, the Bank will coordinate targeted poverty relief through
+finance with rural revitalization and create new financial products and services for poverty relief according to local
+conditions. It will implement the poverty relief model that features the combination of finance, industry, education
+and healthcare, and push the poverty relief efforts from being driven by external forces to being driven by internal
+forces and from individual cases to collective relief. The Bank will refine the financial service channels for poor
+regions, make full use of ICBC Mall, effectively carry out poverty relief through e-commerce, and increase the supply
+of financial services in poor regions to make them more convenient and accessible. It will focus on poverty relief in
+the extremely poor regions, make overall arrangements of resources, and prioritize support to those areas with the
+greatest difficulties, poorest groups and the most urgent problems.
+Subsequent Targeted Poverty Relief Plan
+Note: The "targeted poverty relief" refers to the poverty relief efforts in Tongjiang County, Nanjiang County, Jinyang County and
+Wanyuan City in Sichuan Province.
+58,202
+Including: Number of registered poor people
+Social Responsibility
+317,932
+Number of beneficiaries
+Projects
+2,794.43
+Amount of donations
+The Group poverty relief donations apart from targeted poverty relief
+2,584.67
+Including infrastructure construction, industrial development,
+education, medical care and visit to poor households
+10,800.00
+Green and Environment Protection
+The Bank advocated green office and continuously promoted low-carbon operation, by constantly enriching the
+functions of the office IT system, actively promoting the paperless office operation, and having meetings go paperless.
+In the meantime, it took a further step to tighten the car use system, and continued to develop the diversified official
+car use system focused on self-owned cars and complemented by the commercial car service such as online car
+hailing. The Bank promoted green travel, advocated water conservation, strengthened energy consumption control,
+and carried out the voluntary tree planting initiatives constantly. With these endeavors, it improved the ecological
+environment and raised the awareness of environmental protection among its employees.
+Percentage
+(%)
+Number of shares
+At 31 December 2018
+Increase/decrease
+during the
+reporting period
+Percentage
+(%)
+Particulars of Substantial Shareholders
+Regarding green finance strengthening as a key strategy for long-term pursuit, the Bank comprehensively carried
+forward green finance, promoted the "green adjustment" of credit structure, actively backed the development of
+green industries, reinforced the prevention and control of environmental and social risks, and strictly enforced the
+whole-process management of green credit in all aspects, e.g. policy, management process, business innovation
+and own performance. As at the end of the reporting period, the balance of domestic green credit reached
+RMB1,237,758 million, increasing by RMB138,559 million or 12.61% over the end of 2017, higher than the
+same-period growth of domestic corporate loans by about 6.6 percentage points.
+Number of shares
+DETAILS OF CHANGES IN SHARE CAPITAL
+Changes in Ordinary Shares
+Details of Changes in Share Capital and Shareholding of
+Substantial Shareholders
+73
+Annual Report 2018
+For more details on the Bank's social responsibilities, please refer to the ICBC Corporate Social Responsibility Report 2018
+(Environment, Society and Governance) published on its official website.
+At 31 December 2017
+Poverty relief through industries. The Bank took the lead to found the Alliance of Targeted Poverty Relief for a
+Beautiful Life, and put in place an ecological chain of reducing poverty through industrial development that integrates
+large banks, central media, logistical channels, operations and direct selling. The Bank leveraged on its E-commerce
+platform "ICBC Mall" to consolidate logistics, fund flows and information flows and help agricultural enterprises
+and farmers in poor areas to sell agricultural supplies and agricultural products online. In targeted areas of poverty
+relief, the Bank adhered to the industry-based poverty relief model combining ICBC, the government, the village's
+Party committee and autonomous committee, enterprises and the poor households together, and fostered a group
+of characteristic industrial projects with growing vitality and demonstration effects in strict accordance with the
+principle of targeted poverty relief. The Bank organized training sessions of "three teams" including Party committee
+secretaries, pioneers in making wealth through setting up businesses and practical scientific and technological
+professionals of poverty-stricken villages to broaden their horizons of work and enhance their ability to generate
+wealth for themselves and others.
+Purchase of agricultural products in poor areas
+470.00
+10,626,870.94
+Loan of project targeted poverty relief
+2,909,044.98
+Including: Loan of industry targeted poverty relief
+15,594,543.84
+In RMB10,000
+Including: Rural transport facilities
+Balance of loans
+Targeted Poverty Relief Achievements
+Poverty relief through healthcare. The Bank improved the local medical services and public hygiene and reduced
+the cases of local residents falling below the poverty line or returning to poverty due to illnesses, by offering free
+medical assistance and providing medical and health facilities, enabling more poor people to access basic medical
+services. For the first time, the "Lifeline Express" hospital pulled into Bazhong in Sichuan Province, and a cataract
+treatment center was also built in Bazhong.
+Poverty relief through education. "Prioritizing education for poverty relief" and regarding people as the biggest
+asset, the Bank was well poised to extend support to teachers, students and graduates, supported job creation,
+sponsored poor students, provided training for village teachers, and raised funds for school buildings, thus raising the
+level of poverty relief through education across the board.
+72
+Social Responsibility
+71
+Finance-backed targeted poverty relief
+30.00
+5,079,545.99
+190,432.19
+681.00
+1,890.00
+Assistance in selling agricultural products in poor areas
+Consumption-based poverty relief
+Poverty relief through infrastructure
+Poverty relief through healthcare
+Upgrading of rural power network
+Poverty relief through education
+3,071.00
+Amount of targeted poverty relief input
+171,825.00
+Rural education loan
+707,104.44
+Rural water conservancy facilities
+Poverty relief through industries
+During the reporting period, the Bank's controlling shareholders and de facto controller remained unchanged.
+2
+75
+0.28
+position
+corporations
+Total
+124,731,774,651
+46.26
+35.00
+Notes: (1) According to the register of shareholders of the Bank as at 31 December 2018, MOF held 123,316,451,864 shares in the Bank.
+(2) According to the register of shareholders of the Bank as at 31 December 2018, Huijin held 123,717,852,951 shares in the Bank,
+while Central Huijin Asset Management Co., Ltd., a subsidiary of Huijin, held 1,013,921,700 shares in the Bank.
+(3)
+Due to rounding, percentages presented herein are for reference only.
+Annual Report 2018
+77
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+HOLDERS OF H SHARES
+0.38
+Name of substantial
+Ping An Asset
+Management
+Co., Ltd.(1)
+Number of
+H shares held
+Percentage of
+Capacity
+(share)
+Nature of
+interests
+Percentage of
+H shares (%)
+total ordinary
+shares (%)
+Investment
+8,707,776,000
+manager
+shareholder
+Long
+1,013,921,700
+Interest of
+controlled
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+The second single largest shareholder of the Bank is MOF, which held approximately 34.60% shares of the Bank as at
+31 December 2018. MOF is a department under the State Council, and is responsible for overseeing the State's fiscal
+revenue and expenditure, formulating the fiscal and taxation policies, and supervising State finance at a macro level.
+◆ Particulars of Other Corporate Shareholders Holding 10% Shares or More (Excluding HKSCC Nominees
+Limited)
+None.
+◆ Particulars of the De Facto Controller
+None.
+Interests and Short Positions Held by Substantial Shareholders and Other Persons
+Substantial Shareholders and Persons Having Notifiable Interests or Short Positions
+Pursuant to Divisions 2 and 3 of Part XV of the Securities and Futures Ordinance of
+Hong Kong
+As at 31 December 2018, the Bank received notices from the following persons about their interests or short positions held
+in the Bank's ordinary shares and underlying shares, which were recorded in the register pursuant to Section 336 of the
+Securities and Futures Ordinance of Hong Kong as follows:
+HOLDERS OF A SHARES
+Name of substantial
+shareholder
+Number of
+A shares held
+Capacity
+(share)
+Nature of
+interests
+Percentage of
+A shares (3) (%)
+Percentage of
+total ordinary
+position
+34.71
+45.89
+Long
+123,717,852,951
+Beneficial owner
+Long
+position
+Huijin(2)
+43.77
+Long
+position
+118,006,174,032
+Beneficial owner
+MOF(1)
+shares (3) (%)
+33.11
+ICBC
+10.03
+National Council for
+0.01
+0.00
+guaranteed
+interests in shares
+position
+Interest of
+256,781,554
+Long
+0.30
+0.07
+controlled
+position
+corporations
+Approved
+4,109,856,188
+Long
+Long
+1.15
+lending agent
+position
+Total
+Interest of
+controlled
+corporations
+4,372,394,742
+85,975,521
+5.03
+1.22
+Short
+position
+0.09
+0.02
+Note: (1)
+As confirmed by Ping An Asset Management Co., Ltd., such shares were held by Ping An Asset Management Co., Ltd. on behalf
+of certain customers (including but not limited to Ping An Life Insurance Company of China, Ltd.) in its capacity as investment
+manager and the interests in such shares were disclosed based on the latest disclosure of interests form filed by Ping An Asset
+Management Co., Ltd. for the period ended 31 December 2018 (the date of relevant event being 7 September 2018). Both
+Ping An Life Insurance Company of China, Ltd. and Ping An Asset Management Co., Ltd. are subsidiaries of Ping An Insurance
+(Group) Company of China, Ltd. As Ping An Asset Management Co., Ltd. is in a position to fully exercise the voting rights in
+respect of such shares on behalf of customers and independently exercise the rights of investment and business management
+in its capacity as investment manager, and is completely independent from Ping An Insurance (Group) Company of China, Ltd.,
+Ping An Insurance (Group) Company of China, Ltd. is exempted from aggregating the interests in such shares as a holding
+company under the aggregation exemption and disclosing the holding of the same in accordance with the Securities and Futures
+Ordinance of Hong Kong.
+78
+ICBC
+4.73
+5,757,000
+Person holding
+Citigroup Inc.
+Beneficial owner
+8,663,703,234
+Social Security Fund
+Long
+position
+9.98
+2.43
+Temasek Holdings
+(Private) Limited
+Interest of
+7,317,475,731
+Long
+8.43
+2.05
+controlled
+position
+corporations
+BlackRock, Inc.
+position
+corporations
+decrease of
+shares during
+0.00
+0.00
+Short
+2.44
+1,679,000
+position
+Interest of
+1.23
+5.07
+Long
+4,397,641,191
+controlled
+Annual Report 2018
+Number of
+pledged or
+locked-up shares
+31.34
+11
+China Jianyin Investment Limited
+100.00
+12
+China Galaxy Financial Holdings Company Limited
+69.07
+13
+Shenwan Hongyuan Group Co., Ltd. (A)
+22.28
+14
+China International Capital Corporation Limited (H)
+55.68
+15
+China Securities Co., Ltd. (A; H)
+New China Life Insurance Company Limited (A; H)
+31.21
+Jiantou CITIC Asset Management Co., Ltd.
+70.00
+17
+Guotai Junan Investment Management Co., Ltd.
+14.54
+Notes: (1)
+A represents A share listed company, while H represents H share listed company.
+(2)
+On 6 June 2018, upon going through the public listing procedures of Beijing Financial Assets Exchange, Huijin and Haier Group
+(Qingdao) Financial Holdings Ltd. signed the equity transfer agreement, to transfer 398.5 million A shares of China International
+Capital Corporation Limited ("CICC") to Haier Group (Qingdao) Financial Holdings Ltd. As at the end of 2018, the relevant
+procedures were being handled. After the transfer completed, the percentage of CICC's shares directly held by Huijin will change
+to about 46.2%.
+(3) Except the above-mentioned controlling or equity participating enterprises, Huijin also has a wholly-owned subsidiary - Central
+Huijin Asset Management Co., Ltd. Central Huijin Asset Management Co., Ltd. was incorporated in November 2015 in Beijing.
+With a registered capital of RMB5 billion, the company runs an asset management business.
+1 Ding Xuedong was transferred to serve as Deputy Secretary General of the State Council (Minister Level). He authorized Tu Guangshao to
+function in the capacity of Legal Representative of CIC, Chairman and Legal Representative of Huijin. The authorization came into force
+on 2 March 2017, and shall cease to be effective upon new appointment by the State Council. Tu Guangshao currently serves as Vice
+Chairman and General Manager of CIC.
+76
+restrictions on sales
+II.
+16
+Shares not subject to
+restrictions on sales
+10
+China Reinsurance (Group) Corporation (H)
+Agricultural Bank of China Limited (A; H)
+3
+34.71
+34.68
+Huijin's shareholding
+percentage (%)
+Industrial and Commercial Bank of China Limited (A; H)
+40.03
+China Development Bank Corporation
+1
+No.
+As at 31 December 2018, Huijin held approximately 34.71% shares of the Bank. It held shares directly in the institutions
+listed below:
+The largest single shareholder of the Bank is Huijin, whose full name is Central Huijin Investment Ltd. Huijin is a state-owned
+company founded by the State according to the Company Law on 16 December 2003. Its registered capital is equal to its
+paid-in capital at RMB828,209 million. Its registered address is New Poly Plaza, 1 Chaoyangmen North Street, Dongcheng
+District, Beijing. Its unified social credit code is 911000007109329615, and its legal representative is Ding Xuedong'. Huijin
+is a wholly-owned subsidiary of CIC. It, in accordance with authorization by the State Council, makes equity investments in
+major state-owned financial enterprises, and shall, to the extent of its capital contribution, exercise the rights and perform
+the obligations as an investor on behalf of the State in accordance with applicable laws, to achieve the goal of preserving
+and enhancing the value of state-owned financial assets. Huijin does not engage in any other business activities, and does
+not intervene in the day-to-day business operations of the key state-owned financial institutions it controls.
+◆ Controlling Shareholders
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+Company name
+71.56
+4
+64.02
+9
+73.63
+China Export & Credit Insurance Corporation
+8
+19.53
+Bank of China Limited (A; H)
+China Everbright Bank Company Limited (A; H)
+55.67
+China Everbright Group Ltd.
+6
+57.11
+China Construction Bank Corporation (A; H)
+5
+7
+◆ Senior Management Members
+On 2 July 2018, Mr. Zhang Hongli resigned from the position of Senior Executive Vice President of the Bank due to family
+reasons. On 5 September 2018, Mr. Wang Jingdong resigned from the position of Senior Executive Vice President of the
+Bank due to change of job assignments. On 6 September 2018, Mr. Li Yunze resigned from the position of Senior Executive
+Vice President of the Bank due to change of job assignments.
+Mr. Gu has served as Vice Chairman and Executive Director of the Bank since December 2016, and President since October
+2016. He joined ICBC in 1998, where he served as Deputy General Manager of Accounting and Settlement Department,
+Deputy General Manager of Planning and Finance Department, and General Manager of Finance and Accounting
+Department. Since July 2008, he had served as Board Secretary and General Manager of Corporate Strategy and Investor
+Relations Department of the Bank, Head of Shandong Branch and Senior Executive Vice President of the Bank. He served
+concurrently as Vice Chairman of Standard Bank Group Limited, Chairman of ICBC (London) PLC and Chairman of Industrial
+and Commercial Bank of China (Argentina) S.A. Mr. Gu obtained a Doctorate degree in Economics from Shanghai University
+of Finance and Economics, Master's degree in Economics from Dongbei University of Finance and Economics and Bachelor's
+degree in Engineering from Shanghai Jiao Tong University. He is a senior accountant.
+ICBC
+On 5 January 2018, Mr. Qian Wenhui resigned from the positions of Supervisor and Chairman of the Board of Supervisors of
+the Bank due to change of job assignments.
+88
+Cheng Fengchao, Non-executive Director
+At the First Employees' Congress of the Bank held on 21 September 2018, Mr. Hui Ping was appointed as Employee
+Supervisor of the Bank, and his new term of office started from the day of approval by the Employees' Congress. At the First
+Extraordinary General Meeting of 2018 held on 21 November 2018, Mr. Qu Qiang was appointed as External Supervisor of
+the Bank, and his new term of office started from 20 December 2018.
+In July 2018, Mr. Zhang Hongli ceased to act as Executive Director of the Bank due to expiration of the term of office. In
+September 2018, Mr. Wang Jingdong ceased to act as Executive Director of the Bank due to change of job assignments. In
+October 2018, Mr. Fei Zhoulin ceased to act as Non-executive Director of the Bank citing his age. In October 2018, Mr. Or
+Ching Fai ceased to act as Independent Non-executive Director of the Bank due to expiration of the term of office. In January
+2019, Mr. Yi Huiman ceased to act as Chairman and Executive Director of the Bank due to change of job assignments.
+Dong Shi, Non-executive Director
+Mr. Dong has served as Non-executive Director of the Bank since August 2017. He joined Huijin in 2008, and served as
+Deputy Division Chief of the Audit and Supervision Bureau of PBC, Assistant Special Inspector of the State Council, Division
+Chief of the Supervisory Committee of the Working Commission of Central Level State-Owned Enterprises, and Deputy
+Director-General of the Foreign Affairs Bureau of the State-Owned Assets Supervision and Administration Commission,
+Director of China Reinsurance (Group) Corporation and Director of China Reinsurance Asset Management Co., Ltd. and
+Non-executive Director of China Construction Bank Corporation. He currently serves as Vice Chairman and Non-executive
+Director of China Securities Co., Ltd. He made a study visit to the US Federal Reserve and Royal Melbourne Institute of
+Technology. Mr. Dong graduated from Renmin University of China and obtained a Master's degree in Economic Law. He is a
+senior economist and an accountant.
+Ye Donghai, Non-executive Director
+Mr. Ye has served as Non-executive Director of the Bank since October 2017. He joined Huijin in 2017. Previously, he served
+as Section Chief and Deputy Director General of the Finance Division of Beijing Normal University, Assistant General Manager
+(Deputy General Manager level) of the Planning and Finance Department of China Everbright Bank, Deputy General Manager
+of the Finance and Accounting Department of China Everbright Bank (in charge of the department's work), Vice President
+and member of the CPC Committee of China Everbright Bank Tianjin Branch, Deputy General Manager of the Audit
+Department of China Everbright Bank (in charge of the department's work) and General Manager of the Audit Department
+of China Everbright Bank. He served concurrently as Employee Supervisor of the Board of Supervisors of China Everbright
+Bank. Mr. Ye Donghai graduated from Renmin University of China, and obtained a Master's degree in Economics. He is a
+senior accountant.
+Hong Yongmiao, Independent Non-executive Director
+Mr. Hong has served as Independent Non-executive Director of the Bank since August 2012. Mr. Hong was previously in charge
+of the National Science Fund for Distinguished Overseas Young Scholars supported by the National Science Foundation of China,
+and acted as President of the Chinese Economists Society in North America. He is currently an academician of the Academy of
+Sciences for the Developing World and a professor of Economics and International Studies at Cornell University in the United
+States. He has been enrolled as one of the first participants of the "Thousand Talents Plan" and serves as Vice Chairman of the
+Steering Committee of Economics Teaching at Institutions of Higher Learning under the Ministry of Education and Director of
+the Wang Yanan Institute for Studies in Economics and the School of Economics at Xiamen University. He is a lecture professor
+of the "Changjiang Scholars" launched by the Ministry of Education, an honorary professor of the School of Economics and
+Management at University of Chinese Academy of Sciences and a senior editor in economics for the Journal of Management
+Science and Engineering, an English magazine published by the National Natural Science Foundation of China. He is also an
+editorial board member of Economic Research Journal of the Chinese Academy of Social Sciences and an academic board member
+of China Economic Quarterly published by Peking University. He acts as Independent Non-Executive Director of Xiamen Bank Co.,
+Ltd. as well. Mr. Hong graduated from Xiamen University with a Bachelor of Science degree and a Master's degree in Economics,
+and obtained his Doctorate degree in Economics from the University of California San Diego.
+Bank Group as Senior Advisor and worked in the Development Partner Relationship Department of the Development Finance
+Unit of the International Development Association and the Vice-President Front Office of East Asia and Pacific Region of the
+International Bank for Reconstruction and Development. Ms. Mei obtained a Master's degree in International Affairs from
+School of International and Public Affairs of Columbia University, and a PhD in Economics from Chinese Academy of Fiscal
+Science (formerly known as the Institute of Fiscal Science, MOF).
+84
+Directors, Supervisors, Senior Management, Employees and Institutions
+Anthony Francis Neoh, Independent Non-executive Director
+Mr. Neoh has served as Independent Non-executive Director of the Bank since April 2015. He previously served as Chief
+Advisor to CSRC, a member of the International Consultation Committee of CSRC, a member of the Basic Law Committee of
+the Hong Kong Special Administrative Region under the Standing Committee of the National People's Congress of People's
+Republic of China, and Chairman of the Hong Kong Securities and Futures Commission. He was Chairman of the Technical
+Committee of the International Organization of Securities Commissions, a Non-executive Director of Global Digital Creations
+Holdings Limited. He was an Independent Non-executive Director of Link Management Limited, which is the Manager of
+Link Real Estate Investment Trust. He was also an Independent Non-executive Director of China Shenhua Energy Company
+Limited, Bank of China Limited and China Life Insurance Company Limited. Mr. Neoh currently serves as an Independent
+Non-executive Director of CITIC Limited and New China Life Insurance Company Limited. He graduated from the University
+of London with a Bachelor's degree in Law. He is Honorary Doctorate of Law of Chinese University of Hong Kong and Open
+University of Hong Kong and Honorary Doctorate of Social Sciences of Lingnan University. He was elected Honorary Fellow
+of the Hong Kong Securities Institute and Academician of the International Euro-Asian Academy of Sciences. Mr. Neoh was
+appointed as Senior Counsel in Hong Kong. He is a barrister of England and Wales. He was admitted to the State Bar of
+California.
+Yang Siu Shun, Independent Non-executive Director
+Mr. Yang has served as Independent Non-executive Director of the Bank since April 2016. He previously served as
+Chairman and Principal Partner of PricewaterhouseCoopers Hong Kong, Executive Chairman and Principal Partner of
+PricewaterhouseCoopers Chinese Mainland and Hong Kong, member of five-people leading group of global leadership
+committee of PricewaterhouseCoopers, Chairman of PricewaterhouseCoopers Asia-Pacific region and Director and Chairman of
+Audit Committee of Hang Seng Management College. Mr. Yang currently serves as a member of the 13th National Committee
+of the Chinese People's Political Consultative Conference, a member of the Exchange Fund Advisory Committee of Hong
+Kong Monetary Authority, a member of the board of directors of the Hong Kong Jockey Club, Vice Chairman of the Council
+of the Open University of Hong Kong and an Independent Non-executive Director of the Tencent Holdings Limited. Mr. Yang
+graduated from the London School of Economics and Political Science. He is a Justice of the Peace in Hong Kong. Mr. Yang
+holds the qualification of Chartered Accountants, and is a senior member of the Institute of Chartered Accountants in England
+and Wales, the Hong Kong Institute of Certified Public Accountants and the Chartered Institute of Management Accountants.
+Sheila Colleen Bair, Independent Non-executive Director
+ICBC
+Directors, Supervisors, Senior Management, Employees and Institutions
+83
+Annual Report 2018
+Gu Shu, Vice Chairman, Executive Director, President
+Biographies of Directors, Supervisors and Senior Management
+(6) Mr. Hong Yongmiao () has a former Chinese name. The full name of Mr. Nout Wellink is Arnout Henricus Elisabeth
+Maria Wellink.
+(5) During the reporting period, the Bank did not implement any share incentives. None of the existing directors, supervisors and
+senior management members of the Bank or those who left office during the reporting period, except Mr. Zhang Hongli who
+held 2,000 H shares of the Bank, held shares or share options or were granted restricted shares of the Bank, and there was no
+change during the reporting period.
+Mr. Cheng has served as Non-executive Director of the Bank since March 2015. He joined Huijin in 2009. He served as
+Deputy Director of Finance Bureau of Pingquan County in Hebei Province, Deputy Director of Finance Office of Hebei
+Province, Head of Hebei Certified Public Accountants, Vice Chairman and Secretary of Hebei Institute of Certified Public
+Accountants, Deputy General Manager of Shijiazhuang Office, General Manager of Evaluation Management Department,
+General Manager of Tianjin Office and General Manager of Development Research Department of China Great Wall Asset
+Management Corporation, and Non-executive Director of Agricultural Bank of China Limited. He acts as tutor to PhD
+students of Hunan University, graduate supervisor for Graduate School of Chinese Academy of Social Sciences, member of
+the Expert Advisory Committee for Mergers, Acquisitions and Restructurings of CSRC and Supervisor of China Everbright
+Group Limited. He obtained a Doctorate degree in management from Hunan University. Currently, he is a researcher in
+financial science, senior accountant, PRC Certified Public Accountant and China's Certified Public Valuer.
+(3) According to the Articles of Association, before the newly elected directors take office, the current directors shall continue to act
+as directors.
+Directors, Supervisors, Senior Management, Employees and Institutions
+ICBC
+82
+The terms of Mr. Yi Huiman, Mr. Gu Shu, Mr. Zhang Hongli and Mr. Wang Jingdong as Executive Directors of the Bank are
+set out in the above table. Mr. Gu's term as a Senior Management member of the Bank is specified in the section headed
+"Biographies of Directors, Supervisors and Senior Management". Mr. Yi has served as a member of Senior Management,
+Senior Executive Vice President, President and Vice Chairman of the Bank since October 2005. He has served as Chairman of
+the Board of Directors of the Bank from June 2016 to January 2019. Mr. Zhang and Mr. Wang have served as Senior Executive
+Vice Presidents of the Bank since May 2010 and December 2013, respectively.
+(2)
+Zheng Fuqing, Non-executive Director
+Mr. Zheng has served as Non-executive Director of the Bank since February 2015. He joined MOF in 1989, and served as
+Deputy Head and Head of the Administrative Office of Shanxi Finance Ombudsman Office, and Assistant Ombudsman
+and Associate Counsel of Shanxi Finance Ombudsman Office. Mr. Zheng graduated from the Party School of the Central
+Committee of C.P.C. majoring in law theory. He is an economist.
+Mei Yingchun, Non-executive Director
+Ms. Mei has served as Non-executive Director of the Bank since August 2017. She joined MOF in 1992, and consecutively
+served in the World Bank Department, the Treasury Department and the Tariff Policy Department. Previously, she served as
+Assistant Consultant of the Budget Implementation Division of the Treasury Department of MOF, Assistant Consultant of the
+Audit & Supervision Division of the Treasury Payment Centre of MOF, Deputy Director of the Audit & Supervision Division of
+the Treasury Payment Center of MOF, Director of the Audit & Supervision Division of the Treasury Payment Center of MOF,
+Deputy Director-General of the Tariff Policy Department (Tariff Policy Research Centre) of MOF, and was seconded to World
+Ms. Bair has served as Independent Non-executive Director of the Bank since March 2017. Previously, she served as the
+Research Director, Deputy Counsel and Counsel to Robert Dole. She was a Commissioner of the Commodity Futures Trading
+Commission, later served as a senior vice president for government relations at the New York Stock Exchange, and then
+as Assistant Secretary for Financial Institutions at the U.S. Department of the Treasury. She was President of Washington
+College, the Dean's Professor of Financial Regulatory Policy at the University of Massachusetts-Amherst, Chair of the
+Federal Deposit Insurance Corporation and Senior Advisor to The Pew Charitable Trusts. She is the current Chair Emeritus
+of the Systemic Risk Council. She is a founding board member of The Volcker Alliance, a non-profit organization. She
+is Independent Non-executive Director of Thomson Reuters Corp., Host Hotels & Resort Inc., Paxos Trust Company, LLC
+and its holding company Kabompo Holdings, Ltd. She also serves on the International Advisory Council to CBIRC and the
+International Advisory Board for Santander. She received a Bachelor's Degree in philosophy from the University of Kansas,
+and a juris doctorate from the University of Kansas School of Law. She holds honorary doctorates from Amherst College,
+Drexel University, the University of Kansas, and the University of Massachusetts.
+Annual Report 2018
+85
+Directors, Supervisors, Senior Management, Employees and Institutions
+Tan Jiong, Senior Executive Vice President
+Mr. Tan has served as Senior Executive Vice President of the Bank since January 2017. He joined Bank of China (BOC) in
+June 1988. He previously served as Deputy General Manager (person in charge) and General Manager of Tibet Branch, and
+General Manager of Yunnan Branch of BOC, Chairman of Bank of China Investment Management Co., Ltd. and General
+Manager of Guangdong Branch of BOC. Mr. Tan graduated from Wuhan University and obtained a Doctorate degree in
+Economics. He is a senior economist.
+Wang Bairong, Chief Risk Officer
+Mr. Wang has served as Chief Risk Officer of the Bank since July 2016. He began his career in 1986. He joined ICBC in
+1991 and previously served as Assistant to Head of Zhejiang Branch and Head of Shaoxing Branch, Deputy Head of Zhejiang
+Branch and General Manager of the Banking Department of Zhejiang Branch, and Deputy Head (person in charge) and
+Head of Chongqing Branch. Mr. Wang graduated from the Party School of the Central Committee of C.P.C. and obtained a
+Master's degree in Economics. He is a senior economist.
+Annual Report 2018
+88
+87
+Directors, Supervisors, Senior Management, Employees and Institutions
+Guan Xueqing, Board Secretary
+Mr. Guan has served as Board Secretary of the Bank since July 2016. He joined ICBC in 1984 and served as Head of Suining
+Branch in Sichuan, Representative of Frankfurt Representative Office and Deputy General Manager of Frankfurt Branch,
+Deputy Head of Sichuan Branch, Deputy Head of Sichuan Branch and General Manager of Banking Department of Sichuan
+Branch, and Head of Hubei Branch and Sichuan Branch. Previously Mr. Guan was also General Manager of Corporate
+Strategy and Investor Relations Department of the Bank. He graduated from the Southwestern University of Finance and
+Economics and obtained a Doctorate degree in Economics. He is a senior economist.
+Mr. Cheng Fengchao, Mr. Zheng Fuqing, Ms. Mei Yingchun, Mr. Dong Shi and Mr. Ye Donghai were recommended by
+Huijin to serve as Non-executive Directors of the Bank. Huijin holds interests in shares of the Bank. Please refer to the section
+headed "Details of Changes in Share Capital and Shareholding of Substantial Shareholders - Interests and Short Positions
+Held by Substantial Shareholders and Other Persons" for further details.
+None of the Directors, Supervisors and Senior Management members of the Bank, whether they are incumbent or have left
+office during the reporting period, have been punished by the securities regulator in the past three years.
+Appointment and Removal
+◆ Directors
+At the Annual General Meeting for the Year 2017 held on 26 June 2018, Mr. Cheng Fengchao was elected as Non-
+executive Director of the Bank, and his new term of office as Non-executive Director started from the day of approval by
+the Annual General Meeting. At the First Extraordinary General Meeting of 2018 held on 21 November 2018, Mr. Zheng
+Fuqing was appointed as Non-executive Director of the Bank, and Mr. Nout Wellink and Mr. Fred Zuliu Hu were appointed as
+Independent Non-executive Directors of the Bank. The term of office of Mr. Zheng Fuqing started from the day of approval
+at the Extraordinary General Meeting, the term of office of Mr. Nout Wellink started from 3 December 2018, while the
+qualification of Mr. Fred Zuliu Hu is to be approved by CBIRC.
+Mr. Hu has served as Senior Executive Vice President of the Bank since November 2015. Mr. Hu joined ICBC in 1984, serving
+successively as Deputy General Manager of the Industrial and Commercial Credit Department, Deputy General Manager of
+the Credit Management Department, General Manager of the Institutional Banking Department, General Manager of the
+International Banking Department, President of Chinese Mercantile Bank and Chairman of Industrial and Commercial Bank
+of China Luxembourg S.A. Besides, he once served as Deputy Director-General of Construction and Administration Bureau
+of South-to-North Water Diversion Middle Route Project, a Director of Taiping General Insurance Company Limited, Taiping
+Life Insurance Co., Ltd. and Xiamen International Bank, General Manager of Corporate Strategy and Investor Relations
+Department and Board Secretary of the Bank. He concurrently serves as Vice Chairman of Standard Bank Group Limited and
+Chairman of ICBC (London) PLC. Mr. Hu graduated from Hunan University, and received a Doctorate degree in Economics
+from the Graduate School of the Chinese Academy of Social Sciences. He is a researcher.
+◆ Supervisors
+Hu Hao, Senior Executive Vice President
+Shen Bingxi, External Supervisor
+Shen Si, Independent Non-executive Director
+Mr. Shen has served as Independent Non-executive Director of the Bank since March 2017. Previously, he served as Deputy
+Division Chief and Division Chief of Zhejiang Branch of PBC, Deputy General Director of the Investigation and Statistics
+Department of the Head Office of PBC, and Deputy President of the Hangzhou Branch of Shanghai Pudong Development
+Bank, Board Secretary of Shanghai Pudong Development Bank and Executive Director and concurrently Board Secretary
+of Shanghai Pudong Development Bank. He had participated in important events in Shanghai Pudong Development Bank
+such as its initial public offering, four issues of new shares, acquisition of credit cooperative and its formation of strategic
+partnership with Citibank. He obtained a Master's degree in Economics from Zhejiang University and an EMBA degree. He is
+a senior economist.
+Nout Wellink, Independent Non-executive Director
+Mr. Wellink has served as Independent Non-executive Director of the Bank since December 2018. Previously, he served
+as the Treasurer General in the Dutch Ministry of Finance, member of the Executive Board and the President of the Dutch
+Central Bank, member of the Governing Council of the European Central Bank, member of the Group of Ten Central Bank
+Governors and Governor of the International Monetary Fund, member and Chairman of the Board of Directors of the Bank
+for International Settlements, Chairman of the Basel Committee on Banking Supervision, Independent Non-executive Director
+of Bank of China Limited, Vice Chairman of Supervisory Board of PricewaterhouseCoopers Accountants N.V. and an Emeritus
+Professor at the Free University in Amsterdam. Mr. Wellink also served as member of the supervisory board of a bank, a re-
+insurance company and other enterprises on behalf of the Dutch authorities, Chairman of the Board of Supervisors of the
+Netherlands Open Air Museum, member and treasurer of the Royal Picture Gallery Mauritshuis and the Westeinde Hospital in
+The Hague. He was awarded a Knighthood in the Order of the Netherlands Lion in 1980 and is Commander of the Order of
+Orange-Nassau since 2011. He received a Master's degree in Law from Leiden University, a Doctorate degree in Economics
+from Erasmus University Rotterdam and an Honorary Doctorate from Tilburg University.
+Zhang Wei, Shareholder Supervisor
+Mr. Zhang has concurrently served as Shareholder Supervisor and Director of the Board of Supervisors' Office of the Bank
+since June 2016. He joined ICBC in 1994, and has served as Employee Supervisor of the Board of Supervisors, General
+Manager of the Legal Affairs Department and Chief of Consumer Protection Office of the Bank. He graduated from Peking
+University with a Doctorate degree in Law and is a research fellow.
+Hui Ping, Employee Supervisor
+Mr. Hui has served as Employee Supervisor of the Bank since September 2015. He joined ICBC in 1984 and has served as
+Deputy Secretary of the Party Discipline Committee and concurrently as Director of the Discipline Enforcement Department
+of the Bank since 2015. He was Deputy Head and Head of Shaanxi Branch and General Manager of the Internal Control and
+Compliance Department of the Bank. Mr. Hui graduated from Xiamen University and received a Doctorate degree in Finance.
+He is a senior economist.
+Huang Li, Employee Supervisor
+Mr. Huang has served as Employee Supervisor of the Bank since June 2016. He joined ICBC in 1994 and is currently the chief
+responsible officer of Internal Audit Bureau of the Bank. He served as Deputy General Manager and General Manager of
+the Banking Department as well as Deputy Head and Head of Guizhou Branch of ICBC from December 1998 to June 2015.
+Mr. Huang graduated from The University of Hong Kong with an MBA degree. He is a senior economist.
+86
+ICBC
+Directors, Supervisors, Senior Management, Employees and Institutions
+Qu Qiang, External Supervisor
+Mr. Qu has served as External Supervisor of the Bank since December 2015. Currently, he is a professor and tutor for PhD
+students of Renmin University of China, Director of China Fiscal and Financial Policy Research Center (a key research center
+of humanities and social sciences of the Ministry of Education), Deputy Director of Financial and Securities Institute of Renmin
+University of China, a council member of China Finance Society, a member of China Finance 40 Forum and External Expert of
+China Development Bank. He was Head of the Applied Finance Department of the School of Finance, Renmin University of
+China. Currently, he is also External Supervisor of Bank of Beijing. Mr. Qu graduated from Renmin University of China, and
+received a Doctorate degree in Economics.
+Mr. Shen has served as External Supervisor of the Bank since June 2016. He previously served as the Deputy Chief of the
+Financial Market Division of the Financial System Reform Department, Chief of the System Reform Division and Monetary
+Policy Research Division of the Policy Study Office, and Chief of the Monetary Policy Research Division of the Research
+Bureau of the PBC, Chief Representative of the PBC Representative Office in Tokyo, Deputy Director-general and Director-
+level Inspector of Financial Market Department of the PBC, and Non-executive Director of Agricultural Bank of China.
+Mr. Shen is currently guest professor of Tsinghua University, Zhejiang University and Nankai University. Mr. Shen graduated
+from Renmin University of China, and received a Doctorate degree in Economics. He is a research fellow.
+(4) According to the regulations of CSRC, the commencement date of a re-elected director or supervisor's tenure as indicated in the
+above table shall be the day of his/her first appointment.
+Shareholding
+percentage
+October 2016-September 2018
+Hong Yongmiao
+October 2017-October 2020
+55
+Male
+Non-executive Director
+Ye Donghai
+August 2017-August 2020
+53
+Male
+Non-executive Director
+Dong Shi
+August 2017-August 2020
+47
+Female
+Non-executive Director
+Mei Yingchun
+February 2015-November 2021
+Independent Non-executive Director
+55
+Male
+August 2012-December 2018
+Male
+Independent Non-executive Director
+March 2017–March 2020
+64
+Female
+Independent Non-executive Director
+Sheila Colleen Bair
+Shen Si
+Nout Wellink
+April 2016-April 2019
+63
+Male
+Independent Non-executive Director
+Yang Siu Shun
+April 2015-April 2021
+72
+Male
+Independent Non-executive Director
+Anthony Francis Neoh
+54
+Male
+Non-executive Director
+Zheng Fuqing
+Accounting Policy Adopted for Preference Shares and Rationale
+Restoration of Voting Rights of Preference Shares
+During the reporting period, the Bank did not redeem or convert any preference share.
+Redemption or Conversion of Preference Shares
+The above-mentioned preference share dividend distribution plans have been fulfilled. For particulars of the Bank's
+distribution of dividends on preference shares, please refer to the announcements of the Bank on the websites of SSE, SEHK
+and the Bank.
+Note: Dividend distributed is tax included.
+2,425
+6.00%
+2,412
+6.00%
+2,481
+6.00%
+Offshore preference share
+2,025
+Dividend
+distributed
+Dividend
+rate
+4.50%
+2,025
+_
+According to the Accounting Standard for Business Enterprises No. 22 Recognition and Measurement of Financial
+Instruments, the Accounting Standard for Business Enterprises No. 37 Presentation of Financial Instruments and the
+Rules for Distinguishing Financial Liabilities and Equity Instruments and Relevant Accounting Treatment (Cai Kuai [2014]
+No. 13) promulgated by MOF as well as the International Financial Reporting Standard 9 - Financial Instruments and the
+International Accounting Standard 32 ― Financial Instruments: Presentation promulgated by International Accounting
+Standards Board and other accounting standards and the key terms of issuance of the Bank's preference shares, the issued
+and existing preference shares do not contain contractual obligations to deliver cash or other financial assets or contractual
+obligations to deliver variable equity instruments for settlement, and shall be accounted for as other equity instruments.
+Annual Report 2018
+81
+March 2015-June 2021
+59
+Male
+Non-executive Director
+Cheng Fengchao
+President
+December 2016-December 2019
+51
+65
+Male
+Age
+Gender
+Position
+Tenure
+Gu Shu
+Name
+Basic Information on Directors, Supervisors and Senior Management
+Directors, Supervisors, Senior Management, Employees and
+Institutions
+Vice Chairman, Executive Director,
+March 2017–March 2020
+Independent Non-executive Director
+Male
+Executive Director, Senior Executive
+Zhang Hongli
+June 2015-January 2018
+56
+Male
+Chairman of the Board of Supervisors
+Qian Wenhui
+Executive Director
+July 2013-January 2019
+54
+Male
+Chairman of the Board of Directors,
+Yi Huiman
+Directors, Supervisors and Senior Management Leaving Office
+July 2016-
+55
+Male
+Male
+53
+June 2015-July 2018
+Vice President
+48
+Male
+May 2012-October 2018
+69
+Male
+Independent Non-executive Director
+Senior Executive Vice President
+Li Yunze
+Or Ching Fai
+Board Secretary
+March 2015-October 2018
+Male
+Non-executive Director
+Fei Zhoulin
+December 2016-September 2018
+56
+Male
+Executive Director, Senior Executive
+Vice President
+Wang Jingdong
+60
+Dividend
+distributed
+Guan Xueqing
+56
+Qu Qiang
+June 2016-June 2019
+54
+Male
+Employee Supervisor
+September 2015-September 2021
+58
+Male
+Employee Supervisor
+June 2016-June 2019
+56
+Male
+Shareholder Supervisor
+Hui Ping
+Huang Li
+Zhang Wei
+December 2018-December 2021
+75
+External Supervisor
+Male
+52
+December 2015-December 2021
+Male
+Chief Risk Officer
+Wang Bairong
+January 2017-
+52
+Male
+Senior Executive Vice President
+Tan Jiong
+July 2016-
+November 2015-
+Male
+Senior Executive Vice President
+Hu Hao
+June 2016-June 2019
+66
+Male
+External Supervisor
+Shen Bingxi
+56
+Dividend
+rate
+4.50%
+During the reporting period, the Bank did not restore any voting right of preference share.
+4.50%
+at the end of
+the period
+pledged or
+subject to
+Shares held
+Number of
+Number
+of shares
+Increase/
+decrease
+during the
+reporting
+period
+Class of shares
+Nature of
+shareholder
+Name of shareholder
+Unit: Share
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 DOMESTIC PREFERENCE SHAREHOLDERS OF THE BANK
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+79
+Annual Report 2018
+(4) "Shareholding percentage" refers to the percentage of offshore preference shares held by preference shareholders in total
+number of offshore preference shares.
+(3) The Bank is not aware of any connected relations or concert party action among the afore-mentioned preference shareholders
+and among the afore-mentioned preference shareholders and top 10 ordinary shareholders.
+Shareholding
+percentage (%)
+restrictions
+locked-up
+on sales
+Domestic
+State-owned
+China Life Insurance Company
+preference shares
+None
+11.1
+50,000,000
+Domestic
+(2) As the issuance of the offshore preference shares above was private offering, the register of preference shareholders presented
+the information on proxies of placees.
+Other entities
+None
+44.4
+200,000,000
+Domestic
+preference shares
+Group Co., Ltd.
+Dividend
+distributed
+2,025
+China Mobile Communications
+shares
+China National Tobacco
+Corporation
+35,000,000
+Notes: (1) The above data are based on the Bank's register of offshore preference shareholders as at 31 December 2018.
+13.0
+Notes: (1) Please refer to the section headed "Appointment and Removal".
+Shares held
+at the end of
+Increase/
+decrease
+during the
+reporting
+Nature of
+shareholder
+Foreign legal person
+Cede & Co.
+Name of shareholder
+Unit: Share
+BANK
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 OFFSHORE PREFERENCE SHAREHOLDERS (OR PROXIES) OF THE
+As at the end of the reporting period, the Bank had 28 preference shareholders (or proxies), including two offshore
+preference shareholders (or proxies) and 26 domestic preference shareholders. As at the end of the month immediately
+before the results announcement date (28 February 2019), the Bank had 28 preference shareholders (or proxies), including
+two offshore preference shareholders (or proxies) and 26 domestic preference shareholders.
+Changes in Preference Shares
+On 30 August 2018 and 21 November 2018, the Board of Directors and the Shareholders' General Meeting of the Bank
+reviewed and approved the Proposal on the Domestic Preference Share Issuance Plan of Industrial and Commercial Bank
+of China Limited and the Proposal on the Offshore Preference Share Issuance Plan of Industrial and Commercial Bank of
+China Limited. The Bank plans to issue preference shares with a total amount up to an equivalent of RMB100.0 billion
+on the domestic and offshore markets. Among which, preference shares up to RMB100.0 billion will be issued in a single
+or multiple series in the domestic market and preference shares up to an equivalent of RMB44.0 billion will be issued in
+the offshore market. The specific issuance amount will be determined within the above-mentioned limits by the Board of
+Directors as authorized by the Shareholders' General Meeting (sub-authorization is available). All the funds raised from the
+domestic and offshore issuance of preference shares after deducting the issuance costs will be used to replenish additional
+tier 1 capital of the Bank. The preference share issuance plans are still subject to the approval by relevant regulatory
+authorities.
+Issuance of Preference Shares
+The Bank did not issue any preference shares in the past three years.
+Issuance and Listing of Preference Shares in Latest Three Years
+Preference Shares
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+Number
+of shares
+subject to
+restrictions
+Number of
+pledged or
+locked-up
+40,000,000
+EUR offshore
+preference shares
+Foreign legal person
+preference shares
+Unknown
+39.1
+120,000,000
+RMB offshore
+Unknown
+The Bank of New York
+Depository (Nominees) Limited
+47.9
+147,000,000
+shares
+on sales
+(%)
+the period
+period
+Class of shares
+USD offshore
+preference shares
+Unknown
+7.8
+Other entities
+Limited
+Domestic
+preference shares
+None
+Domestic non-state-
+Ping An Property & Casualty
+Insurance Company of
+China Ltd.
+preference shares
+Corporation Heilongjiang
+Branch
+None
+2.2
+10,000,000
+Domestic
+Other entities
+China National Tobacco
+preference shares
+Corporation Shandong Branch
+None
+2.2
+10,000,000
+10,000,000
+Domestic
+2.2
+Notes: (1) The above data are based on the Bank's register of domestic preference shareholders as at 31 December 2018.
+Domestic preference share
+rate
+Type of preference shares
+Dividend
+2016
+2017
+2018
+In RMB millions, except for percentages
+Dividends on the Bank's offshore preference shares are paid annually in cash, and calculated based on the aggregate
+value of the offshore preference shares. Dividends on the Bank's offshore preference shares are non-cumulative. Holders
+of offshore preference shares are only entitled to dividends at the prescribed dividend rate, but are not entitled to any
+distribution of residual profits of the Bank together with the holders of ordinary shares. According to the dividend
+distribution plan in the offshore preference share issuance proposal, the Bank distributed a dividend of USD196 million,
+EUR40 million and RMB800 million on the offshore preference shares (pre-tax), aggregating to RMB2,481 million at the rate
+prevailing on the date the dividend was declared. In practice, the dividend was distributed in the currency of the preference
+share. According to relevant laws, when the Bank distributes dividends for offshore preference shares, the enterprise income
+tax shall be withheld by the Bank at a rate of 10%. According to the requirements of the terms and conditions of the
+offshore preference shares, the Bank will pay the relevant taxes, in addition to the dividends for offshore preference shares.
+Distribution of dividends on preference shares by the Bank in latest three years is shown as follows:
+Dividends on the Bank's domestic preference shares are paid annually in cash, and calculated based on the aggregate
+value of the issued domestic preference shares. Dividends on the Bank's domestic preference shares are non-cumulative.
+Holders of domestic preference shares are only entitled to dividends at the prescribed coupon rate, but are not entitled
+to any distribution of residual profits of the Bank together with the holders of ordinary shares. According to the dividend
+distribution plan in the domestic preference share issuance proposal, the Bank distributed a dividend of RMB2,025 million on
+the domestic preference shares (pre-tax) at the coupon rate of 4.5%.
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+ICBC
+80
+As per the resolution and authorization of the Shareholders' General Meeting, the Bank reviewed and approved the Proposal
+on Distribution of Dividends for Preference Shares at the meeting of its Board of Directors on 30 October 2018, permitting
+the Bank to distribute the dividends on the Bank's domestic preference shares on 23 November 2018 and on the offshore
+preference shares on 10 December 2018.
+Dividend Distribution of Preference Shares
+(3) "Shareholding percentage" refers to the percentage of domestic preference shares held by preference shareholders in total
+number of domestic preference shares.
+(2) China National Tobacco Corporation Shandong Branch and China National Tobacco Corporation Heilongjiang Branch are both
+wholly-owned subsidiaries of China National Tobacco Corporation. Both "China Life Insurance Company Limited - Dividends
+Distribution Dividends Distribution to Individuals 005LFH002 Hu" and "China Life Insurance Company Limited
+Traditional Ordinary insurance products ―005L - CT001 Hu" are managed by China Life Insurance Company Limited. The
+"Ping An Life Insurance Company of China, Ltd. - Traditional - Ordinary insurance products" is managed by Ping An Life
+Insurance Company of China, Ltd. Ping An Life Insurance Company of China, Ltd. and Ping An Property & Casualty Insurance
+Company of China Ltd. have connected relations. Save as disclosed above, the Bank is not aware of any connected relations
+or concert party action among the afore-mentioned preference shareholders and among the afore-mentioned preference
+shareholders and top 10 ordinary shareholders.
+None
+Other entities
+owned legal person
+preference shares
+preference shares
+None
+3.3
+15,000,000
+Domestic
+State-owned
+legal person
+CCB Trust Co., Ltd.
+preference shares
+owned legal person
+None
+6.7
+30,000,000
+Domestic
+Domestic non-state-
+China National Tobacco
+preference shares
+legal person
+BOCOM Schroders Asset
+Management Co., Ltd.
+Domestic non-state-
+Ping An Life Insurance Company
+of China, Ltd.
+15,000,000
+Domestic
+owned legal person
+3.3
+15,000,000
+Domestic
+Domestic non-state-
+BOC International (China)
+Limited
+preference shares
+None
+None
+15,000,000
+Domestic
+State-owned
+legal person
+China Resources SZITIC Trust
+Co., Ltd.
+preference shares
+owned legal person
+None
+3.3
+3.3
+Adhere to laying a solid
+foundation for risk control
+and achieving development
+through talent cultivation:
+ICBC upholds the Party's leadership over the financial work,
+and strives to improve the scientific decision-making as
+well as the effectiveness of corporate governance through
+enhanced governance system and capacity building.
+ICBC remains steadfast in serving the real economy and
+commits to satisfying people's new expectations and
+demands for financial services, making every effort to build
+the No. 1 Personal Finance Bank.
+ICBC empowers its business operations and management
+with FinTech, and creates superior value for the real
+economy, shareholders, customers, employees and the
+society as a whole.
+ICBC proactively taps resources from both domestic and
+overseas markets, and undertakes to constantly promote
+international development, which well-integrates with
+China's high-level opening-up.
+Keeping pace with changing times, ICBC endeavors to
+advance reforms in key areas and critical steps, seeking
+room for development through transformation and vitality
+for growth through reform.
+ICBC safeguards the lifeline of asset quality by reinforcing
+bottom-line thinking with a combination of prevention and
+control measures. Meanwhile, corporate culture formation
+and caring for staff are strengthened to increase group
+cohesion.
+Mission
+Vision
+To build a world-class, globally
+competitive modern financial
+institution in all aspects, and
+become a long-lasting and
+ever-prosperous bank
+Excellence for You
+Excellent services for clients
+Maximum returns to shareholders
+Real success for employees
+Great contribution to society
+Values
+transformation and progressing
+through reform:
+Integrity Leads to Prosperity
+-
+pragmatic business
+The Bank was ranked the 1st place among the Top
+1000 World Banks by The Banker, the 1st place in the
+Global 2000 by Forbes, and the 1st place in the list of
+commercial banks of the Global 500 in Fortune for the
+ninth consecutive year, and took the 1st place among
+the Top 500 Banking Brands of Brand Finance for the
+sixth consecutive year.
+operations:
+Integrity
+ICBC E
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED
+(A joint stock limited company incorporated in the People's Republic of China with limited liability)
+Stock Code: 1398
+2021 Annual Report
+H
+ICBC
+Company Profile
+Adhere to pushing for
+Industrial and Commercial Bank of China was
+established on 1 January 1984. On 28 October 2005,
+the Bank was wholly restructured to a joint-stock
+limited company. On 27 October 2006, the Bank was
+successfully listed on both Shanghai Stock Exchange
+and The Stock Exchange of Hong Kong Limited.
+Through its continuous endeavor and stable
+development, the Bank has developed into the
+leading bank in the world, possessing an excellent
+customer base, a diversified business structure, strong
+innovation capabilities and market competitiveness.
+The Bank regards service as the very foundation to
+seek further development and adheres to creating
+value through services while providing a comprehensive
+range of financial products and services to over 9.691
+million corporate customers and 704 million personal
+customers. The Bank has been consciously integrating
+the social responsibilities with its development strategy
+and operation and management activities, and gaining
+wide recognition in the aspects of supporting pandemic
+containment, promoting inclusive finance, backing
+rural revitalization, developing green finance and
+participating in public welfare undertakings.
+Strategic Objective:
+Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, ICBC will adhere to the general
+principle of pursuing progress while ensuring stability, apply the new development philosophy, modernize its governance
+system and capacity, and turn ICBC into a world-class and modern financial enterprise with global competitiveness.
+Strategic Significance:
+Adhere to the guidance of
+the Party building theory and
+exercising rigorous corporate
+governance:
+Adhere to putting the customer
+first and serving the real
+economy:
+Adhere to technology-driven
+development and value
+creation:
+Adhere to a broad international
+vision and globalized
+The Bank always keeps in mind its underlying mission
+of serving the real economy with its principal business,
+and along with the real economy it prospers, suffers
+and grows. Taking a risk-based approach and never
+overstepping the bottom line, it constantly enhances its
+capability of controlling and mitigating risks. Besides,
+the Bank remains steadfast in understanding and
+following the business rules of commercial banks to
+strive to be a century-old bank. It also stays committed
+to seeking progress with innovation while maintaining
+stability, continuously enhances the key development
+strategies, actively develops the FinTech and accelerates
+the digital transformation. The Bank unswervingly
+delivers specialized services, and pioneers a specialized
+business model, thus making it "a craftsman in large
+banking".
+Humanity
+51
+Innovation
+•福布斯
+Forbes
+Forbes
+Ranking the
+1st place
+Among commercial banks in
+the Global 500 for the ninth
+consecutive year
+Fortune
+Ranking the
+1st place
+Among the Top 500
+Banking Brands for the sixth
+consecutive year
+Brand Finance®
+Brand Finance
+Ranking the
+1st place
+In the
+"Corporate Brand Value List"
+for the sixth time
+China Council for Brand
+Development
+Ranking the
+1st place
+In the 2021 GYROSCOPE
+assessment system among
+national commercial banks
+中国银行业协会
+for the ninth
+consecutive year
+In the Global 2000
+Ranking the
+1st place
+The Banker
+The International Financial Reporting Standards promulgated by the International
+Accounting Standards Board, which comprise the International Accounting Standards
+Inversora Diagonal S.A.
+Ministry of Finance of the People's Republic of China
+The Guiding Opinions on Regulating the Asset Management Business of Financial
+Institutions jointly promulgated by PBC, CBIRC, CSRC and State Administration of
+Foreign Exchange in 2018 and relevant rules
+The People's Bank of China
+Accounting Standards for Business Enterprises promulgated by MOF
+Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)
+The Stock Exchange of Hong Kong Limited
+Shanghai Stock Exchange
+National Council for Social Security Fund
+CHINA BANKING ASSOCIATION
+Standard Bank Group Limited
+Industrial and Commercial Bank of China Limited; or Industrial and Commercial Bank
+of China Limited and its subsidiaries
+4
+ICBC
+Major Ranking and Rewards in 2021
+Ranking the
+1st place
+Among the Top 1000 World
+Banks for the ninth
+consecutive year
+The Banker
+The State Council of the People's Republic of China
+Industrial and Commercial Bank of China Financial Services LLC
+China Banking Association
+FinTech Development
+Award ECOS Project
+THE ASIAN BANKER®
+The Asian Banker
+Annual Report 2021
+5
+Important Notice
+The Board of Directors, the Board of Supervisors, Directors, Supervisors and Senior Management members of Industrial
+and Commercial Bank of China Limited undertake that the information in this report contains no false record, misleading
+statement or material omission, and assume individual and joint and several liability for the authenticity, accuracy and
+completeness of the information in this report.
+The 2021 Annual Report of the Bank and its abstract have been considered and approved at the meeting of the Board of
+Directors of the Bank held on 30 March 2022. There were 14 directors eligible for attending the meeting, of whom 13
+directors attended the meeting in person and 1 director by proxy, namely, Mr. Nout Wellink appointed Mr. Anthony Francis
+Neoh to attend the meeting and exercise the voting right on his behalf.
+The 2021 financial statements prepared by the Bank in accordance with PRC GAAP and IFRSS have been audited by
+Deloitte Touche Tohmatsu Certified Public Accountants LLP and Deloitte Touche Tohmatsu in accordance with Chinese and
+International Standards on Auditing respectively, with standard unqualified auditors' reports being issued.
+The Board of Directors of the Bank proposed distributing cash dividends for ordinary shares of RMB2.933 (pre-tax) for each
+ten shares for 2021. The distribution plan will be submitted for approval to the Annual General Meeting for the Year 2021.
+The Bank did not convert capital reserve to share capital.
+The Board of Directors of Industrial and Commercial Bank of China Limited
+30 March 2022
+Mr. Chen Siqing, Legal Representative of the Bank, Mr. Liao Lin, President in charge of finance of the Bank, and Mr.
+Liu Yagan, General Manager of the Finance and Accounting Department of the Bank, hereby warrant that the financial
+statements contained in the Annual Report are authentic, accurate and complete.
+The report contains forward-looking statements on the Bank's financial position, business performance and development.
+The statements are based on existing plans, estimates and forecasts, and bear upon future external events or the
+Group's future finance, business or performance in other aspects, and may involve future plans which do not constitute
+substantive commitment to investors. Hence, investors and persons concerned shall be fully aware of the risks and
+understand the difference between plans, estimates and commitments.
+The Bank is primarily exposed to credit risk, market risk, interest rate risk in the banking book, liquidity risk, operational
+risk, reputational risk and country risk. The Bank has actively adopted measures to effectively manage various types of
+risks. Please refer to the section headed "Discussion and Analysis - Risk Management" for detailed information.
+(This report is prepared in both Chinese and English. In the case of discrepancy between the two versions, the Chinese
+version shall prevail.)
+6
+ICBC
+Corporate Information
+Legal name in Chinese
+亚洲银行家
+Best Custodian Bank in China (Mega Bank)
+Best RMB Clearing Bank in Asia Pacific
+Best Asian International Cash
+Management Bank in Asia Pacific
+People's Bank of China
+Data Management Capability Maturity
+(DCMM)
+CFEII
+The highest Level 5
+certification
+中国电子信息行业联合会
+China Federation of Electronics and
+Information Industry
+World's Best Bank in
+Emerging Markets
+Best Bank in Asia-Pacific
+Best Bank in China
+Special Award of
+Best Corporate Bank in China
+Global Finance
+Best Bank in China
+Finance Asia
+Best Bank, China
+Best Bond Advisor, China
+Best Insurance Custodian Bank
+in China
+THE Asset
+The Asset
+nt
+GLOBAL
+FINANCE
+ICBC-AXA Assurance Co., Ltd.
+ICBC Wealth Management Co., Ltd.
+ICBC Information and Technology Co., Ltd.
+Company Law
+CSRC
+HKEX
+Hong Kong Listing Rules
+Huijin
+ICBC (Almaty)
+ICBC (Argentina)
+ICBC (Asia)
+ICBC (Austria)
+ICBC (Brasil)
+ICBC (Canada)
+ICBC (Europe)
+ICBC (Indonesia)
+ICBC (London)
+ICBC (Macau)
+ICBC (Malaysia)
+ICBC (Mexico)
+ICBC (New Zealand)
+ICBC (Peru)
+ICBC (Thai)
+ICBC (Turkey)
+CBIRC
+Capital Regulation
+Bank ICBC (JSC)
+Articles of Association
+Organizational Chart
+141
+Service Improvement
+51
+Auditor's Report and Financial
+Human Resources Management,
+Statements
+142
+Employees and Institutions
+ICBC (USA)
+52
+― Internationalized Operation
+54
+Overseas Branches and Offices
+307
+9.12%
+4.62%
+12%
+Definitions
+In this report, unless the context otherwise requires, the following terms shall have the meanings set out below:
+List of Domestic and
+The Articles of Association of Industrial and Commercial Bank of China Limited
+Bank ICBC (Joint stock company)
+Regulation Governing Capital of Commercial Banks (Provisional) promulgated in June
+2012
+China Banking and Insurance Regulatory Commission
+ICBC-AXA
+ICBCFS
+IFRSS
+Inversora Diagonal
+MOF
+New Rules on Asset Management
+PBC
+PRC GAAP
+Securities and Futures Ordinance of
+ICBC Wealth Management
+Hong Kong
+SSE
+SSF
+Standard Bank
+State Council
+The Bank/The Group
+ICBC International Holdings Limited
+ICBC Financial Asset Investment Co., Ltd.
+ICBC Investments Argentina S.A. Sociedad Gerente de Fondos Comunes de Inversión
+ICBC Financial Leasing Co., Ltd.
+ICBC Standard Bank PLC
+SEHK
+中國工商銀行股份有限公司(「中國工商銀行」)
+ICBC Technology
+ICBC Leasing
+Company Law of the People's Republic of China
+China Securities Regulatory Commission
+Hong Kong Exchanges and Clearing Limited
+Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited
+Central Huijin Investment Ltd.
+Industrial and Commercial Bank of China (Almaty) Joint Stock Company
+Industrial and Commercial Bank of China (Argentina) S.A.
+Industrial and Commercial Bank of China (Asia) Limited
+ICBC Austria Bank GmbH
+Industrial and Commercial Bank of China (Brasil) S.A.
+Industrial and Commercial Bank of China (Canada)
+Industrial and Commercial Bank of China (Europe) S.A.
+PT. Bank ICBC Indonesia
+ICBC (London) PLC
+ICBC Standard Bank
+Industrial and Commercial Bank of China (Macau) Limited
+Industrial and Commercial Bank of China Mexico S.A.
+Industrial and Commercial Bank of China (New Zealand) Limited
+ICBC PERU BANK
+Industrial and Commercial Bank of China (Thai) Public Company Limited
+ICBC Turkey Bank Anonim Şirketi
+Industrial and Commercial Bank of China (USA) NA
+ICBC Credit Suisse Asset Management ICBC Credit Suisse Asset Management Co., Ltd.
+ICBC International
+ICBC Investment
+ICBC Investments Argentina
+Industrial and Commercial Bank of China (Malaysia) Berhad
+Legal name in English
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED ("ICBC")
+Legal Representative
+1.42%
+32,413.64
+18.02%
+Down 0.16 percentage
+points
+26.36%
+ICBC
+139
+Significant Events
+48
+- Internet Finance
+Environmental and Social Responsibilities 135
+44
+- FinTech
+133
+Report of the Board of Supervisors
+42
+Financial Market Business
+129
+Report of the Board of Directors
+Unit: RMB100 millions
+Cost-to-income ratio
+Non-performing
+loans ratio
+Capital adequacy ratio
+2020
+167,613
+2019
+351,714
+333,451
+301,094
+264,418
+251,347
+229,777
+41
+Corporate customers Personal customers
+Self-service banks
+ATM
+9,691 thousand
+704 million
+Up 1,048 thousand
+Up 23.41 million
+15,767
+24,145
+Net tier 1 capital
+Business outlets
+Asset Management Services
+112
+Corporate Governance Report
+· Capital Management
+63
+Risk Management
+and Equity Participating Company 61
+- Major Controlled Subsidiaries
+58
+Subsidiary Management
+Diversified Operation and
+4567825
+79
+15
+12
+Chairman's Statement
+Financial Highlights
+Corporate Information
+Important Notice
+Major Ranking and Rewards in 2021
+Definitions
+CONTENTS
+Excellence
+President's Statement
+186,243
+- Outlook
+Discussion and Analysis
+39
+Personal Banking
+102
+91
+85
+Senior Management
+Directors, Supervisors and
+Shareholders
+and Shareholding of Substantial
+84
+Hot Topics in the Capital Market
+Details of Changes in Share Capital
+Corporate Banking
+34
+Business Overview
+21
+Financial Statements Analysis
+19
+Regulatory Environments
+Economic, Financial and
+19
+34
+- Outlet Development
+2021
+264,418
+17-18/F, East Tower, World Financial Center, 1 East 3rd Ring
+Middle Road, Chaoyang District, Beijing, China
+Haiwen & Partners
+20/F, Fortune Financial Center, 5 East 3rd Ring Middle Road,
+Chaoyang District, Beijing, China
+Hong Kong SAR, China
+Allen & Overy
+9/F, Three Exchange Square, Central, Hong Kong SAR, China
+Freshfields Bruckhaus Deringer
+55th Floor, One Island East, 18 Westlands Road, Quarry Bay,
+Hong Kong SAR, China
+Share Registrars
+A Share
+China Securities Depository and Clearing Corporation Limited,
+Shanghai Branch
+188 Yanggao South Road, Pudong New Area, Shanghai, China
+Telephone: 86-4008058058
+H Share
+Computershare Hong Kong Investor Services Limited
+17M Floor, Hopewell Center, 183 Queen's Road East, Wanchai,
+Hong Kong SAR, China
+Telephone: 852-28628555
+Facsimile: 852-28650990
+Location where copies of this annual report are kept
+Board of Directors' Office of the Bank
+Place where shares are listed, and their names and codes
+A Share
+King & Wood Mallesons
+Chinese mainland
+Legal Advisors
+The "HKEXnews" website of HKEX for disclosure of
+the annual report in respect of H shares
+www.hkexnews.hk
+Chen Siqing
+Registered address and office address
+55 Fuxingmennei Avenue, Xicheng District, Beijing, China
+Postal code: 100140
+Telephone: 86-10-66106114
+Business enquiry and complaint hotline: 86-95588
+Website: www.icbc.com.cn, www.icbc-ltd.com
+Principal place of business in Hong Kong
+33/F, ICBC Tower, 3 Garden Road, Central, Hong Kong SAR, China
+Authorized representatives
+Shanghai Stock Exchange
+Liao Lin and Guan Xueqing
+Guan Xueqing
+Address: 55 Fuxingmennei Avenue, Xicheng District, Beijing, China
+Telephone: 86-10-66108608
+Facsimile: 86-10-66107571
+E-mail: ir@icbc.com.cn
+Selected newspaper for information disclosure
+China Securities Journal, Shanghai Securities News, Securities Times,
+Securities Daily
+Website of SSE for disclosure of
+the annual report in respect of A shares
+www.sse.com.cn
+Board Secretary and Company Secretary
+Stock name:
+Stock code: 601398
+H Share
+2021
+2020
+2019
+Total assets
+Unit: RMB100 millions
+351,714
+3,502
+2021
+3,177
+3,502
+2020
+2019
+Total loans and advances to customers
+Due to customers
+Unit: RMB100 millions
+Unit: RMB100 millions
+206,672
+2021
+2020
+2019
+3,134
+206,672
+Unit: RMB100 millions
+Financial Highlights
+The Stock Exchange of Hong Kong Limited
+Stock name: ICBC
+Stock code: 1398
+Domestic Preference Share
+Shanghai Stock Exchange
+Stock name: I
+Stock code: 360011
+Stock name: 12
+Stock code: 360036
+Net profit
+Offshore Preference Share
+Stock code: 4620
+Name and office address of Auditors
+Domestic Auditor
+Deloitte Touche Tohmatsu Certified Public Accountants LLP
+30/F, 222 East Yan'an Road, Huangpu District, Shanghai, China
+CPAs (Practicing): Wu Weijun and Zeng Hao
+International Auditor
+Deloitte Touche Tohmatsu
+35/F, One Pacific Place, 88 Queensway, Hong Kong SAR, China
+Annual Report 2021
+7
+The Stock Exchange of Hong Kong Limited
+Stock name: ICBC 20USDPREF
+Prudence
+Limited
+98
+products 022L- CT001 Hu
+Notes: (1) The above data are based on the Bank's register of shareholders as at 31 December 2021.
+(2) The Bank had no shares subject to restrictions on sales.
+(3) HKSCC Nominees Limited is a wholly-owned subsidiary of Hong Kong Securities Clearing Company Limited. Central Huijin Asset
+Management Co., Ltd. is a wholly-owned subsidiary of Huijin. Save as disclosed above, the Bank is not aware of any connected
+relations or concert party action among the afore-mentioned shareholders.
+(4) Except to the extent unknown to HKSCC Nominees Limited, the top 10 shareholders of the Bank did not participate in any
+margin trading, short selling or refinancing business.
+(5) The number of shares held by HKSCC Nominees Limited at the end of the period refers to the total H shares held by it as a
+nominee on behalf of all institutional and individual investors registered with accounts opened with HKSCC Nominees Limited
+as at 31 December 2021, which included H shares of the Bank held by SSF, Ping An Asset Management Co., Ltd. and Temasek
+Holdings (Private) Limited.
+(6) According to the Notice on Comprehensively Transferring Part of State-Owned Capital to Fortify Social Security Funds (Cai Zi
+[2019] No. 49), MOF transferred 12,331,645,186 A shares to the state-owned capital transfer account of SSF in a lump sum in
+December 2019. According to the relevant requirements under the Notice of the State Council on Issuing the Implementation
+Plan for Transferring Part of State-Owned Capital to Fortify Social Security Funds (Guo Fa [2017] No. 49), SSF shall perform the
+obligation of more than 3-year lock-up period as of the date of the receipt of transferred shares. At the end of the reporting
+period, according to the information provided by SSF to the Bank, SSF also held 7,946,049,758 H shares of the Bank and
+20,277,694,944 A and H shares in aggregate, accounting for 5.69% of the Bank's total ordinary shares.
+(7) The number of shares held by Hong Kong Securities Clearing Company Limited at the end of the period refers to the total A
+shares (Northbound shares of the Shanghai-Hong Kong Stock Connect) held by it as a nominal holder designated by and on
+behalf of Hong Kong and foreign investors as at 31 December 2021.
+92
+ICBC
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+Particulars of Substantial Shareholders
+During the reporting period, the Bank's controlling shareholders and de facto controller remained unchanged.
+Controlling Shareholders
+The largest single shareholder of the Bank is Huijin, whose full name is Central Huijin Investment Ltd. Huijin is a state-owned
+company founded by the State according to the Company Law on 16 December 2003. Its registered capital is equal to its
+paid-in capital at RMB828,209 million. Its registered address is New Poly Plaza, 1 Chaoyangmen North Street, Dongcheng
+District, Beijing. Its unified social credit code is 911000007109329615, and its legal representative is Peng Chun. Huijin is a
+wholly-owned subsidiary of China Investment Corporation. It, in accordance with authorization by the State Council, makes
+equity investments in major state-owned financial enterprises, and shall, to the extent of its capital contribution, exercise the
+rights and perform the obligations as an investor on behalf of the State in accordance with applicable laws, to achieve the
+goal of preserving and enhancing the value of state-owned financial assets. Huijin does not engage in any other business
+activities, and does not intervene in the day-to-day business operations of the key state-owned financial institutions it
+controls.
+As at 31 December 2021, Huijin held approximately 34.71% shares of the Bank. It held shares directly in the institutions
+listed below:
+No.
+Company name
+1
+China Development Bank Corporation
+2
+Industrial and Commercial Bank of China (A; H)
+3
+Agricultural Bank of China Limited (A; H)
+4
+Traditional Ordinary insurance
+None
+0.12
+426,975,751
+None
+Hong Kong Securities Clearing
+Company Limited(7)
+Foreign legal
+A Share
+200,331,413
+1,386,451,666
+0.39
+None
+Central Huijin Asset Management
+Co., Ltd.
+person
+State-owned
+legal person
+A Share
+1,013,921,700
+Bank of China Limited (A; H)
+0.28
+China Life Insurance Company
+Limited Traditional
+Other entities
+A Share -34,438,403
+435,910,885
+0.12
+None
+- Ordinary insurance products
+―005L-CT001 Hu
+Taiping Life Insurance Co., Ltd.
+_
+Other entities
+A Share
+39,168,600
+None
+5
+China Construction Bank Corporation (A; H)
+Huijin's shareholding
+percentage
+China International Capital Corporation Limited (A; H)
+40.11%
+15
+Jiantou CITIC Asset Management Co., Ltd. (A; H)
+30.76%
+16
+China Galaxy Asset Management Co., Ltd.
+13.30%
+17
+Guotai Junan Investment Management Co., Ltd.
+14.54%
+Notes: (1) A represents A share listed company, while H represents H share listed company.
+14
+(2) Except the above-mentioned controlling or equity participating enterprises, Huijin also has a wholly-owned subsidiary - Central
+Huijin Asset Management Co., Ltd. Central Huijin Asset Management Co., Ltd. was incorporated in November 2015 in Beijing.
+With a registered capital of RMB5 billion, the company runs an asset management business.
+93
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+The second single largest shareholder of the Bank is MOF, which held approximately 31.14% shares of the Bank as at 31
+December 2021. MOF is a department under the State Council, and is responsible for overseeing the State's fiscal revenue
+and expenditure, formulating the fiscal and taxation policies, and supervising State finance at a macro level.
+Particulars of Other Substantial Shareholders
+SSF. SSF owned 5.69% of the shares of the Bank as at 31 December 2021. Founded in August 2000, SSF is a public service
+institution administered by MOF, having its address at South Tower, Building 11, Fenghuiyuan Fenghui Times Building,
+Xicheng District, Beijing, China, and its legal representative being Liu Wei. With the approval of the State Council and
+pursuant to regulations of MOF and the Ministry of Human Resources and Social Security, SSF has been entrusted to manage
+the following funds: the National Social Security Fund, the subsidy from central government to individual accounts, part of
+the surplus of the enterprise employee's basic pension insurance, basic pension insurance fund and the partial state-owned
+capital transferred.
+Particulars of the De Facto Controller
+ICBC
+94
+ICBC
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+Interests and Short Positions Held by Substantial Shareholders and Other Persons
+Substantial Shareholders and Persons Having Notifiable Interests or Short Positions
+Pursuant to Divisions 2 and 3 of Part XV of the Securities and Futures Ordinance of Hong
+Kong
+As at 31 December 2021, the Bank received notices from the following persons about their interests or short positions held
+in the Bank's ordinary shares and underlying shares, which were recorded in the register pursuant to Section 336 of the
+Securities and Futures Ordinance of Hong Kong as follows:
+Annual Report 2021
+0.68
+20.05%
+13
+34.68%
+34.71%
+40.03%
+64.02%
+57.11%
+60
+7
+China Everbright Group Ltd.
+Hengfeng Bank Co., Ltd.
+63.16%
+53.95%
+8
+Shenwan Hongyuan Group Co., Ltd. (A; H)
+China Export & Credit Insurance Corporation
+9
+China Reinsurance (Group) Corporation (H)
+71.56%
+10
+New China Life Insurance Company Limited (A; H)
+31.34%
+11
+China Jianyin Investment Limited
+100.00%
+12
+China Galaxy Financial Holdings Company Limited
+69.07%
+73.63%
+HOLDERS OF A SHARES
+2,416,131,540
+A Share
+356,406,257,089
+100.00
+restrictions on sales
+1.
+RMB-denominated
+269,612,212,539
+75.65
+ordinary shares
+2. Foreign shares listed
+86,794,044,550
+24.35
+overseas
+III.
+Total number of shares
+356,406,257,089
+100.00
+356,406,257,089
+100.00
+269,612,212,539
+75.65
+86,794,044,550
+24.35
+356,406,257,089
+100.00
+Notes: (1) The above data are based on the Equity Structure Chart issued by China Securities Depository and Clearing Corporation Limited.
+Shares not subject to
+II.
+restrictions on sales
+I. Shares subject to
+Discussion and Analysis
+Tianjin-Hebei region, Yangtze River Delta, Guangdong-
+Hong Kong-Macao Greater Bay Area, Central China and
+Chengdu-Chongqing region. In terms of the Urban-
+Rural Collaborative Development Strategy, the Bank
+innovated the rural vitalization service system, introduced
+the "Xingnongtong" brand and provided stronger credit
+resource support. The balance of agriculture-related loans
+reached RMB2.66 trillion.
+iii. Laying a solid foundation: focusing on FinTech
+and financial innovation. In terms of FinTech, the
+Bank practiced technology self-reliance, strengthened the
+"dual wheel drive" of technological innovation and system
+reform, and empowered the development of "D-ICBC"
+with technology. The intelligent banking ecosystem ECOS
+was awarded PBC's only special award of the "FinTech
+Development Awards" in 2021. The Bank had the most
+newly added and accumulated patents among Chinese
+banks. In terms of financial innovation, the Bank
+ranked first in both the balance and growth of credits to
+manufacturing, strategic emerging industries, green and
+other key fields among peers. Specifically, the Bank topped
+the RMB2 trillion mark in balance of manufacturing loans,
+a net increase of RMB319.7 billion. The balance of loans
+to strategic emerging industries exceeded RMB1 trillion.
+Outstanding green loans amounted to RMB2.48 trillion, up
+RMB634.9 billion from the beginning of the year, with the
+new green loans issued in the year hitting an all-time high.
+iv. Laying a solid base: focusing on enhancing the
+capacity of enterprise risk management, efficiency
+of GBC interactions and competitiveness of outlets
+and teams. In terms of enterprise risk management
+system, the Bank adhered to the four-pronged risk
+management approach to people, money, defense
+line and bottom line, followed the guiding principle of
+"active prevention, smart control and comprehensive
+management", incorporated investment and financing
+cooperation, secondary risks of intermediate business,
+climate risk and model risk in the enterprise risk
+management system. The "9+X" risks were generally
+under control. In terms of GBC interactions and
+coordination of channels, the Bank made solid progress
+in GBC work, fund taking, "net making and patching"
+program, payroll service, management of investment and
+financing cooperation institutions and competitiveness
+enhancement of outlets. Remarkable achievements were
+Imade in the development of key GBC scenarios. G-end
+added 12 thousand customers and RMB120.0 billion
+of deposits. B-end added 290 thousand customers and
+RMB290.0 billion of deposits. C-end acquired or activated
+52.00 million customers with a payroll service volume of
+RMB1.7 trillion.
+In 2022, ICBC will adhere to the general principle of
+pursuing progress while ensuring stability, apply the new
+development philosophy in every respect and remain stable
+with sound momentum. The Bank will push for medium-
+term breakthroughs under new plans, deepen digital
+transformation and work hard to break new ground in
+ICBC's high-quality development.
+Hot Topic 2: D-ICBC
+The Bank remained steadfast on the road of digital
+development. In shifting from "bank informatization"
+to "informatized bank", ICBC led the Digital 1.0 stage
+of digital technology-driven business development. The
+Bank keenly grasped the trends in the fresh technological
+revolution and industry transformation and made a push
+for IT architecture transition and the "smart banking
+ecosystem ECOS" project, kick-starting the Digital 2.0
+stage of digitalization-led transformation in every respect.
+During the reporting period, the Bank took the lead in
+developing a five-dimensional plan for "digital ecosystem,
+digital assets, digital technology, digital infrastructure
+and digital genes" and planned to launch a farsighted
+digital brand "D-ICBC". In addition, leveraging on the
+Group's FinTech and data strengths, the Bank deepened
+the D-ICBC development driven by "data and technology"
+on a customer-oriented basis. Keeping in mind the bigger
+picture of building a digital China, ICBC contributed to
+the healthy development of digital economy by promoting
+profound changes in business and service models,
+and improvement of quality and efficiency of product
+innovation. Significant improvements have been made in
+customer experience, service efficiency and business value.
+I. Digital transformation boosted circulation.
+According to the business model and transaction
+characteristics of small and micro customers, the Bank
+continuously upgraded its digital inclusive products and
+their operation system. Inclusive loans issued online
+accounted for 94% of the new balance. More scenarios
+were introduced for "e-Enterprise Quick Loan" to improve
+the service quality and efficiency for small and micro
+customers who hold non-residential real properties. A
+combination of tax, electricity, settlement and other
+data were used to provide credit loan support for the
+activity of small and micro businesses. The digital supply
+chain and industrial chain scenarios-based financial
+services were developed and perfected for national
+strategic sectors such as modern agriculture, "specialized,
+sophisticated, distinctive and innovative" enterprises
+and advanced manufacturing. In cooperation with the
+National Financing Guarantee Fund, the Bank introduced
+Annual Report 2021
+89
+Discussion and Analysis
+the "bulk guarantee" credit enhancement mechanism
+to make financing more accessible to small and micro
+businesses. The Bank strengthened the capacity of fully
+digital operations by building a customer marketing
+system covering "targeting, attraction, engagement
+and retention". During the reporting period, the Bank
+kept deepening trade finance and cross-border finance
+in support of cooperation projects under the Belt and
+Road Initiative. The Bank developed the "ICBC Global
+Pay" product series to provide one-stop global cash
+management services, serving nearly 10,000 multinational
+corporations and helping Chinese enterprises going
+global. The "ICBC Business Matchmaker" cross-border
+matchmaking platform was developed. ICBC became
+the first bank to provide closed-loop cross-border
+matchmaking services. Nearly 80% of matched pairs
+intended to cooperate with each other.
+II. Building a GBC digital community. First, on the
+G-end, new models of digital government services
+were introduced. The Bank carried out government data
+partnership with 29 provincial or equivalent governments
+and launched more than 300 government partnership
+scenarios, proactively supporting government affairs to
+be "processed in one network". "My Ningxia" APP built
+and shaped a new brand and image for Ningxia's digital
+government. Second, B-end saw in-depth participation
+in industry digitalization. Keeping pace with digital
+transformation of leading players in modern agriculture,
+advanced manufacturing and modern service industries,
+the Bank provided services along the value chain ranging
+from upstream to downstream customers, and improved its
+financial service capabilities covering the entire industrial
+chain. The Bank launched over 20 "financial + industrial"
+cloud service ecosystem to provide over 2,600 types of
+financial services and products to the public around the
+hot areas of people's livelihood, including healthcare,
+education and mobility, ranking first among peers by
+service types and number of scenarios covered. Third,
+C-end endeavored to build a new service model
+of "ICBC on cloud". The Bank continued to upgrade
+mobile banking and offered abundant online services
+for 469 million users. It developed new models of smart
+marketing, under which Smart Brain was connected to
+channels such as ICBC e-Service, Gino (Gong Xiao Zhi)
+and cloud studios, providing more than 10 million smart
+service solutions for individual customers. The Bank actively
+promoted scenario- and ecosphere-based use of digital
+RMB, getting fully involved in digital public services. The
+Bank developed special sections for key customer groups,
+becoming the first bank to establish interconnection with
+the system of the Ministry of Human Resources and Social
+Security (MOHRSS) and enabling the issuance of "physical
++ electronic" social security cards. The Bank supported
+cross-provincial processing of social security cards and
+built a "smart risk control" platform to safeguard
+customers' funds. Efforts were intensified to monitor
+unusual transactions in high-risk areas, such as sensitive
+transactions, anti-theft and the elderly's fund transfer.
+(2) "Foreign shares listed overseas", namely H shares, are within the same meaning as defined in the "No. 5 Standards on the
+Content and Format of Information Disclosure of Companies with Public Offerings - Content and Format of the Report of
+Change in Corporate Shareholding" (Revision 2022) of CSRC.
+III. Pushing for technology self-reliance. First, the IT
+core architecture was transformed and upgraded. The
+Bank has advanced the smart banking ecosystem project
+(ECOS) since 2015. Two core IT infrastructure platforms
+(cloud computing and distributed computing) were
+developed in-house to deal with all the core operations of
+ICBC. The two platforms provided safe and stable financial
+services to over 700 million individual customers and
+nearly 9.70 million corporate customers, with the system
+availability always above 99.99%. Second, digital new
+infrastructures were developed in a faster pace. In
+2021, the Bank became the first bank to receive a five-star
+rating for its maturity of data management capabilities. The
+Bank thoroughly implemented the development philosophy
+that "lucid waters and lush mountains are invaluable
+assets" in a bid to build a world-class green data center.
+The Bank's "National Green Data Center" recorded a daily
+peak of 868 million transactions, equivalent to a carbon
+dioxide emissions reduction of nearly 6,000 tons a year.
+Third, the Bank made a push for new technologies on
+all fronts. With a focus on cutting-edge technologies such
+as artificial intelligence, blockchain, cloud computing and
+big data, the Bank has built a series of new IT platforms,
+including ICBC Turing, ICBC Premier Chain and ICBC
+Nebula, to boost its core capabilities in new infrastructures.
+Among them, ICBC Premier Chain integrates basic
+technical services of blockchain, intelligent operations,
+and financial-level security capabilities. With more than
+150 breakthroughs achieved in security, performance and
+capacity, the Bank was included in Forbes' Blockchain
+50 2021. Fourth, data asset management and data
+security control were enhanced. The Bank developed
+a data architecture focused on "one data lake, two
+databases". It built a big data-based smart cloud platform
+that is first of its type, self-contained, controllable and with
+a distributed architecture. All the Group's data have been
+moved into the "lake".
+ICBC
+Details of Changes in Share Capital and Shareholding of
+Substantial Shareholders
+Changes in Ordinary Shares
+DETAILS OF CHANGES IN SHARE CAPITAL
+At 31 December 2020
+Number of shares
+Unit: Share
+Percentage
+(%)
+Increase/decrease
+during the
+reporting period
+At 31 December 2021
+Number of shares
+Percentage
+(%)
+90
+(3) Due to rounding, percentages presented herein are for reference only.
+Details of Securities Issuance and Listing
+During the reporting period, the Bank did not issue any shares, did not have any employee shares, employee stock
+ownership plan, did not issue any convertible bonds, or corporate bonds to be disclosed in accordance with Chapter II,
+Section 9 of the "No. 2 Standards on the Content and Format of Information Disclosure of Companies with Public Offerings
+· Content and Format of the Annual Report (Revision 2021)" issued by CSRC.
+A Share
+110,984,806,678
+31.14
+None
+HKSCC Nominees Limited (5)
+Foreign legal
+H Share
+-13,477,082
+86,154,124,549
+24.17
+Unknown
+person
+State-owned
+SSF(6)
+A Share
+Ping An Life Insurance Company
+of China, Ltd. Traditional —
+Ordinary insurance products
+Other entities
+A Share
+12,331,645,186
+3.46
+None
+3,687,330,676
+1.03
+None
+China Securities Finance Co., Ltd.
+State-owned
+legal person
+State-owned
+-24
+MOF
+34.71
+For details on the issuance of preference shares of the Bank, please refer to the section headed "Details of Changes in Share
+Capital and Shareholding of Substantial Shareholders Preference Shares".
+For details on the issuance progress of tier 2 capital bonds and undated additional tier 1 capital bonds of the Bank during
+the reporting period, please refer to the section headed "Discussion and Analysis - Capital Management".
+For information on other securities issued by the Bank and its subsidiaries, please refer to "Note 35. to the Consolidated
+Financial Statements: Debt Securities Issued; Note 38. to the Consolidated Financial Statements: Other Equity Instruments"
+for details.
+Number of Shareholders and Particulars of Shareholding
+As at the end of the reporting period, the Bank had a total number of 750,894 ordinary shareholders and no holders of
+preference shares with voting rights restored or holders of shares with special voting rights, including 113,054 holders of H
+shares and 637,840 holders of A shares. As at the end of the month immediately before the annual results announcement
+date (28 February 2022), the Bank had a total number of 721,975 ordinary shareholders and no holders of preference shares
+with voting rights restored or holders of shares with special voting rights.
+Annual Report 2021
+91
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 ORDINARY SHAREHOLDERS OF THE BANK
+Unit: Share
+Increase/
+decrease of
+shares during
+Name of shareholder
+Huijin
+None
+Nature of
+shareholder
+State-owned
+A Share
+the reporting
+period
+-
+Number of shares
+held at the end of
+Shareholding
+Number of
+percentage
+pledged or
+reporting period
+(%)
+locked-up shares
+123,717,852,951
+Class of
+shares
+Name of substantial
+None.
+Huijin(1)
+50,000,000
+11.1
+None
+Corporation
+preference shares
+China Life Insurance Company
+State-owned
+Domestic
+35,000,000
+7.8
+None
+legal person
+preference shares
+Ping An Life Insurance Company Domestic non-state-
+Domestic
+30,000,000
+6.7
+None
+of China, Ltd.
+BOCOM Schroders Asset
+owned legal person
+preference shares
+Domestic non-state-
+Domestic
+18,000,000
+4.0
+Domestic
+Other entities
+China National Tobacco
+preference shares
+Number
+of shares
+Number of
+pledged/
+during the
+Shares held
+subject to
+shareholder
+Nature of
+Name of shareholder
+shareholder
+China Mobile Communications
+State-owned
+None
+Class of shares
+Domestic
+at the end of
+the period
+Shareholding
+percentage (%)
+restrictions
+marked
+on sales
+shares
+200,000,000
+44.4
+None
+Group Co., Ltd.
+legal person
+reporting
+period
+Management Co., Ltd.
+owned legal person
+preference shares
+None
+preference shares
+China National Tobacco
+Other entities
+Domestic
+10,000,000
+2.2
+None
+Corporation Shandong Branch
+preference shares
+China National Tobacco
+Other entities
+2.5
+Domestic
+2.2
+None
+Corporation Heilongjiang
+Branch
+preference shares
+Ping An Property & Casualty
+Insurance Company of
+China, Ltd.
+Domestic non-state-
+owned legal person
+Domestic
+preference shares
+10,000,000
+2.2
+None
+Notes: (1) The above data are based on the Bank's register of domestic preference shareholders of "1" as at 31 December 2021.
+(2) China National Tobacco Corporation Shandong Branch and China National Tobacco Corporation Heilongjiang Branch are both
+wholly-owned subsidiaries of China National Tobacco Corporation. "China Life Insurance Company Limited — Traditional
+Ordinary insurance products ―005L - CT001 Hu" is managed by China Life Insurance Company Limited. "Ping An Life
+Insurance Company of China, Ltd. - Traditional — Ordinary insurance products" is managed by Ping An Life Insurance Company
+of China, Ltd. Ping An Life Insurance Company of China, Ltd. and Ping An Property & Casualty Insurance Company of China,
+Ltd. have connected relations. Save as disclosed above, the Bank is not aware of any connected relations or concert party action
+among the afore-mentioned preference shareholders and among the afore-mentioned preference shareholders and top 10
+ordinary shareholders.
+(3) "Shareholding percentage" refers to the percentage of domestic preference shares of "1" held by preference shareholders
+in total number (450 million shares) of domestic preference shares of "I".
+10,000,000
+Increase/
+decrease
+11,400,000
+Domestic
+CCB Trust Co., Ltd.
+State-owned
+legal person
+Domestic
+15,000,000
+3.3
+None
+preference shares
+BOC International (China) Co.,
+Ltd.
+State-owned
+Domestic
+15,000,000
+3.3
+11,400,000
+None
+preference shares
+CITIC Securities Co., Ltd.
+State-owned
+Domestic
+9,240,000
+12,290,000
+2.7
+None
+legal person
+preference shares
+Hwabao Trust Co., Ltd.
+State-owned
+legal person
+legal person
+Unit: Share
+locked-up/
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+Nature of
+interests
+12,168,809,000
+manager
+Long
+position
+Percentage of
+H shares (3) (%)
+14.02
+Percentage of
+total ordinary
+shares (3) (%)
+3.41
+Management
+Co., Ltd. (1)
+SSF(2)
+Beneficial owner
+8,663,703,234
+Temasek Holdings
+Number of
+H shares held
+(share)
+(Private) Limited
+7,317,475,731
+Long
+position
+Long
+position
+9.98
+2.43
+8.43
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 DOMESTIC PREFERENCE SHAREHOLDERS OF "I1″
+Notes: (1) As confirmed by Ping An Asset Management Co., Ltd., such shares were held by Ping An Asset Management Co., Ltd. on behalf
+of certain customers (including but not limited to Ping An Life Insurance Company of China, Ltd.) in its capacity as investment
+manager and the interests in such shares were disclosed based on the latest disclosure of interests form filed by Ping An Asset
+Management Co., Ltd. for the period ended 31 December 2021 (the date of relevant event being 12 June 2019). Both Ping
+An Life Insurance Company of China, Ltd. and Ping An Asset Management Co., Ltd. are subsidiaries of Ping An Insurance
+(Group) Company of China, Ltd. As Ping An Asset Management Co., Ltd. is in a position to fully exercise the voting rights in
+respect of such shares on behalf of customers and independently exercise the rights of investment and business management
+in its capacity as investment manager, and is completely independent from Ping An Insurance (Group) Company of China, Ltd.,
+Ping An Insurance (Group) Company of China, Ltd. is exempted from aggregating the interests in such shares as a holding
+company under the aggregation exemption and disclosing the holding of the same in accordance with the Securities and Futures
+Ordinance of Hong Kong.
+(2) According to the information provided by SSF to the Bank, SSF held 7,946,049,758 H shares of the Bank as at the end of the
+reporting period, accounting for 9.16% of the Bank's H shares and 2.23% of the Bank's total ordinary shares.
+(3) Due to rounding, percentages presented herein are for reference only.
+Annual Report 2021
+95
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+Interest of
+controlled
+corporations
+Preference Shares
+Capacity
+Investment
+shareholder
+MOF
+Capacity
+Beneficial owner
+Number of
+A shares held
+(share)
+Nature of
+interests
+123,717,852,951
+Long
+position
+Percentage of
+A shares (2) (%)
+45.89
+Percentage of
+total ordinary
+shares (2) (%)
+34.71
+Interest of
+controlled
+1,013,921,700
+Ping An Asset
+Long
+0.28
+position
+corporations
+Total
+Beneficial owner
+124,731,774,651
+110,984,806,678
+Long
+position
+46.26
+41.16
+35.00
+31.14
+Notes: (1) According to the register of shareholders of the Bank as at 31 December 2021, Huijin held 123,717,852,951 shares in the Bank,
+while Central Huijin Asset Management Co., Ltd., a subsidiary of Huijin, held 1,013,921,700 shares in the Bank.
+(2) Due to rounding, percentages presented herein are for reference only.
+HOLDERS OF H SHARES
+Name of substantial
+0.38
+Issuance and Listing of Preference Shares in Latest Three Years
+2.05
+With the approval of CBIRC by its Document Yin Bao Jian Fu [2019] No. 444 and the approval of CSRC by its Document
+Zheng Jian Xu Ke [2019] No. 1048, the Bank made a non-public issuance of 700 million domestic preference shares on 19
+September 2019 at a par value of RMB100 per share. The dividend rate is the benchmark interest rate plus a fixed spread,
+remaining unchanged in the first five years. Subsequently the benchmark interest rate will be reset every five years, with
+the dividend rate kept unchanged in each reset period and the fixed spread remaining constant through the duration of
+the domestic preference shares. The initial dividend rate of the afore-mentioned domestic preference shares is set at 4.2%
+through market inquiry for the first five years. With the consent of SSE by its letter Shang Zheng Han [2019] No. 1752, the
+afore-mentioned domestic preference shares issued were listed for transfer on the Comprehensive Business Platform of SSE
+on 16 October 2019 with the stock name "2" and stock code 360036. Proceeds of the afore-mentioned domestic
+preference shares totaled RMB70.0 billion, all of which was replenished to the additional tier 1 capital of the Bank after
+deduction of issuance expenses.
+Class of shares
+Increase/
+decrease
+during the
+reporting
+period
+Shares held
+at the end
+The Bank of New York
+Foreign legal
+Issuance of "I¼2″
+USD offshore
+preference shares
+of the
+period
+145,000,000
+Shareholding
+percentage
+Number
+of shares
+subject to
+restrictions
+Number of
+Nature of
+shareholder
+pledged/
+marked
+(%)
+on sales
+shares
+100
+Unknown
+Notes: (1) The above data are based on the Bank's register of offshore preference shareholders as at 31 December 2021.
+(2) As the issuance of the offshore preference shares above was non-public offering, the register of preference shareholders
+presented the information on the registered holder of the offshore preference shares.
+(3) The Bank is not aware of any connected relations or concert party action between the afore-mentioned preference shareholder
+and top 10 ordinary shareholders.
+(4) "Shareholding percentage" refers to the percentage of offshore preference shares held by preference shareholders in total
+number of offshore preference shares.
+Annual Report 2021
+97
+locked-up/
+Name of shareholder
+Depository (Nominees) Limited person
+BANK
+For issuance of domestic preference shares of the Bank, please refer to the announcements published by the Bank on the
+website of SSE, the "HKEXnews" website of HKEX and the website of the Bank.
+Issuance of offshore preference shares
+With the approval of CBIRC by its Document Yin Bao Jian Fu [2020] No. 138 and the approval of CSRC by its Document
+Zheng Jian Xu Ke [2020] No. 1391, the Bank made a non-public issuance of 145 million USD-denominated non-cumulative
+perpetual offshore preference shares (the "Offshore USD Preference Shares") on 23 September 2020 at an issuance price
+of USD20 per share (see the table below for details). The Offshore USD Preference Shares were listed on the SEHK on 24
+September 2020. All proceeds from the issuance, after deduction of commission and issuance expenses, will be used to
+replenish additional tier 1 capital and increase capital adequacy ratio.
+Type of offshore
+Unit: Share
+USD Preference Shares
+Stock code
+4620
+Dividend rate
+3.58%
+Total
+issuance
+amount
+USD2.9 billion
+Full amount
+of proceeds
+per share
+USD20
+Net amount
+of proceeds
+per share
+RMB135.77
+Number of
+shares issued
+preference shares
+Number of Preference Shareholders and Particulars of Shareholding
+The number of qualified placees for the Offshore USD Preference Shares shall not be less than six, and they shall be offered
+only to professional investors instead of retail investors, and shall be non-publicly transferred in the OTC market only.
+For details on the issuance of offshore preference shares of the Bank, please refer to the announcements published by the
+Bank on the website of SSE, the "HKEXnews" website of HKEX and the website of the Bank.
+96
+ICBC
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+Reset dividend rate of “I¼1″
+Pursuant to relevant provisions of the Prospectus on Non-public Offering of Preference Shares of Industrial and Commercial
+Bank of China Limited, domestic preference shares non-publicly offered by the Bank in November 2015 (abbreviation "I
+1" and code "360011") were priced at a coupon dividend rate adjusted in stages, with the coupon dividend rate being
+the benchmark interest rate plus a fixed spread. The coupon dividend rate for the first five years remained unchanged from
+the date of issuance, and subsequently the benchmark interest rate will be reset every five years, and the nominal dividend
+rate during each reset period will remain unchanged. In November 2020, the Bank reset the nominal dividend rate of "I
+11" as it lasted five years from the issuance date, and the coupon dividend rate after reset became 4.58% from 23
+November 2020.
+For details on the reset dividend rate of domestic preference shares of the Bank, please refer to the announcements
+published by the Bank on the website of SSE, the "HKEXnews" website of HKEX and the website of the Bank.
+As at the end of the reporting period, the Bank had one offshore preference shareholder (or proxy), 25 domestic preference
+shareholders of "1" and 33 domestic preference shareholders of "12". As at the end of the month immediately
+before the annual results announcement date (28 February 2022), the Bank had one offshore preference shareholder (or
+proxy), 26 domestic preference shareholders of "11" and 33 domestic preference shareholders of "Iíƒ₹2″.
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 OFFSHORE PREFERENCE SHAREHOLDERS (OR PROXIES) OF THE
+145 million shares
+Wang Bairong, Chief Business Officer
+Mr. Zhang has served as Senior Executive Vice President of the Bank since June 2021. He joined ICBC in July 1999, and was
+appointed as General Manager of ICBC (Europe) Amsterdam Branch in January 2011, General Manager of Singapore Branch
+in February 2013 and General Manager of the International Banking Department of the Head Office of ICBC in January
+2017. Mr. Zhang graduated from the Northwest University in China and obtained Master's degree in Political Economy and
+MBA from Hitotsubashi University in Japan. He is a senior economist.
+Zhang Weiwu, Senior Executive Vice President
+Annual Report 2021
+107
+Mr. Wang has served as Chief Business Officer of the Bank since April 2020. He began his career in 1986. He joined ICBC in
+1991 and previously served as Assistant to Head of Zhejiang Branch and Head of Shaoxing Branch, Deputy Head of Zhejiang
+Branch and General Manager of the Banking Department of Zhejiang Branch, Deputy Head (person in charge) and Head of
+Chongqing Branch and Chief Risk Officer. Mr. Wang graduated from the Party School of the Central Committee of CPC and
+obtained a Master's degree in Economics. He is a senior economist.
+Directors, Supervisors and Senior Management
+Guan Xueqing, Board Secretary
+None of the Directors, Supervisors and Senior Management members of the Bank, whether they are incumbent or have left
+office during the reporting period, have been punished by the securities regulator in the past three years.
+Xiong Yan, Chief Business Officer
+Ms. Xiong has served as Chief Business Officer of the Bank since April 2020. She joined ICBC in 1984, and served as
+Deputy Director-General of Kunming Sub-bureau of the Internal Audit Bureau, Deputy General Manager of Yunnan Branch,
+Deputy Director-General of the Sub-bureau directly managed by the Internal Audit Bureau, Deputy General Manager of
+the Corporate Banking Department I (Corporate Banking Department) and General Manager of the Institutional Banking
+Department of the Head Office. Ms. Xiong graduated from Hunan University, and obtained a degree of International Master
+of Business Administration (IMBA) from Fudan University and The University of Hong Kong. She is a senior economist.
+Song Jianhua, Chief Business Officer
+Mr. Song has served as Chief Business Officer of the Bank since April 2020. He joined ICBC in 1987. He was appointed as
+Deputy General Manager of Jiangsu Branch and General Manager of the Personal Banking Department of the Head Office.
+Mr. Song graduated from Peking University and obtained a Doctorate degree in management science and engineering from
+Nanjing University. He is a senior economist.
+Mr. Lu Yongzhen, Mr. Feng Weidong, Ms. Cao Liqun, Ms. Chen Yifang and Mr. Dong Yang were recommended by Huijin to
+serve as Non-executive Directors of the Bank. Huijin holds interests in shares of the Bank. Please refer to the section headed
+"Details of Changes in Share Capital and Shareholding of Substantial Shareholders ― Interests and Short Positions Held by
+Substantial Shareholders and Other Persons" for further details.
+108
+ICBC
+Mr. Guan has served as Board Secretary of the Bank since July 2016. He joined ICBC in 1984 and served as Head of Suining
+Branch in Sichuan, Representative of Frankfurt Representative Office and Deputy General Manager of Frankfurt Branch,
+Deputy Head of Sichuan Branch, Deputy Head of Sichuan Branch and General Manager of Banking Department of Sichuan
+Branch, and Head of Hubei Branch and Sichuan Branch. Previously Mr. Guan was also General Manager of Corporate
+Strategy and Investor Relations Department of the Bank. He graduated from the Southwestern University of Finance and
+Economics and obtained a Doctorate degree in Economics. He is a senior economist.
+Mr. Xu has served as Senior Executive Vice President of the Bank since October 2020. He joined ICBC in 1995. He was
+appointed as Deputy Head of Guangdong Branch and Head of Shenzhen Branch. Mr. Xu graduated from the Harbin Institute
+of Technology, and he obtained a Doctorate degree in Economics from Sun Yat-sen University. He is a senior economist.
+External Supervisor
+Mr. Zhang has served as Senior Executive Vice President of the Bank since July 2020. He joined ICBC in 1995. He was
+appointed as Deputy General Manager of the Finance & Accounting Department of the Head Office, Deputy Head of
+Liaoning Branch, Executive Director and Chief Financial Officer of ICBC-AXA Assurance Co., Ltd., Director of the Board of
+Supervisors' Office of the Head Office, and General Manager of the Finance & Accounting Department of the Head Office.
+Mr. Zhang graduated from the University of International Business and Economics, and he obtained a Doctorate degree in
+Management from Renmin University of China. He is a senior accountant.
+Male
+Shareholder Supervisor
+Zhang Wei
+April 2019-April 2022
+1963
+Male
+Independent Non-executive Director
+Fred Zuliu Hu
+December 2018-December 2021
+1962
+1943
+Independent Non-executive Director
+Nout Wellink
+March 2017–June 2023
+1953
+Male
+Independent Non-executive Director
+Shen Si
+April 2016-June 2022
+1955
+Male
+Male
+June 2016-June 2022
+Employee Supervisor
+Male
+Zhang Wenwu
+November 2021-November 2024
+1965
+Male
+External Supervisor
+Zhang Jie
+June 2016-June 2022
+1952
+Huang Li
+Male
+Shen Bingxi
+September 2020-September 2023
+1962
+Male
+Employee Supervisor
+Wu Xiangjiang
+June 2016-June 2022
+1964
+Male
+External Supervisor
+Independent Non-executive Director
+Yang Siu Shun
+April 2015-April 2021
+1967
+Male
+Non-executive Director
+Lu Yongzhen
+September 2024
+September 2021-
+1966
+Male
+Executive Director, Senior Executive Vice President,
+Chief Risk Officer
+August 2019-August 2022
+Wang Jingwu
+1967
+Male
+Executive Director, Senior Executive Vice President
+Zheng Guoyu
+July 2021-July 2024
+1964
+Male
+Chairman of the Board of Supervisors
+Huang Liangbo
+December 2021-December 2024
+Feng Weidong
+Non-executive Director
+Male
+1946
+Male
+Independent Non-executive Director
+Anthony Francis Neoh
+January 2022-January 2025
+1966
+Male
+Non-executive Director
+Dong Yang
+August 2021-August 2024
+1964
+Female
+Non-executive Director
+Chen Yifang
+January 2020-January 2023
+1971
+Female
+Non-executive Director
+Cao Liqun
+January 2020-January 2023
+1964
+1973
+July 2020-July 2023
+July 2020-
+Senior Executive Vice President
+103
+Annual Report 2021
+Mr. Zheng has served as Executive Director and Senior Executive Vice President of the Bank since December 2021 and
+as Senior Executive Vice President of the Bank since September 2021. He joined Bank of China since November 1988.
+He was appointed as Assistant to General Manager and Deputy General Manager of Hubei Branch, General Manager of
+Shanxi Branch, General Manager of Sichuan Branch, Member of Executive Committee of Bank of China, and Executive Vice
+President of Bank of China. Mr. Zheng graduated from Wuhan Institute of Water Transportation Engineering and obtained a
+Master's degree in Business Administration from Huazhong University of Science and Technology. He is a senior economist.
+Zheng Guoyu, Executive Director, Senior Executive Vice President
+Mr. Huang has served as Chairman of the Board of Supervisors of the Bank since July 2021. He served as the Deputy
+Chief of the Human Resources Department of PBC, President of Nanning Central Sub-branch of PBC and Chief of Guangxi
+Zhuang Autonomous Region Branch of State Administration of Foreign Exchange, General Manager of the Human Resources
+Department, member of the Business Committee, Assistant to President and Vice President of Export-Import Bank of
+China, and Chairman of the Board of Supervisors of the People's Insurance Company (Group) of China Limited. Mr. Huang
+graduated from Renmin University of China and obtained a Master's degree in Law, and is a senior economist.
+Huang Liangbo, Chairman of the Board of Supervisors
+Mr. Liao has served as Vice Chairman, Executive Director and President of the Bank since March 2021, Executive Director
+of the Bank since July 2020, and Senior Executive Vice President, Senior Executive Vice President and concurrently Chief
+Risk Officer since November 2019. Mr. Liao joined China Construction Bank in 1989, and was appointed as Deputy General
+Manager of Guangxi Branch of China Construction Bank, General Manager of Ningxia Branch, Hubei Branch and Beijing
+Branch of China Construction Bank, Chief Risk Officer, Executive Vice President and concurrently Chief Risk Officer of
+China Construction Bank. Mr. Liao graduated from Guangxi Agricultural University. He obtained a Doctorate degree in
+management science from Southwest Jiaotong University. Mr. Liao is a senior economist.
+Liao Lin, Vice Chairman, Executive Director, President
+Mr. Chen has served as Chairman and Executive Director of the Bank since May 2019. He joined Bank of China in 1990. Mr.
+Chen Siqing previously worked in the Hunan Branch of Bank of China before he was dispatched to the Hong Kong Branch
+of China and South Sea Bank Ltd. as Assistant General Manager. Mr. Chen held various positions in Bank of China, including
+Assistant General Manager and Vice General Manager of the Fujian Branch, General Manager of the Risk Management
+Department of the Head Office, General Manager of the Guangdong Branch, Executive Vice President, President, Vice
+Chairman and Chairman of Bank of China. Mr. Chen served concurrently as Chairman of the Board of Directors of BOC
+Aviation Limited, Non-executive Director, Vice Chairman and Chairman of the Board of Directors of BOC Hong Kong
+(Holdings) Limited. Mr. Chen graduated from Hubei Institute of Finance and Economics, and obtained a Master's degree
+in Business Administration (MBA) from Murdoch University, Australia. He is a Certified Public Accountant and a senior
+economist.
+Directors, Supervisors and Senior Management
+Chen Siqing, Chairman, Executive Director
+(6) The full name of Mr. Nout Wellink is Arnout Henricus Elisabeth Maria Wellink.
+(5) During the reporting period, the Bank did not implement any share incentives. None of the existing directors, supervisors and
+senior management members of the Bank or those who left office during the reporting period held shares or share options or
+were granted restricted shares of the Bank, and there was no change during the reporting period.
+(4) According to the regulations of CSRC, the commencement date of a re-elected director or supervisor's tenure as indicated in the
+above table shall be the day of his/her first appointment.
+(3) According to laws, regulations and the Articles of Association of the Bank, before the newly elected directors take office, the
+current directors shall continue to act as directors.
+The terms of Mr. Liao Lin, Mr. Zheng Guoyu and Mr. Wang Jingwu as Executive Directors of the Bank are set out in the above
+table. Please refer to the section headed "Biographies of Directors, Supervisors and Senior Management" for the starting time of
+their terms as Senior Management members of the Bank.
+(2)
+Notes: (1) Please refer to the section headed "Appointment and Removal".
+Directors, Supervisors and Senior Management
+ICBC
+Biographies of Directors, Supervisors and Senior Management
+102
+Wang Jingwu, Executive Director, Senior Executive Vice President, Chief Risk Officer
+Lu Yongzhen, Non-executive Director
+Shen Si, Independent Non-executive Director
+Directors, Supervisors and Senior Management
+105
+Annual Report 2021
+Mr. Yang has served as Independent Non-executive Director of the Bank since April 2016. He previously served as
+Chairman and Principal Partner of PricewaterhouseCoopers Hong Kong, Executive Chairman and Principal Partner of
+PricewaterhouseCoopers Chinese Mainland and Hong Kong, member of five-people leading group of global leadership
+committee of PricewaterhouseCoopers, Chairman of PricewaterhouseCoopers Asia-Pacific region, Director and Chairman of
+Audit Committee of Hang Seng Management College, Vice Chairman of the Council of the Open University of Hong Kong
+and a member of the Exchange Fund Advisory Committee of Hong Kong Monetary Authority. Mr. Yang currently serves
+as a member of the 13th National Committee of the Chinese People's Political Consultative Conference, a member of the
+board of directors of the Hong Kong Jockey Club and an Independent Non-executive Director of Tencent Holdings Limited.
+Mr. Yang graduated from the London School of Economics and Political Science. He was awarded the degree of Honorary
+Doctor of Social Sciences by The Open University of Hong Kong. He is a Justice of the Peace in Hong Kong. Mr. Yang holds
+the qualification of Chartered Accountants, and is a senior member of the Institute of Chartered Accountants in England and
+Wales, the Hong Kong Institute of Certified Public Accountants and the Chartered Institute of Management Accountants.
+Yang Siu Shun, Independent Non-executive Director
+Mr. Neoh has served as Independent Non-executive Director of the Bank since April 2015. He previously served as Chief
+Advisor to CSRC, a member of the International Consultation Committee of CSRC, a member of the Basic Law Committee
+of the Hong Kong Special Administrative Region under the Standing Committee of the National People's Congress of
+People's Republic of China, and Chairman of the Hong Kong Securities and Futures Commission. He was Chairman of the
+Technical Committee of the International Organization of Securities Commissions, Chairman of Hong Kong Independent
+Police Complaints Council, a Non-executive Director of Global Digital Creations Holdings Limited. He was an Independent
+Non-executive Director of Link Management Limited, which is the Manager of Link Real Estate Investment Trust. He was
+also an Independent Non-executive Director of China Shenhua Energy Company Limited, Bank of China Limited, China Life
+Insurance Company Limited and New China Life Insurance Company Ltd. Mr. Neoh currently serves as an Independent Non-
+executive Director of CITIC Limited, Treasurer and Member of Council of The Chinese University of Hong Kong and Chairman
+of the Asian Academy of International Law. He graduated from the University of London with a Bachelor's degree in Law.
+He is Honorary Doctorate of Law of Chinese University of Hong Kong and Open University of Hong Kong and Honorary
+Doctorate of Social Sciences of Lingnan University. He was elected Honorary Fellow of the Hong Kong Securities Institute,
+Fellow of the Hong Kong Academy of Finance and Academician of the International Euro-Asian Academy of Sciences. Mr.
+Neoh was appointed as Senior Counsel in Hong Kong. He is a barrister of England and Wales. He was admitted to the State
+Bar of California.
+Anthony Francis Neoh, Independent Non-executive Director
+Mr. Dong has served as Non-executive Director of the Bank since January 2022. He joined MOF in August 1989. He
+previously served as assistant researcher, researcher and secretary (director level) of the Department of National Defense of
+MOF, a member of the CPC Committee, Deputy Inspector, and Discipline Inspection Team Leader of the Commissioner's
+Office of MOF in Heilongjiang, a member of the CPC Committee, Deputy Inspector and Discipline Inspection Leader of the
+Commissioner's Office of MOF in Beijing, a member of the CPC Committee, Deputy Director, and Discipline Inspection Team
+Leader of the Beijing Regulatory Bureau of MOF. Mr. Dong graduated from the Beijing Normal University and obtained a
+Master's degree in Management from Harbin Engineering University.
+Mr. Wang has served as Executive Director, Senior Executive Vice President and concurrently Chief Risk Officer since
+September 2021, and as Senior Executive Vice President of the Bank since April 2020. He joined PBC in August 1985, and
+has successively served as Supervision Commissioner (Deputy Director level) of PBC Shijiazhuang Central Sub-branch, Head of
+PBC Shijiazhuang Central Sub-branch and concurrently Director of State Administration of Foreign Exchange ("SAFE") Hebei
+Branch, Head of PBC Hohhot Central Sub-branch and concurrently Director of SAFE Inner Mongolia Branch, Head of PBC
+Guangzhou Branch and concurrently Director of SAFE Guangdong Branch, and Director-General of PBC Financial Stability
+Bureau since January 2002. Mr. Wang graduated from the Hebei Banking School, and he received a doctorate degree in
+economics from Xi'an Jiaotong University. He is a research fellow.
+Dong Yang, Non-executive Director
+Chen Yifang, Non-executive Director
+Directors, Supervisors and Senior Management
+ICBC
+104
+Ms. Cao has served as Non-executive Director of the Bank since January 2020. She joined Huijin in 2020. Ms. Cao previously
+served as Deputy Director of Regulations Division, General Affairs Department, Director of Regulations Division, General
+Affairs Department, Director of Non-Financial Institutions Inspection Division, Supervision and Inspection Department,
+Director of General Affairs Division, Supervision and Inspection Department, Deputy Director-General of Supervision and
+Inspection Department, Inspector of General Affairs Department (Policy and Regulation Department), Level-Two Inspector of
+General Affairs Department (Policy and Regulation Department) of State Administration of Foreign Exchange, and acted as
+Deputy Director of Administrative Committee of Beijing's Zhongguancun Science Park. Ms. Cao obtained a Bachelor's degree
+in Law from China University of Political Science and Law, a Master's degree in Finance from Renmin University of China, and
+a Master's degree in Public Administration from Peking University. Ms. Cao is an economist.
+Cao Liqun, Non-executive Director
+Mr. Feng has served as Non-executive Director of the Bank since January 2020. He joined MOF in 1986. He previously
+served as Deputy Director of Academic Affairs Division of Chinese Accounting Correspondence School of Accounting
+Department of MOF (deputy division chief level), Person in charge of Teaching Material Department of National Accountant
+Certification Examination Leading Group Office, Director of Accounting Personnel Management Division and Director of
+Institutional System Division I of Accounting Department of MOF, Deputy Director (deputy director-general level), Deputy
+Director (person in charge), Director (director-general level), Secretary of the Party Committee and Director of National
+Accountant Assessment & Certification Centre of MOF. He concurrently serves as a Managing Director of the 8th Council
+of the Accounting Society of China, a part-time professor and off-campus practice tutor for postgraduate students of the
+School of Economics and Management of Beijing Jiaotong University, and a visiting tutor for postgraduate students in the
+Accounting School of the Central University of Finance and Economics. Mr. Feng obtained a Bachelor's degree in Economics
+from Dongbei University of Finance & Economics and Doctorate degree from Beijing Jiaotong University. Mr. Feng Weidong
+is a senior accountant, researcher, non-practicing certified public accountant and is a recipient of the Special Government
+Allowance by the State Council of China.
+Feng Weidong, Non-executive Director
+Mr. Lu has served as Non-executive Director of the Bank since August 2019. He joined Huijin in 2019. Mr. Lu previously
+served as Deputy Director of the Administrative Office of the Economic Research Consultation Centre of the State Economic
+and Trade Commission, Director of the Specific Research Department of the Economic Research Centre of the State
+Economic and Trade Commission, Director of the Capital Markets Research Department of the Research Centre of the State-
+owned Assets Supervision and Administration Commission of the State Council, and Director Assistant of the Research
+Centre of the State-owned Assets Supervision and Administration Commission of the State Council with the concurrent post
+as the Director of the Capital Markets Research Department, and Deputy Director of the Research Centre of the State-owned
+Assets Supervision and Administration Commission of the State Council. Mr. Lu obtained a Bachelor's degree and a Master's
+degree in History from Peking University, and a Doctorate degree in Economics from Southwestern University of Finance and
+Economics. He is a researcher.
+Ms. Chen has served as Non-executive Director of the Bank since August 2021. She joined MOF in August 1985. She
+previously served as Deputy Division Chief of Payment Management Division and Deputy Director of Charge Bill Regulatory
+Center of General Affairs and Reform Department of MOF, Deputy Division Chief of the Charging Fund Policy Management
+Division of the Comprehensive Department of MOF, Division Chief of Charging Fund Division of Policy Planning Department
+of MOF, Division Chief of Housing and Land Division of the Comprehensive Department of MOF, Deputy Director-General of
+the Comprehensive Department of MOF, Member of the Party Group, Inspector and Deputy Secretary of the Party Group of
+Shenzhen Finance Supervision Commissioner Office of MOF, Deputy Secretary of the Party Group, Inspector and Level-one
+Inspector of Shenzhen Regulatory Bureau of MOF, and Level-one Inspector of Fiscal Notes Supervision Center of MOF. Ms.
+Chen obtained a Bachelor's degree in Economics from Jiangxi University of Finance and Economics.
+December 2015-November 2021
+1966
+Male
+Chief Business Officer
+Xiong Yan
+July 2016-
+1963
+Male
+Board Secretary
+Guan Xueqing
+April 2020-
+1962
+Female
+Male
+Wang Bairong
+June 2021-
+1975
+Male
+Senior Executive Vice President
+Zhang Weiwu
+October 2020-
+1969
+Male
+Chief Business Officer
+1964
+April 2020-
+Song Jianhua
+August 2017-February 2021
+1971
+Female
+February 2015-January 2022
+1963
+Male
+January 2020-March 2021
+1963
+Male
+Non-executive Director
+Mei Yingchun
+Non-executive Director
+Zheng Fuqing
+Chairman of the Board of Supervisors
+Yang Guozhong
+Qu Qiang
+Directors, Supervisors and Senior Management Leaving Office
+April 2020-
+1965
+Male
+Chief Business Officer
+Xu Shouben
+1966
+Male
+Vice Chairman, Executive Director, President
+Domestic
+Other entities
+China National Tobacco
+Corporation
+preference shares
+legal person
+None
+10.0
+70,000,000
+Domestic
+50,000,000
+State-owned
+preference shares
+legal person
+Co., Ltd.
+None
+10.0
+70,000,000
+Domestic
+State-owned
+BOC International (China)
+CCB Trust Co., Ltd.
+preference shares
+7.1
+preference shares
+20,000,000
+Domestic
+Domestic non-state-
+owned legal person
+Domestic non-state-
+owned legal person
+Domestic non-state-
+owned legal person
+BOCOM Schroders Asset
+Management Co., Ltd.
+Ping An Property & Casualty
+Insurance Company of
+China, Ltd.
+Bank of Beijing Co., Ltd.
+preference shares
+None
+4.3
+30,000,000
+None
+Domestic
+legal person
+Other entities
+Shanghai Tobacco Group
+Co., Ltd.
+None
+5.3
+37,250,000
+37,250,000
+Domestic
+State-owned
+Jiangsu International Trust
+Co., Ltd.
+preference shares
+legal person
+Group Co., Ltd.
+None
+marked
+restrictions
+Shareholding
+percentage (%)
+the period
+at the end of
+locked-up/
+subject to
+Shares held
+pledged/
+on sales
+of shares
+Number
+Increase/
+decrease
+during the
+reporting
+period
+Class of shares
+Nature of
+shareholder
+Name of shareholder
+Unit: Share
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 DOMESTIC PREFERENCE SHAREHOLDERS OF "I"
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+Xu Shouben, Senior Executive Vice President
+Number of
+shares
+China Life Insurance Company
+State-owned
+14.3
+100,000,000
+Domestic
+State-owned
+China Mobile Communications
+preference shares
+legal person
+None
+16.1
+112,750,000
+112,750,000
+Domestic
+State-owned
+Hwabao Trust Co., Ltd.
+preference shares
+legal person
+Limited
+None
+17.1
+120,000,000
+Domestic
+2.9
+None
+preference shares
+Domestic
+ICBC
+100
+The above-mentioned preference share dividend distribution plans have been fulfilled. For particulars of the Bank's
+distribution of dividends on preference shares, please refer to the announcements of the Bank on the website of SSE, the
+"HKEXnews" website of HKEX and the website of the Bank.
+(3) Offshore USD preference share refers to USD2.9 billion preference shares issued offshore by the Bank at a dividend rate of
+3.58% in 2020.
+Offshore EUR, USD and RMB preference shares refer to EURO.6 billion preference shares, USD2.94 billion preference shares and
+RMB12.0 billion preference shares issued offshore by the Bank at a dividend rate of 6.00% in 2014. The Bank redeemed the
+above offshore USD preference shares and offshore RMB preference shares on 10 December 2019 and the above offshore EUR
+preference shares on 10 December 2021.
+(2)
+Notes: (1) Dividend distributed is tax included.
+N/A
+N/A
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+N/A
+million
+3.58%
+About USD115.3
+Offshore USD preference
+share(3)
+RMB800 million
+EUR40 million
+USD196 million
+RMB preference shares(2)
+N/A
+N/A
+6.00%
+N/A
+Redemption or Conversion of Preference
+Shares
+In 2014, the Bank issued EURO.6 billion offshore
+preference shares. The Board of Directors of the Bank
+reviewed and approved the Proposal on the Exercise of
+Redemption of Offshore EUR Preference Shares on 27
+August 2021. On the premise of obtaining the approval of
+CBIRC, the Bank planned to exercise the right to redeem
+all the abovementioned offshore EUR preference shares on
+10 December 2021. In October 2021, the Bank received
+a reply letter from CBIRC, which had no objection to the
+Bank's redemption of EURO.6 billion offshore preference
+shares. Pursuant to the terms and conditions of the
+offshore EUR preference shares and the reply letter from
+CBIRC, the Bank redeemed the aforementioned offshore
+EUR preference shares in whole on 10 December 2021
+at the redemption price of each offshore EUR preference
+share (being the aggregate of an amount equal to the
+liquidation preference of each offshore EUR preference
+share plus any dividends accrued but unpaid in respect of
+the period from (and including) the immediately preceding
+dividend payment date to (but excluding) the redemption
+date). Subsequent to the redemption and cancellation
+of the aforementioned offshore EUR preference shares
+on the redemption date, there are no EUR preference
+shares issued in the offshore market. Please refer to the
+announcements published by the Bank on the website of
+SSE, the "HKEXnews" website of HKEX and the website of
+the Bank.
+During the reporting period, the Bank did not convert any
+preference share.
+Liao Lin
+May 2019-May 2022
+1960
+Male
+Chairman, Executive Director
+Chen Siqing
+Tenure
+year
+Gender
+Position
+Name
+Birth
+Basic Information on Directors, Supervisors and Senior Management
+Directors, Supervisors and Senior Management
+101
+Annual Report 2021
+According to the Accounting Standard for Business
+Enterprises No. 22 Recognition and Measurement
+of Financial Instruments, the Accounting Standard for
+Business Enterprises No. 37 Presentation of Financial
+well
+Instruments promulgated by MOF as
+International Financial Reporting Standard 9
+Instruments and the International Accounting Standard
+32 Financial Instruments: Presentation promulgated
+by International Accounting Standards Board and other
+accounting standards and the key terms of issuance of
+the Bank's preference shares, the issued and existing
+preference shares do not contain contractual obligations
+to deliver cash or other financial assets or contractual
+obligations to deliver variable equity instruments for
+settlement, and shall be accounted for as other equity
+instruments.
+as the
+Financial
+Accounting Policy Adopted for Preference
+Shares and Rationale
+During the reporting period, the Bank did not restore any
+voting right of preference share.
+Restoration of Voting Rights of Preference
+Shares
+RMB2,940 million
+EUR40 million
+Mr. Shen has served as Independent Non-executive Director of the Bank since March 2017. Previously, he served as Deputy
+Division Chief and Division Chief of Zhejiang Branch of PBC, Deputy General Director of the Investigation and Statistics
+Department of the Head Office of PBC, and Deputy President of the Hangzhou Branch of Shanghai Pudong Development
+Bank, Board Secretary of Shanghai Pudong Development Bank and Executive Director and concurrently Board Secretary of
+Shanghai Pudong Development Bank. He obtained a Master's degree in Economics from Zhejiang University and an EMBA
+degree. He is a senior economist.
+4.20%
+6.00%
+6.00%
+Dividends on the Bank's offshore EUR preference shares
+are paid annually in cash, and calculated based on the
+liquidation preference of the offshore preference shares.
+Dividends on the Bank's offshore EUR preference shares
+are non-cumulative. Holders of offshore EUR preference
+shares are only entitled to dividends at the prescribed
+dividend rate, but are not entitled to any distribution of
+residual profits of the Bank together with the holders of
+ordinary shares. According to the dividend distribution
+plan in the offshore EUR preference share issuance
+proposal, total dividends of EURO.04 billion (pre-tax) on
+the offshore EUR preference shares were distributed in EUR
+at a dividend rate of 6% (after-tax). According to relevant
+1" at a dividend rate of 4.58% (pre-tax); and distributed
+dividends of RMB2,940 million (pre-tax) on the domestic
+preference share "2" at a dividend rate of 4.2%
+(pre-tax).
+1" and "I" are paid annually in cash, and
+calculated based on the aggregate par value of the issued
+domestic preference shares. Dividends on the Bank's
+domestic preference shares are non-cumulative. Holders of
+domestic preference shares are only entitled to dividends
+at the prescribed dividend rate, but are not entitled to any
+distribution of residual profits of the Bank together with
+the holders of ordinary shares. According to the dividend
+distribution plan in the domestic preference share issuance
+proposal, the Bank distributed dividends of RMB2,061
+million (pre-tax) on the domestic preference share "
+Dividends on the Bank's domestic preference shares "I
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+99
+Annual Report 2021
+shares on 23 September 2021; the Bank reviewed and
+approved the Proposal on Distribution of Dividends for
+Offshore EUR Preference Shares and "I" at the
+meeting of its Board of Directors on 29 October 2021,
+permitting the Bank to distribute the dividends on domestic
+preference shares "1" on 23 November 2021 and
+on the offshore EUR preference shares on 10 December
+2021.
+As per the resolution and authorization of the General
+Meeting, the Bank reviewed and approved the Proposal on
+Distribution of Dividends for "2" and Offshore USD
+Preference Shares at the meeting of its Board of Directors
+on 27 August 2021, permitting the Bank to distribute the
+dividends on domestic preference shares "I" on
+24 September 2021 and on the offshore USD preference
+laws, when the Bank distributes dividends for offshore
+EUR preference shares, the enterprise income tax shall be
+withheld by the Bank at a rate of 10%. According to the
+requirements of the terms and conditions of the offshore
+EUR preference shares, the Bank paid the relevant taxes,
+included in the dividends for offshore EUR preference
+shares.
+Dividend Distribution of Preference Shares
+Notes: (1) The above data are based on the Bank's register of domestic preference shareholders of "2" as at 31 December 2021.
+(2) Shanghai Tobacco Group Co., Ltd., China National Tobacco Corporation Shandong Branch and China National Tobacco
+Corporation Heilongjiang Branch are all wholly-owned subsidiaries of China National Tobacco Corporation. "China Life Insurance
+Company Limited - Traditional — Ordinary insurance products ―005L CT001 Hu" is managed by China Life Insurance
+Company Limited. "Ping An Life Insurance Company of China, Ltd. - Traditional - Ordinary insurance products" is managed by
+Ping An Life Insurance Company of China, Ltd. Ping An Life Insurance Company of China, Ltd. and Ping An Property & Casualty
+Insurance Company of China, Ltd. have connected relations. Save as disclosed above, the Bank is not aware of any connected
+relations or concert party action among the afore-mentioned preference shareholders and among the afore-mentioned
+preference shareholders and top 10 ordinary shareholders.
+None
+2.1
+15,000,000
+Domestic
+preference shares
+preference shares
+None
+2.1
+15,000,000
+(3) "Shareholding percentage" refers to the percentage of domestic preference shares of "2" held by preference shareholders
+in total number (700 million shares) of domestic preference shares of "2".
+Dividends on the Bank's offshore USD preference shares
+are paid annually in cash, and calculated based on the
+liquidation preference of the offshore preference shares.
+Dividends on the Bank's offshore USD preference shares
+are non-cumulative. Holders of offshore USD preference
+shares are only entitled to dividends at the prescribed
+dividend rate, but are not entitled to any distribution of
+residual profits of the Bank together with the holders of
+ordinary shares. According to the dividend distribution plan
+in the offshore USD preference share issuance proposal,
+total dividends of about USD115.3 million (pre-tax) on the
+offshore USD preference shares were distributed in USD at
+a dividend rate of 3.58% (after-tax). According to relevant
+laws, when the Bank distributes dividends for offshore
+USD preference shares, the enterprise income tax shall be
+withheld by the Bank at a rate of 10%. According to the
+requirements of the terms and conditions of the offshore
+USD preference shares, the Bank paid the relevant taxes,
+included in the dividends for offshore USD preference
+shares.
+The table below shows the distribution of dividends on preference shares by the Bank in latest three years:
+2021
+Offshore EUR, USD and
+RMB2,940 million
+4.20%
+“工行優2"
+Domestic preference share
+“工行優1"
+Dividend
+distributed (¹)
+RMB2,025 million
+rate
+4.50%
+Dividend
+Dividend
+distributed(¹)
+RMB2,025 million
+rate
+4.50%
+RMB2,061 million
+4.58%
+Domestic preference share
+Dividend
+Dividend
+distributed(1)
+rate
+Dividend
+Type of preference
+shares
+2019
+2020
+EUR40 million
+Nout Wellink, Independent Non-executive Director
+Senior Executive Vice President
+Mr. Hu has served as Independent Non-executive Director of the Bank since April 2019. He previously served as a senior
+economist at the International Monetary Fund, Head of Research at the World Economic Forum, the chairman for Greater
+China and a partner at Goldman Sachs Group, Inc., an independent non-executive director of Great Wall Pan Asia Holdings
+Limited (formerly known as SCMP Group Limited), an independent non-executive director of Hang Seng Bank Limited,
+the non-executive director of China Asset Management Co., Ltd., an independent director of Dalian Wanda Commercial
+Management Group Co., Ltd., an independent director of Shanghai Pudong Development Bank and the independent non-
+executive director of Hong Kong Exchanges and Clearing Limited, etc. Mr. Hu currently serves in various positions such as
+the chairman of Primavera Capital Group, the non-executive chairman of Yum China Holdings, Inc, the independent non-
+executive director of Ant Group Co., Ltd., the director of UBS Group AG, the co-chair of The Nature Conservancy's Asia
+Pacific Council and the director of the China Medical Board. Mr. Hu is also a member of the Global Board of Advisors for
+the Council on Foreign Relations, the 21st Century Council of the Berggruen Institute, the Harvard Global Advisory Council,
+the Harvard Kennedy School Mossavar-Rahmani Center for Business and Government, the Stanford Center for International
+Development, and the Jerome A. Chazen Institute of International Business at Columbia University etc. He concurrently
+serves as the co-director of the National Center for Economic Research and a professor at Tsinghua University, and he is also
+an adjunct professor at the Chinese University of Hong Kong and Peking University. Mr. Hu obtained a master's degree in
+engineering science from Tsinghua University, and a master's degree and a PhD in economics from Harvard University.
+Mr. Wellink has served as Independent Non-executive Director of the Bank since December 2018. Previously, he served
+as the Treasurer General in the Dutch Ministry of Finance, member of the Executive Board and the President of the Dutch
+Central Bank, member of the Governing Council of the European Central Bank, member of the Group of Ten Central Bank
+Governors and Governor of the International Monetary Fund, member and Chairman of the Board of Directors of the Bank
+for International Settlements, Chairman of the Basel Committee on Banking Supervision, Independent Director of Bank of
+China Limited, Vice Chairman of Supervisory Board of PricewaterhouseCoopers Accountants N.V. and an Emeritus Professor
+at the Free University in Amsterdam. Mr. Wellink also served as member of the supervisory board of a bank, a reinsurance
+company and other enterprises on behalf of the Dutch authorities, Chairman of the Board of Supervisors of the Netherlands
+Open Air Museum, member and treasurer of the Royal Picture Gallery Mauritshuis and the Westeinde Hospital in The Hague.
+He was awarded a Knighthood in the Order of the Netherlands Lion in 1980 and is Commander of the Order of Orange-
+Nassau since 2011. He received a Master's degree in Law from Leiden University, a Doctorate degree in Economics from
+Erasmus University Rotterdam and an Honorary Doctorate from Tilburg University.
+Fred Zuliu Hu, Independent Non-executive Director
+Zhang Wei, Shareholder Supervisor
+Mr. Zhang has concurrently served as Shareholder Supervisor and Director of the Board of Supervisors' Office of the Bank
+since June 2016. He joined ICBC in 1994, and has served as Employee Supervisor of the Board of Supervisors, General
+Manager of the Legal Affairs Department and Chief of Consumer Protection Office of the Bank. He graduated from Peking
+University with a Doctorate degree in Law and is a research fellow.
+106
+Directors, Supervisors and Senior Management
+Huang Li, Employee Supervisor
+ICBC
+Wu Xiangjiang, Employee Supervisor
+Mr. Wu has served as Employee Supervisor of the Bank since September 2020. He joined ICBC in 1988 and is currently the
+General Manager of Internal Control & Compliance Department of the Bank. He served such positions at the Bank as Deputy
+Head of Zhejiang Branch, General Manager of E-banking Department and General Manager of Internet Finance Department.
+Mr. Wu graduated from Zhejiang University with a Doctorate degree in Management. He is a senior economist.
+Shen Bingxi, External Supervisor
+Mr. Shen has served as External Supervisor of the Bank since June 2016. He previously served as the Deputy Chief of the
+Financial Market Division of the Financial System Reform Department, Chief of the System Reform Division and Monetary
+Policy Research Division of the Policy Study Office, and Chief of the Monetary Policy Research Division of the Research
+Bureau of the PBC, Chief Representative of the PBC Representative Office in Tokyo, Deputy Director-general and Director-
+level Inspector of Financial Market Department of the PBC, and Non-executive Director of Agricultural Bank of China. Mr.
+Shen is currently guest professor of Tsinghua University, Zhejiang University and Nankai University. Mr. Shen graduated from
+Renmin University of China, and received a Doctorate degree in Economics. He is a research fellow.
+Zhang Jie, External Supervisor
+Mr. Zhang has served as External Supervisor of the Bank since November 2021. He is currently a professor and doctoral
+supervisor of the Renmin University of China, director of the International Monetary Institute, a distinguished professor
+of the Ministry of Education's "Changjiang Scholars Program", a famous teacher of the national "Ten Thousand Talents
+Program", and a national candidate of the "New Century Talents Project". Mr. Zhang is a recipient of the special
+government allowance provided by the State Council to experts, and is engaged in research on the topics of institutional
+finance, China's financial system and financial development. He was the Dean of the School of Finance of Shaanxi Institute
+of Finance and Economics, the Associate Dean of the School of Economics and Finance of Xi'an Jiaotong University, the
+Associate Dean of the School of Finance of Renmin University of China, and the first Secretary General of the College
+Finance Teaching Steering Committee of the Ministry of Education. At present, he is concurrently a researcher of the
+Finance Research Institute of the Counsellor's Office of the State Council, and an executive director of the China Society for
+Finance and Banking. Mr. Zhang graduated from Shaanxi University of Finance and Economics with a Doctorate degree in
+Economics.
+Zhang Wenwu, Senior Executive Vice President
+Mr. Huang has served as Employee Supervisor of the Bank since June 2016. He joined ICBC in 1994 and is currently
+the Head of Beijing Branch of the Bank. He served as Deputy General Manager and General Manager of the Banking
+Department as well as Deputy Head and Head of Guizhou Branch of ICBC. Mr. Huang graduated from The University of
+Hong Kong with an MBA degree. He is a senior economist.
+10.32
+No
+13.65
+3.33
+ICBC
+110
+13/13
+Mei Yingchun
+Zheng Fuqing
+Yang Guozhong
+Directors, Supervisors and Senior Management Leaving Office
+Yes
+Qu Qiang
+Yes
+(5) Fees of Mr. Huang Li and Mr. Wu Xiangjiang are their allowances obtained as Employee Supervisors of the Bank, excluding their
+remuneration with the Bank in accordance with the employee remuneration system.
+16.32
+No
+Directors, Supervisors and Senior Management
+Notes: (1) Since January 2015, the remuneration to the Chairman of the Board of Directors, the President, the Chairman of the Board of
+Supervisors and other executives of the Bank has followed the State's policies relating to the remuneration reform on executives
+of central enterprises.
+(2) During the reporting period, the total remuneration amount paid to Directors, Supervisors and Senior Management members
+was RMB14,157.7 thousand. According to the requirements of relevant government authorities, the total final remuneration
+payable to the Chairman of the Board of Directors, the President, the Chairman of the Board of Supervisors, Executive Directors,
+Shareholder Supervisors and other Senior Management members is still subject to final confirmation by relevant government
+authorities. Additional details of remuneration will be disclosed when they have been determined.
+(3) In accordance with applicable national regulations, the incentive income for 2018-2020 was paid to the Chairman, the President
+and Senior Executive Vice President of the Bank in 2021 based on their specific tenure and performance appraisal results.
+Accordingly, the Bank accrued RMB16 thousand, RMB9.4 thousand, RMB6.5 thousand, RMB5 thousand and RMB3.6 thousand
+for Mr. Chen Siqing, Mr. Liao Lin, Mr. Wang Jingwu, Mr. Zhang Wenwu and Mr. Xu Shouben respectively, as additional
+contribution to the Annuity Plan in 2021.
+(4) During the reporting period, Mr. Lu Yongzhen, Mr. Feng Weidong, Ms. Cao Liqun, Ms. Chen Yifang, Mr. Zheng Fuqing and Ms.
+Mei Yingchun did not obtain remuneration from the Bank during their tenure as directors of the Bank.
+No
+(6) As the Bank's Independent Non-executive Directors served as directors or senior management of other legal persons or
+organizations other than the Bank or the controlled subsidiaries of the Bank, such legal persons or organizations became
+related parties of the Bank. During the reporting period, Independent Non-executive Directors obtained remuneration from such
+related parties. Except to the extent of the afore-mentioned circumstances, none of the Bank's Directors, Supervisors and Senior
+Management was paid by the Bank's related parties during the reporting period.
+(7)
+For the change of the Bank's Directors, Supervisors and Senior Management, please refer to the section headed "Appointment
+and Removal".
+Annual Report 2021
+16.32
+124.01
+No
+96.04
+55.74
+19.36
+75.10
+Zhang Weiwu
+41.81
+15.80
+57.61
+Wang Bairong
+97.70
+28.42
+126.12
+2222
+No
+No
+No
+No
+Guan Xueqing
+101.02
+29.43
+130.45
+111
+Xiong Yan
+96.04
+28.90
+124.94
+No
+Song Jianhua
+27.97
+Corporate Governance Report
+Shareholders'
+During the reporting period, the Bank refined the modern
+corporate governance framework, mechanism and culture.
+The Bank further developed the corporate governance
+structure which was led by the Bank's Party Committee
+with the Board of Directors acting as the decision-
+making organ, the Board of Supervisors responsible for
+compliance supervision, and the Management in charge
+of operation. Under the working guideline of "adhere to
+the guidance of the Party building theory and exercising
+rigorous corporate governance", the Bank strengthened
+the organic connection between the rules of procedure of
+the Party Committee and the decision-making mechanism
+for corporate governance, deeply applied its institutional
+advantages to the construction of modern governance
+system, and constantly improved the governance efficiency
+and high-quality development capability. The Board of
+Directors continued to improve corporate frameworks
+and strengthen strategic guidance. In alignment with
+the national "14th Five-Year Plan" and the long-range
+objectives through the year 2035, the Board of Directors
+Financial Technology
+and Digital
+Development
+Committee
+Financial Assets
+Service
+Management
+Committee
+Inclusive Finance
+and Rural
+Revitalization
+Promotion Committee
+Internal Audit
+Bureau
+Internal Audit
+Sub-bureau
+Marketing
+Management
+Departments
+Profitability
+Units
+Risk
+Management
+Department
+Comprehensive
+Administration
+Departments
+Supporting
+Departments
+Directly
+Controlled
+Institutions
+Domestic
+Institutions
+Overseas
+Institutions
+Note: The above is the corporate governance framework chart as of the disclosure date of this report.
+112
+ICBC
+Corporate Governance Report
+The Bank has made constant efforts to improve the
+corporate governance and checks and balances mechanism
+comprising the Shareholders' General Meeting, the Board
+of Directors, the Board of Supervisors and the Senior
+Management featuring clearly-defined responsibilities
+and accountability, coordination and effective checks and
+balances, and to optimize responsibilities of the authority
+organ, decision-making organ, supervisory organ and
+executive organ. As a result, the corporate governance
+operation mechanism with scientific decision-making
+process, effective supervision and steady operation has
+been in place.
+Corporate Governance Code
+During the reporting period, save as disclosed below, the
+Bank fully complied with the principles, code provisions
+and recommended best practices stipulated in the
+Corporate Governance Code (Appendix 14 to the Hong
+Kong Listing Rules).
+With regard to the compliance with Article C.2.1 of the
+Corporate Governance Code (Appendix 14 to the Hong
+Kong Listing Rules), Mr. Gu Shu resigned from his position
+as President of the Bank on 31 December 2020. The Board
+of Directors of the Bank deliberated and decided that Mr.
+Chen Siqing, Chairman of the Board of Directors, should
+perform the duties of acting President from the date when
+Mr. Gu Shu does not perform the management duties in
+the Bank due to job change to the date when the new
+President appointed by the Board of Directors of the Bank
+formally takes office. On 16 March 2021, Mr. Liao Lin took
+office as President of the Bank, and since that date, Mr.
+Chen Siqing had ceased to serve as acting President.
+Shareholders' General Meeting
+Committee
+Overview of Corporate Governance
+Risk
+Management
+Institutional Banking
+Corporate Governance Framework
+coordinated the implementation of the "Three Tasks" of
+financial work. Focusing on key missions such as service
+for the high-quality development in manufacturing, self-
+reliance and self-improvement in science and technology,
+rural revitalization, inclusive finance, and "carbon peak
+and carbon neutrality", the Board of Directors formulated
+overall strategic development plans to provide more
+adaptive, competitive, and inclusive financial services.
+The Board of Supervisors gave full play to its supervisory
+function. It focused on how the Board of Directors and the
+Senior Management implemented the important decisions
+and arrangements of the Party Central Committee and
+the State Council, national economic and financial policies
+and regulatory requirements, etc. The Board of Supervisors
+conducted sound supervision on duty performance,
+financial management, risk management, internal control
+and compliance and other aspects, putting its important
+role in corporate governance into good use. There is
+no material divergence between the actual corporate
+governance of the Bank, relevant laws and administrative
+regulations, and the corporate governance-related rules
+issued by CSRC.
+Strategy
+Committee
+Corporate Social
+Responsibility and
+Consumer Protection
+Committee
+Board of
+Directors
+Xu Shouben
+General Meeting
+Primary reporting line
+Secondary reporting line
+Board of
+Supervisors
+Risk Management
+Committee
+Nomination
+Committee
+Compensation
+Committee
+Related Party
+Transactions Control
+Committee
+US Risk
+Committee
+Audit Committee
+Senior
+Management
+Asset & Liability
+Management
+Committee
+Personal Banking
+Promotion
+Committee
+Consumer Protection
+Committee
+Corporate &
+Investment Banking
+Promotion Committee
+Promotion
+Committee
+75.10
+Zhang Jie
+55.74
+insurances
+Fees
+income
+before tax
+parties or not
+(1)
+(2)
+(3)
+(4)
+(5)=(1)+(2)+(3)+(4)
+Chen Siging
+61.94
+(before tax)
+20.05
+No
+Liao Lin
+61.42
+19.70
+81.12
+No
+Huang Liangbo
+30.97
+10.06
+41.03
+Zheng Guoyu
+18.58
+81.99
+Name
+other related
+remuneration
+Appointment and Removal
+Directors
+Directors, Supervisors and Senior Management
+On 25 February 2021, the Board of Directors of the Bank
+elected Mr. Liao Lin as Vice Chairman of the Bank, and
+his qualification was approved by CBIRC in March 2021.
+At the Annual General Meeting for the Year 2020 held
+on 21 June 2021, Ms. Chen Yifang was elected as Non-
+executive Director of the Bank, and her qualification
+was approved by CBIRC in August 2021. At the First
+Extraordinary General Meeting of 2021 held on 29 July
+2021, Mr. Wang Jingwu was elected as Executive Director
+of the Bank, and his qualification was approved by
+CBIRC in September 2021. At the Second Extraordinary
+General Meeting of 2021 held on 25 November 2021,
+Mr. Zheng Guoyu was elected as Executive Director of
+the Bank, and his qualification was approved by CBIRC
+in December 2021; Mr. Dong Yang was elected as Non-
+executive Director of the Bank, and his qualification was
+approved by CBIRC in January 2022. On 30 March 2022,
+the Board of Directors of the Bank nominated Mr. Chen
+Siqing as the candidate for Executive Director of the Bank
+and to be re-elected as Executive Director of the Bank,
+and agreed him to consecutively serve as Chairman of the
+Bank after his re-election as Executive Director is approved
+by the Shareholders' General Meeting of the Bank. The
+appointment of Mr. Chen Siqing as Executive Director of
+the Bank shall be submitted to the Shareholders' General
+Meeting of the Bank for deliberation and voting, and his
+new term of office shall start from the date of review and
+approval by the Shareholders' General Meeting.
+In February 2021, Ms. Mei Yingchun ceased to act as
+Non-executive Director of the Bank due to expiration of
+her term of office. In January 2022, Mr. Zheng Fuqing
+ceased to act as Non-executive Director of the Bank due to
+expiration of his term of office.
+Supervisors
+At the First Extraordinary General Meeting of 2021 held
+on 29 July 2021, Mr. Huang Liangbo was elected as
+Shareholder Supervisor of the Bank, and his term of office
+as Shareholder Supervisor of the Bank started from the
+day of approval by the Shareholders' General Meeting,
+and his term of office as Chairman of the Board of
+Supervisors of the Bank took effect simultaneously. At the
+Second Extraordinary General Meeting of 2021 held on
+25 November 2021, Mr. Zhang Jie was elected as External
+Supervisor of the Bank, and his term of office as External
+Supervisor of the Bank started from the day of approval by
+the Shareholders' General Meeting.
+In March 2021, Mr. Yang Guozhong ceased to act as
+Shareholder Supervisor and Chairman of the Board of
+Supervisors of the Bank due to change of job assignments.
+In November 2021, Mr. Qu Qiang ceased to act as External
+Supervisor of the Bank due to change of job assignments.
+Senior Management Members
+On 25 February 2021, the Board of Directors appointed
+Mr. Liao Lin as President of the Bank, and his qualification
+was approved by CBIRC in March 2021. Mr. Liao Lin
+ceased to act as Chief Risk Officer of the Bank after he
+took office as President. On 29 April 2021, the Board of
+Directors appointed Mr. Zhang Weiwu as Senior Executive
+Vice President of the Bank, and his qualification was
+approved by CBIRC in June 2021. On 24 September 2021,
+the Board of Directors appointed Mr. Zheng Guoyu as
+Senior Executive Vice President of the Bank and Mr. Wang
+Jingwu as Chief Risk Officer of the Bank.
+Annual Report 2021
+109
+Directors, Supervisors and Senior Management
+Annual Remuneration
+Remuneration from the Bank
+Contribution
+by the employer
+to social insurance,
+Unit: RMB10,000
+Obtain
+remuneration
+from shareholder
+housing allowance,
+Remuneration
+paid
+annuities, and
+additional medical
+Other
+monetary
+Total
+entities or
+6.48
+25.06
+22
+No
+No
+Fred Zuliu Hu
+41.00
+41.00
+Yes
+Zhang Wei
+93.95
+27.79
+121.74
+Huang Li
+5.00
+5.00
+122
+No
+No
+5.00
+5.00
+No
+Wu Xiangjiang
+Shen Bingxi
+Responsibilities of the Shareholders' General
+Meeting
+2.43
+2.43
+222
+No
+No
+Zhang Wenwu
+47.00
+19.36
+47.00
+Yes
+No
+Wang Jingwu
+55.74
+19.36
+75.10
+No
+Lu Yongzhen
+Yes
+Feng Weidong
+Yes
+Cao Liqun
+Chen Yifang
+Dong Yang
+Anthony Francis Neoh
+Yang Siu Shun
+3/3
+Yes
+Yes
+Yes
+52.00
+52.00
+Yes
+47.00
+47.00
+Yes
+47.00
+47.00
+Nout Wellink
+As the organ of power of the Bank, the Shareholders'
+General Meeting involves all shareholders. The
+Shareholders' General Meeting is responsible for, among
+others, deciding on business policies and significant
+investment plans of the Bank; examining and approving
+the Bank's annual financial budget, final account
+proposals, plans for profit distribution and loss make-up;
+electing and replacing directors, supervisors appointed
+from the shareholder representatives and external
+supervisors; examining and approving work report of
+the Board of Directors and work report of the Board of
+Supervisors; adopting resolutions on merger, division,
+dissolution, liquidation, change of corporate form, increase
+or decrease of the Bank's registered capital, issuance of
+corporate bonds or other securities and public listing,
+repurchase of the shares and issuance of preference shares;
+and amending the Articles of Association of the Bank.
+Shen Si
+During the reporting period, the Bank convened the
+Annual General Meeting for the Year 2020 on 21 June
+2021, the First Extraordinary General Meeting of 2021
+on 29 July 2021, and the Second Extraordinary General
+Meeting of 2021 on 25 November 2021. The afore-
+mentioned Shareholders' General Meetings were convened
+and held in strict compliance with relevant laws and
+regulations and the Articles of Association of the Bank.
+The Bank made announcements on the resolutions and
+disclosed legal opinions in a timely manner in accordance
+with regulatory requirements. For details of the above
+meetings, please refer to the announcements of the Bank
+dated 21 June 2021, 29 July 2021 and 25 November
+2021 respectively on the website of SSE, the "HKEXnews"
+website of HKEX and the website of the Bank.
+Chairman
+Committee Member
+Committee Member
+Committee Member
+Chairman
+Committee Member
+Committee Member
+Chairman
+Committee Member
+Committee Member Committee Member
+Nout Wellink
+Shen Si
+Committee Member
+Yang Siu Shun
+Committee Member
+Committee Member
+Anthony Francis Neoh
+Chairman
+Committee Member
+Committee Member
+Dong Yang
+Committee Member
+Committee Member
+Committee Member
+Chen Yifang
+Committee Member
+Committee Member
+Committee Member
+Committee Member
+Cao Liqun
+Committee Member
+Committee Member
+Committee Member
+Committee Member
+Committee Member
+Committee Member
+During the preparation and audit of the 2021 financial statements, the Audit Committee discussed and
+agreed with the external auditors on matters such as audit schedule and progress arrangement, followed
+the status of external audit and conducted supervision over relevant work at appropriate time by means
+of hearing reports and holding informal discussions, and reviewed the unaudited and preliminarily audited
+annual financial statements respectively. The Audit Committee held a meeting on 29 March 2022, and
+considered that the 2021 financial statements truly, accurately and completely reflected the financial position
+of the Bank.
+The Audit Committee periodically reviewed the financial reports of the Bank. It had reviewed and submitted
+to the Board of Directors to approve the annual report, interim report and quarterly reports of the Bank.
+It also organized and conducted an internal control assessment of the Group for 2020 and engaged
+external auditors to audit the assessment report of the Bank on internal control in accordance with the
+relevant regulatory requirements. Additionally, it enhanced communication with external auditors, attached
+importance to the supervision of external auditors and heard several reports of external auditors concerning
+audit results, and management proposals. The Audit Committee was also concerned with the compliant
+development of overseas institutions and heard related branches' reports on internal audit work.
+Reviewing periodic reports
+Corporate Governance Report
+117
+Annual Report 2021
+Primary Responsibilities of the Audit Committee The Audit Committee is mainly responsible for
+constantly overseeing the Bank's internal control system, and supervising, inspecting and evaluating financial
+information and internal audit of the Bank, proposing the engagement or replacement of external auditors,
+reviewing the reports of external auditors, and coordinating the communication between the internal audit
+departments and external auditors, and assessing mechanisms for the Bank's staff to report misconducts
+in financial statements, internal control, etc., and assessing the mechanism for the Bank to conduct
+independent and fair investigations and take appropriate actions in relation to the reported matters.
+Performance of the Audit Committee During the reporting period, the Audit Committee held five
+meetings on 29 January, 25 March, 28 April, 26 August and 28 October 2021, respectively. At these
+meetings, the Audit Committee considered and approved 10 proposals, and heard 22 reports. The Audit
+Committee continued to oversee the Bank's internal control system, reviewed and approved the Bank's
+annual internal control assessment report, and heard reports on internal control audit results to improve the
+Group's compliant operation. It inspected and supervised the implementation of internal and external audits,
+considered and approved proposals on the internal audit plan and the amendment to the evaluation plan
+of annual performance of external auditors, heard reports on the implementation of internal audits and the
+summary of external audit to promote the formation of an effective communication mechanism between
+internal and external audits.
+Performance of the Corporate Social Responsibility and Consumer Protection Committee During
+the reporting period, the Corporate Social Responsibility and Consumer Protection Committee held three
+meetings on 25 March, 28 April and 26 August 2021, respectively. At these meetings, the Corporate
+Social Responsibility and Consumer Protection Committee considered and approved five proposals. It
+fully performed the political missions and social responsibilities as a major state-owned bank, considered
+and approved the proposals on the donation of anti-epidemic materials in 2020 and the application for
+temporary authorization limit for external donations, etc., providing continuous support for the epidemic
+prevention and control, charity, culture, education and other public-interested activities. The committee
+focused on the development of green finance and inclusive finance, considered and approved the proposals
+on the implementation of green finance and the 2021 annual business plan for inclusive finance, and actively
+practiced China's green development concept and sustainable development strategy.
+Primary Responsibilities of the Corporate Social Responsibility and Consumer Protection Committee
+The Corporate Social Responsibility and Consumer Protection Committee is mainly responsible for
+considering the Bank's fulfillment of social responsibilities with respect to environment, society, corporate
+governance, precision poverty alleviation, and corporate culture, the strategy, policy and target of consumer
+protection, green finance strategy, the development plan, basic policy, annual operating plan and assessment
+method of inclusive finance, and making recommendations to the Board of Directors.
+Performance of the Strategy Committee During the reporting period, the Strategy Committee of
+the Board of Directors held eight meetings on 29 January, 26 March, 29 April, 21 June, 27 August, 24
+September, 29 October and 25 November 2021, respectively. At these meetings, the Strategy Committee
+considered and approved 22 proposals, and heard four reports. To promote the coordination between
+bank-wide strategic planning and national strategies, the Strategy Committee considered and approved the
+Bank's 2021-2023 Development Strategy Plan as well as four sub-plans on risk management, international
+development, internal audit development, and group data governance and intelligent application. The
+Strategy Committee also paid close attention to strategic capital allocation, and reviewed and approved
+several proposals including the proposals on issuing tier 2 capital instruments and the 2020 capital adequacy
+ratio management report, providing a driving force for the Bank to promote sustainable development,
+enhance capital strength, and strengthen risk resistance capacity on all fronts.
+Primary Responsibilities of the Strategy Committee The Strategy Committee is mainly responsible for
+considering the Bank's strategic development plan, risk events that bear material influence on the overall
+situation, business and institutional development plan, major investment and financing plan, annual social
+responsibility report and other major matters critical to the Bank's development, making recommendations to
+the Board of Directors, and examining and assessing the soundness of the corporate governance framework
+to ensure financial reporting, risk management and internal control are compliant with corporate governance
+criteria of the Bank.
+Committee
+Audit
+Protection
+Committee
+and Consumer
+Responsibility
+Corporate
+Social
+Strategy
+Committee
+During the reporting period, the performance of duties by the special committees of the Board of Directors is set out below:
+Corporate Governance Report
+ICBC
+116
+Chairman
+Committee Member
+Committee Member
+Fred Zuliu Hu
+Committee Member
+Chairman
+Committee Member
+Committee Member
+Committee Member
+Feng Weidong
+Committee Member
+As at the disclosure date of the results, the composition of special committees of the Board of Directors of the Bank is as
+follows:
+The Board of Directors of the Bank has established eight special committees, namely, the Strategy Committee, the Corporate
+Social Responsibility and Consumer Protection Committee, the Audit Committee, the Risk Management Committee, the
+Nomination Committee, the Compensation Committee, the Related Party Transactions Control Committee and the US Risk
+Committee. Except the Strategy Committee and the Corporate Social Responsibility and Consumer Protection Committee,
+chairmen of all the other committees are assumed by Independent Non-executive Directors. More than half of the members
+of the Audit Committee, the Nomination Committee, the Compensation Committee and the Related Party Transactions
+Control Committee are Independent Non-executive Directors.
+Special Committees of the Board of Directors
+Special Committees of the Board of Directors
+Corporate Governance Report
+115
+Annual Report 2021
+Appointment
+-
+(3) For the change of directors, please refer to the section headed "Directors, Supervisors and Senior Management
+and Removal".
+Directors who did not attend the meetings of the Board of Directors and its special committees in person appointed other
+directors to attend the meetings and exercise the voting right on their behalf.
+(2)
+Notes: (1) "Attendances in person" refers to attending meetings in person or on telephone or by video conference.
+Mei Yingchun
+¿Fuging 33 1/13 88 4455
+Zheng Fuqing
+Directors Leaving Office
+6/7
+4/4
+2/2
+5/5
+3/5
+6/8
+99
+11/13
+3/3
+Fred Zuliu Hu
+3/3
+Convening of the Shareholders' General
+Meeting
+8/8
+Special Committees under the Board of Directors
+Examining internal control system
+Corporate
+Social
+Responsibility
+and Consumer
+Committee Member
+Committee Member
+Committee Member
+Lu Yongzhen
+Committee Member Committee Member
+Committee Member
+Wang Jingwu
+Committee Member
+Committee Member Committee Member
+Zheng Guoyu
+Committee Member
+Chairman
+Committee Member
+Liao Lin
+Chairman
+Committee
+US Risk
+Control
+Committee
+Compensation
+Committee
+Nomination
+Committee
+Transactions
+Risk
+Management
+Committee
+Committee
+Committee
+Committee
+Directors
+Audit
+Protection
+Strategy
+Related Party
+The Audit Committee is responsible for constantly monitoring and examining the internal control system of
+the Bank, and examining the effectiveness of the system at least on an annual basis. The Audit Committee
+performed its function of examining the Bank's internal control system through reviewing the administrative
+rules and regulations and their implementation, and examined and assessed the compliance and effectiveness
+of major operating activities of the Bank.
+Chen Siging
+Effectiveness of the internal audit function
+Board Strategy
+Protection
+Audit
+Risk
+Management
+Transactions
+Nomination Compensation
+Control
+US Risk
+Directors
+Meeting
+of Directors
+As the decision-making organ of the Bank, the Board of
+Directors of the Bank is accountable to, and shall report
+its work to, the Shareholders' General Meeting. The Board
+of Directors is responsible for, among others, convening
+the Shareholders' General Meeting; implementing
+the resolutions of the Shareholders' General Meeting;
+deciding on the business plans, investment proposals
+and development strategies of the Bank; formulating
+annual financial budget and final accounts of the
+Bank; formulating plans for profit distribution and loss
+recovery of the Bank; formulating plans for the increase
+or decrease of the Bank's registered capital, capital
+replenishment and financial restructuring of the Bank;
+formulating basic management systems of the Bank such
+as risk management system and internal control system,
+and supervising the implementation of such systems;
+appointing or removing President and the Board Secretary,
+and appointing or removing Senior Executive Vice
+Presidents and other senior management members (except
+the Board Secretary) who shall be appointed or removed
+by the Board of Directors under relevant laws according
+to the nomination of the President and deciding on their
+compensation, bonus and penalty matters; deciding on or
+authorizing the President to decide on the establishment
+of relevant offices of the Bank; regularly evaluating and
+improving corporate governance of the Bank; managing
+information disclosure of the Bank; and supervising and
+ensuring the President and other Senior Management
+members to perform their management duties effectively.
+Committee
+General
+Committee
+Committee
+Committee
+Executive Directors
+Chen Siging
+3/3
+11/13
+6/8
+Liao Lin
+3/3
+13/13
+7/7
+3/3
+5/5
+Committee Committee Committee
+and Consumer
+Shareholders'
+Related Party
+The Board of Directors of the Bank is responsible for establishing, improving and effectively implementing
+internal control, assessing its effectiveness and truthfully disclosing internal control assessment reports
+according to the standard system for enterprise internal control. The objective of the internal control of the
+Bank is to reasonably assure the compliance of its operation and management with relevant laws, safety of
+its assets, as well as the authenticity and completeness of its financial reports and relevant information, in
+order to enhance operation efficiency and results, and to facilitate the realization of its development strategy.
+Due to inherent limitation of internal control, only reasonable assurance can be provided for the afore-
+mentioned objectives. The Board of Directors and the Audit Committee have reviewed and approved the
+2021 Internal Control Assessment Report of the Bank. For details of the Bank's internal control, please refer
+to the section headed "Corporate Governance Report - Internal Control".
+Board of Directors and Special Committees
+Responsibilities of the Board of Directors
+Annual Report 2021
+113
+Corporate Governance Report
+Implementation of Resolutions of the
+Shareholders' General Meeting by the
+Board of Directors
+The Board of Directors of the Bank earnestly and fully
+implemented the resolutions adopted by the Shareholders'
+General Meeting during the reporting period.
+Composition of the Board of Directors
+The Bank formulated relatively complete procedures
+for nominating and electing Directors. With diversified
+backgrounds, the Directors of the Bank complemented
+each other on one hand with regard to their expertise,
+professional competence and experience, which ensured
+scientific decision-making of the Board of Directors. As at
+the disclosure date of the results, the Board of Directors of
+the Bank consisted of 14 directors, including four Executive
+Directors: Mr. Chen Siqing, Mr. Liao Lin, Mr. Zheng Guoyu
+and Mr. Wang Jingwu; five Non-executive Directors: Mr. Lu
+Yongzhen, Mr. Feng Weidong, Ms. Cao Liqun, Ms. Chen
+Yifang and Mr. Dong Yang; and five Independent Non-
+executive Directors: Mr. Anthony Francis Neoh, Mr. Yang
+Siu Shun, Mr. Shen Si, Mr. Nout Wellink and Mr. Fred Zuliu
+Hu.
+Mr. Chen Siqing was Chairman of the Board of Directors.
+Mr. Liao Lin was Vice Chairman of the Board of Directors.
+The Executive Directors have worked in the areas of
+banking and management for a long time, possesses
+extensive professional expertise and experience in those
+areas and are familiar with operation and management
+of the Bank. Non-executive Directors have worked in the
+fiscal, economic, financial and governing sectors for many
+years, and they have rich practical experience and relatively
+high level of understanding of policies and theories.
+All of the Independent Non-executive Directors are
+prestigious Chinese or foreign experts in their respective
+areas, e.g. economy, financial supervision, finance, audit
+and law, and they are familiar with Chinese and foreign
+regulatory rules and have a good knowledge of corporate
+governance, finance and bank management. The number
+of Independent Non-executive Directors of the Bank
+accounted for more than one third of the total members of
+the Board of Directors, complying with relevant regulatory
+requirements.
+Chairman and President
+Pursuant to Code Provision C.2.1 of the Corporate
+Governance Code (Appendix 14 to the Hong Kong Listing
+Rules) and the Articles of Association of the Bank, the roles
+of Chairman and President should be held by two persons,
+and the Chairman shall not concurrently hold the position
+of legal representative or chief responsible officer of the
+controlling shareholder.
+Chairman Mr. Chen Siqing is the legal representative of the
+Bank, and is responsible for leading the Board of Directors
+in considering and formulating business development
+strategies, risk management, internal control and other
+significant matters of the Bank.
+President Mr. Liao Lin is responsible for the daily
+management of the business operations of the Bank. The
+President is appointed by and accountable to the Board of
+Directors, and performs his responsibilities as stipulated in
+the Articles of Association of the Bank and as authorized
+by the Board of Directors.
+Mr. Liao Lin took office as President of the Bank on 16
+March 2021. Please refer to the section headed "Corporate
+Governance Report Corporate Governance Code" for
+details.
+―
+Meetings of the Board of Directors
+During the reporting period, the Board of Directors of
+the Bank held 13 meetings on 29 January, 25 February,
+26 March, 29 April, 21 June, 8 July, 19 July, 24 July, 27
+August, 24 September, 29 October, 25 November and
+17 December 2021, respectively. At these meetings, the
+Board of Directors considered 78 proposals, and heard 30
+reports.
+The Board of Directors made scientific decisions on, and
+reviewed and approved such proposals as development
+strategy plans for 2021-2023 and establishment of the
+Rural Revitalization Office in accordance with economic
+and financial policies and major objectives, including
+development strategies, preventing and controlling
+financial risks, serving the real economy, deepening
+inclusive finance, and supporting rural revitalization.
+The Board of Directors attached great importance to the
+enterprise risk management, continuously improved risk
+management systems, and prevented the systemic risk
+with all strength. It revised the Rules on Enterprise Risk
+Management and the Measures for the Reputational Risk
+Management, reviewed and approved proposals including
+the 2020 and 2021 Interim Risk Management Reports,
+the Liquidity Risk Management Strategy for 2021, the
+Management Strategy of Interest Rate Risk in the Banking
+Book for 2021, and heard reports such as Report on
+Technology Risk Management in 2020.
+The Board of Directors improved asset management and
+continued to meet the capital needs of supporting the
+real economy and the regulatory requirements on capital
+management. It reviewed and approved proposals on the
+2020 Risk and Capital Adequacy Assessment Report, the
+2020 Capital Adequacy Ratio Report, issuing eligible tier 2
+capital instruments, etc.
+114
+ICBC
+Corporate Governance Report
+The Board of Directors highly valued the fulfillment of
+social responsibility and endeavored to maximize the
+comprehensive value of economy, environment and
+society. It reviewed and approved proposals on the
+Donations for extreme heavy rainfall in Henan Province, the
+Application for Temporary Authorization Limit for External
+Donations, the Corporate Social Responsibility Report 2020
+(ESG Report), the 2021 Business Plan for Inclusive Finance,
+the Report on the Implementation of Green Finance, the
+2020 Work Report on and 2021 Work Plan for Consumer
+Protection, etc.
+For major proposals reviewed by the Board of Directors,
+please refer to the announcements of the Bank on the
+website of SSE, the "HKEXnews" website of HKEX or the
+website of the Bank.
+The attendance of each of the Directors in Shareholders'
+General Meetings and meetings of the Board of Directors
+and the special committees of the Board of Directors
+during the reporting period is set out below:
+Attendances in person/Number of meetings that should be attended
+Special Committees of the Board of Directors:
+Corporate
+Social
+Responsibility
+Zheng Guoyu
+Wang Jingwu
+Committee
+4/4
+3/3
+12/13
+8/8
+Yang Siu Shun
+3/3
+13/13
+| |
+5/5
+4/4
+6/7
+2/2
+5/5
+5/5
+4/4
+7/7
+1/1
+4/5
+Shen Si
+3/3
+13/13
+5/5
+4/4
+2/2
+4/4
+5/5
+Nout Wellink
+ICBC
+118
+The Bank has established a vertical and independent internal audit management system responsible and
+reporting to the Board of Directors. The Board of Directors regularly reviews the internal audit plan and
+hears internal audit reports on internal audit activities, audit supporting measures, internal audit team
+building, etc., thus effectively performing the function of risk management. The Audit Committee examines,
+monitors and assesses the internal audit work of the Bank, supervises the internal audit rules and their
+implementation, and makes assessment of audit procedures and results of the internal audit department.
+It is also responsible for urging the Bank to ensure adequate resources for the internal audit department
+and coordinating the communication between the internal audit department and external auditors. The
+internal audit department is accountable to and reports to the Board of Directors, is guided by the Board of
+Supervisors and is under the examination, supervision and assessment of the Audit Committee. For details of
+the internal audit, please refer to the section headed "Corporate Governance Report - Internal Audit".
+Anthony Francis Neoh
+Independent Non-executive Directors
+4/4
+3/3
+1/1
+Dong Yang ........
+1/2
+Non-executive Directors
+Lu Yongzhen
+3/3
+13/13
+4/4
+-
+2/2
+Feng Weidong
+3/3
+13/13
+5/5
+4/4
+8/8
+7/7
+5/5
+1/1
+Chen Yifang
+5/5
+5/5
+5/5
+1/1
+Cao Liqun
+4/4
+5/5
+3/3
+13/13
+3/3
+The Board of Directors of the Bank conducted an
+assessment on the effectiveness of the Group's internal
+control during the reporting period in accordance with
+the Basic Standard for Enterprise Internal Control and
+its supporting guidelines issued by five ministries and
+commissions including MOF, and relevant regulatory
+requirements of SSE and CBIRC. No significant or material
+deficiencies were detected in the Bank's internal control
+system during the assessment. Risks that may arise from
+ordinary deficiencies are controllable and corrective actions
+have been or are being taken, which have no material
+impact on the fulfillment of internal control objectives
+of the Bank. The Bank had maintained effective internal
+control in all material aspects in accordance with the
+standard system for enterprise internal control and relevant
+rules.
+There was no factor that affected the assessment
+conclusion of internal control effectiveness from the
+benchmark date to the issuance date of the internal control
+assessment report.
+126
+ICBC
+Internal Audit
+Corporate Governance Report
+The Bank established a vertical and independent internal audit management system responsible and reporting to the Board
+of Directors. The chart below illustrates the internal audit management and reporting framework of the Bank:
+Senior Management
+conditions, properly responded to the COVID-19 pandemic,
+refined the audit management mechanism, optimized the
+audit mode, accelerated digital transformation, promoted
+the deep integration between technologies and businesses,
+improved audit efficiency and value, strengthened the
+audit team's ability to perform duties, and constantly
+enhanced the audit service capacity and professionalism.
+Audit Committee
+Internal Control Evaluation and Defects
+Internal Audit Bureau
+Board of Supervisors
+During the reporting period, internal audit of the Bank
+actively adapted to the changes in the risk management
+Primary reporting line
+Secondary reporting line
+During the reporting period, the Bank acted on the
+regulatory requirements on the industry, implemented
+risk-oriented audit activities and fully accomplished the
+annual audit plan according to the development strategies
+and central tasks of the Bank. The audit activities covered
+domestic and overseas key institutions of the Group, major
+areas, key processes and the main responsible persons
+of domestic and overseas institutions. The audit activities
+focused on the Bank's performance in supporting national
+policies, meeting regulatory requirements, strengthening
+risk prevention and control, promoting strategy
+implementation and other aspects, covering such key areas
+as financial benefit, credit business, emerging business,
+FinTech, operation management, capital management
+and internal control. The Bank also paid close heed to and
+made full use of audit findings and recommendations,
+with the aim of continuously improving risk management,
+internal control and corporate governance.
+Board of Directors
+Beijing Tanin Shenyang Shanghai Nariling Wuhan Guangzhou Chengdu Kumming Vie
+Investor Enquiries
+Internal Control Assessment Report and
+Internal Control Audit
+In 2021, with the consistent adherence to the investor-
+centered approach, the Bank strove to improve the quality
+of investor relations services and generate stable return to
+shareholders following the principle of serving investors
+in a comprehensive, proactive, precise, coordinated and
+efficient manner.
+Effective Communication with Shareholders
+and Review of Investor Relations Activities
+During the reporting period, the Bank proactively carried
+out frequent "online + offline" and "face-to-face +
+screen-to-screen" investor exchanges, and held annual
+and interim results releases through "on-site meetings
++ global teleconferencing + public opinion collection +
+livestreaming". The Bank made constant and extensive
+communication with institutional investors and minority
+investors through online and offline channels like press
+conferences in relation to periodic results announcements,
+reverse roadshows, domestic and overseas non-deal
+roadshows, investor hotline, investor relations mailbox,
+investor relations website and the online platform of sns.
+sseinfo.com. In this way, the Bank presented its operational
+quality, efficiency and strategic achievements to the
+capital market, actively responded to the concerns from
+investors and analysts, and strove to deliver the values
+of ICBC. Besides, it enhanced investors' comprehensive
+and objective understanding and cognition in economic
+development of China and high-quality development of the
+Bank and helped bring the market value in line with the
+long-term intrinsic value of the Bank. The Bank improved
+investor relations information collection and market
+information feedback mechanism, followed and analyzed
+spotlight issues of the capital market, and effectively
+enhanced the quality of communication with the investors.
+The Bank actively understood and solicited the comments
+and suggestions of the capital market on the Bank, and
+assisted the Management in making timely reaction with
+the help of many operation and communication strategies,
+so as to continuously strengthen the level of corporate
+governance and core values of the Bank.
+In 2022, the Bank will further and proactively deepen the
+communication and exchange with investors to enhance
+investors' understanding and recognition of the Bank and
+continue to protect legitimate interests of the investors,
+and at the same time hope to receive more support from,
+and attention of the investors.
+Annual Report 2021
+125
+Corporate Governance Report
+If an investor wishes to enquire any questions related to
+operation performance of the Bank, please contact:
+Telephone: 86-10-66108608
+Facsimile: 86-10-66107571
+E-mail: ir@icbc.com.cn
+Address: Corporate Strategy and Investor Relations
+Department, Industrial and Commercial Bank of China
+Limited, 55 Fuxingmennei Avenue, Xicheng District,
+Beijing, China
+Postal code: 100140
+Internal Control
+The Board of Directors is responsible for formulating
+the basic regulations for internal control and supervising
+the implementation of such regulations. The Audit
+Committee of the Board of Directors supervises the
+development of the internal control system and evaluates
+the compliance and effectiveness of the major operation
+and management activities of the Bank. The Bank has set
+up the Internal Audit Bureau and the Internal Audit Sub-
+bureau, which adopt a hierarchical management system
+and are responsible to and report to the Board of Directors.
+The Senior Management of the Bank is responsible for
+formulating systematic policies, procedures and methods,
+as well as taking risk control measures. Under the Senior
+Management, the Operational Risk and Internal Control
+Management Committee subordinated to the Risk
+Management Committee, performs the responsibilities
+related to internal control and evaluates the sufficiency
+and effectiveness of internal control. The Head Office
+and branches have internal control and compliance
+departments which are responsible for the organization,
+promotion and coordination of internal control.
+During the reporting period, the Bank continued to
+optimize its internal control mechanism for higher
+quality and efficiency of the Group. The Bank formulated
+and implemented the 2021-2023 Development Plan
+for Internal Control System and continuously refined
+the internal control environment. The Bank improved
+the "9+X" risk assessment technologies and methods,
+focused on case and compliance risk control, and
+enhanced prospective risk identification and response
+capabilities. The Bank optimized the system governance
+mechanism and authorization management, strengthened
+the management on key positions and personnel, and
+improved the process and system management for key
+areas and business links, thus developing better capacities
+in the process control of risk. The Bank advanced the
+development of data assets, and boosted the collection,
+processing and analysis of information, ensuring smooth
+and effective internal and external communication. The
+Bank deeply coordinated supervision and inspection,
+optimized the internal control evaluation system, and
+strengthened the dual closed-loop remediation of
+problems, making all-round efforts to implement the new
+accountability mechanism for violations, and enhancing the
+synergistic supervision of the "three lines of defense", in
+an endeavor to ensure stable operations.
+While disclosing the annual report, the Bank also disclosed
+the 2021 Internal Control Assessment Report of Industrial
+and Commercial Bank of China Limited in accordance
+with the requirements of MOF, CSRC and SSE. The report
+stated that the Bank had maintained effective internal
+control over financial reporting in all material aspects
+in accordance with the standard system for enterprise
+internal control and relevant rules as at 31 December 2021
+(benchmark date). Deloitte Touche Tohmatsu Certified
+Public Accountants LLP has audited the effectiveness of
+the Bank's internal control over financial reporting as at
+31 December 2021 and issued the standardized audit
+report on internal control. For details, please refer to the
+announcements published by the Bank on the website of
+SSE, the "HKEXnews" website of HKEX and the website of
+the Bank.
+Engagement of Auditors
+Primary Responsibilities of the Related Party Transactions Control Committee The Related Party
+Transactions Control Committee is mainly responsible for developing the basic policies governing the
+management of related party transactions, identifying the Bank's related parties, approving related party
+transactions and other related matters within the authority granted by the Board, receiving related party
+transaction statistics for filing purpose, reviewing the related party transactions that are subject to the
+approval of the Board of Directors or the Shareholders' General Meeting, and reporting to the Board
+of Directors on the implementation of the related party transaction management policies as well as the
+conditions on these transactions.
+1 Deloitte Touche Tohmatsu Certified Public Accountants LLP and KPMG Huazhen LLP are Recognized Public Interest Entity Auditor under
+Hong Kong's Financial Reporting Council Ordinance. Deloitte Touche Tohmatsu and KPMG are Registered Public Interest Entity Auditor
+under Hong Kong's Financial Reporting Council Ordinance.
+SSE:
+External trainings
+Subject matters of the trainings attended by the Directors of the Bank during the reporting period were mainly as follows:
+During the reporting period, the Bank developed an overall
+training plan, increased training resources, and encouraged
+and actively organized the Directors to attend trainings
+in many ways, with the aim of assisting the Directors in
+continuing to improve their ability to perform their duties.
+Directors of the Bank attended relevant trainings according
+to work needs.
+During the reporting period, Directors of the Bank
+proactively conducted surveys on departments of the
+Bank, branches and subsidiaries concerning such topics as
+serving the new development paradigm, supporting rural
+revitalization, FinTech, green finance, wealth management,
+and pension finance. In the form of survey reports
+and briefs, such investigations provide the Bank with
+constructive suggestions and opinions.
+Investigation and Training of Directors
+Corporate Governance Report
+The Directors of the Bank acknowledged that they are
+responsible for the preparation of the financial statements
+of the Bank. During the reporting period, in strict
+compliance with relevant provisions, the Bank published
+the 2020 Annual Report, the First Quarterly Report of
+2021, the 2021 Interim Report and the Third Quarterly
+Report of 2021 as scheduled.
+Responsibilities of Directors in Respect of
+Financial Statements
+In accordance with the Articles of Association of the
+Bank, Directors are elected by the Shareholders' General
+Meeting with a term of three years, and the appointment
+shall take effect from the date of approval by CBIRC or
+upon completion of relevant procedures according to the
+requirements of CBIRC. Directors may be re-appointed
+through re-election at the Shareholders' General Meeting
+after expiry of their term.
+Term of Directors
+ICBC
+120
+Performance of the US Risk Committee During the reporting period, the US Risk Committee held
+five meetings on 25 March, 21 June, 26 August, 28 October and 17 December 2021, respectively.
+At these meetings, the US Risk Committee considered and approved four proposals, and heard
+12 reports. It attached importance to and strengthened the compliance management of overseas
+institutions, reviewed and approved the proposals including the risk management framework and the
+annual audit of risk appetite in the US, and the liquidity stress testing, funding contingency plans,
+key business lines and product liquidity risks in the US, heard the reports on the risk management
+and liquidity risk management in the US in 2020, and assisted the Board of Directors in urging the
+Management to well perform in compliance and risk prevention and control in international operation.
+Performance of the Related Party Transactions Control Committee During the reporting period, the
+Related Party Transactions Control Committee held four meetings on 25 March, 21 June, 26 August and
+17 December 2021, respectively. At these meetings, the Related Party Transactions Control Committee
+considered and approved four proposals including the proposal on identification of related parties of the
+Bank, and heard two reports including the report on related party transactions in 2020 and the identification
+of related parties of the Bank in 2020. The Related Party Transactions Control Committee focused on
+reviewing the fairness and objectivity of related party transactions, urged the Bank to strengthen the
+management of related party transactions and inside transactions, and assisted the Board of Directors in
+ensuring the Bank's related party transactions are carried out in compliance with laws and regulations.
+Primary Responsibilities of the US Risk Committee In accordance with the relevant requirements
+in the Enhanced Prudential Standards for Bank Holding Companies and Foreign Banking Organizations
+established by the Federal Reserve Board, the US Risk Committee supervised the implementation of the
+US business-related risk management framework and relevant policies.
+Investor Relations
+Performance of the Compensation Committee During the reporting period, the Compensation
+Committee held two meetings on 25 March and 26 August 2021, respectively. At these meetings, the
+Compensation Committee considered and approved five proposals including the proposals on the payment
+of remuneration to Directors and Senior Management members for 2020, the Senior Management
+performance evaluation plan for 2021, the coverage of directors, supervisors and officers liability insurance
+for 2021-2022 and the Employment Plan of the Group for 2022, and heard the 2020 assessment report
+on the performance of duties of Directors by the Board of Directors. The Compensation Committee,
+in accordance with regulatory requirements, drafted the remuneration of directors, and improved the
+performance evaluation indicators and the incentive and constraint mechanism.
+Internal trainings
+Deloitte Touche Tohmatsu Certified Public Accountants
+LLP was the domestic auditors of the Bank for the financial
+statements audit in 2021, and Deloitte Touche Tohmatsu'
+was the international auditors of the Bank for the financial
+statements audit in 2021. Deloitte Touche Tohmatsu
+Certified Public Accountants LLP was also the auditors of
+internal control of the Bank in 2021. KPMG Huazhen LLP¹
+and KPMG resigned from the positions of providers of
+audit services for the Bank after serving a maximum term
+of eight consecutive years from 2013 to 2020.
+Follow-up training for independent directors of listed companies
+Interpretation of Guidelines on Corporate Governance of Banking and Insurance Institutions and
+Measures for Evaluating the Performance of Directors and Supervisors of Banks and Insurance
+Institutions (Pilot)
+Annual Report 2021
+127
+Corporate Governance Report
+During the reporting period, the Group paid Deloitte
+Touche Tohmatsu and its member institutions a total fee
+of RMB176 million for the audit of financial statements
+(including the audit of financial statements of subsidiaries
+and overseas branches). Of which, RMB104 million
+(including fee for internal control audit of RMB8.80 million)
+was paid by the Bank.
+During the reporting period, Deloitte Touche Tohmatsu
+and its member institutions provided the Group with non-
+audit services including professional services for asset
+securitization and bonds issuance etc., and received RMB7
+million for such professional non-audit services.
+Management on Subsidiaries
+For the information of management and control on
+subsidiaries, please refer to "Discussion and Analysis
+-
+Business Overview
+Diversified Operation and Subsidiary
+Management, Major Controlled Subsidiaries and Equity
+Participating Company".
+Remediation of Problems in the Self-
+inspection amid the Governance
+Improvement Campaign of Listed
+Companies
+During the reporting period, in accordance with the
+relevant notices of CSRC, the Bank conducted a self-
+inspection amid the governance improvement campaign
+of listed companies. The self-inspection results showed
+that, from 2018 to 2020, the Bank had complete
+internal rules and regulations for corporate governance,
+sound organizational structure, standardized operation
+procedures, smooth mechanism for the communication
+with investors, and stable cash dividend ratio.
+128
+ICBC
+Climate risk management and green finance
+Trainings on business of the Bank
+Anti-money Laundering
+The Listed Companies Association of Beijing:
+"Compliance Operation", "Investor Protection"
+"Innovative Development", "Capital Operation"
+China Banking Association:
+of insider lists and regularly conducted insider transaction
+self-inspections. After self-inspections, none of the insiders
+of the Bank were found to be involved in dealings in
+shares of the Bank who have taken advantage of inside
+information during the reporting period.
+Composition of the Board of Supervisors
+Inside Information Management
+As at the disclosure date of the results, the Board of
+Supervisors of the Bank consisted of six members, including
+two Shareholder Supervisors, namely Mr. Huang Liangbo
+and Mr. Zhang Wei; two Employee Supervisors, namely
+Mr. Huang Li and Mr. Wu Xiangjiang; and two External
+Supervisors, namely Mr. Shen Bingxi and Mr. Zhang Jie.
+Meetings of the Board of Supervisors
+During the reporting period, the Board of Supervisors held
+nine meetings, reviewed 20 proposals including the Report
+on the Work of the Board of Supervisors for 2020 and the
+Report on Performance Evaluation, heard nine reports on
+the business operation, development strategy planning, the
+Group's anti-money laundering and other contents, and
+reviewed 43 documents including the documents on the
+supervision in each quarter of 2021 and relevant survey
+reports of the Board of Supervisors.
+Attendance of supervisors of the Bank in meetings during the reporting period is as follows:
+Attendances in person/Number of meetings that should be attended
+Supervisor
+Huang Liangbo
+Zhang Wei
+Huang Li
+Wu Xiangjiang
+Shen Bingxi
+Shareholders'
+General
+Meeting
+Board of
+Supervisors
+1/1
+4/4
+3/3
+9/9
+3/3
+general meeting, and convening and presiding over
+the extraordinary general meeting in case the Board
+of Directors fails to perform its duty of convening
+Shareholders' General Meeting; proposing to convene an
+interim meeting of the Board of Directors.
+9/9
+As the supervisory organ of the Bank, the Board of
+Supervisors is accountable to, and shall report its work
+to, the Shareholders' General Meeting. The Board of
+Supervisors is responsible for, among others, supervising
+the performance and due diligence of Directors and Senior
+Management members; supervising the performance
+of duties by the Board of Directors and the Senior
+Management; conducting exit audits on Directors and
+Senior Management members when necessary; inspecting
+and supervising financial activities of the Bank; examining
+financial information such as financial report, business
+report and profit distribution plan to be submitted to
+the Shareholders' General Meeting by the Board of
+Directors; inspecting and supervising the business decision-
+making, risk management and internal control of the
+Bank and guiding the internal audit department of the
+Bank; formulating performance evaluation measures
+of the Board of Directors and the Senior Management
+and their members as well as supervisors; evaluating the
+performance of the Board of Directors and the Senior
+Management and their members as well as supervisors,
+and reporting to the Shareholders' General Meeting
+for approval; presenting proposals to the Shareholders'
+General Meeting; proposing to convene an extraordinary
+Board of Supervisors
+Primary Responsibilities of the Compensation Committee The Compensation Committee is mainly
+responsible for formulating assessment measures on the performance of duties and compensation plans
+for Directors, organizing the assessment on the performance of duties of Directors, putting forth proposal
+on remuneration distribution for Directors, formulating and reviewing the assessment measures and
+compensation plans for Senior Management members of the Bank and evaluating the performance and
+behaviors of Senior Management members.
+During the reporting period, the Board Secretary of the
+Bank attended the relevant specialized trainings, with
+the training hours over 15 hours, which meets relevant
+regulatory requirements.
+Independence and Performance of Duties
+of Independent Non-executive Directors
+The qualifications, number and proportion of the Bank's
+Independent Non-executive Directors comply with
+regulatory requirements. The Bank's Independent Non-
+executive Directors do not have any business or financial
+interests in the Bank or its subsidiaries, and they have not
+assumed any managerial position in the Bank. The Bank
+has received the annual confirmation on independence
+from all Independent Non-executive Directors and
+considered that they were independent.
+Annual Report 2021
+121
+Corporate Governance Report
+During the reporting period, Chairman Chen Siqing held
+discussions with the Bank's Independent Non-executive
+Directors, who provided suggestions with respect to the
+Bank's development strategies, business transformation
+and risk control, etc. The Bank's Independent Non-
+executive Directors earnestly attended the meetings of the
+Board of Directors and special committees, and during
+consideration of issues, gave independent opinions on
+improving the abilities of serving national strategies,
+focusing on risk control and compliance development, and
+speeding up FinTech innovation, etc. They also carried out
+active discussions or surveys on financial support for the
+real economy, climate risk management, green finance
+development, etc., exchanged ideas, and put forward
+comments and suggestions. The Bank paid close attention
+to the relevant comments and suggestions, and organized
+the implementation thereof according to the actual
+conditions.
+During the reporting period, the Bank's Independent Non-
+executive Directors did not raise any objection on proposals
+of the Board of Directors and special committees of the
+Board of Directors.
+For the details on performance of duties of Independent
+Non-executive Directors of the Bank during the reporting
+period, please refer to the Work Report of Independent
+Directors for 2021 issued by the Bank on 30 March 2022.
+Independent Non-executive Directors' Special Explanation and Independent
+Opinions on External Guarantees of the Bank
+In accordance with relevant provisions and requirements of CSRC, we, in the capacity of Independent Non-executive
+Directors of the Bank, reviewed external guarantees of the Bank on the principles of fairness, impartiality and
+objectivity, and hereby give our specific explanation and opinions as follows: upon review, external guarantees
+provided by the Bank mainly focus on issuance of letters of guarantee and standby letters of credit, which is part of
+the ordinary banking services within the business scope of the Bank as approved by relevant regulatory authorities.
+As at 31 December 2021, the balance of letters of guarantee and standby letters of credit issued by the Bank totaled
+RMB494,532 million.
+The Bank has attached great importance to the management of risks arising from such business, formulated strict rules
+on the credit ratings of the entities to which the guarantee was provided and on the operation process and duration
+management of provision of guarantee services, and carried out relevant business on such basis.
+Independent Non-executive Directors of Industrial and Commercial Bank of China Limited
+Anthony Francis Neoh, Yang Siu Shun, Shen Si, Nout Wellink and Fred Zuliu Hu
+122
+ICBC
+Corporate Governance Report
+Responsibilities of the Board of Supervisors
+3/3
+9/9
+3/3
+An extraordinary general meeting should be convened
+within two (2) months from the date when shareholders
+holding more than ten percent (10%) of the voting
+shares of the Bank, either individually or jointly, request
+to convene in writing. Proposing shareholders shall have
+the right to request the Board of Directors in writing to
+convene an extraordinary general meeting. The Board of
+Directors shall make a written response as to whether
+or not it agrees to convene such a meeting within ten
+(10) days upon receipt of the request in accordance with
+laws, administrative regulations, rules and the Articles of
+Association of the Bank. Reasonable expenses incurred
+from the case where shareholders convene the meeting
+by themselves due to the failure of the Board of Directors
+to convene the meeting shall be borne by the Bank, and
+deducted from the payment to those negligent directors.
+Submitting Interim Proposals for the
+Shareholders' General Meeting
+Shareholders who hold more than three percent (3%)
+of shares of the Bank, either individually or jointly, may
+prepare an interim proposal and submit it in writing to the
+Board of Directors ten (10) days before the Shareholders'
+General Meetings convened. The Board of Directors shall
+issue a supplementary notice for the Shareholders' General
+Meeting within two (2) days upon receipt of the proposal
+and submit such proposal to the Shareholders' General
+Meeting for approval.
+Powers and Functions of the Senior
+Management
+The powers of the Board of Directors and the Senior
+Management are separated in strict compliance with the
+Articles of Association and other corporate governance
+documents of the Bank. During the reporting period, the
+Bank made an inspection on the implementation of the
+plan on authorization of the Board of Directors to the
+President, and no matter was found to be beyond the
+approval authority of the President.
+Putting Forward Suggestions and
+Reviewing Documents
+Shareholders are entitled to supervise business operation
+of the Bank and put forward suggestions or inquiries
+accordingly. Shareholders are entitled to review the
+information of the Bank such as the Articles of Association,
+the register of shareholders, documents on status of share
+capital and minutes of Shareholders' General Meetings,
+etc.
+124
+ICBC
+Corporate Governance Report
+Special Provisions on Rights of Preference
+Shareholders
+In the following circumstances, preference shareholders
+of the Bank have the right to attend the Shareholders'
+General Meeting and exercise voting rights: (1)
+amendments to the Articles of Association which relate
+to preference shares; (2) the reduction of the registered
+capital of the Bank by more than 10% (either separately
+or in aggregate); (3) merger, division and dissolution or
+change of corporate form of the Bank; (4) issuance of
+preference shares; and (5) other events specified in the
+Articles of Association that will change or abrogate the
+rights of preference shareholders. If any of the above
+circumstances occurs, the notice of a Shareholders' General
+Meeting shall be given to preference shareholders in
+accordance with the notification procedures applicable
+to ordinary shareholders as specified in the Articles of
+Association.
+In the event that the Bank failed to pay the agreed
+dividend to preference shareholders for three years in
+aggregate or for two consecutive years, from the next
+day following the date of approval of the proposal not
+paying the agreed dividend for the current year by the
+Shareholders' General Meeting, preference shareholders
+shall be entitled to attend and vote (together with ordinary
+shareholders) at the Shareholders' General Meeting. For
+preference shares the dividend of which is non-cumulative,
+the voting rights shall be temporarily restored until the full
+payment of the agreed dividend for the current year by the
+Bank.
+Other Rights
+Ordinary shareholders of the Bank have the right to
+collect dividends and other forms of benefits distributed
+on the basis of the number of shares held by them;
+preference shareholders shall be entitled to rights to
+dividends in priority to payment of dividends to ordinary
+shareholders. Shareholders have other rights conferred by
+laws, administrative regulations, rules and the Articles of
+Association of the Bank.
+Proposing the Convening of an Extraordinary
+General Meeting
+Shareholders' Rights
+As the executive organ of the Bank, the Senior
+Management is accountable to the Board of Directors.
+The Senior Management is responsible for, among others,
+the operation and management of the Bank; organizing
+the implementation of operation and investment plans
+approved by the Board of Directors; formulating specific
+rules and regulations of the Bank; determining plans for
+compensation distribution and performances evaluation of
+persons in charge of internal departments and branches
+of the Bank (except the internal audit department);
+truthfully reporting to the Board of Directors or the Board
+of Supervisors on the business performance; drafting
+the annual financial budget plan, final account plan,
+profit distribution plan and loss make-up plan, plans for
+increase or reduction of the registered capital, the issuance
+of bonds or other securities and listing, and making
+suggestions in that respect to the Board of Directors.
+Responsibilities of the Senior Management
+9/9
+1/1
+Zhang Jie
+Supervisor Leaving Office
+Yang Guozhong
+Qu Qiang
+3/3
+Note: For the change of supervisors, please refer to the section headed "Directors, Supervisors and Senior Management
+Removal".
+The Bank manages inside information and insiders in
+accordance with regulatory requirements of the exchanges
+on which the Bank is listed and the Bank's rules, and
+conducts the collection, delivery, sorting, preparation
+and disclosure of relevant information in compliance
+with applicable laws and regulations. During the
+reporting period, the Bank continued to strengthen inside
+information management, timely organized the completion
+-
+8/8
+Appointment and
+Annual Report 2021
+123
+Corporate Governance Report
+Securities Transactions of Directors and
+Supervisors
+The Bank has adopted a set of codes of conduct
+concerning the securities transactions by directors and
+supervisors which are no less stringent than the standards
+set out in the Model Code for Securities Transactions by
+Directors of Listed Issuers, Appendix 10 to the Hong Kong
+Listing Rules. After making enquiries to all Directors and
+Supervisors of the Bank, each Director and Supervisor
+confirmed that he/she has complied with the provisions
+of the afore-said codes of conduct during the reporting
+period.
+Senior Management
+1/1
+Performance of the Nomination Committee During the reporting period, the Nomination Committee held
+seven meetings on 29 January, 25 February, 28 April, 8 July, 26 August, 24 September and 25 November
+2021, respectively. Through the seven meetings, the Nomination Committee considered and approved
+13 proposals including the proposals on the election of Mr. Liao Lin as Vice Chairman of the Bank, the
+nomination of Mr. Zheng Guoyu and Mr. Wang Jingwu as candidates for Executive Directors of the Bank,
+the nomination of Ms. Chen Yifang and Mr. Dong Yang as candidates for Directors of the Bank, and the
+appointment of Mr. Liao Lin as President of the Bank, Mr. Zheng Guoyu and Mr. Zhang Weiwu as Senior
+Executive Vice Presidents of the Bank, and Mr. Wang Jingwu concurrently as Chief Risk Officer of the Bank,
+and heard the report on the framework of the Board of Directors in 2020. The Nomination Committee
+prudently assessed the organizational structure of the Bank's Board of Directors and its special committees,
+promoted the change of directors in an orderly manner and continuously improved the composition of
+special committees of the Board of Directors.
+Introduction trainings for newly-appointed directors
+Committee
+US Risk
+Committee
+Corporate Governance Report
+Risk
+Management
+Committee
+Nomination
+Committee
+Primary Responsibilities of the Risk Management Committee The Risk Management Committee
+is primarily responsible for constantly overseeing the Bank's risk management system, reviewing and
+revising the strategy, policy and procedures of risk management and internal control process of the Bank,
+and supervising and evaluating the performance of Senior Management members and risk management
+departments in respect of risk management.
+Performance of the Risk Management Committee During the reporting period, the Risk Management
+Committee held four meetings on 25 March, 28 April, 26 August and 28 October 2021, respectively.
+At these meetings, the Risk Management Committee considered and approved 16 proposals, and heard
+five reports. The Risk Management Committee continuously supervised enterprise risk management. It
+considered and approved proposals on the 2020 and 2021 Interim Risk Management Report, the 2020
+Report on Management of Interest Rate Risk in the Banking Book, the 2020 Report on the Risk Appetite
+Implementation and Assessment, the 2020 Compliance Risk Management Report of the Group and the 2020
+Case Prevention Report and heard reports on technology risk management and the Group's anti-money
+laundering in 2020. It has become more foresighted in preventing and controlling financial risks and refining
+the risk management mechanism, in a bid to assist the Board of Directors in improving its risk management,
+prevention and control capabilities.
+•
+Training of Board Secretary
+The Risk Management Committee is responsible for constantly monitoring and examining the risk
+management system of the Bank, and examining the effectiveness of the system at least on an annual basis.
+Under the enterprise risk management system structure of the Bank, the Risk Management Committee
+performed its function of examining the Bank's risk management system through reviewing and revising the
+risk strategy, risk management policy, risk appetite and the enterprise risk management structure, monitoring
+and evaluating the setup, mode of organization, work procedures and results of risk management
+departments, regularly assessing the risk policy, risk appetite and enterprise risk management status,
+supervising and assessing risk control activities conducted by the Senior Management members in terms of
+credit risk, market risk, operational risk, liquidity risk, compliance risk, reputational risk and interest rate risk
+in the banking book. For details of the risk management, please refer to the section headed "Discussion and
+Analysis - - Risk Management".
+Primary Responsibilities of the Nomination Committee The Nomination Committee is mainly responsible
+for making recommendations to the Board of Directors on candidates for Directors and Senior Management
+members, nominating candidates for chairmen and members of special committees of the Board of
+Directors, formulating the standards and procedures for selection and appointment of Directors and Senior
+Management members, and formulating the training and development plans for Senior Management
+members and key reserved talents. The Nomination Committee is also responsible for assessing the structure,
+size and composition of the Board of Directors on a yearly basis and making recommendations to the Board
+of Directors based on the Bank's development strategy.
+The Articles of Association of the Bank specifies methods and procedures to nominate Directors. Please refer
+to Article 118 of the Articles of Association. During the reporting period, the Bank appointed and renewed
+the appointments of Directors of the Bank in strict accordance with the Articles of Association of the Bank.
+The Nomination Committee reviews the qualifications of candidates for Directors based on whether the
+candidate complies with applicable laws, administrative rules, regulations and the Articles of Association of
+the Bank. The Bank attached importance to diversified sources and backgrounds of Directors and continued
+the efforts to enhance the professionalism of the Board of Directors, thus laying the foundation for the
+effective operation and scientific decision-making of the Board of Directors. According to the requirement
+on diversified composition of the Board of Directors in the Rules for Recommendation and Nomination of
+Board Candidates of the Bank, the Nomination Committee shall pay attention to the complementarity of
+the candidates in terms of expertise, professional competence and experience, cultural and educational
+background, gender, etc., to ensure the members of the Board of Directors are well equipped, experienced
+and have diversified perspectives and views. In order to implement the diversity policy, the Nomination
+Committee discusses and designs measurable goals according to actual conditions and assesses the
+improvement of diversified composition of the Board of Directors during the course of its yearly assessment
+on the framework, number of Directors and composition of the Board of Directors. As at the disclosure date
+of the results, there were five Independent Non-executive Directors, accounting for more than one third of
+the total members of the Board of Directors.
+Annual Report 2021
+119
+Corporate Governance Report
+Compensation
+Committee
+Examining the risk management system
+Related Party
+Transactions
+Control
+During the reporting
+period, the Bank did not enter into or have any contract
+regarding the management and administration of the
+whole or any important business.
+Management Contracts
+Equity-linked Agreement The Bank had no
+equity-linked agreements required to be disclosed by the
+Hong Kong Listing Rules.
+Report of the Board of Directors
+ICBC
+130
+For future planning disclosed in the public disclosure
+documents such as previous offering prospectuses and
+fund raising prospectuses issued by the Bank which has
+continued during the reporting period, its implementation
+progress conformed to the planning as described after
+verification and analysis.
+interest income and other operating income from top five
+customers of the Bank did not exceed 30% of the interest
+income and other operating income of the Bank for the
+year.
+Use of Proceeds from Fundraising
+Activities
+Major Customers In 2021, the aggregate
+As at the latest practicable date before the disclosure date
+of the results, the Bank has maintained the minimum
+public float of 23.45%, based on the publicly available
+information and to the best knowledge of the Board of
+Directors of the Bank.
+Changes in the share capital of the Bank for the year
+ended 31 December 2021 are set out in "Note 37. to the
+Consolidated Financial Statements: Share Capital".
+Subsidiaries Particulars of the Bank's major
+subsidiaries as at 31 December 2021 are set out in the
+sections headed "Discussion and Analysis Business
+Overview" and "Note 25. to the Consolidated Financial
+Statements: Investments in Subsidiaries" in this annual
+report.
+Directors' and Supervisors' Interests in
+Transactions, Agreements or Contracts
+of Significance During the reporting period,
+none of the Directors or Supervisors of the Bank had
+any material interests, whether directly or indirectly, in
+any transaction, arrangement or contract of significance
+regarding the Bank's business to which the Bank, its
+subsidiaries, its controlling shareholders or subsidiaries
+of its controlling shareholders was a party. None of the
+Directors or Supervisors of the Bank have entered into any
+service contract with the Bank, which is not determinable
+by the Bank within one year without payment of
+compensation (other than statutory compensation).
+The funds raised from the Bank's fundraising activities were
+used for the purposes as disclosed in the prospectuses,
+namely, strengthening the capital base to support the
+ongoing business growth of the Bank.
+Directors' Interests in Competing
+Business None of the Bank's Directors held any
+interests in any business competes or competed or is or
+was likely to compete, either directly or indirectly, with the
+Bank.
+131
+Interests in Shares, Underlying Shares,
+and Debentures Held by Directors
+and Supervisors As at 31 December 2021,
+none of the Directors or Supervisors of the Bank had
+any interests or short positions in the shares, underlying
+shares or debentures of the Bank or any of its associated
+corporations (as defined in Part XV of the Securities and
+Futures Ordinance of Hong Kong) which have to be
+notified to the Bank and SEHK under Divisions 7 and 8 of
+Members of the Board of Directors
+Management The Bank has clearly documented
+the remuneration policy for Directors, Supervisors and
+Senior Management members, and has continuously
+improved its performance assessment system and incentive
+restriction mechanism. From the perspectives of economic
+benefit, prevention and control of financial risks and
+support for the real economy and social responsibilities,
+the Bank adopted a system composed of the Bank's
+overall operation and management based indicators for
+the Management and duties allocation based indicators
+for individuals. The remuneration to the Chairman of
+the Board of Directors, the President, the Chairman
+of the Board of Supervisors and other executives of
+the Bank has followed the State's policies relating
+to the remuneration reform on executives of central
+enterprises, which consists of basic annual remuneration,
+performance-based remuneration and incentive income
+linked to term appraisal. The remuneration to other Senior
+Management members and Shareholder Supervisors
+consists of basic annual remuneration and performance-
+based remuneration, and part of performance-based
+remuneration is paid in a deferred manner. The Bank has
+contributed to statutory retirement programs organized by
+Chinese governmental organizations at different levels for
+Directors, Supervisors and Senior Management members
+concurrently as the employees of the Bank. Upon obtaining
+all applicable approvals, the Bank will implement a long-
+term incentive program. As at 31 December 2021, the
+Bank had not granted any share appreciation rights to
+any Director, Supervisor, Senior Management member, or
+other core business personnel designated by the Board of
+Directors.
+Remuneration Policy for Directors,
+Supervisors and Senior
+Relations among Directors, Supervisors
+and Senior Management Directors, Supervisors
+and Senior Management members of the Bank are not
+related to one another with respect to finance, business,
+family, or other material relationships which are required to
+be disclosed.
+Liability Insurance of Directors,
+Supervisors and Senior Management
+Members Pursuant to the Articles of Association
+of the Bank, where conditions permit, the Bank may
+establish the professional liability insurance system of
+Directors, Supervisors and Senior Management members
+upon approval of the Shareholders' General Meeting.
+The Bank will use its own assets to compensate each
+Director, Supervisor and Senior Management member for
+any liability arising during their performance period to the
+maximum extent permitted by laws and administrative
+regulations or within the scope not prohibited by laws and
+administrative regulations, unless the Directors, Supervisors
+and Senior Management members are otherwise proved
+to have failed to act honestly or in good faith during their
+duty performance. During the reporting period, the Bank
+purchased liability insurance for Directors, Supervisors and
+Senior Management members.
+Participation in Investing in National
+Green Development Fund Co, Ltd. In
+July 2020, the Bank signed the Promoter's Agreement of
+the National Green Development Fund Co, Ltd. In April
+2021, upon the approval of CBIRC, the Bank planned to
+contribute RMB8.0 billion to National Green Development
+Fund Co, Ltd., which shall be paid by instalments. In May
+2021, the Bank completed the first contribution of RMB0.8
+billion. For details on the investment, please refer to the
+announcements published by the Bank on the website of
+SSE, the "HKEXnews" website of HKEX and the website of
+the Bank.
+Report of the Board of Directors
+Donations During the reporting period, the Group
+made external donations of RMB114.81 million equivalent.
+Annual Report 2021
+Participation in Investing in National
+Financing Guarantee Fund Co., Ltd. In
+July 2018, the Bank signed the Promoter's Agreement
+of the National Financing Guarantee Fund Co., Ltd.
+In October 2018, upon the approval of CBIRC, the
+Bank planned to contribute RMB3.0 billion to National
+Financing Guarantee Fund Co., Ltd., which shall be paid by
+instalments. In May 2021, the Bank completed the entire
+contribution. For details on the investment, please refer to
+the announcements published by the Bank on the website
+of SSE, the "HKEXnews" website of HKEX and the website
+of the Bank.
+Please refer to "Note 47. to the Consolidated Financial
+Statements: Related Party Disclosures" for details of
+the related party transactions defined under the laws,
+regulations and accounting standards of China.
+During the reporting period, the Bank's connected
+transactions under the rules of CBIRC mainly included
+inter-bank lending, bond repurchase, bond investment,
+loans, deposits and financial market derivative transactions
+etc., with a total amount of RMB1,430,056 million
+accumulatively.
+In 2021, the Bank carried out standardized management
+of the Group's connected transactions in strict accordance
+with the regulations of CBIRC and CSRC as well as
+listing rules in Shanghai and Hong Kong, and had no
+connected transaction to be submitted to the Board
+of Directors or the Shareholders' General Meeting for
+review. All connected transactions occurred complied
+with the disclosure exemptions under the Listing Rules of
+the Shanghai Stock Exchange and the Hong Kong Listing
+Rules. The disclosure exemptions abided by the provisions
+of SSE for disclosure of connected transactions as well as
+the provisions of SEHK for reporting and announcement of
+connected transactions.
+Connected Transactions
+Part XV of the Securities and Futures Ordinance of Hong
+Kong (including interests or short positions therein that
+they shall be deemed to have pursuant to such provisions
+of the Securities and Futures Ordinance of Hong Kong), or
+any interests or short positions which have to be recorded
+in the register under Section 352 of the Securities and
+Futures Ordinance of Hong Kong, or any interests or short
+positions which have to be notified to the Bank and SEHK
+pursuant to the Model Code for Securities Transactions by
+Directors of Listed Issuers as set out in Appendix 10 to the
+Hong Kong Listing Rules.
+Directors' and Supervisors' Rights to
+Acquire Shares or Debentures None of
+the Bank, its subsidiaries, its controlling shareholders or
+subsidiaries of its controlling shareholders entered into
+any agreement or arrangement enabling the Directors and
+Supervisors to acquire benefits by means of the acquisition
+of shares in or debentures of the Bank or any other body
+corporate.
+Pre-emptive Rights The Articles of Association
+of the Bank does not have any mandatory provision
+regarding pre-emptive rights. Pursuant to the Articles of
+Association, the Bank may increase its registered capital
+after obtaining approval of the Shareholders' General
+Meeting and of relevant authorities, by issuing shares
+through public or non-public offering, issuing bonus shares
+to the existing shareholders, converting capital reserve
+to share capital or using other methods as allowed by
+applicable laws and administrative regulations or approved
+by relevant authorities.
+the long-term interest of the Bank, the overall interests of
+all shareholders and the sustainable development of the
+Bank. It emphasizes the priority to adopt cash dividend
+as the profit distribution method and provides that the
+Bank's adjustment to the profit distribution policy shall be
+discussed by the Board of Directors as a special proposal
+and the grounds for adjustment shall be substantiated and
+proved in detail and presented in a written substantiating
+report for Independent Non-executive Directors to issue
+their opinions, and then the report will be submitted to the
+Shareholders' General Meeting for approval as a special
+resolution.
+Reserves Details of the
+distributable reserves of the Bank as at 31 December 2021
+are set out in "Note 39. to the Consolidated Financial
+Statements: Reserves" of this annual report.
+2.933
+2019
+2020
+2021
+Percentage of cash dividends (1) (%)
+Cash dividends (pre-tax, in RMB millions)
+Dividend per ten shares (pre-tax, in RMB yuan)
+Item
+The Bank did not convert any capital reserve to share capital in the last three years. The table below sets out the dividend
+distribution of ordinary shares of the Bank for the last three years:
+about RMB104,534 million. The distribution plan will be
+submitted for approval to the Annual General Meeting
+for the Year 2021. Once approved, the above-mentioned
+dividends will be paid to the holders of A shares and H
+shares whose names appeared on the share register of
+the Bank after the close of market on 11 July 2022. The
+Bank will suspend the registration procedures of H share
+ownership transfer on 6 July 2022 (inclusive) through 11
+July 2022 (inclusive). The holders of H shares of the Bank
+that desire to receive the proposed cash dividends but
+have not registered the ownership transfer documents
+are requested to hand over their ownership transfer
+documents together with the H shares to the Bank's H
+share registrar Computershare Hong Kong Investor
+Services Limited that is located at Room 1712-1716,
+17 Floor, Hopewell Center, 183 Queen's Road East,
+Wanchai, Hong Kong no later than 4:30 p.m. of 5 July
+2022. Pursuant to relevant regulatory requirements and
+operational rules, dividends on A shares and H shares will
+be paid on 12 July 2022 and 27 July 2022, respectively.
+For dividend-related tax and tax reduction, please refer to
+the announcements on dividend distribution of the Bank.
+The Board of Directors of the Bank proposed distributing
+cash dividends of RMB2.933 (pre-tax) for each ten shares
+of 356,406,257,089 ordinary shares for 2021, totaling
+As approved at the Annual General Meeting for the Year
+2020 held on 21 June 2021, the Bank has distributed cash
+dividends of about RMB94,804 million, or RMB2.660 per
+ten shares (pre-tax) for the period from 1 January 2020
+to 31 December 2020 to the ordinary shareholders whose
+names appeared on the share register after the close of
+market on 5 July 2021.
+The profit and financial status of the Bank during the
+reporting period are presented in the Auditor's Report and
+Financial Statements of the Annual Report.
+Profits and Dividends Distribution
+Principal Business The principal business of the
+Bank and its subsidiaries is the provision of banking and
+related financial services. Please refer to the section headed
+"Discussion and Analysis" for the business review of the
+Bank.
+2.660
+Financial Summary The summary of results,
+assets and liabilities for the five years ended 31 December
+2021 is set out in the section headed "Financial
+Highlights" of this annual report.
+104,534
+2.628
+93,664
+Distributable
+Purchase, Sale and Redemption of
+Shares During the reporting period, except the
+redemption of offshore EUR preference shares, neither
+the Bank nor any of its subsidiaries purchased, sold or
+redeemed any listed shares of the Bank. For details on
+the redemption of offshore EUR preference shares, please
+refer to the section headed "Details of Changes in Share
+Capital and Shareholding of Substantial Shareholders
+Preference Shares".
+The formulation and implementation of the Bank's cash
+dividend policy accords with the provisions stipulated in
+the Articles of Association and the requirements provided
+in the resolutions of the Shareholders' General Meeting,
+the dividend distribution standards and proportion are
+clear and explicit, and the decision-making procedure and
+mechanism are complete. Moreover, Independent Non-
+executive Directors had issued their opinions for it. Minority
+shareholders can fully express their opinions and appeals,
+to completely safeguard their legitimate rights.
+Report of the Board of Directors
+129
+Annual Report 2021
+As at the disclosure date of the results, the composition of
+the Board of Directors of the Bank is as follows:
+The Articles of Association of the Bank explicitly stipulates
+that the Bank's profit distribution policy shall maintain
+its continuity and stability and meanwhile have regard to
+Formulation and Implementation of
+Cash Dividend Policy
+_
+For details on the distribution of dividends on preference
+shares of the Bank, please refer to the section headed
+"Details of Changes in Share Capital and Shareholding of
+Substantial Shareholders Preference Shares".
+Note: (1) Calculated by dividing cash dividends on ordinary shares (pre-tax) by net profit attributable to ordinary shareholders of the parent
+company for the period.
+30.4
+30.9
+30.9
+94,804
+Executive Directors: Mr. Chen Siqing, Mr. Liao Lin,
+Mr. Zheng Guoyu and Mr. Wang Jingwu;
+Board of Directors
+Mr. Feng Weidong, Ms. Cao Liqun, Ms. Chen Yifang and
+Mr. Dong Yang;
+ICBC
+136
+The urban-rural collaborative development strategy was
+put in place. The Bank established the "Steering Group
+for Financial Services for Rural Revitalization" headed
+by the chairman of the Bank and the "Committee for
+Promoting Financial Services for Rural Revitalization"
+with the president of the Bank serving as the director.
+Leveraging the advantages in urban finance, technological
+development and integrated services, the Bank
+formulated and implemented the urban-rural collaborative
+development strategy, released the Action Plan for
+Financial Support to Rural Revitalization, and introduced
+15 action measures. It also launched a uniform brand
+of financial services for rural revitalization "ICBC
+Xingnongtong" to strengthen the urban-rural collaborative
+financial services to rural areas featuring urban areas
+helping rural areas and urban-rural complementarity and
+boost the comprehensive extension of industrial chain,
+supply chain and capital chain from urban to rural areas.
+The Bank fully implemented the national strategic plans for
+rural revitalization, and resolutely followed the regulatory
+requirements of financial services for rural revitalization. To
+"address the country's needs, give full play to finance and
+tap into ICBC strengths", the Bank put in place the urban-
+rural collaborative development strategy and made all-
+round efforts to consolidate and expand the achievements
+made in poverty alleviation in coordination with the
+extensive drive for rural vitalization.
+Consolidation of Achievements in
+Poverty Alleviation and Services for
+Rural Revitalization
+Scan for access to the 2021 Corporate Social Responsibility
+(ESG) Report of Industrial and Commercial Bank of China
+Limited
+For details of the Bank's fulfillment of corporate social
+responsibilities, please refer to the 2021 Corporate Social
+Responsibility (ESG) Report of Industrial and Commercial
+Bank of China Limited published by the Bank on the
+website of SSE, the "HKEXnews" website of HKEX and the
+website of the Bank.
+The Bank conducted in-depth researches on topics such as
+low-carbon transformation of commercial banks, financial
+support for carbon market development, and business
+promotion of pilot zones for green finance reform and
+innovation, explored quantitative assessment methods
+for corporate green development, and established an
+assessment mechanism of green finance development
+under the framework of Paris Agreement. It also updated
+and published the 2021 edition of the Belt and Road Green
+Finance (Investment) Indexes Report, launched China's
+first industry standard for environmental information
+disclosure by financial institutions, and developed the
+CERAT online instrument for environmental risk analysis
+to help enterprises and financial institutions quantify
+the environmental risks of overseas projects. It actively
+participated in the global financial governance of the
+Task Force on Climate-Related Financial Disclosures,
+and spared no efforts to push forward climate change
+response and "dual carbon" work through international
+platforms such as United Nations Environment Programme
+Finance Initiative (UNEP FI), Global Investors for Sustainable
+Development Alliance (GISD), Green Investment Principles
+(GIP) for the Belt and Road, and the Belt and Road Inter-
+bank Regular Cooperation Mechanism (BRBR).
+International Exchange and Cooperation
+management in its operation, made use of information
+technology to collect, analyze and summarize historical
+carbon emission data, and provided strong support for
+continuous digital carbon emission management. On the
+basis of the pilot carbon emission inventory conducted
+by the Head Office, Beijing Branch and Hunan Branch,
+the Bank launched the relevant work to find out the real
+carbon emissions data in the past five years. According to
+the total amount and structure of carbon emissions in the
+past, the Bank studied and developed the implementation
+roadmap for carbon neutrality in its operation as well as
+the energy saving and emission reduction pathway, and
+gradually advanced the carbon neutrality in its operation.
+Remarkable results were achieved in green office. The Bank
+implemented independent and controllable localization of
+office platform, optimized the system functions of official
+document processing and business trip reimbursement,
+integrated and upgraded mobile office functions, with the
+daily active users of mobile office increasing by more than
+50% year-on-year.
+Environmental and Social Responsibilities
+135
+Annual Report 2021
+The Bank made steady progress in promoting carbon
+footprint management. It established an information
+statistics and analysis system for carbon footprint
+Green Office
+Environmental and Social Responsibilities
+The Bank was actively engaged in the issuance,
+underwriting and investment of green bonds, and provided
+green financial support for the key areas of ecological
+civilization development, such as ecological protection
+and clean energy. In 2021, it completed the issuance of
+67 green bonds of various categories as lead underwriter,
+and assisted other issuers in raising funds of RMB140,130
+million with a lead underwriting scale of RMB63,637
+million, including 24 carbon-neutral bonds with a lead
+underwriting scale of RMB24,909 million which ranked
+No.1 in the market. In 2021, the total amount of offshore
+green bonds issued by the Bank reached USD13.06 billion,
+with 11 international awards received by the Bank.
+The Bank made sustained efforts to scale up lending to
+new energy, resource recycling, advanced manufacturing
+and other areas of transformation and upgrading, with
+a focus on providing financing support to small and
+micro enterprises in green and low-carbon industries.
+Taking into account the new types of financing needs
+arising from the low-carbon transformation of small and
+micro enterprise customers, the Bank actively developed
+supporting products to promote innovation of small and
+micro financing products. It remained committed to the
+development approach of "digital inclusive finance",
+accelerated the digital transformation of traditional
+credit products for small and micro enterprises, and
+progressively guided and promoted the digital and low-
+carbon transformation of production and operation of
+micro and small enterprises. By actively taking advantage of
+innovative financial instruments such as digital credit note,
+it worked to increase the supply of funds and support for
+small and micro enterprises in green industry chains such as
+clean energy, pollution control and resource recycling.
+A rural financial service system was built and relevant
+systems and mechanisms were further refined. The Bank
+established a specialized institution of Rural Vitalization
+Office which was designed to coordinate financial services
+for rural revitalization, and set up the specialized line of
+financial services for rural revitalization. With all these
+efforts, the Bank was committed to building an all-
+round rural financial service system covering agriculture,
+rural areas and farmers, offering rural customer groups
+with meticulous, warm and convenient customer
+experience, and delivering readily available, intelligent and
+wholehearted financial services to boost prosperity in rural
+areas, rural industries and livelihood of rural residents.
+Achievements made in poverty alleviation were
+consolidated and expanded. The Bank continued to provide
+all kinds of support for poverty alleviation with financial
+services, optimized micro loan products for poverty
+alleviation, and strongly supported the financing needs
+of key counties for national rural revitalization assistance.
+Furthermore, the Bank launched the specialized rural
+revitalization recruitment of "ICBC Stars Supporting Rural
+Residents and Enabling Dreams", targeting at college
+students from families that have shaken off poverty, people
+involved in "three supports and one assistance" and
+other key targeted groups and areas of national poverty
+alleviation efforts as well as groups providing support for
+agriculture, rural areas and farmers.
+a
+ICBC
+138
+Adhering to putting the customer first, the Bank took
+special measures to tackle the pain points of customer
+experience, carried out "I do practical things for the
+public" service improvement campaign, and implemented
+root-cause rectification in terms of rules and regulations
+formulation, products improvement, processes
+optimization and systems refinement to continuously
+improve the quality of financial services. The Bank also
+established a customer complaint management system
+that is more compatible with customer demands and
+regulatory requirements, and strengthened the full-
+chain management covering monitoring and early
+warning, standardized processing, and supervision and
+implementation. In 2021, the Bank further broadened its
+complaint acceptance channels and optimized the relevant
+process, as part of its effort to listen more to customers'
+voices and respond to and resolve customer appeals in
+a more comprehensive way, with customer satisfaction
+reaching 86.8%.
+The Bank widely rolled out the series of "Chunxun Action"
+training ("Spring Training Action") for consumer protection
+to promote more effective implementation of the laws,
+regulations and regulatory requirements of consumer
+protection in key areas such as personal banking, credit
+cards and Internet finance. Ongoing efforts were made
+to strengthen special training, where corresponding
+training content and focus of consumer protection were
+set in accordance with the management level, profession
+and job responsibilities of the targeted groups, in a bid
+to constantly improve the accuracy and effectiveness of
+training.
+The Bank highly valued the integration of online and
+offline efforts, launching consumer protection promotion
+activities such as "March 15th Consumer Protection
+Publicity Week", "Financial Knowledge Publicity Month,
+Household Financial Knowledge, Be a Rational Investor
+and a Good Financial Internet User ", "Spreading Financial
+Knowledge, Protecting Your Pocket" and "Publicizing
+Financial Knowledge to Walk Ten Thousand Miles",
+where the efforts were especially directed at key contents
+and special groups with an aim to continuously enhance
+consumers' financial literacy and risk prevention capability.
+The Bank designed itself a uniform consumer protection
+logo, established a library of consumer protection materials
+and gave full play to its advantages in channels, brands
+and talented staff. It also made sustained efforts to
+enhance the standardization, quality and efficiency of
+consumer protection promotion endeavors, in an effort to
+build a publicity brand with the Bank's own characteristics.
+in a targeted manner. The Bank also strengthened the
+management of third-party cooperation agencies and
+continuously improved the level of compliance operations.
+By creating the "ICBC with You" elderly customer
+service brand, it worked to make the elderly customers
+more satisfied and happier with financial service and
+to contribute to the effective implementation of the
+national strategy of responding to population aging. It
+also continued to conduct reviews and risk warning on
+policies, procedures, financial products and services related
+to consumer protection, actively protected consumer rights
+and enhanced consumer experience.
+Environmental and Social Responsibilities
+137
+Annual Report 2021
+The Bank conscientiously implemented the laws,
+regulations and regulatory requirements regarding
+consumer protection, took various measures to
+improve the consumer protection governance system,
+and comprehensively enhance its ability to protect
+the legitimate rights and interests of consumers. It
+strengthened the guidance and coordination of the
+consumer protection work of the Board of Directors,
+the Board of Supervisors and the Senior Management,
+and continuously consolidated the management
+groundwork of corporate governance. It incorporated
+the risks of consumer protection into a comprehensive
+risk management system, refined the key rules and
+regulations for consumer protection, and continuously
+improved the systematization and standardization of
+consumer protection. Moreover, it optimized the system
+functions of financial information protection and sales of
+financial products, and enhanced the level of intelligent
+management and control of consumer protection risks
+Consumer Protection
+As at the end of 2021, the Bank's balance of agriculture-
+related loans exceeded RMB2.6 trillion, an increase of over
+RMB400.0 billion from the beginning of the year. The
+balance of loans placed at areas that have been lifted out
+of poverty was RMB782.0 billion, up over RMB100 billion
+from the beginning of the year. The balance of loans in
+granted for key poverty assistance counties exceeded
+RMB100.0 billion, an increase higher than the average of
+the Bank's loans.
+Innovation was made in rural revitalization product.
+Nearly 100 credit and non-credit products and services
+were launched to form a product and service system
+with ICBC characteristics, covering rural industry, rural
+development, inclusive finance, farmer services, GBC
+interaction and technology empowerment. It made
+breakthrough in launching an online agriculture-related
+inclusive loan product, i.e., "ICBC Prosperous Agriculture
+Loan", and cooperated with the Ministry of Agriculture
+and Rural Affairs to carry out various activities such as
+the "agricultural matchmaking" activity and the "serving
+thousands of villages and accompanying ten thousands
+of households" campaign. It also launched a series of
+training for rural customers on "practical skills for poverty
+alleviation of Jinyang", and promoted the brand of
+"ICBC Training for Rural Revitalization", with the aim to
+create an integrated rural revitalization service with ICBC
+characteristics that combined financing, consulting and
+commercial services.
+Service was further delivered in lower-tier market. The
+Bank developed an online-offline integrated rural services
+delivery system highlighting online, streamlined and
+efficient operation. In terms of offline channels, relying
+on rural service sites for inclusive finance, it built a light-
+asset and flexible ICBC messenger operation and service
+model to effectively fill the gap of rural financial services. In
+terms of online channels, the Bank built a comprehensive
+service platform - ICBC "Xingnongtong" APP, effectively
+realizing the service downward penetration of "one-point
+access, borderless rural revitalization".
+"Three-to-One" paired assistance mechanism, and
+organized 12 branches to pair up with targeted assistance
+counties to help attract investment and high-caliber
+professionals. It insisted on promoting poverty assistance
+through healthcare and education, business development,
+and consumption growth, in a way to help the invigoration
+of high-caliber talents.
+Targeted assistance for poverty alleviation was continuously
+improved to help the targeted regions realize rural
+revitalization. The Bank formulated and released the Work
+Plan on Targeted Poverty Alleviation for 2021, established
+of domestic loans granted to such green fields as energy
+saving and environmental protection, clean production,
+clean energy, ecological environment, green upgrade of
+infrastructures and green services, representing an increase
+of RMB634,902 million over the end of the previous year.
+In 2021, green projects supported by the Bank's green
+loans converted into savings of 47,381.3 thousand tons of
+standard coal, a reduction of 98,846.9 thousand tons in
+carbon dioxide emissions.
+The Bank continuously refined the green finance policy
+system, intensified the implementation of green finance
+planning, and strengthened the policy guidance of
+differentiated investment and financing to positively
+advance the green adjustment of investment and
+financing structure. As part of its efforts to intensify the
+management of environment (climate) and social risks, the
+Bank fully implemented the green-classified management
+of investment and financing business, actively advanced
+systematic control over environment (climate) and social
+risks of investment and financing, and took the initiative to
+conduct the climate risks studies. As at the end of 2021,
+the Bank recorded a balance of RMB2,480,621 million
+Green Finance
+Supervision on internal control. The Board of
+Supervisors supervised the effectiveness of the internal
+control system, the performance of internal control duties
+and the business compliance with laws and regulations.
+It paid close attention to the operation of internal control
+mechanism, policy system building, implementation of
+regulatory opinions, remediation of inspection findings,
+management of material risk events and accountability
+for operating losses, among other aspects. The Board
+of Supervisors effectively supervised key institutions and
+business areas, paid continuous attention to internal
+control in case prevention management, AML, information
+Risk supervision. The Board of Supervisors supervised
+the effectiveness and soundness of the risk management
+system and mechanism. It paid close attention to the risk
+management strategies, the formulation and transmission
+of risk appetite, and improvement and implementation of
+risk management policies and procedures. It supervised
+capital management, consolidated management, stress
+testing management and regulatory indicators, and
+tracked changes in major risks such as credit risk, market
+risk and liquidity risk. It concerned about the impact
+of continued spreading of pandemic on the domestic
+economy and finance as well as relevant risk prevention
+and control measures taken by the Bank, and strengthened
+the supervision of key regions, key institutions and key
+businesses, to analyze and expose the potential risks and
+hazards as early as possible.
+Financial supervision. The Board of Supervisors
+supervised the Bank's financial activities as well as
+decisions on and implementation of material financial
+issues. It paid close attention to the major accounting
+issues, expected credit loss, financial approval issues, and
+relevant accounting items of the Bank, kept alert to the
+impact of domestic and overseas pandemic situations
+on the Bank's business operation, and conducted in-
+depth analysis on the major factors affecting the Group's
+profitability. It carefully reviewed periodic reports, final
+accounts and profit distribution plan, learned about and
+kept watchful eye on the external audit work, and oversaw
+and evaluated the quality of external audit. It focused on
+the allocation of financial resources and the operation of
+financial management mechanism to intensify supervision
+constantly.
+six key areas", facilitated the inclusive finance and green
+finance development, prevented and defused financial
+risks, and handled information disclosure. It ensured the
+Bank could well-perform the political, social and economic
+responsibilities as a large state-owned bank.
+Supervision on the performance of duties. The Board
+of Supervisors supervised the Board of Directors, Senior
+Management and their members on their compliance
+with the laws and regulations, the Articles of Association
+of the Bank, and the implementation of the resolutions
+of the Shareholders' General Meeting and the Board
+of Directors and the regulatory opinions. It paid close
+attention to how the Board of Directors and the Senior
+Management implemented the economic and financial
+policies of the state and regulatory requirements,
+served the implementation of major national strategies,
+responded to the COVID-19 pandemic, supported the
+real economy, promoted the key tasks of "ensuring
+stability on six key fronts" and "maintaining security in
+Performance of the Board of Supervisors. In 2021, the
+Board of Supervisors held nine meetings, considered 20
+proposals including proposals on the 2020 work report
+of the Board of Supervisors and assessment report on
+the duty performance, heard nine reports on the topics
+including the operation, development strategy planning
+and the Group's AML work, and reviewed 43 reports
+including reports on the quarterly supervision and relevant
+surveys of the Board of Supervisors in 2021. It issued
+opinions in an objective and fair manner and appropriately
+exercised voting rights. The members of the Board of
+Supervisors diligently and faithfully fulfilled their duties,
+attended three Shareholders' General Meetings, and
+attended nine meetings of the Board of Directors and 36
+meetings of special committees as non-voting attendees.
+They input adequate time and effort in supervisory
+inspections, attached equal importance to theoretical
+learning and experience summary from practice, with an
+aim to further build up their duty performance ability.
+External supervisors of the Bank worked for more than
+15 working days in the Bank, complying with the relevant
+requirements.
+During the reporting period, the Board of Supervisors,
+pursuant to relevant laws and regulations, regulatory
+requirements and the Articles of Association, performed
+supervision duties earnestly. Relying on a variety of
+methods such as onsite surveying and offsite monitoring,
+it carried out supervision of duty performance and due
+diligence, financial activities, risk management and internal
+control, etc. in a down-to-earth way. With its important
+role in corporate governance exploited adequately, it
+promoted the legal, compliant operation and development
+across the Bank.
+Work of the Board of Supervisors
+Report of the Board of Supervisors
+Industrial and Commercial Bank of China Limited
+ICBC
+132
+Mr. Shen Si, Mr. Nout Wellink and Mr. Fred Zuliu Hu.
+Mr. Anthony Francis Neoh, Mr. Yang Siu Shun,
+Independent Non-executive Directors:
+Annual Report 2021
+133
+Report of the Board of Supervisors
+technology and other aspects, and gave full play to the
+supervision efficiency to effectively improve the Group's
+internal control compliance management.
+During the reporting period, being fully committed to
+the strategic plan of carbon peak and carbon neutrality,
+the Bank established and improved the green financial
+development system, issued the Work Plan of Industrial
+and Commercial Bank of China Limited for Carbon Peak
+and Carbon Neutrality (Trial), and set up the Steering
+Group for Carbon Peak and Carbon Neutrality to carry
+out the systematic planning and overall deployment of
+the Bank's carbon neutrality efforts. Leveraging on the
+investment and financing toolkit of "loan, bond, stock,
+agency, lease and consultant", the Bank promoted
+investment and financing restructuring across all regions,
+increased financial support for green technology, and
+made every effort to drive innovation in financial products
+and services. Progress was made in approaching the
+national carbon emissions trading market by offering it
+comprehensive financial services. ICBC Credit Suisse, one
+of the Bank's subsidiaries, launched an ESG-themed ETF
+that was the first one of the kind approved in the industry,
+and ICBC Wealth Management released the first ESG-
+themed net worth-based wealth management product in
+the industry. The Bank actively supported the innovation-
+driven development of the national pilot zone for green
+finance reform and innovation, and further strengthened
+the environmental and social risk prevention and control.
+It also launched the "ICBC ESG" column on its official
+website, through which the 2021 interim ESG special
+report was released for the first time globally. Moreover,
+further progress was made in exchange, cooperation and
+prospective studies on green finance.
+Fulfillment of Environmental and
+Corporate Social Responsibilities
+Environmental and Social Responsibilities
+ICBC
+134
+Save as disclosed above, the Board of Supervisors had no
+objection to any other matters during the reporting period.
+Implementation of Information Disclosure
+Rules During the reporting period, the Bank performed
+its duty of information disclosure in compliance with the
+regulatory requirements, implemented the information
+disclosure management rules in earnest, and disclosed
+information in a timely and fair manner. Information
+disclosed was authentic, accurate and complete.
+Non-executive Directors: Mr. Lu Yongzhen,
+Review of the Internal Control Assessment
+Report The Board of Supervisors reviewed the 2021
+Internal Control Assessment Report of the Bank and had
+no objection to the report.
+Connected Transactions During the reporting period,
+the connected transactions of the Bank were conducted
+on normal commercial terms. The Board of Supervisors
+did not find any circumstance that infringed upon the
+interests of the Bank. The approval, voting, disclosure
+and implementation of connected transactions complied
+with applicable laws and regulations and the Articles of
+Association of the Bank.
+assets.
+Purchase and Sale of Assets During the reporting
+period, the Board of Supervisors did not find any insider
+trading or any circumstance that contravened the
+shareholders' interests or caused the loss of the Bank's
+assets in the process of the Bank's purchase or sale of
+Use of Proceeds from Fundraising Activities During
+the reporting period, the use of proceeds from the Bank's
+fundraising activities was consistent with the purpose
+stated in the prospectuses.
+Preparation of Annual Report Preparation and
+review procedures of the Bank's Annual Report were in
+compliance with laws, regulations and regulatory rules.
+Contents of this report reflected the actual conditions of
+the Bank truly, accurately and completely.
+Compliant Operation During the reporting period,
+the Board of Directors and the Senior Management
+of the Bank continued to operate in compliance with
+applicable laws and regulations, and the decision-making
+procedures complied with applicable laws and regulations
+and the Articles of Association of the Bank. Members
+of the Board of Directors and the Senior Management
+diligently and faithfully performed their duties, and the
+Board of Supervisors did not find any violation of laws
+and regulations, or any circumstance that contravened the
+interests of the Bank in their performance of duties during
+the reporting period.
+Independent Opinions of the Board of
+Supervisors on Relevant Issues
+Implementation of Resolutions Passed at the
+Shareholders' General Meeting During the reporting
+period, the Board of Supervisors had no objection to the
+reports or proposals presented by the Board of Directors to
+the Shareholders' General Meeting for consideration. The
+Board of Directors earnestly implemented the resolutions
+approved at the Shareholders' General Meetings.
+Share Capital and Public Float
+Report of the Board of Directors
+Changchun Institute
+of Financial Managers
+191
+13. Five Highest Paid Individuals
+237
+48. Segment Information
+187
+12. Directors' and Supervisors' Remuneration
+231
+47. Related Party Disclosures
+186
+49. Financial Risk Management
+11. Operating Expenses
+46. Commitments and Contingent Liabilities
+186
+10. Other Operating Income, Net
+228
+45. Share Appreciation Rights Plan
+185
+Net Gains on Financial Investments
+9.
+228
+229
+44. Assets Pledged as Security
+242
+191
+19. Cash and Balances with Central Banks
+274
+53. Comparative Amounts
+193
+18. Earnings Per Share
+274
+52. Events After the Reporting Period
+193
+17. Dividends
+14. Impairment Losses on Assets
+273
+192
+of the Parent Company
+Statement of Changes in Equity
+16. Profit Attributable to Equity Holders
+51. Statement of Financial Position and
+192
+15. Income Tax Expense
+266
+50. Fair Value of Financial Instruments
+of the Bank
+185
+Net Trading Income
+8.
+218
+Other Equity Instruments
+38.
+162
+Amendments to IFRSS
+217
+Share Capital
+37.
+Application of the New and
+4.
+3.
+Other Liabilities
+36.
+161
+Basis of Preparation
+2.
+214
+35. Debt Securities Issued
+161
+Corporate Information
+217
+Summary of Significant Accounting Policies
+164
+39. Reserves
+227
+Transferred Financial Assets
+43.
+185
+Net Fee and Commission Income
+7.
+226
+42. Interests in Structured Entities
+184
+Net Interest Income
+6.
+225
+Cash and Cash Equivalents
+41.
+183
+Estimates
+224
+Other Comprehensive Income
+40.
+5. Significant Accounting Judgements and
+223
+194
+1.
+54. Approval of the Consolidated Financial
+Statements
+Risk based sample selection for credit review
+selected samples for credit review by focusing
+on industries that are significantly affected
+by fluctuations of economic cycle and policy
+regulations, regions with high credit risk
+exposure, and loans with other high-risk
+characteristics such as non-performing loans,
+overdue performing loans, rescheduled loans
+and borrowers with negative publicity;
+(3)
+How our audit addressed the key audit matter
+Expected credit loss allowance of loans and advances
+to customers measured at amortised cost (continued)
+Key audit matter
+Key audit matters (continued)
+Independent Auditor's Report
+ICBC
+146
+•
+performed back-testing, and verified the results
+of the model using actual observable data, and
+evaluated whether there was any indication of
+management bias.
+verified, on a sample basis, the accuracy of
+ECL model data input such as loan agreement
+amount, due date, interest rate, guarantee
+method;
+assessed the internal credit risk rating
+benchmark used in the ECL model by reviewing
+its periodic validation and monitoring report to
+evaluate the reasonableness of the validation
+approach, completeness of the validation
+scope and accuracy of the validation, and
+selected samples to verify the accuracy of
+internal rating calculation;
+assessed the reliability and appropriateness
+of the ECL model and the reasonableness of
+key parameters used in the model, including:
+PD, LGD, EAD, discount rate, forward-looking
+adjustments, and evaluated the rationality of
+the key management judgements on those key
+parameters;
+ECL model
+(2)
+How our audit addressed the key audit matter
+Expected credit loss allowance of loans and advances
+to customers measured at amortised cost (continued)
+Due to the significance of allowance for impairment losses
+of loans and advances to customers measured at amortised
+cost and the associated ECL allowance and the significant
+judgements and estimation exercised by management in
+estimating ECL, we identified this as a key audit matter.
+Refer to Note 4 (10), Note 5, Note 14, Note 23, and Note
+49(a) to the consolidated financial statements for relevant
+disclosures.
+Key audit matter
+Key audit matters (continued)
+assessed the reasonableness of the selection
+and weighting of economic indicators, multiple
+macro-economic scenarios, and other inputs
+and assumptions used by management in the
+forward-looking adjustments; assessed the
+reasonableness of forecasted macro-economic
+indicators and industry data by comparing to
+available third party information, and reviewed
+the sensitivity analysis of economic indicators;
+verified, on a sample basis, the calculation of
+ECL model, and tested whether the model
+reasonably reflected management's modelling
+methodology;
+Independent Auditor's Report
+analysed the borrower's financial and non-
+financial information, and other available
+information, and evaluated the reasonableness
+of management's judgement on staging,
+including whether credit risk has increased
+significantly since initial recognition and
+whether credit impairment events have
+occurred by reviewing the credit files,
+interviewing management, independently
+searching for publicly available information and
+exercising professional judgement;
+Annual Report 2021
+ICBC
+148
+the management's decision on the
+consolidation of structured entities through carrying
+out the above procedures.
+assessed
+analysed the scope of the Group's decision-
+making power over the structured entity, the level
+of remuneration obtained from providing asset
+management services, the risk of variable return
+borne by holding other interests in the structured
+entity and the substantive rights held by other
+participants, checked the Group's analysis on the
+magnitude and variability of variable return, and
+assessed whether the Group acts as principal or
+agent in the structured transaction;
+verified the analysis on the Group's variable
+return which includes, but is not limited to, fixed
+management fee and performance fees obtained
+through acting as asset manager, as well as the
+returns obtained from holding an interest in a
+structured entity, and providing liquidity support or
+other support;
+inspected agreements relating to the structured
+entity and understood the purpose of its set
+up; assessed the power the Group has over the
+structured entity according to the Group's rights and
+obligations under different transaction structures and
+its involvement with the structured entity;
+Selected samples to perform the following audit
+procedures:
+Understood, assessed and tested the related design and
+operating effectiveness of the internal controls relating to
+the consolidation of structured entities.
+performed credit assessments on borrower's
+and guarantor's financial information,
+collateral valuation and other sources of
+repayment for the selected stage 3 credit-
+impaired corporate loans and advances, tested
+the recalculation of impairment provision
+based on the recoverable cash flows and
+discount rates, and evaluated whether there
+was any material misstatement.
+Our audit procedures in respect of consolidation of
+structured entities included the following:
+Refer to Note 4(2), Note 5 and Note 42 to the consolidated
+financial statements for relevant disclosures.
+We identified the consolidation of structured entities as a
+key audit matter because the amount involved is significant
+and the evaluation on whether the Group has control
+over the structured entities requires significant accounting
+judgement.
+In determining whether the Group has control and
+therefore should consolidate a structured entity,
+management is required to consider the power it
+possesses, its exposure to variable returns, and its ability
+to use its power to affect returns. The Group is required
+to collectively consider the relevant facts and substance to
+assess whether it has control over the structured entity.
+Structured entities mainly include wealth management
+products, investment funds, trust plans, asset management
+plans and asset-backed securities in which the Group has
+interests in them through their initiation, management or
+investment.
+Consolidation of structured entities
+Key audit matter
+Key audit matters (continued)
+Independent Auditor's Report
+147
+How our audit addressed the key audit matter
+145
+Annual Report 2021
+understood, assessed and tested the design
+and operating effectiveness of key internal
+controls of ECL model, including the selection,
+approval, and application of ECL model
+methodology, on-going model monitoring,
+input of underlying data and parameters, and
+loan staging based on customer asset quality,
+cash flow projection used in the discounted
+cash flow method, and the review and
+approval of forward-looking information;
+understood, assessed and tested the
+information technology system and design and
+operating effectiveness of the related controls,
+including general information technology
+controls, data transmission between systems,
+mapping of parameters of ECL model, and
+system calculation of loss allowance.
+143
+Annual Report 2021
+207
+Joint Ventures
+26. Investments in Associates and
+205
+25. Investments in Subsidiaries
+201
+24. Financial Investments
+Independent Auditor's Report
+199
+198
+22. Reverse Repurchase Agreements
+TO THE CONSOLIDATED FINANCIAL STATEMENTS 275
+195
+21. Derivative Financial Instruments
+UNAUDITED SUPPLEMENTARY INFORMATION
+194
+Financial Institutions
+274
+23. Loans and Advances to Customers
+Deloitte.
+To the Shareholders of Industrial and Commercial Bank of China Limited
+(Incorporated in the People's Republic of China with limited liability)
+Opinion
+understood, assessed and tested the design
+and operating effectiveness of key internal
+controls relating to approval, recording,
+monitoring and regular evaluation of internal
+credit risk ratings which are relevant inputs to
+the ECL model;
+•
+Design and operating effectiveness of key internal
+controls
+(1)
+Our audit procedures in respect of expected credit loss
+allowance of loans and advances to customers measured at
+amortised cost included the following:
+How our audit addressed the key audit matter
+The management exercised significant judgements and
+estimation in its assessment of ECL allowance of loans and
+advances to customers measured at amortised cost. They
+include the determination of staging of loans and advances
+to customers including determining whether the credit risk
+has increased significantly and credit impairment events
+have occurred; the determination of key parameters used
+in the ECL model including probability of default (PD), loss
+given default (LGD), exposure at default (EAD), discount
+rate, and forward-looking information for stage 1 and
+2 corporate loans and advances, discounted bills and all
+personal loans and advances; the determination of key
+parameters used in discounted cash flow assessment in
+respect of stage 3 corporate loans and advances including
+recoverable cash flows and discount rates.
+As at 31 December 2021, the Group's loans and
+advances to customers measured at amortised cost was
+RMB20,174,699 million, and the related impairment
+provision was RMB603,764 million.
+The Group uses an expected credit loss ("ECL") model
+to calculate the loss allowance for loans and advances to
+customers measured at amortised cost in accordance with
+IFRS 9.
+Expected credit loss allowance of loans and advances
+to customers measured at amortised cost
+Key audit matter
+Key audit matters (continued)
+Independent Auditor's Report
+144
+Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
+consolidated financial statements of the current period. These matters were addressed in the context of our audit of the
+consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion
+on these matters.
+Key audit matters
+We conducted our audit in accordance with International Standards on Auditing ("ISAS"). Our responsibilities under those
+standards are further described in the Auditor's responsibilities for the audit of the consolidated financial statements section
+of our report. We are independent of the Group in accordance with the Code of Ethics for Professional Accountants issued
+by International Ethics Standards Board for Accountants ("the Code"), and we have fulfilled our other ethical responsibilities
+in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
+basis for our opinion.
+Basis for opinion
+In our opinion, the consolidated financial statements give a true and fair view of the financial position of the Group as at
+31 December 2021, and of its consolidated financial performance and its consolidated cash flows for the year then ended
+in accordance with International Financial Reporting Standards ("IFRSS") issued by the International Accounting Standards
+Board ("IASB") and have been properly prepared in compliance with the disclosure requirements of the Hong Kong
+Companies Ordinance.
+We have audited the consolidated financial statements of Industrial and Commercial Bank of China Limited (the "Bank")
+and its subsidiaries (collectively referred to as the "Group") set out on pages 153 to 274, which comprise the consolidated
+statement of financial position as at 31 December 2021, the consolidated statement of profit or loss, the consolidated
+statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the
+consolidated statement of cash flows for the year then ended, and a summary of significant accounting policies and other
+explanatory information.
+德勤
+20. Due From Banks and Other
+214
+ICBC
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Internal departments and directly managed
+Sub-bureau
+Internal Audit Bureau
+Internal Audit
+US Risk Committee
+Audit Committee
+Related Party
+Transactions Control
+Committee
+Nomination
+Committee
+institutions of the Head Office
+Responsibility and Consumer
+Protection Committee
+Compensation
+Committee
+Management
+Committee
+Risk
+Strategy
+Committee
+Board of Directors
+Annual Report 2021
+Office
+Board of Directors'
+Corporate Social
+Shareholders'
+General Meeting
+Board of Supervisors
+Supervisory Board Office
+Business Research &
+Development Center
+of Financial Managers
+Hangzhou Institute
+Department
+Private Banking
+Organizational Chart
+Overseas Institutions
+Domestic Institutions
+Financial Assets Service
+Management Committee
+Senior Management
+Risk Management
+Committee
+Asset & Liability
+Management Committee
+Institutional Banking
+Promotion Committee
+Inclusive Finance and
+Rural Revitalization
+Promotion Committee
+Corporate &
+Investment Banking
+Promotion Committee
+Committee
+Consumer Protection
+Financial Technology and
+Digital Development
+Committee
+Personal Banking
+Promotion Committee
+ICBC
+Software
+Development Center
+140
+Disciplinary Actions
+139
+Annual Report 2021
+Occupation of Fund by Controlling
+Shareholders and Other Related
+Parties During the reporting period, none of the
+controlling shareholders and other related parties of the
+Bank occupied any fund of the Bank. The auditors have
+issued the Special Explanation on the Occupation of Fund
+by Controlling Shareholders and Other Related Parties of
+Industrial and Commercial Bank of China Limited in 2021.
+Material Related Party Transactions
+During the reporting period, the Bank did not enter into
+any material related party transactions.
+External Guarantees During the reporting
+period, the Bank did not enter any guarantee contract
+against the resolution procedures for external guarantees
+that are prescribed by laws, administrative regulations or
+CSRC.
+Key Audit Matters The Audit Committee
+has reviewed the key audit matters in the audit report
+and concluded that it is unnecessary to provide a
+supplementary explanation.
+Other Material Contracts During the reporting
+period, the Bank did not have any other material contracts
+which were subject to disclosure.
+Material Guarantees The provision of guarantees
+is in the ordinary course of business of the Bank. During
+the reporting period, the Bank did not have any material
+guarantee that needs to be disclosed except for the
+financial guarantee services within the business scope as
+approved by PBC and the CBIRC.
+Significant Events
+Lease During the reporting period, the Bank had not
+held on trust to a material extent or entered into any
+material sub-contract or lease arrangement in respect
+of assets of other corporations, which were subject to
+disclosure, and no other corporation had held on trust to
+a material extent or entered into any material sub-contract
+or lease arrangement in respect of the Bank's assets, which
+were subject to disclosure.
+Material Contracts and Performance of
+Obligations thereunder
+Please refer to "Note 47. to the Consolidated Financial
+Statements: Related Party Disclosures" for details of
+the related party transactions defined under the laws
+and regulations of China and the relevant accounting
+standards.
+Implementation of Share Incentive Plan
+and Employee Stock Ownership Plan
+during the Reporting Period During the
+reporting period, the Bank did not implement any share
+incentive plan or any employee stock ownership plan.
+Credit Standing During the reporting period,
+neither the Bank nor its controlling shareholders had
+ever failed to fulfil obligations provided in effective legal
+documents issued by court for material lawsuits, nor had
+there been any outstanding debt of significant amount.
+Material Assets Acquisition, Sale and
+Merger During the reporting period, the Bank had no
+material assets acquisition, sale and merger.
+Material Lawsuits or Arbitration
+Cases During the reporting period, the Bank incurred
+no material lawsuits or arbitration cases. It was involved
+in several legal disputes in its ordinary course of business.
+Most of these cases were initiated by the Bank to recover
+non-performing loans, while some were related to disputes
+with clients. As at 31 December 2021, the amount of
+cases pending judgements or arbitrations awards in which
+the Bank and/or its subsidiaries are defendants totaled
+RMB6, 165 million, and the Bank does not expect any
+material adverse effect from the above-mentioned cases on
+the Bank's business, financial position or operating results.
+Significant Events
+34. Due to Customers
+Material Trust, Sub-contract and
+Commitments
+As at 31 December 2021, all of the continuing commitments made by the shareholders were properly fulfilled, and were
+listed as follows:
+Shareholder
+Huijin
+and did not
+do anything in
+violation of the
+commitment.
+SSF strictly
+fulfilled the above
+commitment
+December 2021,
+As at 31
+As at 31
+December 2021,
+Huijin strictly
+fulfilled the above
+commitment
+and did not
+do anything in
+violation of the
+commitment.
+Fulfillment of
+commitment
+According to the Notice of the State
+Council on Issuing the Implementation
+Plan for Transferring Part of State-Owned
+Capital to Fortify Social Security Funds
+(Guo Fa [2017] No. 49), SSF shall perform
+the obligation of more than 3-year lock-
+up period as of the date of the receipt of
+transferred shares.
+Provided that Huijin continues to hold
+any share of the Bank or is deemed as
+the controlling shareholder of the Bank
+or the related party of the controlling
+shareholder of the Bank according to
+the laws or listing rules of China or
+the listing place of the Bank, Huijin
+will not engage in or participate in any
+competitive commercial banking business
+including but not limited to granting
+loans, attracting deposits and providing
+settlement, fund custody, bank card
+and money exchange services. However,
+Huijin can engage in or participate in
+some competitive businesses by investing
+in other commercial banks. In this regard,
+Huijin has committed that it will: (1)
+fairly treat the investments in commercial
+banks and will not make any decision or
+judgment that will have adverse impact
+on the Bank or be beneficial to other
+commercial banks by taking advantage
+of the status of being a shareholder of
+the Bank or information obtained by
+taking advantage of the status of being a
+shareholder of the Bank; and (2) perform
+the shareholders' rights for the maximum
+interests of the Bank.
+Commitment
+Simplified Report of
+Changes in Equity of
+National Council for
+Social Security Fund
+Prospectus of
+Industrial and
+Commercial Bank
+of China Limited
+on Initial Public
+Offering (A Share)
+Prospectus on A
+Share Rights Issue
+of Industrial and
+Commercial Bank
+of China Limited
+commitment is
+made
+Legal document
+under which the
+Taking effect from
+December 2019/
+Above three years
+November 2010/
+No specific term
+Time and term of
+commitment
+October 2006/
+No specific term
+Commitment of
+performing the
+obligation of
+lock-up period
+for A shares
+SSF
+non-competition
+During the reporting period, the Bank was not subject to any case filing investigation for
+suspected crime, nor was any of its controlling shareholders, Directors, Supervisors and Senior Management members
+subject to coercive measures for suspected crime; neither the Bank nor its controlling shareholders, Directors, Supervisors
+and Senior Management members were subject to any criminal penalty or any case filing investigation by CSRC for
+suspected illegality or irregularity or administrative penalty by CSRC or material administrative penalty by other competent
+authority; none of its controlling shareholders, Directors, Supervisors and Senior Management members was held in
+retention by the disciplinary inspection and supervision organ because of suspected serious illegality or irregularity or
+work-related crime, which affected their duty performance; none of its Directors, Supervisors and Senior Management
+members was subject to coercive measures taken by other competent authority for suspected illegality or irregularity, which
+affected their duty performance; neither the Bank nor any of its controlling shareholders, Directors, Supervisors and Senior
+Management members was subject to any administrative or regulatory measures taken by CSRC or disciplinary sanction
+imposed by stock exchanges.
+Data Center
+Type of
+commitment
+Commitment of
+Domestic Subsidiaries
+and their Branches
+211
+Other Assets
+29.
+Consolidated:
+209
+28. Deferred Tax Assets and Liabilities
+AUDITED FINANCIAL STATEMENTS
+208
+27. Property and Equipment
+144
+INDEPENDENT AUDITOR'S REPORT
+Pages
+Pages
+CONTENTS
+Dec
+Nov
+Oct
+Sep
+Aug
+July
+Statement of Profit or Loss
+Statement of Profit or Loss and
+June
+153
+Financial Liabilities Designated as at
+214
+Domestic Branches
+Certificates of Deposit
+33.
+159
+Statement of Cash Flows
+214
+Repurchase Agreements
+32.
+157
+Statement of Changes in Equity
+213
+Institutions
+Statement of Financial Position
+31. Due to Banks and Other Financial
+154
+Other Comprehensive Income
+213
+Fair Value Through Profit or Loss
+30.
+May
+155
+Mar
+Department
+Information
+Management
+Operation
+Department
+Financial Technology
+Corporate Strategy and
+CHROMBRER
+} }
+Finance & Accounting
+Department
+D D D D D D G D
+Overseas Subsidiaries
+and their Institutions
+(367)
+ICBC-AXA
+ICBC Credit Suisse
+Asset Management
+ICBC Leasing
+Grassroots Branches
+(15,508)
+Banking Departments of Tier-one
+Branches and Tier-two Branches (459)
+Apr
+Tier-one Branches
+(including Directly Managed Branches)
+(36)
+Management
+Department
+Corporate
+Culture
+Department
+Party-related
+Affairs
+Department
+Overseas Branches
+and their Institutions
+(54)
+Modern Finance
+Research Institute
+Feb
+8
+9
+11
+12
+Auditor's Report and
+Financial 
+Statements
+Secondary reporting line
+Primary reporting line
+10
+Jan
+ICBC Wealth Management
+ICBC Investment
+141
+Staff Union Working
+Committee
+Retired Staff
+Service and Management
+Department
+Security Department
+Rural Banks
+Inspection Office of
+the Party Committee
+14
+541
+(iv) Other comprehensive income recognised under the equity
+method
+(253)
+442
+(iii) Reserve from cash flow hedging instruments
+8
+1,827
+1,623
+fair value through other comprehensive income
+(ii) Credit losses of debt instruments measured at fair value through
+other comprehensive income
+(v) Foreign currency translation differences
+(b) Items that may be reclassified subsequently to profit or loss:
+(i) Changes in fair value of debt instruments measured at
+1,051
+(3,042)
+(8,172)
+Non-controlling interests
+340,089
+28
+Equity holders of the parent company
+Total comprehensive income for the year attributable to:
+301,846
+342,044
+(12,353)
+Total comprehensive income for the year
+300,536
+Subtotal of other comprehensive income for the year
+1,311
+885
+(vi) Other
+(16,212)
+(15,839)
+(iii) Other
+Consolidated Statement of Profit or Loss and Other Comprehensive Income
+15
+18
+The accompanying notes form part of these consolidated financial statements.
+1,310
+18
+348,338
+315,906
+1,878
+350,216
+1,779
+317,685
+0.95
+0.86
+0.95
+0.86
+Annual Report 2021
+153
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+the equity method
+(ii) Other comprehensive income recognised under
+1,289
+(1,180)
+(i) Changes in fair value of equity instruments designated as at
+fair value through other comprehensive income
+40
+(5)
+317,685
+2020
+2021
+Note
+(a) Items that will not be reclassified to profit or loss:
+Other comprehensive income (after tax, net):
+Profit for the year
+350,216
+342,044
+27
+The accompanying notes form part of these consolidated financial statements.
+6,265,668
+26
+61,782
+41,206
+Property and equipment
+290,296
+286,279
+Deferred tax assets
+28
+79,259
+67,713
+Other assets
+29
+TOTAL ASSETS
+707,862
+35,171,383
+729,258
+33,345,058
+54,974
+39,723
+00 00
+Due to central banks
+31 December 2020
+31 December 2021
+6,830,933
+Notes
+(In RMB millions, unless otherwise stated)
+As at 31 December 2021
+Consolidated Statement of Financial Position
+155
+Annual Report 2021
+The accompanying notes form part of these consolidated financial statements.
+LIABILITIES
+301,846
+― Financial investments measured at amortised cost
+Investments in associates and joint ventures
+1,803,604
+154
+ICBC
+Consolidated Statement of Financial Position
+As at 31 December 2021
+(In RMB millions, unless otherwise stated)
+Notes
+31 December 2021 31 December 2020
+ASSETS
+Cash and balances with central banks
+Due from banks and other financial institutions
+Derivative financial assets
+Reverse repurchase agreements
+Loans and advances to customers
+Financial investments
+Financial investments measured at fair value through
+profit or loss
+21
+22223 2
+Financial investments measured at fair value through
+other comprehensive income
+784,483
+623,223
+18,136,328
+8,591,139
+9,257,760
+24
+1,540,988
+739,288
+76,140
+663,496
+20,109,200
+1,081,897
+3,537,795
+3,098,438
+827,150
+20
+19
+134,155
+317,685
+Annual Report 2021
+(74,441)
+Other information
+The Directors are responsible for the other information. The other information comprises all the information included in the
+annual report, other than the consolidated financial statements and our auditor's report thereon.
+Our opinion on the consolidated financial statements does not cover the other information and we do not express any form
+of assurance conclusion thereon.
+In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and,
+in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or
+our knowledge obtained in the audit or otherwise appears to be materially misstated.
+If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we
+are required to report that fact. We have nothing to report in this regard.
+Responsibilities of the directors for the consolidated financial statements
+The Directors are responsible for the preparation of the consolidated financial statements that give a true and fair view in
+accordance with IFRSS issued by IASB and the disclosure requirements of the Hong Kong Companies Ordinance, and for such
+internal control as the Directors determine is necessary to enable the preparation of consolidated financial statements that
+are free from material misstatement, whether due to fraud or error.
+In preparing the consolidated financial statements, the Directors are responsible for assessing the Group's ability to continue
+as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
+accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative
+but to do so.
+The Directors are assisted by the Audit Committee in discharging their responsibilities for overseeing the Group's financial
+reporting process.
+Auditor's responsibilities for the audit of the consolidated financial statements
+Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free
+from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion solely
+to you, as a body, and for no other purpose. We do not assume responsibility towards or accept liability to any other person
+for the contents of this report.
+Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAS
+will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
+material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
+taken on the basis of these consolidated financial statements.
+As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism
+throughout the audit. We also:
+•
+Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud
+or error, design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient
+and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
+fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
+misrepresentations or the override of internal control.
+151
+Independent Auditor's Report
+ICBC
+152
+30 March 2022
+Certified Public Accountants
+Hong Kong
+Deloitte Touche Tohmatsu
+From the matters communicated with the Audit Committee, we determine those matters that were of most significance in
+the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe
+these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in
+extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse
+consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
+The engagement partner on the audit resulting in this independent auditor's report is Wu Wei Jun, David.
+Independent Auditor's Report
+We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the audit
+and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
+We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements regarding
+independence and communicate with them all relationships and other matters that may reasonably be thought to bear on
+our independence and, where applicable, actions taken to eliminate threats or safeguards applied.
+Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
+disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a
+manner that achieves fair presentation.
+Conclude on the appropriateness of the Directors' use of the going concern basis of accounting and, based on the
+audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
+doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
+required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or,
+if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained
+up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue
+as a going concern.
+Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
+disclosures made by the Directors.
+Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
+appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's
+internal control.
+•
+Auditor's responsibilities for the audit of the consolidated financial statements (continued)
+Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
+within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction,
+supervision and performance of the Group audit. We remain solely responsible for our audit opinion.
+Consolidated Statement of Profit or Loss
+ICBC
+understood, assessed and tested the design and
+operating effectiveness of controls over cyber
+security management mechanism, the operational
+security of key information infrastructure, data and
+customer information management, and system
+operation monitoring and emergency management.
+evaluated the fair value of level 1 financial
+instruments by comparing the fair value with publicly
+available market observable data;
+Financial liabilities designated as at fair value through profit or loss
+.
+Selected samples to perform the following audit
+procedures:
+Understood, assessed and tested the design and operating
+effectiveness of internal controls relating to the valuation
+of financial instruments, independent pricing validation,
+and valuation model validation and approval.
+Our audit procedures in respect of fair value assessment of
+financial instruments included the following:
+How our audit addressed the key audit matter
+Refer to Note 4(7), Note 5, Note 21, Note 22, Note 23,
+Note 24, Note 30, and Note 50 to the consolidated
+financial statements for relevant disclosures.
+We identified fair value assessment of financial instruments
+as a key audit matter because the amount involved is
+significant and the valuation requires significant judgement
+and estimation, and particularly for level 3 financial
+instruments due to the uncertainty arising from the use of
+unobservable input data.
+December 2021, the Group's financial
+assets that were measured at fair value amounted to
+RMB3,198,887 million, representing 9.10% of total
+assets; financial liabilities that were measured at fair value
+amounted to RMB454,645 million, representing 1.43%
+of total liabilities. Level 3 financial assets and liabilities
+with significant unobservable input data amounted to
+RMB153,164 million and RMB1,993 million respectively.
+The valuation of the Group's financial instruments
+measured at fair value is based on readily available market
+data or valuation models. For financial instruments without
+readily available market data such as debt securities,
+equities, over-the-counter derivative contracts and
+structured deposits, fair values are measured based on
+valuation techniques. The selection of valuation techniques
+and significant unobservable input data requires significant
+accounting judgement and estimation by management.
+As at 31
+Fair value of financial instruments
+Key audit matter
+Key audit matters (continued)
+Independent Auditor's Report
+evaluated the appropriateness of the Group's
+valuation techniques, inputs and assumptions for
+level 2 and 3 financial instruments, and compared
+the observable market data with publicly available
+market data;
+assessed and verified the valuation techniques used
+in the valuation of complex financial instruments
+valuation, selected samples to perform independent
+valuation and compared the results with the Group's
+valuation.
+understood, assessed and tested the design and
+operating effectiveness of automated controls
+relevant to significant accounts and assertions or risk
+of material misstatement, and such IT automated
+controls include accuracy of system calculation
+logic and consistency of data transmission, covering
+business in corporate banking, personal banking,
+and financial markets, as well as financial reporting
+process;
+understood, assessed and tested the design and
+operating effectiveness of key internal controls of the
+IT systems relevant to financial reporting;
+•
+Our audit procedures in respect of IT systems and controls
+over financial reporting included the following:
+How our audit addressed the key audit matter
+With the rapid increase in the volume of on-line
+transactions of the Group, as well as the continuous
+development and application of new technologies and
+open banking that increased third party network access,
+the Group faces increasing challenges on cyber security
+and data protection that warrant close monitoring of their
+potential impact on financial reporting related IT systems.
+We identified IT systems and controls over financial
+reporting as a key audit matter because the Group's
+financial accounting and reporting systems are highly
+reliant on complex IT systems and control processes,
+and the IT systems are required to serve the Group's
+global customer base, handle large volumes of frequent
+transactions, and continue to develop in response to
+changing business needs.
+150
+To ensure the accuracy of financial reports, IT over
+financial reporting and its related general controls and
+automated controls are required to be designed and
+operated effectively. The related general controls include
+IT governance, controls over program development and
+changes, access to programs and data and IT operations.
+Automated controls include system calculations and data
+logic relating to significant accounts, as well as interfaces
+between business management systems and accounting
+systems.
+IT systems and controls over financial reporting
+Key audit matter
+Key audit matters (continued)
+Independent Auditor's Report
+149
+Annual Report 2021
+As a large banking group, the Group's IT systems are
+complex.
+350,216
+For the year ended 31 December 2021
+Interest income
+148,727
+146,668
+(15,703)
+(15,453)
+7
+133,024
+131,215
+819
+8,955
+2,222
+16,440
+11,829
+10
+11,781
+8,044
+860,880
+800,075
+(74,683)
+15
+392,126
+424,899
+1,304
+2,869
+77
+390,822
+(202,668)
+(202,623)
+14
+(206,585)
+(236,227)
+11
+422,030
+(In RMB millions, unless otherwise stated)
+646,765
+6
+Interest expense
+NET INTEREST INCOME
+Fee and commission income
+Fee and commission expense
+NET FEE AND COMMISSION INCOME
+Net trading income
+Net gains on financial investments
+Other operating income, net
+OPERATING INCOME
+Operating expenses
+Impairment losses on assets
+OPERATING PROFIT
+Share of results of associates and joint ventures
+PROFIT BEFORE TAXATION
+Income tax expense
+PROFIT FOR THE YEAR
+Profit for the year attributable to:
+(445,756)
+(471,538)
+1,092,521
+1,162,218
+66
+2020
+690,680
+2021
+Diluted (RMB yuan)
+Basic (RMB yuan)
+EARNINGS PER SHARE
+PROFIT FOR THE YEAR
+Non-controlling interests
+Equity holders of the parent company
+Notes
+30
+1,955
+87,938
+Annual Report 2021
+157
+Consolidated Statement of Changes in Equity
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Attributable to equity holders of the parent company
+Reserves
+Foreign
+Share
+Balance as at 1 January 2020
+Other
+equity Capital
+capital instruments
+356,407 206,132 149,139 292,291
+Surplus
+reserve
+reserve
+reserve
+Investment currency
+General revaluation translation
+reserve
+reserve
+305,019 23,280 (18,568)
+Profit for the year
+Other comprehensive income
+(672)
+Total comprehensive income
+(672)
+៩៩
+(15,753)
+The accompanying notes form part of these consolidated financial statements.
+(15,753)
+Includes the appropriation made by overseas branches and subsidiaries in the amounts of RMB47 million and RMB1,746
+million, respectively.
+(ii)
+99,251
+34,258
+(34,258)
+99,251
+(99,251)
+139,730
+other equity instrument holders
+Capital reduction by
+other equity instrument holders
+(11,218)
+63
+Dividends to non-controlling shareholders
+Other comprehensive income
+transferred to retained earnings
+334
+334
+(334)
+Balance as at 31 December 2021
+356,407 354,331 148,703 357,169 438,952 24,628 (39,999) (4,243) 1,165
+926,375 1,620,642 3,257,755 17,503 3,275,258
+139,730
+139,730
+63
+(11,155)
+(11,155)
+(465) (465)
+Includes the appropriation made by overseas branches and subsidiaries in the amounts of RMB56 million and RMB1,764
+million, respectively.
+(272) 1,327 (15,370)
+(272) 1,327 (15,370)
+Cash flow
+hedging Other
+Retained
+reserve reserves Subtotal earnings Total interests equity
+(4,453) (1,597) 745,111 1,368,536 2,676,186 15,817 2,692,003
+315,906 315,906 1,779 317,685
+(15,370) (469) (15,839)
+315,906 300,536 1,310
+301,846
+Non-
+(337)
+Other comprehensive income transferred
+to retained earnings
+Other
+(865)
+(221)
+(10) 6,439
+(221)
+218
+(3)
+3
+(34) 5,530 (5,432)
+98
+Balance as at 31 December 2020
+356,407
+225,819 148,640 322,911 339,701 22,377 (27,882) (4,725)
+(304) 800,718 1,510,558 2,893,502
+16,013 2,909,515
+(i)
+Includes the appropriation made by overseas branches and subsidiaries in the amounts of RMB101 million and RMB935
+million, respectively.
+(ii)
+Includes the appropriation made by overseas branches and subsidiaries in the amounts of RMB11 million and RMB1,435
+million, respectively.
+The accompanying notes form part of these consolidated financial statements.
+158
+ICBC
+87,180
+(337)
+Dividends to non-controlling shareholders
+(1,279)
+(780)
+controlling
+Total
+Dividends ordinary shares 2019 final
+(note 17)
+(93,664) (93,664)
+(93,664)
+Distributions to other equity instrument
+holders (note 17)
+(8,839) (8,839)
+(8,839)
+Appropriation to surplus reserve (i)
+Appropriation to general reserve (ii)
+31,485
+34,258
+34,682
+(31,485)
+34,682
+(34,682)
+Capital injection by other equity
+instrument holders
+19,687
+19,687
+19,687
+Change in shareholding in subsidiaries
+(499)
+(499)
+(499)
+31,485
+Capital injection by
+98
+Appropriation to surplus reserve (i)
+36
+789,355
+712,770
+31,896,125
+30,435,543
+Debt securities issued
+Other liabilities
+TOTAL LIABILITIES
+EQUITY
+Equity attributable to equity holders of the parent company
+Share capital
+37
+356,407
+356,407
+Other equity instruments
+38
+354,331
+225,819
+Reserves
+39
+926,375
+800,718
+Retained earnings
+1,620,642
+1,510,558
+798,127
+3,257,755
+791,375
+2,881
+Appropriation to general reserve (ii)
+Derivative financial liabilities
+21
+71,337
+140,973
+Due to banks and other financial institutions
+31
+2,921,029
+Repurchase agreements
+32
+365,943
+293,434
+Certificates of deposit
+33
+290,342
+335,676
+Due to customers
+Income tax payable
+Deferred tax liabilities
+34
+26,441,774
+25,134,726
+28
+92,443
+5,624
+89,785
+35
+2,893,502
+2,784,259
+TOTAL EQUITY
+Balance as at 1 January 2021
+356,407 225,819 148,640 322,911
+reserve
+339,701
+General revaluation translation
+reserve reserve
+22,377
+Profit for the year
+Other comprehensive income
+1,917
+(12,117)
+Total comprehensive income
+1,917
+(12,117)
+482
+482
+hedging Other
+controlling
+reserve reserves Subtotal earnings Total interests equity
+(27,882) (4,725) (304) 800,718 1,510,558 2,893,502 16,013 2,909,515
+348,338 348,338 1,878 350,216
+1,469 (8,249)
+(8,249)
+1,469 (8,249) 348,338 340,089
+Retained
+Total
+77 (8,172)
+1,955 342,044
+Dividends ordinary shares 2020 final
+(note 17)
+(94,804)
+Distributions to other equity instrument
+holders (note 17)
+Non-controlling interests
+(9,607) (9,607)
+(9,607)
+reserve
+reserve
+(94,804) (94,804)
+Capital Surplus
+capital instruments
+17,503
+3,275,258
+2,909,515
+33,345,058
+Chen Siqing
+Chairman
+Liao Lin
+Vice Chairman
+and President
+The accompanying notes form part of these consolidated financial statements.
+156
+ICBC
+TOTAL EQUITY AND LIABILITIES
+35,171,383
+Liu Yagan
+Non-
+Investment currency Cash flow
+Other
+Share equity
+Foreign
+Reserves
+Attributable to equity holders of the parent company
+16,013
+(i)
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Consolidated Statement of Changes in Equity
+Finance and Accounting Department
+General Manager of
+13,008
+(3,344,684)
+8,539
+(3,191,273)
+2,423,298
+1,845,743
+(21,207)
+(11,690)
+206
+282,407
+(674,556)
+139,793
+Cash payment for redemption of other equity instruments
+19,716
+835,441
+(11,155)
+(26,320)
+(25,137)
+Repayment of debt securities
+(836,623)
+(38,005)
+(858,858)
+627
+250,962
+(1,135,097)
+927,759
+(other than repossessed assets)
+Interest paid on debt securities
+1,557,616
+The accompanying notes form part of these consolidated financial statements.
+Annual Report 2021
+Acquisition of non-controlling interests
+159
+Consolidated Statement of Cash Flows
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Note
+2021
+2020
+CASH FLOWS FROM INVESTING ACTIVITIES
+Purchases of property and equipment and other assets
+Proceeds from disposal of property and equipment and other assets
+Purchases of financial investments
+Proceeds from sale and redemption of financial investments
+Investments in associates and joint ventures
+Proceeds from disposal of associates and joint ventures
+Investment returns received
+Net cash flows from investing activities
+CASH FLOWS FROM FINANCING ACTIVITIES
+Proceeds from issuance of other equity instruments
+Proceeds from issuance of debt securities
+(27,584)
+(1,279)
+41
+(94,804)
+Interest paid
+939,737
+902,804
+(351,322)
+(393,080)
+The accompanying notes form part of these consolidated financial statements.
+160
+ICBC
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+NET CASH FLOWS FROM OPERATING ACTIVITIES INCLUDE:
+Interest received
+(In RMB millions, unless otherwise stated)
+Industrial and Commercial Bank of China Limited (the "Bank"), which was previously known as Industrial and Commercial
+Bank of China ("ICBC"), used to be a wholly-state-owned commercial bank established on 1 January 1984 based on
+the authorisation of the State Council and the People's Bank of China (the "PBOC") of the People's Republic of China
+(the "PRC"). On 28 October 2005, with the approval of the State Council, ICBC was restructured and incorporated as
+a joint-stock limited company. The joint-stock limited company undertook all the assets and liabilities of ICBC upon the
+restructuring. On 27 October 2006, the Bank was listed on both Shanghai Stock Exchange and The Stock Exchange of Hong
+Kong Limited.
+The Bank obtained authorisation to carry out banking business with an institution code of No. B0001H111000001 from the
+China Banking and Insurance Regulatory Commission (the "CBIRC") of the PRC. The Bank obtained its business license with
+unified social credit code 91100000100003962T from the State Administration for Industry and Commerce of the PRC. The
+legal representative is Mr. Chen Siqing and the registered office is located at No. 55 Fuxingmennei Avenue, Xicheng District,
+Beijing, the PRC.
+The Bank's stock codes of A Shares and H Shares listed on Shanghai Stock Exchange and The Stock Exchange of Hong Kong
+Limited are 601398 and 1398, respectively. The Bank's offshore preference shares are listed on The Stock Exchange of Hong
+Kong Limited and the stock code is 4620. The Bank's domestic preference shares are listed on Shanghai Stock Exchange and
+the stock codes are 360011 and 360036.
+The principal activities of the Bank and its subsidiaries (collectively referred to as the "Group") comprise corporate and
+personal financial services, treasury operations, investment banking, asset management, trust, financial leasing, insurance
+and other financial services. Domestic establishments refer to the Head Office of the Bank, branches and subsidiaries
+established in Chinese mainland. Overseas establishments refer to branches and subsidiaries established in jurisdictions
+outside Chinese mainland.
+2. BASIS OF PREPARATION
+(1) Statement of compliance
+The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards
+("IFRSS") promulgated by the International Accounting Standards Board (the "IASB"), and the disclosure requirements of the
+Hong Kong Companies Ordinance and the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong
+Limited.
+(84,552)
+(2) Basis of preparation of the financial statements
+The consolidated financial statements have been prepared under the historical cost convention, except for certain financial
+instruments, and certain non-financial assets measured at fair value, as further explained in the respective accounting policies
+below.
+1. CORPORATE INFORMATION
+Dividends paid on ordinary shares
+1,791,122
+CASH AND CASH EQUIVALENTS AT END OF THE YEAR
+(93,664)
+Dividends or interest paid to other equity instrument holders
+(9,607)
+(8,839)
+Dividends paid to non-controlling shareholders
+(465)
+(337)
+Cash payment for other financing activities
+(7,813)
+(6,310)
+1,436,757
+Net cash flows from financing activities
+(46,949)
+NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS
+(325,227)
+375,570
+Cash and cash equivalents at beginning of the year
+1,791,122
+1,450,413
+Effect of exchange rate changes on cash and cash equivalents
+(29,138)
+(34,861)
+(11,553)
+(82,654)
+360,882
+(2,077)
+Income tax paid
+(1,304)
+28,194
+27,046
+11
+3,125
+2,607
+14
+202,623
+202,668
+(22,300)
+(2,869)
+(12,642)
+25,549
+(1,964)
+(1,710)
+(18,349)
+(9,814)
+(262,827)
+(245,294)
+(14,473)
+(12,797)
+(1,238)
+27,673
+9
+Dividend income
+Net gains on disposal and stocktake of property and equipment and
+Consolidated Statement of Cash Flows
+The preparation of financial statements in conformity with IFRSS requires management to make judgements, estimates and
+assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses.
+Actual results may differ from these estimates. Judgements made by management in the application of IFRSS that have
+significant effect on the financial statements and major sources of estimation uncertainty are disclosed in Note 5.
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Notes
+2021
+2020
+CASH FLOWS FROM OPERATING ACTIVITIES
+Profit before taxation
+424,899
+other assets (other than repossessed assets)
+392,126
+Share of results of associates and joint ventures
+Depreciation
+Amortisation
+Impairment losses on assets
+Unrealised gains on foreign exchange
+Interest expense on debt securities issued
+Accreted interest on impaired loans
+Net gains on financial investments
+Interest income on financial investments
+Net gains on changes in fair value
+Adjustments for:
+(3,388)
+(2,355)
+358,267
+(15,161)
+53,959
+Due to banks and other financial institutions
+158,557
+563,361
+Repurchase agreements
+77,427
+30,155
+Certificates of deposit
+(37,420)
+Due to central banks
+269
+Other liabilities
+1,261,998
+2,219,487
+311,773
+82,547
+1,756,321
+2,942,248
+Net cash flows from operating activities before tax
+443,536
+1,642,168
+Due to customers
+(7,530)
+(853)
+Financial liabilities designated as at fair value through profit or loss
+362,842
+Net decrease/(increase) in operating assets:
+Due from central banks
+155,880
+75,762
+Due from banks and other financial institutions
+157,890
+(16,064)
+Financial assets measured at fair value through profit or loss
+143,496
+284,342
+Reverse repurchase agreements
+99,863
+123,955
+Loans and advances to customers
+(2,184,611)
+(2,079,400)
+Other assets
+(43,570)
+(51,517)
+(1,671,052)
+(1,662,922)
+Net (decrease)/increase in operating liabilities:
+Net cash flows from operating activities
+Annual Report 2021
+Effective for annual periods beginning on or after 1 January 2023.
+Notes to the Consolidated Financial Statements
+(iii)
+is a member of the key management personnel of the Group or of a parent of the Group;
+the party is an entity where any of the following conditions applies:
+the entity and the Group are members of the same group;
+(ii)
+one entity is an associate or joint venture of the other entity (or of a parent, subsidiary or fellow subsidiary of the
+other entity);
+(iii)
+(b)
+the entity and the Group are joint ventures of the same third party;
+(v)
+the entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity
+related to the Group;
+(vi) the entity is controlled or jointly controlled by a person identified in (a);
+(vii) a person identified in (a)(i) has significant influence over the entity or is a member of the key management
+personnel of the entity (or of a parent of the entity); or
+(viii) the entity, or any member of a Group of which it is a part, provides key management personnel services to the
+Group or to the Group's parent.
+166
+ICBC
+(iv) one entity is a joint venture of a third entity and the other entity is an associate of the third entity;
+or
+has significant influence over the Group; or
+(ii)
+If the business combination is achieved in stages, the acquirer's previously-held equity interest in the acquiree is re-measured
+to the acquisition date fair value through profit or loss.
+Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. Subsequent
+changes to the fair value of the contingent consideration that is classified as a financial asset or financial liability, is
+recognised in profit or loss. If the contingent consideration is classified as equity, it shall not be re-measured, and its
+subsequent settlement is accounted for within equity.
+Annual Report 2021
+165
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred, the amount
+recognised for non-controlling interests and the fair value of the acquirer's previously-held equity interest in the acquiree
+over the net of the acquisition-date amounts of the identifiable assets and liabilities acquired. If the sum of this consideration
+and other items is lower than the fair value of the net assets of the subsidiary acquired, the difference is, after reassessment,
+recognised in profit or loss as gains on bargain purchase.
+After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is tested for
+impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be
+impaired. The Group performs its annual impairment test of goodwill at year end date. For the purpose of impairment
+testing, goodwill arising in a business combination is, from the acquisition date, allocated to each of the Group's cash-
+generating units ("CGU"), or group of CGUS, that are expected to benefit from the synergies of the combination,
+irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units.
+Impairment is determined by assessing the recoverable amount of the CGU or group of CGUS to which the goodwill relates.
+Where the recoverable amount of the CGU or group of CGUS is less than the carrying amount, an impairment loss is
+recognised. An impairment loss recognised for goodwill is not reversed in subsequent period.
+Where goodwill forms part of a CGU or group of CGUs and part of the operation within that unit is disposed of, the
+goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining
+the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative
+values of the operation disposed of and the portion of the CGU or group of CGUS retained.
+(6) Related parties
+A party is considered to be related to the Group if:
+(a)
+the party is a person or a close member of that person's family and that person:
+(i)
+has control or joint control over the Group;
+Notes to the Consolidated Financial Statements
+When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and
+designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition
+date. This includes the separation of embedded derivatives from host contracts of the acquiree.
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
+instrument of another entity.
+Financial assets measured at FVTPL
+These financial assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend
+income, are recognised in profit or loss unless the financial assets are part of a hedging relationship.
+Financial assets measured at amortised cost
+These assets are subsequently measured at amortised cost using the effective interest method. A gain or loss on a financial
+asset that is measured at amortised cost and is not part of a hedging relationship shall be recognised in profit or loss when
+the financial asset is derecognised, through the amortisation process or in order to recognise impairment gain or loss.
+Debt instruments measured at FVTOCI
+These assets are subsequently measured at fair value. Interest income calculated using the effective interest method,
+impairment and foreign exchange gains and losses are recognised in profit or loss. Other net gains and losses are recognised
+in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are
+reclassified to profit or loss.
+Equity instruments measured at FVTOCI
+Subsequent measurement of financial assets
+These assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss. Other net
+gains and losses are recognised in other comprehensive income. On derecognition, gains and losses accumulated in other
+comprehensive income are reclassified to retained earnings.
+Financial liabilities are classified as measured at FVTPL and other financial liabilities.
+Financial liabilities measured at FVTPL
+161
+ICBC
+168
+Financial liabilities measured at FVTPL are subsequently measured at fair value and net gains and losses (including any
+interest expense) are recognised in profit or loss, unless the financial liabilities are part of a hedging relationship.
+A financial liability is classified as measured at FVTPL if it is classified as held-for-trading (including derivative financial liability)
+or it is designated as such on initial recognition.
+(iii) Classification and subsequent measurement of financial liabilities
+The business model refers to how the Group manages its financial assets in order to generate cash flows. That is, the
+Group's business model determines whether cash flows will result from collecting contractual cash flows, selling financial
+assets or both. The Group determines the business model for managing the financial assets according to the facts and based
+on the specific business objective for managing the financial assets determined by the Group's key management personnel.
+In assessing whether the contractual cash flows are solely payments of principal and interest on the principal amount
+outstanding, the Group considers the contractual terms of the instrument. For the purposes of this assessment, principal is
+defined as the fair value of the financial asset on initial recognition. Interest is defined as consideration for the time value
+of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for
+other basic lending risks and costs, as well as a profit margin. The Group also assesses whether the financial asset contains
+a contractual term that could change the timing or amount of contractual cash flows such that it would not meet the above
+contractual cash flows characteristics.
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2021
+(i) Initial recognition and measurement of financial instruments
+At initial recognition, financial assets and financial liabilities are measured at fair value. For financial assets and financial
+liabilities measured at fair value through profit or loss ("FVTPL"), any related directly attributable transaction costs are
+charged to profit or loss; for other categories of financial assets and financial liabilities, any related directly attributable
+transaction costs are included in their initial recognised value.
+Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
+market participants at the measurement date.
+When measuring fair value, the Group shall take into account the characteristics of the asset or liability if market participants
+would take those characteristics into account when pricing the asset or liability at the measurement date (including the
+condition of the asset; and restrictions, if any, on the sale or use of the asset), and use valuation techniques that are
+appropriate in the circumstances and for which sufficient data and other information are available to measure fair value. The
+adopted valuation techniques mainly include market approach, income approach and cost approach.
+Classification of financial assets
+The classification of financial assets is generally based on the business model in which a financial asset is managed and its
+contractual cash flow characteristics. On initial recognition, a financial asset is classified as measured at amortised cost, at
+fair value through other comprehensive income ("FVTOCI"), or at FVTPL.
+Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for
+managing financial assets in which case all affected financial assets are reclassified on the first day of the first reporting
+period following the change in the business model.
+A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:
+it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
+its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the
+principal amount outstanding.
+A financial asset is measured at FVTOCI if it meets both of the following conditions and is not designated as at FVTPL:
+-
+it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling
+financial assets; and
+its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the
+principal amount outstanding.
+On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present
+subsequent changes in the investment's fair value in other comprehensive income. This election is made on an investment-
+by-investment basis, and the investment should meet the definition of an equity instrument from perspective of the issuer.
+All financial assets not classified as measured at amortised cost or FVTOCI as described above are measured at FVTPL. On
+initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be
+measured at amortised cost or at FVTOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch
+that would otherwise arise.
+Annual Report 2021
+167
+Notes to the Consolidated Financial Statements
+(7) Financial instruments
+Business combinations are accounted for by applying the acquisition method. The Group can elect to apply an optional
+concentration test, on a transaction-by-transaction basis, that permits a simplified assessment of whether the acquired set
+of assets is not a business. If the concentration test is met, the set of assets is determined not to be a business; otherwise,
+the Group shall then perform an assessment in accordance with the requirements of business. The consideration transferred
+is measured at acquisition date fair value which is the sum of the acquisition date fair values of assets transferred by the
+Group, liabilities assumed by the Group to the former owners of the acquiree and the equity interests issued by the Group in
+exchange for control of the acquiree. Any costs directly attributable to the combination are recognised in profit or loss when
+incurred.
+(ii) Classification and subsequent measurement of financial assets
+In the Bank's statement of financial position, investments in associates and joint ventures are stated at cost less impairment
+losses.
+(2) Issued but not yet effective IFRSS and amendments to IFRSS
+The Group has not applied the following new and revised IFRSS that have been issued but are not yet effective.
+IFRS 17: Insurance Contracts and the related Amendments
+2
+Amendments to IFRS 3: Reference to the Conceptual Framework'
+Amendments to IFRS 10 and IAS 28: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture³
+Amendments to IAS 1: Classification of Liabilities as Current or Non-current²
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Amendments to IAS 1 and IFRS Practice Statement 2: Disclosure of Accounting Policies²
+Amendments to IAS 12: Deferred Tax related to Assets and Liabilities arising from a Single Transaction²
+Amendments to IAS 16: Property, Plant and Equipment: Proceeds before Intended Use¹
+Amendments to IAS 37: Onerous Contracts
+Cost of Fulfilling a Contract¹
+Amendments to IFRSS: Annual Improvements to IFRSS 2018-2020¹
+1
+Effective for annual periods beginning on or after 1 January 2022.
+Amendments to IAS 8: Definition of Accounting Estimates²
+Notes to the Consolidated Financial Statements
+ICBC
+The Group has early adopted amendments to IFRS 16 COVID 19 Related Rent Concession Beyond 30 June 2021. The
+amendment has no significant financial and operational impacts to the Group.
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+3.
+APPLICATION OF THE NEW AND AMENDMENTS TO IFRSS
+(1) Mandatory amendments to IFRSS effective for the current year
+(5) Business combination and goodwill
+In the current year, the Group has applied, for the first time, the following amendments to IFRSS issued by the IASB which
+are mandatorily effective for the annual periods beginning on or after 1 January 2021 for the preparation of the Group's
+consolidated financial statements:
+Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16: Interest Rate Benchmark Reform (Phase 2)
+Changes in the basis for determining the contractual cash flows as a result of interest rate
+benchmark reform
+For changes in the basis for determining the contractual cash flows of a financial asset or financial liability as a result of
+interest rate benchmark reform, the Group applies the practical expedient to account for these changes by updating the
+effective interest rate. Such change in effective interest rate normally has no significant effect on the carrying amount of the
+relevant financial asset or financial liability.
+A change in the basis for determining the contractual cash flows is required by interest rate benchmark reform if and only if,
+both these conditions are met:
+the change is necessary as a direct consequence of interest rate benchmark reform; and
+the new basis for determining the contractual cash flows is economically equivalent to the previous basis.
+For other changes made to a financial asset or financial liability in addition to changes to the basis for determining the
+contractual cash flows required by interest rate benchmark reform, the Group first applies the practical expedient to
+the changes required by interest rate benchmark reform by updating the effective interest rate. The Group then applies
+the applicable requirements in IFRS 9 Financial Instruments on modification of a financial asset or a financial liability for
+additional changes to which the practical expedient does not apply.
+Transition and summary of effects
+The Group's business impacted by interest rate benchmark reform are mainly those linked with London Interbank Offered
+Rate, consisting of loans, debt investments and derivatives. The Group considered the application of this amendment had no
+material impact on the Group's financial positions and performance for the current period.
+_
+2
+3
+162
+Further information about those changes that are expected to affect the Group:
+As at the end of the reporting period, the assets and liabilities of foreign operations are translated into the presentation
+currency of the Bank at the exchange rates ruling at the end of the reporting period. For overseas business not operating in a
+hyperinflationary economy, all items within equity except for retained earnings are translated at the exchange rates ruling at
+the dates of the initial transactions. Income and expenses in the statement of profit or loss are translated using the exchange
+rates at the date of the transactions or deemed exchange rates. The exchange differences arising on the above translation
+are taken to other comprehensive income. On disposal of a foreign operation, the deferred cumulative amount recognised
+in other comprehensive income relating to that particular foreign operation is recognised in profit or loss. The effect of
+exchange rate changes on cash and cash equivalents is presented separately in the statement of cash flows.
+(2) Subsidiaries
+Subsidiaries are entities (including structured entities) controlled by the Group. The Group controls an entity if it is exposed,
+or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its
+power over the entity. The Group reassesses whether it has control if there are changes to one or more of the elements of
+control. This includes circumstances in which protective rights held (e.g. those resulting from a lending relationship) become
+substantive and lead to the Group having power over an entity.
+A structured entity is an entity that has been designed so that voting or similar rights are not the dominant factor in deciding
+who controls the entity, and the relevant activities are directed by means of contractual or other arrangements.
+An investment in a subsidiary is consolidated into the consolidated financial statements from the date that control
+commences until the date that control ceases. Intra-group balances, transactions and any unrealised profit or loss arising
+from intra-group transactions are eliminated in full in preparing the consolidated financial statements.
+164
+ICBC
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(3) Non-controlling interests
+If an investment in an associate becomes an investment in a joint venture, the retained interest is not re-measured. Instead,
+the investment continues to be accounted under the equity method, and vice versa.
+Under the equity method, an investment in an associate or joint venture is carried in the consolidated statement of financial
+position at cost plus post-acquisition changes in the Group's share of the net assets of the associate or joint venture, less any
+impairment losses. The consolidated statement of profit or loss reflects the share of the results of operations of the associate
+or joint venture. Unrealised profits and losses resulting from transactions between the Group and the associates or joint
+ventures are eliminated to the extent of the Group's interests in the associates or joint ventures.
+An associate is an entity in which the Group has significant influence. A joint venture is an arrangement whereby the
+Group and other parties contractually agree to share control of the arrangement, and have rights to the net assets of the
+arrangement. Other than those measured at fair value through profit or loss, the Group's investments in associates or joint
+ventures are accounted for using the equity method.
+(4) Associates and joint ventures
+Effective for annual periods beginning on or after a date to be determined.
+Non-controlling interests represent the equity in a subsidiary not attributable directly or indirectly to a parent.
+Non-controlling interests are presented in the consolidated statement of financial position within equity, separately from
+equity attributable to the equity holders of the Bank. Non-controlling interests in the results of the Group are presented
+on the face of the consolidated statement of profit or loss and the consolidated statement of profit or loss and other
+comprehensive income as an allocation of the total profit or loss and total comprehensive income for the year between non-
+controlling interests and the equity holders of the Bank.
+Changes in the Group's interests in a subsidiary that do not result in a loss of control are accounted for as equity
+transactions, whereby adjustments are made to the amounts of controlling and non-controlling interests within consolidated
+statement of equity to reflect the change in relative interests, but no adjustments are made to goodwill and no gain or loss
+is recognised.
+Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rates as
+at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated
+using the exchange rates as at the date when the fair value is determined. Any goodwill arising on the acquisition of a
+foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition
+are treated as foreign assets and liabilities of the foreign operation and translated at the deemed rates at the end of the
+reporting period. The exchange differences are recognised in profit or loss or in other comprehensive income, depending on
+the nature of non-monetary items.
+Foreign currency transactions are initially recorded in the functional currency using the exchange rates at the dates of the
+transactions or deemed exchange rates. Monetary assets and liabilities denominated in foreign currencies are retranslated
+into the functional currency at the applicable exchange rates ruling at the end of the reporting period. Exchange differences
+arising on the settlement of monetary items or on translating monetary items at period end rates are recognised in profit or
+loss, with the exception that they are taken directly to other comprehensive income when the monetary items are designated
+as part of the hedge of the Bank's net investment in a foreign entity, and the aggregate exchange differences are not
+recognised in profit or loss until the disposal of such net investment.
+In the Bank's statement of financial position, investments in subsidiaries are stated at cost less impairment losses.
+The functional currency of the Group's domestic establishments is Renminbi ("RMB"). The overseas establishments
+determine their own functional currencies which best represent the economic environment they operate in. These financial
+statements are presented in RMB millions except when otherwise indicated.
+The IASB issued the amendments to IFRS 17 in 2020 to provide response to the stakeholders and are designed to:
+Foreign currency translation
+reduce costs by simplifying certain requirements in the IFRS 17;
+make financial performance easier to explain; and
+ease transition by deferring the effective date of IFRS 17 to 2023 and by providing additional relief to reduce the effort
+required when applying IFRS 17 for the first time.
+IFRS 17 Insurance Contracts and the related amendments
+Other new and revised IFRSS that have been issued but are not yet effective are expected to have no material impact on the
+financial position and financial performance of the Group.
+Annual Report 2021
+163
+The Group is currently assessing the impact of the standard and its amendments on the Group's financial position and
+financial performance.
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+4.
+SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
+(1) Functional currency and foreign currency translation
+Functional currency
+Notes to the Consolidated Financial Statements
+IFRS 17 is issued to resolve the comparability issues created by IFRS 4 Insurance Contracts by setting out a single principle-
+based standard for the recognition, measurement, presentation and disclosure of insurance contracts in the financial
+statements of the issuers of those contracts.
+there is a change in the amounts expected to be payable under a residual value guarantee;
+175
+there is a change in future lease payments resulting from a change in an index or a rate used to determine those
+payments;
+there is a change in the assessment of whether the Group will exercise a purchase, extension or termination option, or
+there is a change in the exercise of the extension or termination option.
+When the lease liability is re-measured, a corresponding adjustment is made to the carrying amount of the right-of-use asset,
+or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
+Under the following circumstances after the commencement date, the Group re-measures lease liabilities based on the
+present value of revised lease payments:
+The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of
+12 months or less and leases of low-value assets. The Group recognises the lease payments associated with these leases in
+profit or loss or as the cost of the assets where appropriate using the straight-line method over the lease term.
+Annual Report 2021
+Lease receipts from operating leases is recognised as income using the straight-line method over the lease term. The initial
+direct costs incurred in respect of the operating lease are initially capitalised and subsequently amortised in profit or loss over
+the lease term on the same basis as the lease income. Variable lease payments not included in lease receipts are recognised
+as income as they are earned.
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(ii) As a lessor
+The Group determines at lease inception whether each lease is a finance lease or an operating lease. A lease is classified as
+a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset irrespective
+of whether the legal title to the asset is eventually transferred. An operating lease is a lease other than a finance lease.
+When the Group is a sub-lessor, it assesses the lease classification of a sub-lease with reference to the right-of-use asset
+arising from the head lease, not with reference to the underlying asset. If the head lease is a short-term lease to which the
+Group applies practical expedient described above, then it classifies the sub-lease as an operating lease.
+Under a finance lease, at the commencement date, the Group recognises the finance lease receivable and derecognises the
+finance lease asset. The finance lease receivable is initially measured at an amount equal to the net investment in the lease.
+The net investment in the lease is measured at the aggregate of the unguaranteed residual value and the present value of
+the lease receivable that are not received at the commencement date, discounted using the interest rate implicit in the lease.
+The Group recognises finance income over the lease term, based on a pattern reflecting a constant periodic rate of return.
+The impairment and derecognition of the finance lease receivable are recognised in accordance with the accounting policy
+in Note 4(10) and 4(12). Variable lease payments not included in the measurement of net investment in the lease are
+recognised as income as they are earned.
+(18) Fiduciary activities
+(17) Financial guarantee contracts
+A constant periodic rate is used to calculate the interest on the lease liability in each period during the lease term with a
+corresponding charge to profit or loss or included in the cost of assets where appropriate. Variable lease payments not
+included in the measurement of the lease liability are charged to profit or loss or included in the cost of assets where
+appropriate as incurred.
+The Group issues financial guarantee contracts, including letters of credit, letters of guarantee and acceptance. These
+financial guarantee contracts provide for specified payments to be made to reimburse the holders for the losses they incur
+when a guaranteed party defaults under the original or modified terms of a debt instrument, loan or any other obligation.
+The Group initially measures all financial contracts at fair value, in other liabilities, being the premium received. This
+amount is recognised ratably over the period of the contract as fee and commission income. Subsequently, the liabilities are
+measured at the higher of the amount of the loss allowance determined in accordance with impairment policies of financial
+instruments and the amount initially recognised less the cumulative amount of income. Any increase in the liability relating
+to a financial guarantee is taken to the statement of profit or loss.
+Notes to the Consolidated Financial Statements
+The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement
+date. In calculating the present value of lease payments, the Group uses the incremental borrowing rate if the interest rate
+implicit in the lease is not readily determinable. Each institution of the Group uses an interest rate that a lessee would have
+to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to
+the right-of-use asset in a similar economic environment as the incremental borrowing rate.
+When measuring insurance contract liabilities, the Group classifies insurance contracts whose insurance risks are of similar
+nature as a measurement unit. Insurance contract liabilities are measured based on a reasonably estimated amount of
+payment that the Group is obliged to pay to fulfill relevant obligations under the insurance contract. At the end of each
+reporting period, the adequacy of liability is tested. If the insurance contract liabilities re-calculated with the insurance
+actuarial method exceed their carrying amounts on the date of the liability adequacy test, an additional provision shall be
+Imade for the respective insurance contract liabilities based on the difference. Otherwise, no adjustment is made to the
+respective insurance contract liabilities.
+The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is
+initially measured at cost, which comprises the initial amount of the lease liability, any lease payments made at or before
+the commencement date (less any lease incentives received), any initial direct costs incurred and an estimate of costs to
+dismantle and remove the underlying asset or to restore the site on which it is located or restore the underlying asset to the
+condition required by the terms and conditions of the lease.
+where the insurance risk and other risks cannot be distinguished from each other, or can be distinguished but cannot
+be separately measured, an umbrella contract applies and a significant insurance risk test shall be performed based on
+it. If the insurance risk is significant, the contract is accounted for as an insurance contract; otherwise, it is accounted
+for as a non-insurance contract.
+When the Group acts in a fiduciary capacity such as custodian or agent, assets arising thereon together with related
+undertakings to return such assets to customers are excluded from the statement of financial position.
+Insurance income recognition
+Insurance premium income is recognised when:
+(i)
+the insurance contract is issued, and related insurance risk is taken on by the Group;
+(ii)
+the related economic benefits are likely to flow to the Group; and
+(iii) related income can be reliably measured.
+Insurance contract liabilities
+(16) Leases
+A lease is when the lessor conveys the right to control the use of an asset for a period of time in exchange for the
+consideration of the lessee.
+At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease
+if the contract conveys the right to control the use of one or more identified assets for a period of time in exchange for
+consideration.
+To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether:
+the contract involves the use of an identified asset. An identified asset may be specified explicitly or implicitly in a
+contract and should be physically distinct, or a capacity portion or other portion of an asset that is not physically
+distinct but represents substantially all of the capacity of the asset and thereby provides the customer with the right to
+obtain substantially all of the economic benefits from the use of the asset. If the supplier has a substantive substitution
+right throughout the period of use, then the asset is not identified;
+ICBC
+174
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+the lessee has the right to obtain substantially all of the economic benefits from use of the asset throughout the
+period of use;
+the lessee has the right to direct the use of the asset.
+For a contract that contains more than one separate lease components, the lessee and the lessor separate lease components
+and account for each lease component as a lease separately. For a contract that contains lease and non-lease components,
+the lessee and the lessor separate lease components from non-lease components. However, for the leases in which the
+Group is a lessee, the Group has elected not to separate lease components from non-lease components and accounts for the
+lease and non-lease components as a single lease component.
+(i) As a lessee
+The right-of-use asset is depreciated using the straight-line method. If the lessee is reasonably certain to exercise a purchase
+option by the end of the lease term, the right-of-use asset is depreciated over the remaining useful lives of the underlying
+asset. Otherwise, the right-of-use asset is depreciated from the commencement date to the earlier of the end of the useful
+life of the right-of-use asset or the end of the lease term. Impairment losses of right-of-use assets are accounted for in
+accordance with the accounting policy described in Note 4(23).
+The asset custody services of the Group refer to the business that the Group as trustee approved by regulatory authorities,
+signs custody agreement with clients and takes the responsibility of trustee in accordance with relevant laws and regulations.
+The assets under custody are not recorded on the statement of financial position as the Group merely fulfils the responsibility
+as trustee and charges fees in accordance with these agreements without retaining any risks or rewards of the assets under
+custody.
+(22) Repossessed assets
+ICBC
+Annual Report 2021
+177
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(21) Land use rights
+Land use rights are recognised at cost, being the fair value at the time of injection from the central government of the PRC
+(the "Government") during the Group's restructuring or the consideration paid. The rights are amortised using the straight-
+line method over the periods of the leases. When the prepaid land lease payments cannot be allocated reliably between the
+land and buildings elements, the entire lease payments are included in the costs of properties and buildings as finance leases
+in property and equipment.
+Repossessed assets are initially recognised at fair value of assets not retained plus related costs, and are subsequently
+measured at the lower of the carrying value and net recoverable amount. If the recoverable amount is lower than the
+carrying value of the repossessed assets, the assets are written down to the recoverable amount.
+(23) Non-financial asset impairment
+An item of property and equipment is derecognised upon disposal or when no future economic benefits are expected from
+its use or disposal. Any gain or loss arising from derecognition of the asset (calculated as the difference between the net
+disposal proceeds and the carrying amount of the asset) is included in the statement of profit or loss in the year the asset is
+derecognised.
+The Group assesses at the end of each reporting period whether there is any indication that property and equipment,
+land use rights, right-of-use assets, associates and joint ventures and other non-financial assets may be impaired. If any
+such indication exists, or when impairment testing for an asset is required, the Group makes an estimate of the asset's
+recoverable amount. An asset's recoverable amount is the higher of its fair value less costs to sell and its value in use and
+is determined on an individual basis, unless the asset does not generate cash inflows that are largely independent of those
+from other assets or groups of assets, in which case the recoverable amount is determined for the CGU to which the asset
+belongs. Where the gross carrying amount of an asset exceeds its recoverable amount, the asset is considered to be impaired
+and is written down to its recoverable amount. In assessing value in use of an asset, the estimated future cash flows are
+discounted to their present values using a pre-tax discount rate that reflects current market assessments of the time value of
+money and the risks specific to the asset.
+(24) Provisions
+Provisions are recognised when the Group has a present obligation as a result of a past event, and it is probable that an
+outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be
+made of the amount of the obligation.
+A provision is initially measured at the best estimate of the expenditure required to settle the related present obligation.
+When the effect of the time value of money is material, the best estimate is determined by discounting the related future
+cash outflows. When determining the best estimate, the Group considers factors pertaining to a contingency such as
+risks, uncertainties and time value of money. Where there is a range of possible outcome, and each possible outcome in
+that range is as likely as any other, the best estimate is the mid-point of that range. In other cases, the best estimate is
+determined according to the following circumstances:
+where the contingency involves a single item, the best estimate is the most likely outcome;
+where the contingency involves a large population of items, the best estimate is determined by weighting all possible
+outcomes by their associated probabilities.
+The Group reviews the carrying amount of a provision at the end of reporting period. The carrying amount is adjusted to the
+current best estimate.
+178
+ICBC
+where the insurance risk and other risks can be distinguished from each other and separately measured, the insurance
+risk is separated from other risks. The insurance risk is accounted for as an insurance contract and other risks are
+accounted for according to the relevant accounting standards;
+An assessment is made at the end of each reporting period as to whether there is any indication that previously recognised
+impairment losses may no longer exist or may have decreased. If such an indication exists, the recoverable amount is
+estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to
+determine the asset's recoverable amount since the last impairment loss was recognised. If that is the case, the carrying
+amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that
+I would have been determined, net of any depreciation or amortisation, had no impairment loss been recognised for the asset
+in prior years. Any such reversal is recognised in profit or loss. After such a reversal, the depreciation or amortisation charge
+is adjusted in future periods to allocate the asset's revised carrying amount, less any residual value, on a systematic basis over
+its remaining useful life.
+Residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at least at each financial
+year end.
+For an impaired fixed asset, the depreciation is calculated based on the carrying value less the cumulative impairment loss.
+Where parts of an item of property and equipment have different useful lives, the cost of that item is allocated on a
+reasonable basis among the parts and each part is depreciated separately.
+Equipment under operating leases where the Group is the lessor contains aircraft, aircraft engines and vessels. The estimated
+useful lives and depreciation methods are determined according to the conditions of individual aircraft and vessel. The
+residual values are assessed by an independent appraiser based on historical data. The estimated useful lives range from 15
+to 25 years.
+176
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(19) Precious metals
+Precious metals comprise gold, silver and other precious metals. Precious metals that are not related to the Group's precious
+metals trading activities are initially measured at acquisition cost and subsequently measured at the lower of cost and
+net realisable value. Precious metals acquired by the Group for trading purposes are initially measured at fair value and
+subsequent changes in fair value are recorded in the statement of profit or loss.
+The Group records the precious metals received as an asset. A liability to return the amount of precious metals deposited is
+also recognised. The precious metals deposited with the Group are measured at fair value both on initial recognition and in
+subsequent measurement.
+(20) Property and equipment
+Property and equipment, other than construction in progress are stated at costs less accumulated depreciation and
+any impairment loss. The cost of an item of property and equipment comprises its purchase price, tax and any directly
+attributable costs of bringing the asset to its present working condition and location for its intended use. Expenditure
+incurred after items of property and equipment have been put into operation, such as repairs and maintenance, is normally
+charged to profit or loss in the period in which it is incurred. In situations where the recognition criteria are satisfied, the
+expenditure for a major inspection is capitalised in the carrying amount of the asset as a replacement.
+Construction in progress comprises the direct costs of construction during the period of construction and is not depreciated.
+Construction in progress is reclassified to the appropriate category of property and equipment when completed and ready
+for use.
+The carrying values of property and equipment are reviewed for impairment when events or changes in circumstances
+indicate that the carrying values may not be recoverable.
+Depreciation is calculated on the straight-line basis to write off the cost of each item of property and equipment, less any
+estimated residual value, over the estimated useful life. The estimated useful life, estimated residual value and the annual
+depreciation rate of each item of property and equipment (excluding aircraft and vessels) are as follows:
+Properties and buildings
+Office equipment and motor vehicles
+(excluding aircraft and vessels)
+Leasehold improvements
+Estimated
+useful life
+5-50 years
+Estimated residual
+value rate
+0%-3%
+Annual
+depreciation rate
+1.94%-20%
+2-7 years
+14.29%-50%
+The shorter of the economic useful
+lives and remaining lease terms
+The Group grants entrusted loans on behalf of trustors, which are recorded off-balance sheet. The Group, as a trustee,
+grants such entrusted loans to borrowers under the direction of those trustors who fund these loans. The Group has been
+contracted by those trustors to manage the administration and collection of these loans on their behalf. Those trustors
+determine both the underwriting criteria for and the terms of all entrusted loans including their purposes, amounts, interest
+rates, and repayment schedules. The Group charges a commission related to its activities in connection with entrusted loans
+which are recognised ratably over the period in which the service is provided. The risk of loss is borne by those trustors.
+(ii)
+Annual Report 2021
+The Group's insurance subsidiary executes the contract with the policyholder. Where the Group undertakes insurance risk
+(other than financial risk) transferred from the policyholders, the contract is classified as an insurance contract. Insurance risk
+refers to the risk that the combined cost of claims, administration and policy acquisitions may exceed the aggregate amount
+of premiums received and investment income over time. Where the Group undertakes the risks other than insurance risk, the
+contract is classified as a non-insurance contract. Where the Group undertakes both insurance risk and other risks, forming a
+contract with mixed risks, the following stipulations are applied:
+The maximum period considered when estimating ECL is the maximum contractual period (including extension options) over
+which the Group is exposed to credit risk.
+Lifetime ECL is the ECL that result from all possible default events over the expected life of a financial instrument.
+12-month ECL is the portion of ECL that result from default events that are possible within the 12 months after the end of
+the reporting period (or a shorter period if the expected life of the instrument is less than 12 months).
+The Group classifies financial instruments into three stages and provides provisions for ECL accordingly, depending on
+whether credit risk on that financial instrument has increased significantly since initial recognition.
+The three risk stages are defined as follows:
+Stage 1: A financial instrument of which the credit risk has not significantly increased since initial recognition. The amount
+that equals to 12-month ECL is recognised as loss allowance.
+Stage 2: A financial instrument with a significant increase in credit risk since initial recognition but is not considered to be
+credit-impaired. The amount that equals to lifetime ECL is recognised as loss allowance. Refer to Note 49(a) credit risk for
+the description of how the Group determines when a significant increase in credit risk has occurred.
+Stage 3: A financial instrument is considered to be credit-impaired as at the end of the reporting period. The amount that
+equals to lifetime ECL is recognised as loss allowance. Refer to Note 49(a) credit risk for the definition of credit-impaired
+financial assets.
+Presentation of allowance for ECL
+The Group's method of measuring ECL of financial instruments reflects the following elements: (i) unbiased weighted
+average probability determined by the results of evaluating a range of possible outcomes; (ii) time value of money; (iii)
+reasonable and evidence-based information about past events, current conditions, and future economic forecasts that are
+available at no additional cost or effort at the end of the reporting period.
+ECL is re-measured at the end of each reporting period to reflect changes in the financial instrument's credit risk since
+initial recognition. Any change in the ECL amount is recognised as an impairment gain or loss in profit or loss. The Group
+recognises impairment gains or losses for financial instruments measured at amortised cost with a corresponding adjustment
+to their carrying amount through allowance for impairment loss. For debt instruments that are measured at FVTOCI, the
+loss allowance is recognised in other comprehensive income, which does not decrease the carrying amount of the financial
+assets. The Group recognises loss allowance for loan commitments and financial guarantee contracts through other liabilities
+(provisions for credit commitments).
+The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic
+prospect of recovery. A write-off constitutes a derecognition event. This is generally the case when the Group determines
+that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts
+subject to the write-off. However, financial assets that are written off could still be subject to enforcement activities in order
+to comply with the Group's procedures for recovery of amounts due. Subsequent recoveries of an asset that was previously
+written off are recognised as a reversal of impairment in profit or loss in the period in which the recovery occurs.
+(11) Modification of financial assets contracts
+In some cases (such as renegotiating loans), the Group may renegotiate or otherwise modify the financial assets contracts.
+The Group would assess whether or not the new contractual terms are substantially different to the original terms. If the
+terms are substantially different, the Group derecognises the original financial asset and recognises a new asset under the
+revised terms. If the renegotiation or modification does not result in derecognition, but leads to changes in contractual cash
+flows, when assessing whether a significant increase in credit risk has occurred, the Group compares the risk of a default
+occurring under the revised terms as at the end of the reporting period with that as at the date of initial recognition under
+original terms.
+170
+ICBC
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+(12) Derecognition of financial assets and liabilities
+Derecognition of financial assets
+Financial asset is derecognised when one of the following conditions is met:
+Write-off
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements
+For the financial liabilities designated as at FVTPL, the gains and losses from changes in fair value of the financial liability
+arising from changes in the Group's own credit risk are included in other comprehensive income; other changes in fair value
+of the financial liabilities are recognised in profit or loss. If the treatment of the impact of changes in the financial liabilities'
+own credit risk will create or enlarge the accounting mismatch in profit or loss, the Group shall recognise the entire gains
+or losses of the financial liabilities (including the amount of the impact of changes in its own credit risk) in profit and loss.
+When these liabilities are derecognised, the cumulative gains or losses previously recognised in other comprehensive income
+are reclassified from reserve to retained earnings.
+Other financial liabilities
+Other financial liabilities are subsequently measured at amortised cost using the effective interest method.
+(iv) Financial instruments reclassification
+The Group will reclassify all related financial assets when it changes its business model for managing financial assets, and
+the reclassification applies prospectively from the reclassification date (the first day of the first reporting period following the
+change in business model).
+(8) Trade date accounting
+All regular way purchases and sales of financial assets are recognised at the trade date, which is the date that the Group
+commits to purchase or sell the assets. A regular way purchase or sale is the purchase or sale of financial assets that requires
+delivery of assets within the time frame generally established by regulation or convention in the marketplace.
+(9) Presentation of financial instruments
+Financial assets and financial liabilities are generally presented separately in the statement of financial position and shall not
+be offset. However, a financial asset and a financial liability are offset and the net amount is presented in the statement of
+financial position when both the following conditions are satisfied:
+-
+the Group currently has a legally enforceable right to set off the recognised amounts; and
+the Group intends either to settle on a net basis, or to realise the financial asset and settle the financial liability
+simultaneously.
+(10) Impairment of financial assets
+The Group recognises loss allowances for expected credit loss ("ECL") on:
+financial assets measured at amortised cost;
+debt instruments measured at FVTOCI; and
+loan commitments and financial guarantee contracts.
+Financial assets measured at fair value, including debt or equity instruments measured at FVTPL, equity instruments
+designated as at FVTOCI and derivative financial assets, are not subject to ECL assessment.
+Measurement of ECL
+ECL is a probability-weighted amount that is determined with the respective risks of default occurring as the weight. Credit
+losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in
+accordance with the contract and the cash flows that the Group expects to receive).
+169
+the Group's contractual rights to the cash flows from the financial asset expire;
+the financial asset has been transferred and the Group transfers substantially all of the risks and rewards of ownership
+of the financial asset; or
+the financial asset has been transferred, although the Group neither transfers nor retains substantially all of the risks
+and rewards of ownership of the financial asset, it does not retain control over the transferred asset.
+Where the Group has transferred its rights to receive cash flows from an asset or has retained its rights to receive cash
+flows from the asset but assumed the obligation to pay those cash flows to the eventual recipients and meanwhile meet the
+conditions of the transfer of financial assets, and has neither transferred nor retained substantially all the risks and rewards
+of the asset nor transferred control of the asset, the asset is recognised to the extent of the Group's continuing involvement
+in the asset. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower
+of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to
+repay.
+172
+ICBC
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Cash flow hedges
+Cash flow hedges are hedges of the Group's exposure to variability in cash flows that is attributable to a particular risk
+associated with a recognised asset or liability, a highly probable forecast transaction or a component of any such item, and
+could affect profit or loss. For designated and qualifying cash flow hedges, the effective portion of the gain or loss on the
+hedging instrument is initially recognised directly in other comprehensive income. The ineffective portion of the gain or loss
+on the hedging instrument is recognised immediately in profit or loss.
+When the hedged cash flow affects profit or loss, the gain or loss on the hedging instrument recognised directly in other
+comprehensive income is recycled in the corresponding income or expense line of the statement of profit or loss. When
+the hedging relationship ceases to meet the qualifying criteria after taking into account any rebalancing of the hedging
+relationship, including the hedging instrument has expired or has been sold, terminated or exercised, any cumulative gains or
+losses existing in other comprehensive income at that time remains in other comprehensive income until the hedged forecast
+transaction ultimately occurs. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that
+was reported in other comprehensive income is immediately transferred to profit or loss.
+Net investment hedges
+A net investment hedge is a hedge of the currency risk of a net investment in a foreign institution operation.
+Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the
+hedging instrument relating to the effective portion of the hedge is recognised directly in other comprehensive income; the
+gain or loss relating to the ineffective portion is recognised in profit or loss immediately. Gains and losses accumulated in
+other comprehensive income are included in profit or loss when the foreign operation is disposed of as part of the gains or
+losses on the disposal.
+(14) Repurchase and reverse repurchase transactions (including securities borrowing and
+lending)
+Assets sold under agreements to repurchase at a specified future date ("repos") are not derecognised from the statement
+of financial position. The corresponding cash received, including accrued interest, is recognised on the statement of financial
+position as a "repurchase agreement". The difference between the sale and repurchase prices is treated as an interest
+expense and is amortised over the life of the agreement using the effective interest method.
+Conversely, assets purchased under agreements to resell at a specified future date ("reverse repos") are not recognised on
+the statement of financial position. The corresponding cash paid, including accrued interest, is recognised on the statement
+of financial position as a "reverse repurchase agreement".
+According to the policy of classification of financial assets, the reverse repurchase agreements held by the Group were
+divided into different classifications according to the entity's business model for managing the financial instruments and the
+contractual cash flow characteristics of the assets: financial assets measured at amortised cost and financial assets measured
+at FVTPL. The difference between the purchase and resale prices of reverse repurchase agreements measured at amortised
+cost is treated as an interest income and is amortised over the life of the agreement using the effective interest method.
+Securities borrowing and lending transactions are usually collateralised by securities or cash. The transfer of the securities
+to counterparties is only reflected on the statement of financial position if the risks and rewards of ownership are also
+transferred. Cash advanced or received as collateral is recorded as an asset or liability.
+Securities borrowed are not recognised in the statement of financial position, unless they are then sold to third parties, in
+which case the obligation to return the securities is recorded as a financial liability held for trading and measured at fair
+value with any gains or losses included in profit or loss.
+Annual Report 2021
+173
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(15) Insurance contracts
+Insurance contracts classification
+The Group discontinues fair value hedge accounting when the hedging relationship ceases to meet the qualifying criteria
+after taking into account any rebalancing of the hedging relationship, including the hedging instrument has expired or has
+been sold, terminated or exercised. If the hedged items are derecognised, the unamortised adjustment to carrying amount is
+recorded in profit or loss.
+(i)
+When an unrecognised firm commitment is designated as a hedged item, the subsequent cumulative change in fair value of
+the firm commitment attributable to the hedged risk is recognised as an asset or liability with a corresponding gain or loss
+recognised in profit or loss. The changes in fair value of the hedging instrument are also recognised in profit or loss.
+Fair value hedges are hedges of the Group's exposure to changes in fair value of a recognised asset or liability or an
+unrecognised firm commitment, or an identified portion of such an asset, liability or unrecognised firm commitment, that
+is attributable to a particular risk and could affect the profit or loss or other comprehensive income. Among them, the
+circumstances affecting other comprehensive income are limited to the hedging for the risk exposure from fair value change
+of non-trading equity investment designated as at FVTOCI. For fair value hedges, the carrying amount of the hedged item
+not already measured at fair value is adjusted for the gain or loss attributable to the risk being hedged and is taken to profit
+or loss or other comprehensive income. The gains or losses for hedging instrument re-measured at fair value are taken to
+profit or loss or other comprehensive income.
+Securitisation
+As part of its operational activities, the Group securitises credit assets. When a securitisation of financial assets does not
+qualify for derecognition, the relevant financial assets are not derecognised, and the consideration paid by third parties are
+recorded as a financial liability; when the securitisation of financial assets partially qualifies for derecognition, the Group
+continues to recognise the transferred assets to the extent of its continuing involvement, and derecognises the remaining
+portion. The carrying amount of the transferred assets is apportioned between the derecognised portion and the retained
+portion based on their relative fair values, and the difference between the carrying amount of the derecognised portion and
+the total consideration paid for the derecognised portion is recorded in profit or loss.
+Sales of assets on condition of repurchase
+The derecognition of financial assets sold on condition of repurchase is determined by the economic substance of the
+transaction. If a financial asset is sold under an agreement to repurchase the same or substantially the same asset at a
+fixed price or at the sale price plus a reasonable return, the Group will not derecognise the asset. If a financial asset is
+sold together with an option to repurchase the financial asset at its fair value at the time of repurchase, the Group will
+derecognise the financial asset.
+Derecognition of financial liabilities
+The Group derecognises a financial liability (or part of it) only when its contractual obligation (or part of it) is extinguished.
+(13) Derivatives and hedge accounting
+Derivatives
+Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered
+into and are subsequently re-measured at fair value. Derivatives are carried as assets when the fair value is positive and as
+liabilities when the fair value is negative.
+Annual Report 2021
+171
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+If the host contract included in the hybrid contract is a financial asset, the embedded derivative is no longer split from the
+main contract of the financial asset, and the hybrid financial instrument as a whole is related to the classification of the
+financial asset provision. If the host contract included in the hybrid contract is not a financial asset, when the embedded
+derivative's economic characteristics and risks are not closely related to those of the hybrid contract, those separate
+instruments with the same terms as the embedded derivative would meet the definition of a derivative, and the hybrid
+instrument is not carried at FVTPL, derivatives embedded in other financial instruments should be split from the hybrid
+contract and treated as separate derivatives. These embedded derivatives are measured at fair value with the changes in fair
+value recognised in profit or loss.
+Any gains or losses arising from changes in fair value on derivatives that do not qualify for hedge accounting are taken
+directly to profit or loss.
+For less complex derivative products, the fair values are principally determined by valuation models which are commonly used
+by market participants. Inputs to valuation models are determined from observable market data wherever possible, including
+foreign exchange spot and forward rates and interest rate yield curves. For more complex derivative products, the fair values
+are mainly determined by quoted prices from dealers.
+Hedge accounting
+At the inception of a hedging relationship, the Group formally designates the hedging instruments and the hedged items,
+and documents the hedging relationship to which the Group wishes to apply hedge accounting and the risk management
+objective and strategy for undertaking the hedge. The documentation includes identification of the hedging instrument, the
+hedged item or transaction, the nature of the risk being hedged and how the entity will assess the hedging instrument's
+effectiveness in offsetting the exposure to changes in the hedged item's fair value or cash flows attributable to the hedged
+risk. Such hedges are expected to meet the hedge effectiveness in achieving offsetting changes in fair value or cash
+flows and are assessed on an on-going basis to analyse the sources of hedge ineffectiveness which are expected to affect
+the hedging relationship in remaining hedging period. If a hedging relationship ceases to meet the hedge effectiveness
+requirement relating to the hedge ratio, but the risk management objective for that designated hedging relationship remains
+the same, the Group would rebalance the hedging relationship.
+Certain derivative transactions, while providing effective economic hedges under the Group's risk management positions,
+do not qualify for hedge accounting and are therefore treated as derivatives held for trading with fair value gains or losses
+recognised in profit or loss.
+Fair value hedges
+When the hedged item in a fair value hedge is measured at amortised cost, any hedge adjustment to its carrying amount is
+amortised to profit or loss. The amortisation is based on a recalculated effective interest rate at the date when amortisation
+begins.
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+ICBC
+619
+4,086
+4,106
+Repairs and maintenance charges
+8,348
+8,173
+Depreciation charge for right-of-use assets and other leasing expense
+13,689
+14,596
+Depreciation charge for property and equipment
+Property and equipment expenses:
+126,572
+139,363
+14,241
+18,313
+defined contribution plans (i)
+Post-employment benefits
+29,915
+1,323
+265
+(242)
+11,781
+8,044
+11. OPERATING EXPENSES
+Utility expenses
+Staff costs:
+2020
+Salaries and bonuses
+90,250
+82,416
+Staff benefits
+30,800
+2021
+1,947
+1,837
+28,822
+186
+ICBC
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+12. DIRECTORS' AND SUPERVISORS' REMUNERATION
+Details of the directors' and supervisors' remuneration before tax, as disclosed pursuant to the Rules Governing the Listing of
+Securities on The Stock Exchange of Hong Kong Limited and the Hong Kong Companies Ordinance, are as follows:
+(ii) The principal auditor's remuneration of RMB183 million for the year (2020: RMB224 million) is included in other
+administrative expenses.
+Year ended 31 December 2021
+Contribution by
+to social
+insurance,
+housing
+allowance,
+annuities, and
+Remuneration
+the employer
+2,182
+The defined contribution plans mainly include pension insurance, unemployment insurance and the Annuity Plan.
+206,585
+27,960
+Amortisation
+3,125
+2,607
+Other administrative expenses (ii)
+Taxes and surcharges
+(i)
+26,539
+9,318
+8,524
+Other
+29,060
+15,236
+236,227
+25,686
+additional
+Net gains on disposal of property and equipment, repossessed assets and other
+Other
+13,016
+2020
+2021
+9. NET GAINS ON FINANCIAL INVESTMENTS
+The above amounts mainly include gains and losses arising from the buying and selling of, the interest income and expense
+on, and the changes in fair value of financial assets and liabilities held for trading.
+2,222
+8,955
+3,196
+(196)
+(6,938)
+2,370
+5,964
+6,781
+2020
+2021
+Equity investments
+Derivatives and other
+Debt securities
+1,617
+2,894
+3,037
+148,727
+146,668
+Fee and commission expense
+Dividend income from equity investments designated as at FVTOCI, including:
+Derecognised during the year
+(15,703)
+133,024
+131,215
+Net fee and commission income
+Included in personal wealth management and private banking services, corporate wealth management services, asset
+custody business and trust and agency services above is an amount of RMB20,999 million (2020: RMB16,584 million)
+with respect to trust and other fiduciary activities for 2021.
+8.
+NET TRADING INCOME
+(15,453)
+3,388
+2,355
+291
+185
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+10. OTHER OPERATING INCOME, NET
+2021
+11,829
+2020
+46,024
+47,573
+Operating cost of insurance business
+(49,706)
+(53,366)
+Lease income
+Net premium income
+12,756
+16,440
+229
+133
+Held at the year end
+3,097
+2,222
+Gains on financial instruments measured at FVTPL, net, including:
+10,739
+(317)
+7,402
+(17,674)
+(8,859)
+Net gains on disposal of financial instruments measured at FVTOCI, net
+2,084
+2,389
+Other
+Net losses on financial instruments designated as at FVTPL
+Total
+paid
+medical
+3,329
+Total
+Former External Supervisor
+Former Non-executive Director
+Mei Yingchun (x)
+Qu Qiang (xi)
+Former Non-executive Director
+Zheng Fuqing (ix)
+137
+33
+104
+Former Chairman of the Board of Supervisors
+Yang Guozhong (viii)
+24
+24
+External Supervisor
+Zhang Jie (vii)
+External Supervisor
+470
+470
+470
+470
+410
+410
+1,068
+1,217
+50
+Wu Xiangjiang
+Employee Supervisor
+50
+50
+Shen Bingxi
+50
+163
+163
+2,627
+At the First Extraordinary General Meeting of 2021 held on 29 July 2021, Mr. Huang Liangbo was elected as
+Shareholder Supervisor of the Bank, and his term of office as Shareholder Supervisor of the Bank started from the day
+of approval by the Shareholders' General Meeting, and his term of office as Chairman of the Board of Supervisors of
+the Bank took effect simultaneously.
+On 24 September 2021, the Board of Directors appointed Mr. Zheng Guoyu as Senior Executive Vice President of the
+Bank. At the Second Extraordinary General Meeting of 2021 held on 25 November 2021, Mr. Zheng Guoyu was elected
+as Executive Director of the Bank, and his qualification was approved by CBIRC in December 2021.
+At the First Extraordinary General Meeting of 2021 held on 29 July 2021, Mr. Wang Jingwu was elected as Executive
+Director of the Bank, and his qualification was approved by CBIRC in September 2021. On 24 September 2021, the
+Board of Directors appointed Mr. Wang Jingwu as Chief Risk Officer of the Bank.
+At the Annual General Meeting for the Year 2020 held on 21 June 2021, Ms. Chen Yifang was elected as Non-
+executive director of the Bank, and her qualification was approved by CBIRC in August 2021.
+At the Second Extraordinary General Meeting of 2021 held on 25 November 2021, Mr. Dong Yang was elected as Non-
+executive Director of the Bank, and his qualification was approved by CBIRC in January 2022.
+At the Second Extraordinary General Meeting of 2021 held on 25 November 2021, Mr. Zhang Jie was elected as
+External Supervisor of the Bank, and his term of office as External Supervisor of the Bank started from the day of
+approval by the Shareholders' General Meeting.
+On 25 February 2021, the Board of Directors elected Mr. Liao Lin as Vice Chairman of the Bank and appointed Mr. Liao
+Lin as President of the Bank, and his qualification was approved by CBIRC in March 2021. Mr. Liao Lin ceased to act as
+Chief Risk Officer of the Bank after he took office as President.
+(viii) In March 2021, Mr. Yang Guozhong ceased to act as Shareholder Supervisor and Chairman of the Board of Supervisors
+of the Bank due to change of job assignments.
+(x)
+(xi)
+In January 2022, Mr. Zheng Fuqing ceased to act as Non-executive Director of the Bank due to expiration of his term of
+office.
+In February 2021, Ms. Mei Yingchun ceased to act as Non-executive Director of the Bank due to expiration of her term
+of office.
+In November 2021, Mr. Qu Qiang ceased to act as External Supervisor of the Bank due to change of job assignments.
+188
+(ix)
+470
+(vii)
+(v)
+7,024
+Note: Since January 2015, the remuneration to the Chairman of the Board of Directors, the President, the Chairman of the Board
+of Supervisors and other executives of the Bank has followed the State's policies relating to the remuneration reform on
+executives of central enterprises.
+The total compensation packages for the Chairman of the Board of Directors, President, Chairman of the Board of
+Supervisors, Executive Directors, and Shareholder Representative Supervisors of the Bank have not been finalised in
+accordance with the regulations of the PRC relevant authorities. The remuneration not yet accrued is not expected to have a
+significant impact on the Group's 2021 consolidated financial statements. The total compensation packages will be further
+disclosed when determined by the relevant authorities.
+Annual Report 2021
+187
+Notes to the Consolidated Financial Statements
+(vi)
+For the year ended 31 December 2021
+In accordance with applicable national regulations, the incentive income for 2018-2020 was paid to the Chairman, the
+President and Senior Executive Vice President of the Bank in 2021 based on their specific tenure and performance appraisal
+results. Accordingly, the Bank accrued RMB16 thousand, RMB9 thousand and RMB7 thousand for Mr. Chen Siqing, Mr. Liao
+Lin and Mr. Wang Jingwu respectively, as additional contribution to the Annuity Plan in 2021.
+Fees of Mr. Huang Li and Mr. Wu Xiangjiang are their allowances obtained as Employee Supervisors of the Bank, excluding
+their remuneration with the Bank in accordance with the employee remuneration system.
+As at the approval date of these financial statements, changes of directors and supervisors of the Bank were as follows:
+(i)
+(ii)
+(iv)
+(In RMB millions, unless otherwise stated)
+470
+520
+520
+820
+Liao Lin (i)
+Vice Chairman, Executive Director, President
+614
+197
+811
+201
+Huang Liangbo (ii)
+310
+100
+410
+Zheng Guoyu (iii)
+Executive Director, Senior Executive
+Vice President
+Chairman of the Board of Supervisors
+186
+Chairman, Executive Director
+(4)=(1)+(2)+(3)
+remuneration
+Name
+Position
+before tax
+insurances
+Fees
+Chen Siqing
+before tax
+RMB'000
+RMB'000
+RMB'000
+(1)
+(2)
+(3)
+RMB'000
+1,808
+65
+Wang Jingwu (iv)
+Nout Wellink
+Independent Non-executive Director
+Independent Non-executive Director
+Independent Non-executive Director
+Independent Non-executive Director
+Fred Zuliu Hu
+Shen Si
+Independent Non-executive Director
+Shareholder Supervisor
+939
+278
+Huang Li
+Employee Supervisor
+222222
+Zhang Wei
+251
+Yang Siu Shun
+Non-executive Director
+Executive Director, Senior Executive
+Vice President, Chief Risk Officer
+557
+194
+351
+751
+Anthony Francis Neoh
+Lu Yongzhen
+Feng Weidong
+Non-executive Director
+Non-executive Director
+Non-executive Director
+Chen Yifang (v)
+Dong Yang (vi)
+Non-executive Director
+Cao Liqun
+7,545
+Annual Report 2021
+Fee and commission income
+Deferred tax liabilities are recognised for all taxable temporary differences, except:
+Deferred tax is provided using the balance sheet liability method on temporary differences at the end of the reporting period
+between the tax bases of assets and liabilities and their carrying amounts.
+Deferred tax
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements
+181
+Annual Report 2021
+Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from
+or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or
+substantively enacted by the end of each reporting period.
+Current tax
+Income tax comprises current and deferred tax. Income tax is recognised in the statement of profit or loss except that it
+relates to items recognised directly in equity, in which case it is recognised in equity.
+(31) Income tax
+According to the Bank's policy on early retirement benefits, certain employees are entitled to take leave of absence and
+in return receive a certain level of staff salaries and related benefits from the Bank. The salaries and benefit payments are
+made from the date of early retirement to the normal retirement date. Differences arising from changes in assumptions and
+estimates of the present value of the liabilities are recognised in profit or loss.
+Early retirement benefits
+when the Group has a specific, formal restructure plan involving payment of termination benefits, and the plan has
+started or informed each affected party about the influence of the plan, therefore each party formed reasonable
+expectations.
+when the Group can no longer withdraw an offer of those benefits;
+Termination benefits are payable as a result of either the Group's decision to terminate an employee's employment before
+the due date of labor contract or an employee's decision to accept an offer of benefits in exchange for the termination of
+employment. The Group recognises termination benefits in profit or loss at the earlier of:
+Termination benefits
+In addition, employees in Chinese mainland also participate in a defined contribution retirement benefit plan established
+by the Group (the "Annuity Plan"). The Group and its employees are required to contribute a certain percentage of the
+employees' previous year basic salaries to the Annuity Plan. The Group pays a fixed contribution into the Annuity Plan and
+has no obligation to pay further contributions if the Annuity Plan does not hold sufficient assets to pay all employee benefits.
+The contribution is charged to profit or loss when it is incurred.
+(i)
+Pursuant to the relevant laws and regulations of the PRC, the Group participates in a defined contribution basic pension
+insurance and unemployment insurance in the social insurance system established and managed by government
+organisations. The Group makes contributions to basic pension insurance and unemployment insurance plans based on
+the applicable benchmarks and rates stipulated by the government. Basic pension insurance and unemployment insurance
+contributions are recognised as liabilities with a corresponding charge to profit or loss or included in the cost of assets where
+appropriate as the related services are rendered by the employees.
+where the taxable temporary difference arises from the initial recognition of goodwill;
+where the taxable temporary difference arises from the initial recognition of assets and liabilities in a transaction that
+is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable
+income (or deductible expenses).
+Measurement of the ECL allowance
+In the process of applying the Group's accounting policies, management is required to make judgements, estimates and
+assumptions of the effects of uncertain future events on the financial statements. The most significant use of judgements,
+estimates and assumptions concerning the uncertainty of the future at the end of the reporting period that have a significant
+risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are
+described below.
+SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES
+5.
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+ICBC
+182
+Dividends are recognised as a liability and deducted from equity when they are approved by the Bank's shareholders in
+general meetings and declared. Interim dividends are deducted from equity when they are approved and declared, and
+no longer at the discretion of the Bank. A dividend for the year that is approved after the end of the reporting period is
+disclosed as an event after the reporting period.
+(32) Dividends
+Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets
+against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
+The carrying amount of deferred tax assets is reviewed at the end of the reporting period and reduced to the extent that
+it is no longer probable that sufficient taxable income will be available to allow all or part of the deferred tax asset to be
+utilised. When it is virtually probable that sufficient taxable income will be available, the reduced amount can be reversed
+accordingly.
+Deferred tax assets and deferred tax liabilities are measured at the tax rates that are expected to apply to the period when
+the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
+enacted by the end of the reporting period, and reflect the corresponding tax effect.
+at the time of the transaction, it affects neither the accounting profit nor taxable income (or deductible expenses).
+In respect of deductible temporary differences associated with investments in subsidiaries, associates and joint ventures,
+deferred tax assets are recognised only to the extent that it is probable that the temporary differences will be reversed in the
+foreseeable future and taxable profit will be available against which the temporary differences can be utilised.
+transaction is not a business combination;
+(ii)
+(i)
+Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused
+tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary
+differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except that deferred tax assets
+are not recognised if the temporary difference arises from the initial recognition of assets and liabilities in a transaction and
+that:
+In respect of taxable temporary differences associated with investments in subsidiaries, associates and joint ventures,
+deferred tax liabilities are recognised except where the timing of the reversal of the temporary differences can be controlled
+and it is probable that the temporary differences will not be reversed in the foreseeable future.
+(ii)
+Post-employment benefits-defined contribution plans
+All eligible employees outside Chinese mainland participate in local defined contribution schemes. The Group contributes to
+these defined contribution schemes based on the requirements of the local regulatory bodies and charge to profit or loss or
+included in the cost of assets where appropriate.
+Employee wages or salaries, bonuses, social security contributions such as medical insurance, work injury insurance,
+maternity insurance and housing fund, measured at the amount incurred or at the applicable benchmarks and rates, are
+recognised as a liability as the employee provides services, with a corresponding charge to profit or loss or included in the
+cost of assets where appropriate.
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements
+179
+Annual Report 2021
+Cash and cash equivalents refer to monetary assets, which are short-term, highly liquid, readily convertible into known
+amounts of cash and subject to an insignificant risk of changes in value. Cash and cash equivalents comprise cash,
+unrestricted balances with central banks, amounts due from banks and other financial institutions and reverse repurchase
+agreements with original maturity of less than three months.
+(28) Cash and cash equivalents
+Preference shares and perpetual bonds issued that should be classified as equity instruments are recognised in equity based
+on the actual amount received. Any distribution of dividends or interests during the instrument's duration is treated as profit
+appropriation. When the preference shares and perpetual bonds are redeemed according to the contractual terms, the
+redeemed amount is charged to equity.
+At initial recognition, the Group classifies the preference shares, perpetual bonds issued or their components as financial
+liabilities or equity instruments based on their contractual terms and their economic substance after considering the
+definition of financial liabilities and equity instruments. Preference shares and perpetual bonds issued containing both equity
+and liability components are accounted for using the accounting policy for convertible instruments containing an equity
+component.
+(27) Preference shares and perpetual bonds
+If the convertible instrument is converted, the liability component, together with the equity component, are transferred
+to equity. If the convertible instrument is redeemed, the consideration paid and transaction fees for the redemption are
+allocated to the liability and equity components. The method used to allocate the consideration and transaction costs is
+the same as that used for issuance. After allocating the consideration and transaction costs, the difference between the
+allocated and carrying amounts is charged to profit and loss if it relates to the liability component or directly recognised in
+equity if it relates to the equity component.
+Subsequent to initial recognition, the liability component is measured at amortised cost using the effective interest method,
+unless it is designated upon recognition at FVTPL. The equity component is not re-measured.
+The initial carrying amount of a compound financial instrument is allocated to its equity and liability components. The
+amount recognised in equity is the difference between the fair value of the instrument as a whole and the separately
+determined fair value of the liability component (including the value of any embedded derivatives other than the equity
+component). Transaction costs that relate to the issue of a compound financial instrument are allocated to the liability and
+equity components in proportion to the allocation of proceeds.
+Convertible instruments issued by the Group that can be converted to equity shares, where the number of shares to be
+issued and the value of consideration to be received at that time do not vary, are accounted for as compound financial
+instruments containing both liability and equity components.
+(26) Convertible instruments
+A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by
+the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. It
+can also be a present obligation arising from past events that is not recognised because it is not probable that an outflow
+of economic resources will be required or the amount of obligation cannot be measured reliably. Contingent liabilities are
+disclosed in the notes to the financial statements. When a change in the probability of an outflow occurs so that outflow is
+probable and can be reliably estimated, it will then be recognised as a provision.
+(25) Contingent liabilities
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+8,738
+(In RMB millions, unless otherwise stated)
+(29) Revenue recognition
+Interest income
+For all financial instruments measured at amortised cost and interest-generating financial instruments classified as financial
+assets measured at FVTOCI, interest income is recorded at the effective interest rate, which is the rate that exactly discounts
+estimated future cash receipts or payments through the expected life of the financial instrument, where appropriate, to the
+gross carrying amount of the financial asset, or the amortised cost of financial liability. The calculation takes into account all
+contractual terms of the financial instrument (for example, prepayment options) and includes any fees or incremental costs
+that are directly attributable to the instrument and are an integral part of the effective interest rate, but not expected credit
+losses.
+Interest income is calculated by applying the effective interest rate to the gross carrying amount of financial assets and is
+recognised as interest income, except for:
+Short-term employee benefits
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+180
+Employee benefits refer to all forms of consideration and other related expenditure given by the Group in exchange for
+services rendered by employees. The benefits payable are recognised as liabilities during the period in which the employees
+have rendered services to the Group. If the effect of discounting the benefits payable which are payable after one year from
+the end of the reporting period is significant, the Group will present them at their present value.
+(30) Employee benefits
+Dividend income is recognised when the Group's right to receive payment is established, it is probable that the related
+economic benefits will flow to the Group and the related income can be reliably measured.
+Dividend income
+In other cases, the Group recognises revenue at a point in time at which a customer obtains control of the promised
+services.
+The measurement of the ECL allowance for financial assets measured at amortised cost and FVTOCI and with exposure
+arising from loan commitments and financial guarantee contracts, is an area that requires the use of complex models and
+significant assumptions about future economic conditions and credit behavior (the likelihood of customers defaulting and
+the resulting losses). Refer to Note 49(a) credit risk for the explanation of the inputs, assumptions and estimation techniques
+used in measuring ECL.
+the Group does not provide service with an alternative use to the Group, and the Group has an enforceable right
+to payment for performance completed to date.
+the customer simultaneously receives and consumes the benefits provided by the Group's performance as the
+Group performs;
+(ii)
+(i) The Group recognises income over time by measuring the progress towards the complete satisfaction of a
+performance obligation, if one of the following criteria is met:
+The Group earns fee and commission income from a diverse range of services it provides to its customers. The fee and
+commission income recognised by the Group reflects the amount of consideration to which the Group expects to be entitled
+in exchange for transferring promised services to customers, and income is recognised when its performance obligation in
+contracts is satisfied.
+Fee and commission income
+purchased or originated financial assets that are not credit-impaired but have subsequently become credit-impaired,
+whose interest income is calculated by applying the effective interest rate to their amortised cost (i.e. net of the
+expected credit loss provision). If, in a subsequent period, the financial assets quality improve so that they are no
+longer credit-impaired and the improvement in credit quality is related objectively to a certain event occurring after the
+application of the above-mentioned rules, then the interest income is calculated by applying the effective interest rate
+to their gross carrying amount.
+purchased or originated credit-impaired financial assets, whose interest income is calculated, since initial recognition,
+by applying the credit adjusted effective interest rate to their amortised cost; and
+(ii)
+(i)
+the customer controls the service provided by the Group in the course of performance; or
+Impairment of goodwill
+ICBC
+Income tax
+Notes to the Consolidated Financial Statements
+(i)
+NET FEE AND COMMISSION INCOME
+7.
+ICBC
+184
+The above interest income and expense are related to financial instruments which are not measured at fair value through
+profit or loss.
+(ii) Includes interest expense on due to central banks and repurchase agreements.
+Includes interest income on reverse repurchase agreements.
+(i)
+646,765
+690,680
+Net interest income
+(445,756)
+(471,538)
+(30,106)
+(29,526)
+Debt securities issued and certificates of deposit
+(51,477)
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(44,387)
+2020
+41,270
+Other
+The Group assesses whether goodwill is impaired at least on an annual basis and when circumstances indicate that the
+carrying value may be impaired. The Group allocates the goodwill to the CGU or group of CGUS and makes an estimate
+of the expected future cash flows from the CGU or group of CGUS and also to choose a suitable discount rate in order to
+calculate the present value of those cash flows.
+Trust and agency services (i)
+Asset custody business (i)
+10,101
+9,756
+Guarantee and commitment business
+15,554
+15,165
+Corporate wealth management services (i)
+18,623
+16,679
+Bank card business
+21,460
+22,416
+29,630
+30,001
+Personal wealth management and private banking services (i)
+Investment banking business
+39,101
+Settlement, clearing business and cash management
+Due to banks and other financial institutions (ii)
+2021
+(397,625)
+Personal loans
+Loans and advances to customers:
+Corporate loans and advances
+Interest income on:
+2020
+2021
+6. NET INTEREST INCOME
+Wealth management products, investment funds, trust plans, asset management plans and
+asset-backed securities
+Certain securitisation vehicles sponsored by the Group under its securitisation programme are run according to
+predetermined criteria at the initial set up of the vehicles. In addition, the Group is exposed to variability of returns from the
+vehicles through holding interests in the vehicles and the day-to-day servicing of the underlying assets in the vehicles which
+is carried out by the Group under a servicing contract. Key decisions are usually required only when underlying assets go into
+default. Therefore, in considering whether it has control, the Group considers whether it can use its power to influence these
+vehicles' returns.
+Securitisation vehicles
+Discounted bills
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+183
+Annual Report 2021
+Management applies its judgement to determine whether the control indicators set out in Note 4(2) indicate that the Group
+controls securitisation vehicles, wealth management products, investment funds, trust plans, asset management plans and
+asset-backed securities.
+Determination of control over investees
+If the market for a financial instrument is not active, the Group determines the fair value by using valuation technique,
+including using recent arm's length market transactions between knowledgeable and willing parties, if available, reference to
+the current fair value of another instrument that is substantially the same, discounted cash flow analysis and option pricing
+models. Valuation technique makes maximum use of observable market input. However, where observable market inputs are
+not available, management makes estimates on such unobservable market inputs.
+(364,173)
+Fair value of financial instruments
+Determining income tax provisions requires the Group to estimate the future tax treatment of certain transactions. The
+Group evaluates tax implications of transactions in accordance with prevailing tax regulations and makes tax provisions
+accordingly. In addition, deferred tax assets are recognised to the extent that it is probable that future taxable profit will be
+available against which the deductible temporary differences can be utilised. This requires significant judgement on the tax
+treatments of certain transactions and also significant assessment on the probability that adequate future taxable profits will
+be available for the deferred tax assets to be recovered.
+For the year ended 31 December 2021
+832,136
+The Group acts as manager or investor in a number of wealth management products, investment funds, trust plans, asset
+management plans and assets-backed securities. When assessing whether the Group controls such a structured entity, the
+Group would determine whether it exercises the decision-making rights as a principal or an agent and usually focuses on the
+assessment of the aggregate economic interests of the Group in the entity (comprising any carried interests and expected
+management fees) and the decision-making authority of the entity. The Group would also determine whether another entity
+with decision-making rights is acting as an agent for it.
+243,545
+766,407
+1,162,218
+40,547
+25,228
+Due from banks and other financial institutions (i)
+Interest expense on:
+42,022
+42,027
+Due from central banks
+1,092,521
+Financial investments
+11,615
+10,430
+318,272
+353,733
+436,520
+467,973
+Due to customers
+262,827
+12,028,262
+10,705,465
+11,481,141
+268,914
+Corporate deposits
+13,331,463
+Personal deposits
+6,754,692 5,756,704
+25,354,657 23,945,987
+21,408,934 19,562,936
+8,591,139 7,647,117
+30,435,543 27,417,433
+25,134,726 22,977,655
+12,944,860
+12,497,968
+234,852
+10,477,744
+9,436,418
+8,568,917
+Other deposits
+250,349
+261,389
+361,994
+Accrued interest
+26,441,774
+288,554
+11,660,536
+Due to customers
+6,383,624
+Total liabilities
+FinTech input
+FinTech personnel
+Personal loans
+267,941
+7,944,781
+7,115,279
+5,636,574
+4,945,458
+Discounted bills
+527,758
+406,296
+421,874
+364,437
+351,126
+Allowance for impairment losses
+603,983
+531,161
+478,730
+413,177
+340,482
+on loans (1)
+Investment
+9,257,760
+31,896,125
+236,797
+17,190,992
+Due to banks and other financial
+2,872,792
+2,657,523
+2,312,143
+2,110,060
+Net capital base(2)
+3,909,669
+3,396,186
+3,121,479
+2,644,885
+2,406,920
+3,241,364
+Risk-weighted assets (2)
+20,124,139
+18,616,886
+15,902,801
+Per share data (in RMB yuan)
+Net asset value per share(3)
+8.15
+7.48
+6.93
+Market value
+6.30
+21,690,349
+Net tier 1 capital(2)
+2,030,108
+2,232,033
+2,921,029
+2,784,259
+2,266,573
+1,814,495
+1,706,549
+institutions
+Equity attributable to equity holders
+3,257,755
+2,893,502
+2,676,186
+2,330,001
+2,127,491
+of the parent company
+Share capital
+356,407
+356,407
+356,407
+356,407
+356,407
+Net core tier 1 capital (2)
+2,886,378
+2,653,002
+2,457,274
+222,461
+Unit: RMB100 millions
+2020
+Financial Highlights
+130,573
+124,394
+139,625
+Operating income
+860,880
+800,075
+776,002
+725,121
+675,654
+Operating expenses
+131,215
+236,227
+207,776
+194,203
+186,194
+Impairment losses on assets
+202,623
+202,668
+178,957
+161,594
+ICBC
+Operating profit
+206,585
+133,024
+Net fee and commission income
+522,078
+5.73
+RMB 2.933
+2021
+2.933
+2020
+2.660
+259.87
+Up 21.68
+35 thousand
+USD 245.4 billion
+2019
+2.628
+(Financial data and indicators in this annual report are prepared in accordance with IFRSS and, unless otherwise specified, are
+consolidated amounts of the Bank and its subsidiaries and denominated in Renminbi.)
+Financial Data
+2021
+2019
+2018
+2017
+Annual operating results (in RMB millions)
+Net interest income
+690,680
+646,765
+632,217
+593,677
+422,030
+390,822
+389,269
+369,324
+Financial Highlights
+Financial Data (continued)
+2021
+2020
+2019
+2018
+2017
+As at the end of reporting period
+(in RMB millions)
+Total assets
+35,171,383
+Total loans and advances to customers
+20,667,245
+33,345,058
+18,624,308
+30,109,436 27,699,540 26,087,043
+16,761,319
+15,419,905 14,233,448
+Corporate loans
+12,194,706
+11,102,733
+9,955,821
+Unit: RMB yuan
+Dividend per 10 shares
+(pre-tax)
+9
+[011]
+Annual Report 2021
+529,911
+361,691
+Profit before taxation
+424,899
+392,126
+391,789
+372,413
+364,641
+Net profit
+350,216
+317,685
+313,361
+298,723
+287,451
+Net profit attributable to equity holders
+of the parent company
+348,338
+315,906
+312,224
+297,676
+286,049
+Net cash flows from operating activities
+360,882
+1,557,616
+481,240
+770,864
+Basic earnings per share
+127,769
+0.86
+(6) Calculated by dividing operating expenses (less taxes and surcharges) by operating income.
+(7) Calculated by dividing the balance of NPLs by total balance of loans and advances to customers.
+(8) Calculated by dividing allowance for impairment losses on loans by total balance of NPLs.
+(9) Calculated by dividing allowance for impairment losses on loans by total balance of loans and advances to customers.
+(10) Calculated in accordance with the Capital Regulation.
+Quarterly Financial Data
+(In RMB millions)
+Operating income
+Q1
+214,120
+2021
+Q2
+Q3
+(5) Calculated by dividing net profit by the average balance of risk-weighted assets at the beginning and at the end of the
+reporting period.
+Q4
+2020
+Q2
+Q3
+Q4
+Net profit attributable to equity
+holders of the parent
+company
+212,286 217,489 216,985
+85,730 77,743 88,348 96,517
+206,187
+196,159 197,901 199,828
+84,494
+64,296 79,885 87,231
+Net cash flows from operating
+Q1
+(4) Calculated by dividing net interest income by the average balance of interest-generating assets.
+(3) Calculated by the spread between yield on average balance of interest-generating assets and cost on average balance of
+interest-bearing liabilities.
+Notes: (1) Calculated by dividing net profit by the average balance of total assets at the beginning and at the end of the reporting period.
+(2) Calculated in accordance with the Rules for the Compilation and Submission of Information Disclosure by Companies that Offer
+Securities to the Public No. 9 - Calculation and Disclosure of Return on Net Assets and Earnings per Share (Revision 2010)
+issued by CSRC.
+14.27
+13.45
+9,418,894
+13.27
+Capital adequacy ratio (10)
+18.02
+16.88
+16.77
+15.39
+15.14
+Total equity to total assets ratio
+9.31
+8.73
+8.94
+8.47
+8.21
+Risk-weighted assets to total assets
+61.67
+60.35
+61.83
+62.06
+60.96
+ratio
+activities
+612,669 (235,123) 588,904 (605,568) 1,907,890 (34,157) 146,709 (462,826)
+Annual Report 2021
+11
+President's Statement
+President
+Liao Lin
+Annual Report 2021
+15
+President's Statement
+In 2021, in the face of the complicated and severe external
+environment, the Bank conscientiously implemented the
+decisions and arrangements of the CPC Central Committee
+and the State Council, acted upon the "48-character"
+guideline, stepped foot in the new development stage,
+applied the new development philosophy in full, in
+the right way and in all fields, and actively served and
+integrated into the new development paradigm. We
+coordinated COVID-19 containment efforts and financial
+work, went to all lengths to accomplish the "Three
+Tasks" of financial work, and achieved stable and even
+more remarkable business performance. We made great
+headway in our new development plan and took solid
+steps toward high-quality development.
+In 2021, the Group recorded RMB860.9 billion in
+operating income, representing an increase of 7.6%
+from the previous year. Profit before provision was
+RMB627.5 billion, representing an increase of 5.5% from
+the previous year. Net profit reached RMB350.2 billion,
+representing an increase of 10.2% from the previous year.
+Return on total average assets and return on weighted
+average equity were both higher than the previous year.
+Capital adequacy ratio stood at 18.02%. NPL ratio was
+1.42%, down 0.16 percentage points from the end of
+the previous year. Allowance to NPLs reached 205.84%.
+These indicators fully reflect the balance and coordination
+between value creation, market standing, risk management
+and capital constraints and demonstrate the Bank's strong
+momentum for high-quality development and extraordinary
+development resilience.
+Such resilience is firmly rooted in our commitments
+to fulfilling our original aspirations and serving
+the real economy. According to the cross-cyclical and
+counter-cyclical policy adjustments, the Bank earnestly
+implemented the requirements for "ensuring stability on
+six key fronts" and "maintaining security in six key areas".
+We arranged the aggregate volume, pace and structure of
+investment and financing in a well-coordinated way, and
+continuously improved the adaptability, competitiveness
+and inclusiveness of financial services, so as to better meet
+the diversified financial needs of the real economy and
+the general public. The Bank registered new domestic
+RMB loans of RMB2.12 trillion, RMB243.3 billion more
+than the increment last year, hitting the new high for the
+same period. Bond investments grew by RMB763.2 billion,
+with the balance remaining at the first position among
+peers. We took precise and targeted actions to support
+the key fields and weak areas of the real economy. Loans
+to manufacturing increased by RMB319.7 billion, with the
+medium to long-term loans to manufacturing growing
+by RMB242.7 billion. We improved financial service
+modes for sci-tech enterprises, and the balance of loans
+to key state-supported high-tech fields surpassed RMB1
+trillion. We actively pushed forward green and low-carbon
+transformation and witnessed the total amount of green
+loans exceeding RMB2.4 trillion, indicating a growth rate
+of 34.4%. We made vigorous efforts in the development
+of digital inclusive finance and supply chain finance,
+and scaled up small and micro loans. We launched the
+"ICBC Xingnongtong" brand, to expand the breadth and
+depth of our financial support for the endeavor of rural
+revitalization. Our inclusive loans grew by over 50% in the
+year.
+Such resilience is built upon our solid measures for
+safeguarding the bottom line of risk management
+and continuously enhancing our ability to defuse
+risks. The Bank placed equal emphasis on development
+and security, adopted a holistic risk management
+approach to people, money and policy system, and
+upgraded the enterprise risk management system through
+"active prevention, smart control and comprehensive
+management". We strengthened the implementation
+of policies and fully implemented new credit review
+regulations across domestic institutions. We carried out
+special actions to improve asset quality, systematically
+inspected and managed risks in key areas and related to
+key customers, and redoubled efforts in the collection and
+disposal of NPLs. The overdue rate, overdue amount and
+price scissors between overdue loans and NPLs continued
+to decline. We overdid the task of reducing existing wealth
+management products. We stayed vigilant against market
+risk and took effective measures to forestall emerging risks
+such as climate risk and model risk. We comprehensively
+improved the effectiveness of internal control and case
+prevention, and achieved notable results in customer
+complaint management.
+16
+ICBC
+President's Statement
+Such resilience stems from our thorough efforts
+to advance transformation and innovation and
+continuously inspire business vitality and growth
+momentum. In alignment with the 14th Five-Year Plan,
+the Bank launched its new development plan, followed
+through on the pattern of "bringing out our strengths to
+make up for our weaknesses and laying a solid foundation
+and base" and pushed forward the implementation of
+the No.1 Personal Bank Strategy, the Preferred Bank
+Strategy for Foreign Exchange Business, the Strategy for
+Sharpening Competitive Edge in Key Regions and the
+Urban-Rural Collaborative Development Strategy. We
+worked hard to cultivate and shape new advantages for
+high-quality development, advanced the transformation of
+asset management, private banking, bank card and other
+businesses in an orderly manner, and comprehensively
+improved our service quality. We accelerated digital
+transformation and deepened the fusion of technology
+and business. We vigorously developed service scenarios in
+smart government, smart social security, smart education
+and other fields with a focus to help improve people's
+livelihoods, further strengthened the interactions among
+government, business and consumption ("GBC"), and
+achieved substantial results in fundamental work such as
+fund taking and "net making and patching" program.
+With more than 700 million personal customers and
+9.69 million corporate customers, the Bank has a well-
+coordinated customer ecosystem encompassing large,
+medium, small and micro customers, laying a solid
+foundation for high-quality development.
+2022 is of great significance in the development progress
+of the Party and the country, as the Communist Party
+of China will hold its 20th National Congress. The Bank
+will continue to fully implement the decisions and
+arrangements of the CPC Central Committee and the
+State Council, and stick to the general principle of
+pursuing progress while ensuring stability. In light of the
+"48-character" guideline, we, with the trust and support
+of all shareholders and people from all walks of society,
+will concentrate on our core responsibilities and businesses,
+place a greater emphasis on integrity and innovation, focus
+on "action, implementation and promotion", and adhere
+to the pattern of "bringing out our strengths to make
+up for our weaknesses and laying a solid foundation and
+base". We will strive for mid-term breakthroughs in the
+implementation of our new plan, step up efforts to build
+a world-class modern financial institution, and stick to the
+path of financial development with Chinese characteristics.
+We will welcome the convening of the Party's 20th National
+Congress with concrete actions aimed at serving the
+new development paradigm and promoting high-quality
+development.
+President: Liao Lin
+30 March 2022
+Annual Report 2021
+17
+Chairman of the Board of Supervisors Huang Liangbo
+18
+30 March 2022
+14.28
+Chairman: Chen Siqing
+14
+Chairman's Statement
+12
+Chairman Chen Siqing
+ICBC
+Chairman's Statement
+The year 2021 was a milestone in the history of the
+Communist Party of China ("CPC" or the "Party") and
+the country as we celebrated the 100th anniversary of the
+founding of the Party. ICBC adhered to Xi Jinping Thought
+on Socialism with Chinese Characteristics for a New Era,
+earnestly implemented the decisions and arrangements
+of the CPC Central Committee and the State Council,
+stayed committed to the general principle of pursuing
+progress while ensuring stability, and continued to uphold
+the "48-character" guideline. Based on the reality of the
+new development stage, we applied the new development
+philosophy, actively served and integrated into the new
+development paradigm, responded to COVID-19 and
+pursued financial security and business development in
+a well-coordinated way, and contributed to high-quality
+economic development while striving to pursue our own
+high-quality development. As a result, we delivered a solid
+performance to celebrate the Party's centenary.
+We kept in mind national priorities and did our best
+to serve high-quality development. In line with the
+new development paradigm and the requirements for the
+implementation of the 14th Five-Year Plan, we implemented
+the guidance of macro policies, and promoted high-
+level coordination of investment and financing in terms
+of quality, scale, pace and price. We continued to refine
+financial services in key areas and weak links, and led
+the market in terms of credit scale in manufacturing,
+technological innovation and green sectors, with the
+growth of inclusive finance loans topping the rankings. To
+promote common prosperity, we set up special agencies
+to serve rural revitalization, launched the brand "ICBC
+Xingnongtong", and delivered helpful assistance to micro,
+small and medium-sized enterprises and industries in
+need. We strengthened global service synergy, and actively
+promoted opening-up at a higher level and the high-quality
+development of the Belt and Road Initiative. We ensured
+financial support for epidemic prevention and control,
+energy supply, flood control and relief, and vigorously built
+up our image as a responsible large bank.
+We adhered to the bottom-line thinking and spared
+no effort to promote high-quality risk control. We
+continued to plan ahead, see the big from the small,
+remedy in time and draw inferences. By doing so we
+improved the enterprise risk management system, and
+helped maintain economic and financial stability. We
+planned in a well-coordinated way, and managed with
+clear accounting. We improved the risk identification,
+early-warning and risk mitigation mechanism across the
+entire chain, and coordinated efforts to guard against
+and control traditional and emerging risks, risks on and
+off the balance sheet, domestic and overseas, online and
+offline. We tightened control over all kinds of credit risks,
+and increased efforts to improve the asset quality, with
+continuous improvement in the operating capacity of
+risk assets, and simultaneous decline in the NPL ratio and
+overdue loan ratio. We stayed alert to the volatility of the
+financial market, adhered to prudent trading strategies,
+strictly controlled the risk exposure, and kept the market
+risk at an overall stable level.
+We advanced reform more vigorously and strived
+to achieve high-quality development. We focused
+on improving the governance system and capacity, and
+deepened the organic integration of Party leadership
+and corporate governance. We pushed forward the
+arrangements of "bringing out our strengths to make
+up for our weaknesses and laying a solid foundation
+and base." Headways were made in our implementation
+of key strategies such as the No.1 Personal Bank, the
+Preferred Bank for Foreign Exchange Business, Sharpening
+Competitive Edge in Key Regions and Urban-Rural
+Collaborative Development. We accelerated the bank-
+wide digital transformation. Our intelligent banking
+ecosystem ECOS project was awarded PBC's special
+award of the "FinTech Development Awards", and our
+data management capability was given the highest rating
+by the Ministry of Industry and Information Technology.
+Last year, we delivered financial services for the China
+International Import Expo, the China Import and Export
+Fair, the China International Fair for Trade in Services and
+the China International Consumer Products Expo. We
+initiated the China-Europe Business Council, and promoted
+the development of Belt and Road Bankers Roundtable
+("BRBR"). We played an active part in international
+governance of green finance and launched the Beijing
+Initiative on Climate-Friendly Banks.
+We made every effort to promote the head start of the
+new development plan. We acted swiftly and efficiently
+to implement key strategies and tasks, with notable
+achievements made. We performed well in major operating
+indicators and we became "stronger, better and bigger."
+The foundation for strong development was
+further consolidated. Our capital strength was further
+strengthened. The capital adequacy ratio exceeded 18%,
+one of the highest among the large banks in the world.
+The balance of provisions surpassed RMB600.0 billion, and
+the allowance to NPLs rebounded to over 200% for the
+first time in the past seven years. For the ninth consecutive
+year, the Bank ranked first among Global 2000 by Forbes
+and the Top 1000 World Banks by The Banker.
+Annual Report 2021
+13
+Chairman's Statement
+The quality of business performance was further
+improved. Our operating efficiency continued to improve,
+with the return on assets ("ROA") and return on equity
+("ROE") reaching 1.02% and 12.15% respectively.
+Through meticulous management and internal potential
+tapping, the change in our net interest margin ("NIM")
+was better than most peers, and the cost-to-income ratio
+was 26.36%, lower than most large banks in the world.
+Our scale merits were further augmented. Our assets
+exceeded RMB35 trillion, operating income topped
+RMB860.0 billion, and net profit surpassed RMB350.0
+billion, consolidating our lead in the banking sector. We
+maintained the first place in assets, capital, deposits and
+loans among banks in the world, and the first place in
+market value and total dividends among Chinese banks.
+On behalf of the Board of Directors, I would like to express
+my sincere gratitude to people from all walks of society for
+their care and support to ICBC, to the Board of Supervisors
+for its effective supervision, and to the Management and
+all employees for their dedication and contribution. Based
+on our good business performance, the Board of Directors
+proposed a dividend of RMB2.933 per ten ordinary shares
+for 2021, which will be submitted to the Shareholders'
+General Meeting for deliberation.
+From our practices in the past year, we have deepened
+our understanding on improving our financial work. We
+will always follow the guidance of Party building, firmly
+carry out financial work in the right direction, adhere to
+the people-centered principle, and fulfill our responsibility
+of serving the real economy. We will foster and uphold
+the correct view on business performance, unswervingly
+follow the qualitative development path of quality-first,
+efficiency-prioritized and innovation-driven development,
+and strive to become stronger, better and bigger. We will
+stick to the bottom-line thinking, take the initiative to
+guard against and defuse risks, and promote the realization
+of the dynamic balance between high-quality development
+and high-level security. We shall actively shoulder our
+due responsibilities, address difficulties on development
+through reform, and stick to the path of financial
+development with Chinese characteristics.
+At present, as the world is experiencing a pandemic and
+changes unseen in the past century, a fast-changing global
+political and economic landscape, and chain reactions
+arising from geopolitical conflicts, the global finance,
+energy, transportation and supply chain stability are faced
+with great shocks, and the global banks are facing an ever-
+complex external environment and new challenges in their
+operations. However, the fundamentals of the Chinese
+economy remain unchanged, and they will maintain long-
+term growth and demonstrate strong resilience and vitality.
+As China moves faster to construct a new development
+pattern and implements macro policies in full, the Chinese
+economy is being stimulated on all fronts for steady, sound
+and high-quality growth. The domestic banking sector is
+facing a favorable environment for development.
+In 2022, we will continue to follow the guidance of Xi
+Jinping Thought on Socialism with Chinese Characteristics
+for a New Era, make economic stability our top priority and
+pursue progress while ensuring stability, thus contributing
+to the goal of achieving a stable performance of the
+macro economy. We will further improve the quality and
+efficiency of services for the real economy, and make
+more progress in achieving high-quality development. We
+will remedy problems identified by the central inspection
+team, and in the course push forward the implementation
+of various reforms to produce real effects. We will work
+hard to build the Bank into a world-class modern financial
+enterprise with Chinese characteristics and set the stage
+for the Party's 20th National Congress with concrete actions
+and remarkable achievements.
+th
+の
+情
+ICBC
+0.95
+14.94
+12.77
+ICBC
+Financial Indicators
+Financial Highlights
+2021
+2020
+2019
+2018
+2017
+Profitability (%)
+Return on average total assets (1)
+10
+1.02
+1.08
+1.11
+1.14
+Return on weighted average equity(2)
+12.15
+11.95
+13.05
+13.79
+14.35
+Net interest spread (3)
+1.00
+(4) The rating results are in the form of "long-term foreign currency deposits rating”.
+(3) Calculated by dividing equity attributable to equity holders of the parent company after deduction of other equity instruments at
+the end of the reporting period by the total number of ordinary shares at the end of the reporting period.
+(2) Calculated in accordance with the Capital Regulation.
+0.86
+0.82
+0.79
+Diluted earnings per share
+0.95
+0.86
+0.86
+0.82
+0.79
+Credit rating
+S&P(4)
+Moody's (4)
+A
+A
+A
+A
+A
+A1
+A1
+A1
+A1
+A1
+Notes: (1) Calculated by adding allowance for impairment losses on loans and advances to customers measured at amortised cost with
+allowance for impairment losses on loans and advances to customers measured at fair value through other comprehensive income.
+1.92
+1.97
+2.12
+2.20
+Non-performing loans ("NPLs") ratio (7)
+1.42
+1.58
+1.43
+Allowance to NPLs (8)
+205.84
+180.68
+199.32
+1.52
+175.76
+1.55
+154.07
+Allowance to total loans ratio (9)
+2.92
+2.85
+2.86
+2.68
+2.39
+Capital adequacy (%)
+Core tier 1 capital adequacy ratio (10)
+13.31
+13.18
+13.20
+12.98
+Asset quality (%)
+Tier 1 capital adequacy ratio (10)
+26.45
+25.79
+2.10
+Net interest margin (4)
+2.11
+2.15
+2.30
+2.36
+2.22
+Return on risk-weighted assets(5)
+1.68
+1.64
+1.75
+1.81
+1.89
+Ratio of net fee and commission income
+15.45
+16.40
+16.83
+17.15
+20.67
+to operating income
+Cost-to-income ratio(6)
+26.36
+24.76
+25.71
+8,936,864
+154,612
+Position
+one year
+15,909
+77,779
+3
+within
+five years
+Over
+five years
+Total
+Assets
+Liabilities
+8,730
+1,211
+239
+29
+25,087
+3
+150,480
+68
+61
+4,150
+(546)
+(1,243)
+(15)
+71,728
+93,691
+9,974
+242
+175,635
+33
+4,211
+Equity derivatives
+Currency swap contracts
+(96)
+51,651
+47,170
+6,723
+131
+105,675
+444
+(1,190)
+31 December 2020
+71,490
+Notional amounts with remaining maturity of
+Over three
+Over one
+Within
+three
+months
+but within
+year but
+months
+Interest rate swap contracts
+209
+Fair values
+(1,804)
+Annual Report 2021
+195
+38,352
+(64,319)
+374
+(4,263)
+(i)
+Debt securities are included in financial investments measured at FVTOCI, financial investments measured at amortised
+cost and debt securities issued.
+(ii)
+Other hedged items are included in due from banks and other financial institutions, other assets, due to banks and
+other financial institutions, customer deposits and other liabilities.
+Debt securities (i)
+(4,416)
+Loans and advances to customers
+Other (ii)
+Carrying amount of hedged items
+Hedging instruments
+Effect on other
+comprehensive
+Accumulated
+effect on other
+Assets
+Liabilities
+income during
+the current year
+comprehensive
+income
+58,998
+31 December 2020
+108
+(28,533)
+14,027
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Details of the Group's hedged risk exposures in cash flow hedges and the corresponding effect on equity are as follows:
+Debt securities (i)
+Loans and advances to customers
+Other (ii)
+31 December 2021
+Carrying amount of hedged items
+Assets
+Liabilities
+Hedging instruments
+Effect on other
+comprehensive
+income during
+the current year
+Accumulated
+effect on other
+comprehensive
+income
+19,617
+(35,786)
+192
+161
+4,708
+74
+(8)
+5,679
+4
+49
+1,243
+Fair values
+Liabilities
+amounts
+Assets
+Liabilities
+Exchange rate contracts
+5,107,815
+44,956
+(41,578)
+Notional
+5,779,609
+(91,559)
+Interest rate contracts
+2,018,010
+15,706
+(15,457)
+2,199,849
+23,002
+(25,248)
+Commodity derivatives and other
+95,260
+Fair values
+Assets
+amounts
+Notional
+Banks and other financial institutions operating outside Chinese mainland
+Accrued interest
+192,030
+262,922
+3,364
+3,279
+481,435
+559,720
+Less: Allowance for impairment losses
+(742)
+480,693
+827,150
+(736)
+558,984
+1,081,897
+194
+ICBC
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+21. DERIVATIVE FINANCIAL INSTRUMENTS
+A derivative is a financial instrument, the value of which changes in response to the changes in a specified interest rate,
+financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or
+other similar variables. The Group uses derivative financial instruments including forwards, swaps, options and futures.
+The notional amount of a derivative represents the underlying amount of the specific financial instruments mentioned above.
+It indicates the volume of business transacted by the Group but does not reflect the risk.
+The notional amounts and fair values of derivative financial instruments held by the Group are set out below:
+31 December 2021
+31 December 2020
+975,169
+(14,779)
+15,478
+804,987
+five years
+Total
+Assets
+Liabilities
+Interest rate swap contracts
+64
+2,878
+5,283
+127
+five years
+8,352
+47,204
+43,049
+1,391
+91,644
+8
+436
+(146)
+(948)
+Equity and other derivatives
+4,383
+Currency swap contracts
+one year
+months
+Over
+15,893
+(24,166)
+8,100,994
+76,140
+(71,337)
+8,784,445
+134,155
+(140,973)
+(1) Cash flow hedges
+The Group's cash flow hedges consist of interest rate swap contracts, currency swap contracts, equity and other derivatives
+that are used to protect against exposures to variability of future cash flows.
+Included in the above derivative financial instruments, those designated as hedging instruments in cash flow hedges are set
+out below:
+31 December 2021
+Notional amounts with remaining maturity of
+Fair values
+Over three
+Over one
+Within
+three
+months
+but within
+year but
+within
+(14,302)
+(62)
+(31)
+2,278
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(4) Offsetting of financial instruments
+In accordance with the principle of offsetting financial instruments, the Group offsets certain derivative financial assets and
+derivative financial liabilities, and presents the net amounts after offsetting in the financial statements.
+Derivative financial assets
+Derivative financial liabilities
+31 December 2021
+Gross amounts
+197
+36,220
+41,792
+31 December 2020
+Gross amounts
+48,896
+Net amounts
+37,045
+51,690
+39,839
+(5) Counterparty credit risk-weighted assets of derivative financial instruments
+The credit risk-weighted assets in respect of the above derivatives of the Group as at the end of the reporting period are as
+follows:
+Counterparty credit default risk-weighted assets
+Including: Non-netting settled credit default risk-weighted assets
+Netting settled credit default risk-weighted assets
+Net amounts
+25,442
+31,014
+Annual Report 2021
+As at 31 December 2021, an accumulated net gains from the hedging instrument of RMB1,650 million was recognised in
+other comprehensive income (31 December 2020: accumulated net gains of RMB889 million). As at 31 December 2021,
+there was no ineffectiveness in profit or loss that arises from the net investment hedges (31 December 2020: Nil).
+The Group's consolidated statement of financial position is affected by exchange differences between the functional
+currency of the Bank and functional currencies of its branches and subsidiaries. The Group hedges such exchange exposures
+under certain circumstances. Hedging is undertaken by using customer deposits taken in the same currencies as the
+functional currencies of related branches and subsidiaries which are accounted for as hedges of certain net investments in
+foreign operations.
+Liabilities
+Assets
+58,827
+(5,062)
+6,908
+Liabilities
+(237)
+5,435
+1,462
+13,289
+(10,028)
+166
+68
+77,551
+(15,090)
+8,536
+(169)
+(i)
+(ii)
+Debt securities are included in financial investments measured at FVTOCI, financial investments measured at amortised
+cost and debt securities issued.
+Other hedged items are included in reverse repurchase agreements, due to banks and other financial institutions,
+repurchase agreements and certificates of deposit.
+(3) Net investment hedges
+Credit value adjustment risk-weighted assets
+Assets
+Central counterparties credit risk-weighted assets
+31 December
+96,863
+409,047
+186,189
+398,535
+59
+69
+(128)
+(117)
+505,841
+584,676
+2020
+Measured at FVTPL:
+114,994
+126,192
+Cash advanced as collateral on securities borrowing
+42,661
+28,420
+157,655
+ICBC
+198
+739,288
+Reverse repurchase agreements-securities
+2021
+31 December
+31 December
+2021
+2020
+126,653
+147,747
+120,128
+76,703
+6,525
+71,044
+67,911
+48,366
+1,751
+2,351
+196,315
+198,464
+The credit risk-weighted assets of derivative financial instruments were calculated with reference to Regulation Governing
+Capital of Commercial Banks (Provisional).
+22. REVERSE REPURCHASE AGREEMENTS
+Measured at amortised cost:
+Reverse repurchase agreements-bills
+Reverse repurchase agreements-securities
+Accrued interest
+Less: Allowance for impairment losses
+31 December
+204,585
+Accumulated adjustments
+to the fair value of hedged items
+31 December 2020
+(1,486)
+1,437
+(49)
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Included in the above derivative financial instruments, those designated as hedging instruments in fair value hedges are
+interest rate swaps and the details are set out below:
+Notional amounts with remaining maturity of
+Fair values
+31 December 2021
+2,207
+(2,258)
+(51)
+31 December 2020
+Over one
+Within
+months
+three
+but within
+year but
+within
+Over
+months
+one year
+Over three
+2020
+2021
+ICBC
+(65)
+(82)
+58,190
+(308,298)
+(19)
+(4,524)
+119,466
+(323,077)
+(146)
+(4,637)
+(i)
+Debt securities are included in financial investments measured at FVTOCI, financial investments measured at amortised
+cost and debt securities issued.
+Other hedged items are included in due from banks and other financial institutions, other assets, due to banks and
+other financial institutions, certificates of deposit, customer deposits and other liabilities.
+There was no ineffectiveness recognised in profit or loss that arises from the cash flow hedges in 2021 (2020: Nil).
+(2) Fair value hedges
+Fair value hedges are used by the Group to protect against changes in fair value of financial assets and financial liabilities
+due to movements in market interest rates. The Group mainly used interest rate swaps as hedging instruments to hedge the
+interest risk of financial assets and financial liabilities.
+The changes in fair value of the hedging instruments and net gains or losses arising from the hedged risk relating to the
+hedged items are set out below:
+Gain/(loss) arising from fair value hedges, net:
+Hedging instruments
+Hedged risk relating to the hedged items
+196
+five years
+Carrying amount of hedged items
+five years
+4,623
+(339)
+21
+Liabilities
+(3)
+2,441
+(21)
+955
+(6,954)
+(1)
+62,768
+59
+(7,293)
+(1)
+56
+(i)
+Debt securities are included in financial investments measured at FVTOCI, financial investments measured at amortised
+cost and debt securities issued.
+(ii)
+Other hedged items are included in due from banks and other financial institutions, repurchase agreements and
+customer deposits.
+Debt securities (i)
+Loans and advances to customers
+Other (ii)
+66,164
+Assets
+Liabilities
+Assets
+7,187
+41,439
+21,108
+74,357
+Assets
+627
+Liabilities
+(1,071)
+3,074
+31,267
+38,119
+24,984
+97,444
+277
+(3,119)
+Details of the Group's hedged risk exposures in fair value hedges are set out below:
+Debt securities (i)
+Loans and advances to customers
+Other (ii)
+31 December 2021
+Accumulated adjustments
+Carrying amount of hedged items
+to the fair value of hedged items
+Total
+Name
+188,935
+88,934
+1,011
+354
+498
+159
+1,011
+1,011
+27
+27
+37
+1,011
+13
+77
+Ye Donghai
+Mei Yingchun (vi)
+Dong Shi
+Former Non-executive Director
+Former Non-executive Director
+Sheila Colleen Bair (vii)
+Hui Ping (viii)
+Former Independent Non-executive Director
+Former Employee Supervisor
+115
+77
+159
+498
+354
+50
+Wu Xiangjiang (iii)
+Employee Supervisor
+13
+13
+13
+Qu Qiang
+External Supervisor
+250
+250
+250
+Shen Bingxi
+External Supervisor
+Gu shu (iv)
+Yang Guozhong (v)
+Hu Hao
+Former Vice Chairman of the Board
+of Directors, Executive Director, President
+Former Chairman of the Board of Supervisors
+Former Executive Director, Senior Executive
+Vice President
+Former Non-executive Director
+115
+50
+37
+115
+37
+At the Annual General Meeting of the Bank for the Year 2019 held on 12 June 2020, Mr. Shen Si was re-elected as
+Independent Non-executive Director of the Bank, and his new term of office started from the day of approval at the
+Annual General Meeting.
+At the special meeting of the first session of employee representative assembly of the Bank held on 15 September
+2020, Mr. Wu Xiangjiang was elected as Employee Supervisor of the Bank, and his term of office started from the day
+of approval by the employee representative assembly.
+In December 2020, Mr. Gu Shu ceased to act as Vice Chairman, Executive Director and President of the Bank due to
+change of job assignments.
+At the First Extraordinary General Meeting of 2020 held on 8 January 2020, Mr. Yang Guozhong was elected as
+Shareholder Supervisor of the Bank, and his new term of office started from the day of approval by the Shareholders'
+General Meeting, and his term of office as Chairman of the Board of Supervisors of the Bank took effect
+simultaneously. In March 2021, Mr. Yang Guozhong ceased to act as Shareholder Supervisor and Chairman of the
+Board of Supervisors of the Bank due to change of job assignments.
+In February 2021, Ms. Mei Yingchun ceased to act as Non-executive Director of the Bank due to expiration of her term
+of office.
+In March 2020, Ms. Sheila Colleen Bair ceased to act as Independent Non-executive Director of the Bank due to
+expiration of her term of office.
+(viii) In September 2020, Mr. Hui Ping ceased to act as Employee Supervisor of the Bank due to his age.
+The Non-executive Directors of the Bank who were recommended by Huijin received emoluments from Huijin in respect of
+their services during the year.
+In 2021, there was no arrangement under which a Director or a Supervisor of the Bank waived or agreed to waive any
+remuneration (2020: Nil).
+At the Annual General Meeting of the Bank for the Year 2019 held on 12 June 2020, Mr. Liao Lin was elected as
+Executive Director of the Bank, and his qualification was approved by CBIRC in July 2020. On 25 February 2021,
+the Board of Directors of the Bank elected Mr. Liao Lin as Vice Chairman of the Bank and appointed Mr. Liao Lin as
+President of the Bank, and his qualification was approved by CBIRC in March 2021. Mr. Liao Lin ceased to act as Chief
+Risk Officer of the Bank after he took office as President.
+In 2021, no emolument was paid by the Group to any of the Directors or Supervisors as an inducement to join or upon
+joining the Group or as a compensation for loss of office (2020: Nil).
+ICBC
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+13. FIVE HIGHEST PAID INDIVIDUALS
+The five highest paid individuals of the Group are employees of the Bank's subsidiaries. Their emoluments were determined
+based on the prevailing market rates in the respective countries/regions where the subsidiaries are operating. None of them
+are directors, supervisors or key management personnel of the Bank whose emoluments are disclosed in notes 12 and 47(g)
+to the consolidated financial statements. Details of the emoluments in respect of the five highest paid individuals are as
+follows:
+2021
+RMB'000
+2020
+RMB'000
+Salaries and allowances
+Discretionary bonuses
+Other
+15,998
+190
+(vii)
+(vi)
+(v)
+2,805
+1,988
+3,264
+878
+8,935
+515
+8,420
+Note: Since January 2015, the remuneration to the Chairman of the Board of Directors, the President, the Chairman of the Board
+of Supervisors and other executives of the Bank has followed the State's policies relating to the remuneration reform on
+executives of central enterprises.
+The remuneration before tax payable to Directors and Supervisors for 2020 set out in the table above represents the total
+amount of annual remuneration for each of these individuals, which include the amounts disclosed in the 2020 Annual
+Report.
+Pursuant to the PRC relevant regulations, a portion of the discretionary bonus payments for the Chairman of the Board
+of Directors, the President, the Chairman of the Board of Supervisors, Executive Directors and other senior management
+members are deferred based on the future performance.
+Fees of Mr. Huang Li, Mr. Wu Xiangjiang and Mr. Hui Ping were their allowances obtained as Employee Supervisors of the
+Bank, excluding their remuneration with the Bank in accordance with the employee remuneration system.
+Annual Report 2021
+189
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+As at the approval date of the consolidated financial statements for the year ended 31 December 2020, changes of directors
+and supervisors of the Bank were as follows:
+(i)
+(ii)
+(iii)
+(iv)
+37
+15,889
+50
+Huang Li
+RMB'000
+RMB'000
+RMB'000
+before tax
+RMB'000
+payment
+paid before tax
+RMB'000
+RMB'000
+(1)
+RMB'000
+(2)
+(4) (5)=(1)+(2)+(3)+(4)
+(6)
+(7)=(5)-(6)
+354
+498
+159
+1,011
+1,011
+319
+(3)
+insurances
+bonuses
+Fees Remuneration
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Year ended 31 December 2020
+Contribution
+by the
+employer to
+social
+insurance,
+housing
+allowance,
+annuities and
+Actual
+additional
+Total
+Of which:
+amount of
+Discretionary
+medical
+emoluments
+deferred
+remuneration
+448
+Employee Supervisor
+154
+921
+470
+470
+Nout Wellink
+Independent Non-executive Director
+470
+470
+470
+Fred Zuliu Hu
+Independent Non-executive Director
+470
+410
+410
+Zhang Wei
+Shareholder Supervisor
+580
+1,285
+234
+2,099
+515
+1,584
+410
+Independent Non-executive Director
+Shen Si (ii)
+470
+Chen Siging
+Liao Lin (i)
+Lu Yongzhen
+Chairman, Executive Director
+Vice Chairman, Executive Director, President
+Non-executive Director
+Zheng Fuqing
+Non-executive Director
+Feng Weidong
+Non-executive Director
+Cao Liqun
+Non-executive Director
+Anthony Francis Neoh
+Independent Non-executive Director
+520
+520
+520
+Yang Siu Shun
+Independent Non-executive Director
+470
+470
+921
+Other financial institutions operating in Chinese mainland
+66,495
+349
+338,731
+307,067
+Weighted average number of ordinary shares in issue (in million shares)
+Basic earnings per share (RMB yuan)
+Diluted earnings per share (RMB yuan)
+Basic and diluted earnings per share were calculated using the profit for the year attributable to ordinary shareholders of the
+parent company divided by the weighted average number of ordinary shares in issue.
+356,407
+356,407
+0.95
+Profit for the year attributable to ordinary shareholders of the parent company
+Shares:
+0.86
+0.86
+Annual Report 2021
+193
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+19. CASH AND BALANCES WITH CENTRAL BANKS
+Cash on hand
+Balances with central banks
+0.95
+Mandatory reserves (i)
+(8,839)
+holders of the parent company
+5,279
+Interests on perpetual bonds
+3,560
+3,560
+9,607
+8,839
+2021
+2020
+Dividends on ordinary shares proposed for approval
+(9,607)
+(not recognised as at 31 December):
+104,534
+94,804
+18. EARNINGS PER SHARE
+2021
+2020
+Earnings:
+Profit for the year attributable to equity holders of the parent company
+Less: Profit for the year attributable to other equity instrument
+348,338
+315,906
+Final dividend on ordinary shares for 2021: RMB0.2933 per share
+(2020: RMBO.2660 per share)
+Surplus reserves (ii)
+Fiscal deposits and other
+31 December
+243,440
+433,575
+Other financial institutions operating in Chinese mainland
+10,508
+2,728
+Banks and other financial institutions operating outside Chinese mainland
+Accrued interest
+90,511
+82,807
+2,347
+Banks operating in Chinese mainland
+4,294
+523,404
+Less: Allowance for impairment losses
+(349)
+(491)
+346,457
+522,913
+Placements with banks and other financial institutions:
+Banks operating in Chinese mainland
+97,106
+346,806
+Deposits with banks and other financial institutions:
+2020
+2021
+2021
+31 December
+2020
+62,872
+64,833
+2,459,402
+2,601,657
+338,551
+236,211
+619,968
+249,836
+1,501
+3,537,795
+(i)
+(!!)
+Accrued interest
+1,402
+3,098,438
+The Group is required to place mandatory reserve deposits and other restricted deposits with the PBOC and certain
+central banks of overseas countries or regions where it has operations. They are not available for use in the Group's
+daily operations. As at 31 December 2021, the mandatory deposit reserve ratios of the domestic branches of the Bank
+in respect of customer deposits denominated in RMB and foreign currencies were 10% (31 December 2020: 11%) and
+9% (31 December 2020: 5%) respectively. The mandatory reserve funds placed by domestic subsidiaries of the Group
+are determined by the PBOC. The amounts of mandatory reserve deposits placed with the central banks of those
+countries or regions outside Chinese mainland are determined by local jurisdictions.
+Surplus reserves with the PBOC include funds for the purpose of cash settlement and other kinds of unrestricted
+deposits.
+20. DUE FROM BANKS AND OTHER FINANCIAL INSTITUTIONS
+31 December
+31 December
+6,047
+39,256
+Dividends or interests declared and paid to other equity instrument holders:
+Dividends on preference shares
+94,804
+34,356
+202,623
+30,838
+202,668
+Annual Report 2021
+191
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+15. INCOME TAX EXPENSE
+171,830
+(a) Income tax expense
+Chinese mainland
+Hong Kong SAR and Macau SAR
+Other overseas jurisdictions
+Deferred income tax expense
+2021
+2020
+79,459
+74,022
+1,768
+Current income tax expense:
+2020
+2021
+168,267
+Other
+8,772
+82,842
+63,917
+The number of these individuals whose emoluments fell within the following bands is set out below:
+Number of employees
+2021
+2020
+RMB10,500,001 Yuan to RMB11,000,000 Yuan
+RMB11,000,001 Yuan to RMB11,500,000 Yuan
+RMB11,500,001 Yuan to RMB12,000,000 Yuan
+RMB13,500,001 Yuan to RMB14,000,000 Yuan
+RMB14,000,001 Yuan to RMB14,500,000 Yuan
+RMB14,500,001 Yuan to RMB15,000,000 Yuan
+RMB23,500,001 Yuan to RMB24,000,000 Yuan
+RMB25,000,001 Yuan to RMB25,500,000 Yuan
+1
+2
+1
+1
+1
+1
+1
+1
+1
+5
+5
+In 2021, no emoluments were paid by the Group to any of these non-director and non-supervisor individuals as an
+inducement to join or upon joining the Group (2020: Nil).
+14. IMPAIRMENT LOSSES ON ASSETS
+Loans and advances to customers (note 23)
+1,776
+93,664
+1,950
+83,177
+(326)
+Effects of other
+(890)
+581
+Income tax expense
+74,683
+74,441
+(i)
+The non-deductible expenses mainly represent non-deductible impairment provision and write-offs.
+(717)
+(ii) The non-taxable income mainly represents interest income arising from the PRC government bonds and municipal
+debts.
+The consolidated profit attributable to equity holders of the parent company for the year ended 31 December 2021 includes
+a profit of RMB323,100 million (2020: RMB304,267 million) which has been dealt with in the financial statements of the
+Bank (Note 51).
+192
+ICBC
+17. DIVIDENDS
+Dividends on ordinary shares declared and paid:
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+2021
+2020
+Final dividend on ordinary shares for 2020: RMB0.2660 per share
+(2019: RMBO.2628 per share)
+16. PROFIT ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT COMPANY
+2,347
+Effects of profits attributable to associates and joint ventures
+(51,427)
+78,145
+(8,494)
+(3,704)
+74,683
+74,441
+(b) Reconciliation between income tax and accounting profit
+PRC statutory income tax rate is 25%. Taxes on profits assessable elsewhere have been calculated at the applicable rates
+of tax prevailing in the countries/regions in which the Group operates in. The Group has reconciled income tax expense
+applicable to profit before taxation at the PRC statutory income tax rate to actual income tax expense for the Group as
+follows:
+2021
+2020
+(42,803)
+Profit before taxation
+392,126
+Tax at the PRC statutory income tax rate
+106,225
+98,032
+Effects of different applicable rates of tax prevailing in other countries/regions
+Effects of non-deductible expenses (i)
+(827)
+(1,521)
+22,319
+20,478
+Effects of non-taxable income (ii)
+424,899
+663,496
+204
+123,820
+25. INVESTMENTS IN SUBSIDIARIES
+10
+10
+100
+100
+180
+100
+MXN1,597 million
+MXN1,597 million
+Mexico City, Mexico
+Commercial banking
+Real202 million
+Real202 million
+Sao Paulo, Brazil
+Commercial banking
+100
+(Brasil) S.A.
+100
+100
+ARS28,415 million
+USD904 million
+Buenos Aires, Argentina
+Commercial banking
+(Argentina) S.A
+ICBC Peru Bank ("ICBC Peru")
+100
+100
+ICBC Credit Suisse Asset Management Co., Ltd.*
+80
+80
+ICBC Financial Leasing Co., Ltd.*
+Industrial and Commercial Bank of China
+Industrial and Commercial Bank of China
+100
+Industrial and Commercial Bank of China
+Mexico S.A.
+USD200 million
+USD1,083 million
+RUB10,810 million
+USD200 million
+USD839 million
+RUB10,810 million
+London, United Kingdom
+London, United Kingdom
+Commercial banking
+Banking
+Moscow, Russia
+Commercial banking
+TRY860 million
+USD425 million
+Istanbul, Turkey
+Commercial banking
+EUR200 million
+USD369 million
+EUR200 million
+USD306 million
+Vienna, Austria
+New York, United States
+Commercial banking
+Commercial banking
+Broker dealer and
+margin trading
+Commercial banking
+Delaware and
+New York, United States
+Toronto, Canada
+CAD218.66 million
+CAD208 million
+80
+80
+100
+80
+Industrial and Commercial Bank of China
+(Canada)
+USD50.25 million
+USD50 million
+100
+100
+Industrial and Commercial Bank of China
+Financial Services LLC
+80
+888888
+100
+USD120 million
+As at 31 December 2021 and 31 December 2020, the Group held 97.98% voting rights of ICBC Thai. Apart from ICBC Thai,
+voting rights of other subsidiaries of the Group are in line with the Group's equity interests.
+The above table lists the principal subsidiaries of the Bank. To give details of other subsidiaries would, in the opinion of the
+management, result in particulars of excessive length.
+There is no subsidiary of the Group which has material non-controlling interests during the reporting period.
+206
+ICBC
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+26. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
+Interests in associates
+Interests in joint ventures
+Share of net assets
+Goodwill
+Less: Allowance for impairment losses
+31 December
+2021
+These subsidiaries incorporated in Chinese mainland are all limited liability companies.
+31 December
+2020
+39,776
+1,210
+61,782
+1,430
+41,206
+31 December
+31 December
+2021
+2020
+47,108
+32,110
+15,039
+9,444
+62,147
+41,554
+60,572
+*
+Commercial banking
+Commercial banking
+Zhejiang, the PRC
+Chongqing, the PRC
+RMB433 million
+RMB11,000 million
+Lima, Peru
+Beijing, the PRC
+Tianjin, the PRC
+("ICBC Leasing")
+ICBC-AXA Assurance Co., Ltd.*
+60
+60
+RMB12,505 million
+ICBC Financial Asset Investment Co., Ltd.*
+100
+100
+RMB27,000 million
+RMB7,980 million
+RMB27,000 million
+Shanghai, the PRC
+Nanjing, the PRC
+("ICBC Investment")
+ICBC Wealth Management Co., Ltd.*
+100
+100
+RMB120 million
+RMB100 million
+RMB200 million
+RMB100 million
+100
+100
+Chongqing Bishan ICBC Rural Bank Co., Ltd.*
+60
+USD120 million
+RMB200 million
+RMB18,000 million
+60
+Wealth
+management
+Insurance
+Financial asset
+investment
+Commercial banking
+Fund management
+Leasing
+Beijing, the PRC
+RMB16,000 million
+RMB16,000 million
+Zhejiang Pinghu ICBC Rural Bank Co., Ltd.*
+ICBC
+100
+100
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Particulars of the Group's principal subsidiaries as at the end of the reporting period are as follows:
+Nominal value
+of issued share/
+Percentage of equity interest %
+paid-in capital
+Amount
+31 December
+31 December
+31 December
+Name
+Industrial and Commercial Bank of China
+(Asia) Limited ("ICBC Asia")
+205
+2021
+100
+100
+2021
+HKD44,188 million
+invested
+by the Bank
+HKD54,738 million
+Place of
+incorporation/
+registration
+and operations
+Hong Kong SAR, the PRC
+Principal
+activities
+Commercial banking
+ICBC International Holdings Limited
+100
+100
+HKD5,963 million
+HKD5,963 million
+2020
+Annual Report 2021
+147,383
+163,283
+(19)
+19
+16
+1,572
+(21)
+(209)
+2,234
+2,718
+(5)
+GE
+(1)
+1,587
+(235)
+121
+5,073
+Balance at 31 December 2020
+(i)
+144,671
+160,571
+2,712
+2,712
+2020
+2021
+Hong Kong SAR, the PRC
+31 December
+Listed investments, at cost
+Unlisted investments, at cost
+(348)
+Other investments include debt investment plans, asset management plans and trust plans with fixed or determinable
+payments. They will mature from January 2022 to November 2032 and bear interest rates ranging from 4.25% to
+6.60% per annum.
+This includes a special government bond, which is a non-negotiable bond with a nominal value of RMB85,000 million
+(31 December 2020: RMB85,000 million) issued by the Ministry of Finance of the People's Republic of China (the
+"MOF") to the Bank in 1998. The bond will mature in 2028 and bears interest at a fixed rate of 2.25% per annum.
+This includes Huarong bonds of RMB90,309 million (31 December 2020: RMB90,309 million). Huarong bonds are a
+series of long-term bonds issued by China Huarong Asset Management Co., Ltd. ("Huarong") in the year of 2000
+and 2001 to the Bank, with an aggregate amount of RMB312,996 million. The proceeds from the issuance of the
+bonds were used to purchase non-performing loans of the Bank. The bonds are non-negotiable, with a tenure of 10
+years and bear interest at a fixed rate of 2.25% per annum. The MOF provides funding support for the repayment
+of principal and interest of the bonds. In 2010, the Bank received a notice from the MOF that the maturity dates of
+the Huarong bonds were extended for ten years. In 2020, the Bank received a notice from the MOF to adjust the
+interest rate of the Huarong bonds, starting from 1 January 2020. Interest rate would be determined on yearly basis
+with reference to the average level of five-year government bond yield in the previous year. In January 2021, the Bank
+received notice from the MOF that the maturity dates of Huarong bonds were further extended for ten years. As at
+31 December 2021, the Bank had received accumulated early repayments amounting to RMB222,687 million (31
+December 2020: RMB222,687 million).
+(iii)
+(ii)
+31 December
+92.84
+Investment banking
+Industrial and Commercial Bank of China
+(Almaty) Joint Stock Company
+Industrial and Commercial Bank of China
+100
+100
+NZD234 million
+NZD234 million
+Auckland, New Zealand
+Commercial banking
+(New Zealand) Limited ("ICBC New Zealand")
+Industrial and Commercial Bank of China
+100
+100
+80
+EUR437 million
+Commercial banking
+EUR437 million
+Commercial banking
+(Europe) S.A.
+ICBC (London) PLC
+100
+ICBC Standard Bank PLC
+Bank ICBC (Joint stock company)
+100
+ICBC Turkey Bank Anonim Şirketi
+92.84
+ICBC Austria Bank GmbH
+100
+Industrial and Commercial Bank of China
+(USA) NA
+88888
+100
+Luxembourg
+Almaty, Kazakhstan
+KZT8,933 million
+KZT8,933 million
+89.33
+89.33
+MOP589 million
+MOP12,064 million
+Macau SAR, the PRC
+Commercial banking
+(Macau) Limited ("ICBC Macau")
+PT. Bank ICBC Indonesia
+98.61
+98.61
+Industrial and Commercial Bank of China
+100
+100
+IDR3,706,100 million
+MYR833 million
+USD361 million
+MYR833 million
+Jakarta, Indonesia
+Kuala Lumpur, Malaysia
+Commercial banking
+Commercial banking
+10
+100
+00
+100
+Industrial and Commercial Bank of China
+(Thai) Public Company Limited ("ICBC Thai")
+("ICBC International")
+Commercial banking
+THB23,711 million
+THB20,132 million
+97.86
+97.86
+Industrial and Commercial Bank of China
+(Malaysia) Berhad
+Bangkok, Thailand
+208
+290,296
+139,579
+2,101
+25,763
+Standard Bank
+Associates
+1,210
+(7)
+(102)
+3
+72
+(193)
+7
+1,430
+Joint ventures
+of the year
+537
+of the year
+or profits
+income
+method
+in capital
+in capital
+of the year
+at end
+at end
+comprehensive cash dividends
+the equity
+Decrease
+Increase
+impairment
+Balance
+Others
+(875)
+(2,557)
+24,969
+(365)
+62,147
+(2,818)
+(1,015)
+556
+2,869
+(206)
+21,207
+41,554
+Total
+(365)
+60,937
+(2,811)
+(913)
+553
+2,797
+(13)
+(348)
+Other
+14,361
+21,200
+(13)
+696
+distribution of
+16
+(254)
+35,968
+(17)
+Subtotal
+40,124
+21,200
+(38)
+27. PROPERTY AND EQUIPMENT
+Other
+Balance
+at beginning
+97,216
+1,033,331
+993,965
+1,129,310
+1,091,181
+Net assets
+Liabilities
+Assets
+The associate
+2020
+2021
+As at/
+year ended
+31 December
+year ended
+31 December
+As at/
+95,979
+The accounting policies of Standard Bank are consistent with those of the Group. Its financial information is significant to
+the Group and summarised as follows:
+41,206
+61,782
+15,791
+37,161
+25,415
+24,621
+2020
+2021
+31 December
+31 December
+Standard Bank
+Other
+(a) Carrying value of the Group's associates and joint ventures are as follows:
+41,206
+61,782
+Standard Bank Group Limited ("Standard Bank") is a listed commercial bank registered in Johannesburg, the Republic of
+South Africa with an issued capital of ZAR162 million and a strategic partner of the Group. As at 31 December 2021 and 31
+December 2020, the Group's equity interest and voting rights were 20.06%.
+Profit from continuing operations
+10,725
+5,459
+investee
+Name of
+Balance of
+allowance for
+Declared
+recognised
+income
+Investment
+Movements during 2021
+Movements of associates and joint ventures investments of the Group are as follows:
+(b)
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements
+207
+Annual Report 2021
+25,763
+24,969
+Equity method of the associate
+Net assets of the associate attributable to the parent company
+Group's effective interest
+82,364
+81,530
+20.06%
+20.06%
+under
+Group's share of net assets of the associate
+16,355
+Goodwill
+8,447
+9,408
+Balance of the Group's interest in Standard Bank in the
+consolidated financial statements
+16,522
+Office
+equipment
+Properties and
+buildings
+6,353
+Depreciation charge for the year
+179,124
+35,962
+61,514
+10,786
+38
+70,824
+At 31 December 2020 and 1 January 2021
+(12,127)
+(4,084)
+(6,960)
+(104)
+(979)
+866
+Disposals
+3,691
+Impairment charge for the year
+19,243
+5,554
+6,683
+907
+6,099
+Depreciation charge for the year
+168,317
+30,801
+61,791
+9,983
+38
+65,704
+3,691
+7,377
+5,901
+20,497
+19,292
+2,097
+18,182
+111,146
+At 31 December 2021
+286,279
+133,211
+18,371
+2,039
+35,173
+97,485
+At 31 December 2020
+Carrying amount:
+191,036
+41,366
+62,340
+11,493
+Impairment charge for the year
+4
+2,282
+2,286
+Disposals
+(1,374)
+At 1 January 2020
+(4)
+(6,555)
+(2,779)
+(10,871)
+At 31 December 2021
+75,803
+34
+(159)
+Accumulated depreciation and impairment:
+481,332
+180,945
+(301)
+(2,077)
+Disposals
+8,573
+138
+(16,517)
+7,806
+CIP transfer in/out)
+35,746
+11,128
+10,012
+1,108
+12,277
+1,221
+Additions
+454,878
+164,941
+Construction
+in progress
+Leasehold
+improvements
+and motor
+Aircraft and
+vehicles
+(211)
+vessels
+Cost:
+At 1 January 2020
+161,359
+39,752
+11,928
+76,898
+Total
+(3
+(7,163)
+(25,221)
+81,632
+13,590
+18,216
+186,949
+At 31 December 2021
+(14,471)
+(3,769)
+(7,516)
+(232)
+(601)
+(2,353)
+Disposals
+5,014
+51
+(24,915)
+19,850
+CIP transfer in/(out)
+At 31 December 2020 and 1 January 2021
+168,309
+35,211
+12,825
+79,885
+169,173
+(15,469)
+465,403
+1,143
+8,521
+997
+9,212
+10,527
+30,400
+Additions
+3
+(365)
+Charge/(reverse) for the year
+20,122
+Unlisted
+57,288
+71,113
+90,746
+93,728
+31,675
+Funds and other investments:
+4,044
+3,349
+Listed outside Hong Kong SAR
+1,521
+1,226
+Unlisted
+Listed in Hong Kong SAR
+Listed outside Hong Kong SAR
+2,493
+1,783
+784,483
+Debt securities:
+Listed in Hong Kong SAR
+3,301
+2,802
+Listed outside Hong Kong SAR
+21,164
+30,847
+Unlisted
+395,818
+432,163
+420,283
+465,812
+Equity investments:
+Listed in Hong Kong SAR
+106,629
+220,368
+112,194
+224,943
+Listed outside Hong Kong SAR
+Unlisted
+Equity investments:
+Listed in Hong Kong SAR
+Listed outside Hong Kong SAR
+Unlisted
+31 December
+2020
+653,774
+479,505
+171,130
+169,478
+310,160
+281,215
+551,757
+509,422
+Listed in Hong Kong SAR
+623,223
+Debt securities:
+Equity investments
+623,223
+784,483
+202
+ICBC
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(b) Financial investments measured at FVTOCI
+31 December
+2021
+Debt securities, analysed by type of issuers:
+Governments and central banks
+Policy banks
+Banks and other financial institutions
+Corporate entities
+Accrued interest
+Analysed into:
+17,343
+354,451
+70,167
+Financial investments designated as at FVTPL
+31 December
+2021
+31 December
+2020
+97,364
+73,219
+Equity investments
+12,670
+58,218
+56,114
+92,666
+102,630
+260,918
+246,757
+14,794
+Corporate entities
+Banks and other financial institutions
+Policy banks
+623,223
+784,483
+(b)
+1,803,604
+1,540,988
+6,830,933
+6,265,668
+9,257,760
+8,591,139
+Annual Report 2021
+201
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(a) Financial investments measured at FVTPL
+Financial investments held for trading
+Debt securities, analysed by type of issuers:
+Governments and central banks
+9,417
+10,497
+270,335
+257,254
+Corporate entities
+Equity investments
+Funds and other investments
+Analysed into:
+11,192
+11,082
+143,637
+188,144
+4,536
+1,827
+159,365
+201,053
+81,329
+83,231
+90,403
+Banks and other financial institutions
+331,097
+Policy banks
+Other financial investments measured at FVTPL
+Debt securities, analysed by type of issuers:
+Governments and central banks
+Policy banks
+Banks and other financial institutions
+12,858
+1,755
+3,370
+Corporate entities
+19
+18,002
+Funds and other investments
+21,791
+154,776
+21,791
+172,778
+Debt securities, analysed by type of issuers:
+이 회
+19,398
+1,459,018
+31 December
+2020
+Debt securities, analysed by type of issuers:
+Governments and central banks (i)
+Policy banks
+Banks and other financial institutions (ii)
+Corporate entities
+2021
+Accrued interest
+5,205,346
+559,808
+528,587
+432,980
+370,300
+61,257
+5,661,784
+31 December
+(c) Financial investments measured at amortised cost
+2,468
+2
+― to stage 3
+Charge for the year
+Other movements
+Balance at 31 December 2020
+406
+18
+48
+472
+(54)
+(6)
+(60)
+2,206
+22
+240
+46,759
+84,598
+78,888
+6,800,427
+79,031
+Unlisted
+6,615,869
+6,106,393
+6,794,839
+6,227,650
+Other investments:
+Unlisted
+36,094
+38,018
+36,094
+6,830,933
+38,018
+6,265,668
+Market value of listed securities
+179,807
+147,531
+(2)
+Listed outside Hong Kong SAR
+31,439
+6,229,880
+Other investments (iii)
+Accrued interest
+38,341
+122
+40,699
+38,463
+162
+40,861
+6,838,890
+Less: Allowance for impairment losses
+(7,957)
+6,830,933
+6,270,741
+(5,073)
+6,265,668
+Analysed into:
+Debt securities:
+Listed in Hong Kong SAR
+42,226
+1,704,164
+(78)
+― to stage 2
+81,970
+1,803,604
+1,540,988
+The Group designates certain non-trading equity investments as financial investments measured at FVTOCI. In 2021,
+dividend income from such equity investments was RMB3,388 million (2020: RMB2,355 million). There was RMB291 million
+dividend income from equity investments derecognised in 2021 (2020: RMB133 million). In 2021, the value of equity
+investments disposed of was RMB6,963 million (2020: RMB2,247 million) and the cumulative losses transferred into retained
+earnings from other comprehensive income after disposal was RMB334 million (2020: cumulative gains of RMB221 million).
+Movements of the allowance for impairment loss on financial investments measured at FVTOCI are accounted for in the
+following way. Allowance for impairment losses on financial investments measured at FVTOCI is recognised in other
+comprehensive income without decreasing the carrying amount of financial investments presented in the consolidated
+statement of financial position, and any impairment gain or loss is recognised in the profit or loss.
+Annual Report 2021
+203
+99,440
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Balance at 1 January 2021
+Transfer:
+to stage 1
+― to stage 2
+Stage 1
+2,206
+For the year ended 31 December 2021
+71,016
+91,370
+8,569
+99,440
+81,970
+1,803,604
+1,540,988
+119,453
+172,667
+229,406
+219,291
+1,355,305
+1,067,060
+1,704,164
+1,459,018
+2,656
+2,385
+5,414
+Stage 2
+Stage 3
+Total
+222
+2,674
+355
+1,341
+4,370
+Stage 1
+Stage 2
+Stage 3
+Total
+Balance at 1 January 2020
+1,778
+80
+198
+2,056
+Transfer:
+― to stage 1
+Balance at 31 December 2021
+78
+(75)
+(1)
+22
+240
+2,468
+(12)
+12
+― to stage 3
+(44)
+44
+Charge for the year
+585
+322
+1,070
+1,977
+Other movements
+(61)
+(13)
+2020
+2021
+31 December
+Corporate loans and advances
+Loans
+3,594
+20,109,200
+3,914
+18,136,328
+As at 31 December 2021, the Group's allowance for impairment losses on loans and advances to customers measured at
+FVTOCI was RMB219 million, refer to note 23.2(b) (31 December 2020: RMB861 million).
+Annual Report 2021
+414,292
+199
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+23.2 Impairment provision
+(a) Movements of the allowance for impairment losses on loans and advances to customers
+measured at amortised cost are as follows:
+Stage 1
+Stage 2
+Notes to the Consolidated Financial Statements
+534,671
+9
+12
+18,248,422
+Less: Allowance for impairment losses of loans and advances to customers
+measured at amortised cost (note 23.2(a))
+(603,764)
+(530,300)
+19,570,935
+17,718,122
+Measured at FVTOCI:
+Corporate loans and advances
+― Loans
+Discounted bills
+Accrued interest
+Measured at FVTPL:
+9,271
+525,388
+11,078
+403,205
+Balance at 1 January 2021
+Transfer:
+to stage 1
+223,703
+Write-offs and transfer out
+(100,447)
+168,351
+(100,447)
+Recoveries of loans and advances
+previously written off
+9,020
+9,020
+Other movements
+(628)
+(564)
+(2,268)
+(3,460)
+Balance at 31 December 2021
+269,376
+110,649
+67,614
+20,174,699
+58,906
+Charge for the year
+89,151
+Stage 3
+217,446
+Total
+530,300
+17,860
+(15,581)
+(2,279)
+to stage 2
+(9,856)
+14,056
+(4,200)
+― to stage 3
+(3,534)
+(35,319)
+38,853
+41,831
+223,739
+3,091
+42,311
+Accrued interest
+(3)
+(5)
+Other movements
+2,892
+(116)
+3,008
+(8)
+Charge/(reverse) for the year
+to stage 2
+Total
+5,073
+Stage 3
+121
+(402)
+402
+2,718
+to stage 3
+Balance at 31 December 2021
+5,639
+2,200
+― to stage 3
+to stage 2
+― to stage 1
+Transfer:
+3,721
+127
+1,339
+2,255
+Balance at 1 January 2020
+Total
+Stage 3
+Stage 2
+Stage 1
+7,957
+118
+Stage 2
+Stage 1
+2,234
+to stage 1
+Transfer:
+As part of the reverse repurchase agreements, the Group has received securities that it is allowed to sell or repledge in
+the absence of default by their owners. As at 31 December 2021, the Group had received securities with a fair value
+of approximately RMB143,559 million on such terms (31 December 2020: RMB184,324 million). Of these, securities
+with a fair value of approximately RMB107,698 million had been repledged under repurchase agreements (31
+December 2020: RMB119,984 million). The Group has an obligation to return the securities to its counterparties at the
+maturity of the contract. If the collateral received declines in value, the Group may, in certain circumstances, require
+additional collateral.
+23. LOANS AND ADVANCES TO CUSTOMERS
+23.1 Loans and advances to customers by type of measurement:
+Measured at amortised cost:
+Corporate loans and advances
+Loans
+― Finance lease
+Personal loans
+Discounted bills
+31 December
+2021
+31 December
+2020
+12,181,841
+12,000,191
+181,650
+7,944,781
+11,087,741
+10,913,984
+173,757
+7,115,279
+131,182
+2,370
+45,707
+236,536
+263,394
+218,583
+Balance at 1 January 2021
+Movements of the allowance for impairment losses on financial investments measured at amortised cost are as follows:
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+ICBC
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(i)
+Based on master repurchase agreements and related supplementary agreements, the Group offsets certain reverse
+repurchase agreements and repurchase agreements, and presents net asset (or liability) amounts as reverse repurchase
+agreements (or repurchase agreements) in the consolidated financial statements in accordance with the accounting
+policy of offsetting.
+116,390
+31 December 2021
+Gross amounts
+Reverse repurchase agreements
+Repurchase agreements
+Net amounts
+104,765
+131,623
+Gross amounts
+203,791
+31 December 2020
+Net amounts
+(ii)
+603,764
+Stage 1
+Stage 2
+Other movements
+Stage 2
+Stage 1
+219
+28
+(7)
+(551)
+(84)
+(71)
+(551)
+191
+Total
+(7)
+861
+Total
+Stage 3
+650
+211
+Stage 2
+Stage 1
+Balance at 31 December 2021
+Other movements
+Write-offs and transfer out
+Reverse for the year
+(13)
+to stage 3
+Balance at 1 January 2020
+5
+31 December
+Financial investments measured at amortised cost
+Financial investments measured at FVTOCI
+Financial investments measured at FVTPL
+24. FINANCIAL INVESTMENTS
+861
+650
+211
+Balance at 31 December 2020
+(0)
+227
+(0)
+645
+(16)
+Other movements
+(Reverse)/charge for the year
+to stage 3
+_
+to stage 2
+to stage 1
+Transfer:
+232
+629
+― to stage 2
+Stage 3
+Transfer:
+Stage 3
+Total
+Balance at 1 January 2020
+78,494
+184,688
+478,498
+Transfer:
+― to stage 1
+24,002
+(22,507)
+78,244
+(1,495)
+(6,913)
+9,311
+(2,398)
+― to stage 3
+(4,838)
+(53,754)
+58,592
+(Reverse)/charge for the year
+to stage 1
+(2,984)
+― to stage 2
+95,941
+215,316
+Write-offs and transfer out
+Balance at 1 January 2021
+(b) Movements of the allowance for impairment losses on loans and advances to customers
+measured at FVTOCI are as follows:
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+ICBC
+200
+171,201
+217,446
+89,151
+223,703
+Balance at 31 December 2020
+530,300
+4,977
+4,977
+(2,542)
+(630)
+(880)
+Other movements
+previously written off
+Recoveries of loans and advances
+(120,324)
+(120,317)
+(7)
+(4,052)
+(21,224)
+(5,417)
+Accrued staff costs
+34,823
+8,684
+(1,997)
+6,628
+Other
+(7,847)
+(5,635)
+26,512
+(22,620)
+(liabilities)
+Change in fair value of financial instruments
+(taxable)
+31 December 2020
+Deductible/
+Deferred
+Deferred
+31 December 2021
+Deductible/
+Deferred tax assets:
+(a) Analysed by nature
+temporary
+28. DEFERRED TAX ASSETS AND LIABILITIES
+As at 31 December 2021, the carrying amount of aircraft and vessels owned by the Group that have been pledged as
+security for liabilities due to banks and other financial institutions was RMB92,426 million (31 December 2020: RMB77,858
+million).
+As at 31 December 2021, the carrying amount of aircraft and vessels leased out by the Group under operating leases was
+RMB139,579 million (31 December 2020: RMB133,211 million).
+As at 31 December 2021, the process of obtaining the legal titles for the Group's properties and buildings with an aggregate
+carrying amount of RMB12,798 million (31 December 2020: RMB11,203 million) was still in progress. Management is of the
+view that the aforesaid matter would neither affect the rights of the Group to these assets nor have any significant impact
+on the business operation of the Group.
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+Ending balance of lease liabilities
+As at 31 December 2021, the construction in progress for aircraft and vessels was RMB9, 101 million (31 December 2020:
+RMB12,623 million).
+measured at FVTOCI
+tax
+assets/
+tax
+assets/
+(2,470)
+(9,858)
+(3,455)
+(13,823)
+measured at FVTPL
+Change in fair value of financial instruments
+(taxable)
+temporary
+70,094
+81,662
+328,794
+Allowance for impairment losses
+differences
+(liabilities)
+differences
+281,442
+29,825
+860
+218
+1,727
+12,095
+At 31 December 2020 and 1 January 2021
+(813)
+(60)
+(39)
+(714)
+Decreases
+135
+7,803
+623
+7,089
+Depreciation charge for the year
+6,967
+104
+1,143
+5,720
+At 1 January 2020
+91
+Accumulated depreciation:
+13,957
+7,011
+Impairment charge for the year
+173
+24
+At 1 January 2020
+Impairment:
+18,817
+218
+2,075
+Depreciation charge for the year
+16,524
+(2,837)
+(33)
+(222)
+(2,582)
+Decreases
+7,697
+116
+570
+At 31 December 2021
+18
+50,730
+16,109
+93
+1,357
+9,317
+Additions
+40,625
+1,628
+16,534
+22,463
+10,767
+At 1 January 2020
+Total
+motor vehicles
+equipment and
+aircraft
+and vessels
+and buildings
+Leased office
+Leased
+Leased
+properties
+Cost:
+357
+Decreases
+(1,341)
+34,264
+At 31 December 2021
+(4,312)
+(680)
+(441)
+(3,191)
+Decreases
+7,017
+(1,251)
+91
+Additions
+48,025
+946
+16,550
+30,529
+At 31 December 2020 and 1 January 2021
+(3,367)
+(775)
+6,926
+101
+At 31 December 2020 and 1 January 2021
+42
+60,704
+64,488
+4,889
+2020
+2021
+31 December
+31 December
+€ €
+18,409
+Other
+and account-based investment products
+Financial liabilities related to precious metals
+Interbank wealth management products
+30. FINANCIAL LIABILITIES DESIGNATED AS AT FAIR VALUE THROUGH PROFIT OR LOSS
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+ICBC
+212
+Debt securities issued
+The recoverable amount of the CGU is determined based on the discounted future cash flows of the CGU. The cash flow
+projections are based on financial forecasts approved by management of the subsidiaries. The average growth rates are
+projected based on the similar rates which do not exceed the long-term average growth rate for the business in which the
+CGU operates in. The discount rate is the before-tax rate and reflects the specific risk associated with the CGU.
+11,574
+10,771
+Banks and other financial institutions operating in Chinese mainland
+Banks and other financial institutions operating outside Chinese mainland
+Accrued interest
+Money market takings:
+2,179,522
+134,346
+1,775
+2,315,643
+2,431,689
+143,928
+1,269
+2,286,492
+Banks and other financial institutions operating in Chinese mainland
+Banks and other financial institutions operating outside Chinese mainland
+Accrued interest
+31 December
+2020
+4,283
+2021
+Deposits:
+31. DUE TO BANKS AND OTHER FINANCIAL INSTITUTIONS
+For 2021 and 2020, there were no significant changes in the credit spread of the Group and therefore the amounts of
+changes in fair value of the financial liabilities arising from changes in the credit risk and the accumulated amounts as at the
+end of the respective years were not significant. The changes in fair value of the financial liabilities were mainly attributable
+to changes in other market factors.
+Financial liabilities related to precious metals and account-based investment products, and certain issued debt
+securities have been matched with precious metals and derivatives of the Group as part of a documented risk
+management strategy to mitigate market risk. An accounting mismatch would arise if these financial liabilities were
+accounted for at amortised cost, whereas the related precious metals and derivative were measured at fair value with
+movements in fair value taken through the statement of profit or loss. By designating these financial liabilities at
+FVTPL, the movement in their fair values is recorded in the statement of profit or loss. As at 31 December 2021 and 31
+December 2020, the difference between the fair values of the financial liabilities related to precious metals, account-
+based investment products and issued debt securities and the amounts that the Group would be contractually required
+to pay to the holders of the financial liabilities related to precious metals, account-based investment products and
+issued debt securities upon maturity was not significant.
+The principal-guaranteed interbank wealth management products issued by the Group and the financial assets which
+the aforesaid products held form part of a group of financial instruments that were managed together on a fair
+value basis, and were classified as financial liabilities and financial assets designated as at FVTPL, respectively. As at
+31 December 2020, the fair value of the interbank wealth management products was approximately the same as the
+amount that the Group would be contractually required to pay to the holders of the wealth management products
+upon maturity.
+(i)
+87,938
+87,180
+31 December
+Goodwill arising from business combinations has been allocated to the Group's CGU, which is not larger than the reportable
+segment of the Group, for impairment testing.
+8,586
+8,169
+14,549
+18,392
+At 31 December 2021
+At 31 December 2020
+ICBC
+251
+219
+32
+811
+At 31 December 2021
+316
+119
+197
+| || |
+(55)
+(10)
+Decreases
+274
+(65)
+33,752
+17,708
+13,815
+(359)
+(349)
+8,945
+8,518
+(572)
+(427)
+9,517
+8,945
+2020
+2021
+Net carrying amount
+Less: Allowance for impairment losses
+Subtotal
+Exchange difference
+At 1 January
+Goodwill
+(ii)
+31,662
+139
+(i) Right-of-use assets
+226,907
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+Recognised
+in other
+comprehensive
+Recognised in
+1 January
+Deferred tax assets:
+5,624
+(459)
+3,202
+2,881
+31 December
+1,567
+860
+Other
+690
+(459)
+1,149
+measured at FVTOCI
+Change in fair value of financial instruments
+3,635
+707
+1,826
+2020
+income
+338
+6,290
+Accrued staff costs
+(5,417)
+364
+(5,781)
+measured at FVTOCI
+Change in fair value of financial instruments
+profit or loss
+(2,470)
+(851)
+measured at FVTPL
+Change in fair value of financial instruments
+70,094
+7,206
+62,888
+Allowance for impairment losses
+2020
+(1,619)
+6,628
+1,809
+Change in fair value of financial instruments
+Other
+8,684
+2,056
+6,628
+Accrued staff costs
+(5,635)
+(218)
+(5,417)
+(1,122)
+measured at FVTOCI
+(3,455)
+(985)
+(2,470)
+measured at FVTPL
+Change in fair value of financial instruments
+81,662
+11,568
+70,094
+Change in fair value of financial instruments
+measured at FVTPL
+(943)
+(1,997)
+(268)
+669
+(937)
+Allowance for impairment losses
+2021
+income
+profit or loss
+2021
+68
+31 December
+Recognised in
+1 January
+Recognised
+in other
+Deferred tax liabilities:
+79,259
+(150)
+11,696
+67,713
+comprehensive
+Other
+(10)
+(1,005)
+34,068
+31,913
+278,429
+267,239
+349,590
+267,342
+Interest receivable
+Repossessed assets
+15,593
+Advance payments
+Land use rights
+Right-of-use assets (i)
+Precious metals
+Settlement and clearing balances
+2020
+2021
+31 December
+31 December
+Goodwill (ii)
+29. OTHER ASSETS
+16,225
+8,945
+211
+Annual Report 2021
+729,258
+707,862
+(5,077)
+(10,053)
+Less: Allowance for impairment losses
+734,335
+8,518
+717,915
+110,574
+Other
+1,985
+2,283
+7,357
+6,211
+8,878
+8,242
+28,858
+As at 31 December 2021, the Group did not have significant unrecognised deferred tax assets (31 December 2020: Nil).
+2,881
+(208)
+2020
+31 December
+comprehensive
+Recognised in
+1 January
+in other
+Recognised
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+profit or loss
+Notes to the Consolidated Financial Statements
+ICBC
+210
+67,713
+257
+4,920
+62,536
+(1,122)
+(107)
+Deferred tax liabilities:
+income
+2020
+Allowance for impairment losses
+1,216
+1,873
+860
+445
+415
+Other
+1,149
+(208)
+1,357
+measured at FVTOCI
+Change in fair value of financial instruments
+1,809
+1,173
+636
+measured at FVTPL
+Change in fair value of financial instruments
+(937)
+(402)
+(535)
+For the year ended 31 December 2021
+Allowance for impairment losses
+159,590
+304,413
+4.875%
+12,700
+2,000
+99.189
+USD
+21/09/2015
+Circulation date
+Maturity date
+21/09/2015
+Value date
+(In RMB)
+(million)
+(In original
+currency)
+(million)
+Currency Issued price
+Issue date
+Ending
+balance
+Issued
+amount
+Name
+In 2015, the Bank issued tier 2 capital bonds denominated in USD. The bonds were approved for listing and dealing by The
+Stock Exchange of Hong Kong Limited. The relevant information is set out below:
+Coupon
+rate
+The Bank has the option to redeem these bonds on specific dates at par value in future upon the approval of the relevant
+regulatory authorities.
+21/09/2025
+15 USD
+Sydney Branch issued notes denominated in AUD, RMB, HKD and USD at fixed or floating interest rates amounting to
+an equivalent of RMB11,372 million in total with maturities between 2022 and 2026.
+Head Office issued debt securities denominated in RMB at fixed interest rates amounting to RMB20,075 million in total
+with maturities between 2023 and 2024.
+(ii)
+(i)
+The Bank:
+(b) Other debt securities issued
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2021
+22/09/2015
+Notes to the Consolidated Financial Statements
+Annual Report 2021
+The above tier 2 capital bonds are separately listed on the Thai Bond Market Association and The Stock Exchange of Hong
+Kong Limited. ICBC Thai and ICBC Macau have not had any defaults of principal or interest or other breaches with respect to
+the tier 2 capital bonds in 2021 (2020: Nil).
+On 12 September 2019, ICBC Macau issued a tier 2 capital bond with an aggregate nominal amount of USD500 million,
+bearing a fixed interest rate of 2.875% per annum. The bond will mature on 12 September 2029.
+On 23 March 2018, ICBC Thai issued a tier 2 capital bond with an aggregate nominal amount of THB5,000 million, bearing
+a fixed interest rate of 3.5%. The bond will mature on 23 September 2028.
+Subsidiaries:
+The Bank has not had any defaults in respect of payments of principal or interest or other breaches with respect to the
+subordinated bonds and tier 2 capital bonds in 2021 (2020: Nil).
+The bonds cannot be redeemed before maturity.
+Tier 2 capital bonds
+215
+(iii) Singapore Branch issued notes denominated in RMB, USD and EUR at fixed or floating interest rates amounting to an
+equivalent of RMB48,080 million in total with maturities between 2022 and 2025.
+15/12/2021
+3.74%
+16/11/2020
+4.45%
+10,000
+100 Yuan
+12/11/2020
+20 ICBC 03 Tier 2 Bond
+17/11/2020
+16/11/2030
+16/11/2035
+16/11/2020
+30,000
+100 Yuan
+12/11/2020
+20 ICBC 02 Tier 2 Bond
+25/09/2020
+24/09/2030
+24/09/2020
+4.20%
+4.15%
+14/12/2021 15/12/2036
+17/11/2020
+19/01/2021
+10,000
+100 Yuan
+13/12/2021
+21 ICBC 03 Tier 2 Bond
+15/12/2021
+15/12/2031
+14/12/2021
+3.48%
+21 ICBC 01 Tier 2 Bond
+50,000
+13/12/2021
+21 ICBC 02 Tier 2 Bond
+22/01/2021
+21/01/2031
+21/01/2021
+4.15%
+30,000
+100 Yuan
+100 Yuan
+(iv) Tokyo Branch issued notes denominated in JPY at fixed interest rate amounting to an equivalent of RMB249 million in
+total that will mature in 2022.
+(v)
+New York Branch issued notes denominated in USD at fixed interest rates amounting to an equivalent of RMB14,572
+million in total with maturities between 2022 and 2027.
+Less than one year
+Lease liabilities
+(i)
+48,424
+712,770
+789,355
+155,200
+Other
+490
+One to two years
+32
+1,193
+1,081
+Promissory notes
+15,595
+16,454
+Sundry tax payables
+24,807
+32,751
+Early retirement benefits
+(ii)
+Two to three years
+More than five years
+28,340
+32,492
+29,929
+6,221
+5,113
+6,008
+5,210
+5,658
+Three to five years
+4,542
+6,749
+8,090
+8,315
+2020
+2021
+31 December
+31 December
+Undiscounted lease liabilities
+6,515
+Salaries, bonuses, allowances and subsidies payables
+26,710
+24,449
+(vi)
+ICBC New Zealand issued medium-term debt securities and notes denominated in NZD at fixed or floating interest
+rates amounting to an equivalent of RMB2,331 million in total with maturities between 2022 and 2024.
+(v)
+ICBC International issued medium-term debt securities and notes denominated in USD at fixed interest rates
+amounting to an equivalent of RMB12,709 million in total with maturities between 2022 and 2025.
+(iv)
+ICBC Thai issued medium-term debt securities and notes denominated in THB at fixed interest rates amounting to an
+equivalent of RMB8,367 million in total with maturities between 2022 and 2026.
+ICBC Leasing issued medium-term debt securities and notes denominated in RMB and USD at fixed or floating interest
+rates amounting to an equivalent of RMB70,528 million in total with maturities between 2022 and 2031.
+ICBC Asia issued medium-term debt securities and notes denominated in RMB and USD at fixed or floating interest
+rates amounting to an equivalent of RMB8,469 million in total with maturities between 2022 and 2024.
+ICBC Investment issued medium-term debt securities and notes denominated in RMB at fixed interest rates amounting
+to RMB28,000 million in total with maturities between 2022 and 2025.
+(iii)
+(i)
+Subsidiaries:
+Macau Branch issued notes denominated in MOP at fixed interest rates amounting to an equivalent of RMB3,239
+million in total with maturities between 2022 and 2023.
+(x)
+(ix) London Branch issued notes denominated in GBP, USD and EUR at fixed or floating interest rates amounting to an
+equivalent of RMB13,401 million in total with maturities between 2022 and 2025.
+(viii) Hong Kong Branch issued notes denominated in USD at fixed or floating interest rates amounting to an equivalent of
+RMB45,726 million in total with maturities between 2022 and 2026.
+(vii) Dubai (DIFC) Branch issued notes denominated in USD at floating interest rates amounting to an equivalent of
+RMB13,415 million in total with maturities between 2022 and 2024.
+(vi) Luxembourg Branch issued notes denominated in USD and EUR at fixed or floating interest rates amounting to an
+equivalent of RMB18,114 million in total with maturities between 2022 and 2024.
+(ii)
+(vii) ICBC Peru issued short-term debt securities denominated in PEN at fixed interest rates amounting to an equivalent of
+RMB154 million in total that will mature in 2022.
+216
+ICBC
+Provisions for credit commitments
+29,825
+28,340
+(i)
+170,846
+213,457
+394,880
+317,591
+Lease liabilities
+Insurance contract liabilities
+Settlement and clearing balances
+2020
+2021
+31 December
+31 December
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements
+36. OTHER LIABILITIES
+60,000
+258,465
+100 Yuan
+20 ICBC 01 Tier 2 Bond
+Issued by subsidiaries
+Issued by the Bank
+Subordinated bonds and tier 2 capital bonds
+35. DEBT SECURITIES ISSUED
+As at 31 December 2021, pledged deposits included in above amounted to RMB228,227 million (31 December 2020:
+RMB249,915 million).
+25,134,726
+26,441,774
+267,941
+Accrued interest
+361,994
+250,349
+11,953,629
+12,905,739
+6,463,929
+7,107,386
+5,489,700
+5,798,353
+12,651,767
+261,389
+12,923,692
+Other debt securities
+Issued by subsidiaries
+130,558
+232,356
+188,243
+(b)
+430,064
+470,806
+6,747
+8,002
+Issued by the Bank
+4,285
+419,032
+458,688
+2020
+2021
+31 December
+31 December
+이
+Accrued interest
+4,116
+134,038
+5,196,607
+7,455,160
+2021
+31 December
+31 December
+Accrued interest
+Cash received as collateral on securities lending
+Repurchase agreements-securities
+Repurchase agreements-bills
+32. REPURCHASE AGREEMENTS
+2020
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+213
+Annual Report 2021
+2,784,259
+468,616
+489,340
+2,921,029
+4,613
+3,968
+For the year ended 31 December 2021
+5,390,582
+8,110
+7,874
+274,446
+7,533,110
+31 December
+2020
+31 December
+2021
+Accrued interest
+Other
+Personal customers
+Corporate customers
+Time deposits:
+341,718
+Personal customers
+Demand deposits:
+34. DUE TO CUSTOMERS
+Certificates of deposit issued by certain of the Bank's overseas branches and subsidiaries are measured at amortised cost.
+33. CERTIFICATES OF DEPOSIT
+293,434
+190
+10,924
+16,015
+100
+365,943
+Corporate customers
+1,768
+1,669
+320,569
+19 ICBC 02 Tier 2 Bond
+26/03/2019
+25/03/2029
+25/03/2019
+4.26%
+45,000
+100 Yuan
+21/03/2019
+21/03/2019
+19 ICBC 01 Tier 2 Bond
+22/11/2027
+22/11/2017
+4.45%
+44,000
+100 Yuan
+20/11/2017
+17 ICBC 02 Tier 2 Bond
+10/11/2017
+23/11/2017
+08/11/2027
+100 Yuan
+4.51%
+28/04/2019
+26/04/2034
+26/04/2019
+4.69%
+10,000
+100 Yuan
+24/04/2019
+19 ICBC 04 Tier 2 Bond
+10,000
+28/04/2019
+26/04/2019
+4.40%
+45,000
+100 Yuan
+24/04/2019
+19 ICBC 03 Tier 2 Bond
+26/03/2019
+25/03/2019 25/03/2034
+26/04/2029
+08/11/2017
+4.45%
+44,000
+Issue date
+Name
+Maturity
+Coupon
+nominal amount
+Issue price
+Issued and
+As approved by the PBOC and the CBIRC, the Bank issued callable subordinated bonds and tier 2 capital bonds through
+open market bidding. These subordinated bonds and tier 2 capital bonds were traded on the National Interbank Bond
+Market. The relevant information is set out below:
+(In RMB)
+The Bank:
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+ICBC
+214
+As at 31 December 2021, the amount of debt securities issued that were due within one year was RMB124,031 million (31
+December 2020: RMB120,429 million).
+798,127
+791,375
+368,063
+(a) Subordinated bonds and tier 2 capital bonds
+(In RMB million)
+rate
+Value date
+100 Yuan
+06/11/2017
+17 ICBC 01 Tier 2 Bond
+13/07/2012
+13/06/2027
+13/06/2012
+4.99%
+20,000
+100 Yuan
+11/06/2012
+12 ICBC 01
+30/08/2011
+date Circulation date
+30/06/2031
+30/06/2011
+5.56%
+38,000
+100 Yuan
+29/06/2011
+11 ICBC 01
+22/09/2020
+2021
+Carrying amount:
+comprehensive
+18/11/2015
+RMB2015
+Shares:
+Domestic Preference
+No
+Mandatory
+None
+Equity
+19,716
+145
+3.58% 20USD/Share
+Equity
+23/09/2020
+USD
+Shares:
+Offshore Preference
+2,900
+4.58% 100RMB/Share
+450
+RMB2019
+Book value
+(102)
+Less: issue fees
+134,716
+Total
+No
+Mandatory No
+Mandatory
+70,000 None
+70,000
+None
+45,000
+45,000
+680
+700
+4.20% 100RMB/Share
+Equity
+19/09/2019
+Conversion
+condition
+(million) Maturity
+(million)
+Except for the dividends for H shares which are payable in Hong Kong dollars, all of the ordinary A shares and H shares rank
+pari passu with each other in respect of dividends on ordinary shares.
+356,407
+356,407
+356,407
+356,407
+269,612
+269,612
+269,612
+269,612
+86,795
+86,795
+86,795
+86,795
+(millions)
+of shares
+31 December 2021
+Number
+Nominal
+value
+Annual Report 2021
+134,614
+217
+For the year ended 31 December 2021
+shares)
+Issue price
+rate
+Conversion
+In RMB
+currency
+(million
+Dividend
+Accounting
+classification
+Issue date
+Financial instrument
+outstanding
+In original
+Amount
+(a) Preference shares outstanding ("Preference Shares"):
+(1) Preference shares
+38. OTHER EQUITY INSTRUMENTS
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+(b) Main clauses and basic information
+income
+Offshore and domestic dividends are paid annually.
+Other
+1,149
+4,823
+690
+2,737
+measured at FVTOCI
+Change in fair value of financial instruments
+1,809
+7,236
+3,635
+15,692
+measured at FVTPL
+Change in fair value of financial instruments
+(937)
+(3,273)
+(268)
+(535)
+1,567
+Allowance for impairment losses
+3,465
+24,179
+(i) Dividend
+Recognised in
+profit or loss
+2021
+1 January
+31 December
+in other
+Recognised
+Deferred tax assets:
+(b) Movements of deferred income tax
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements
+209
+Annual Report 2021
+2,881
+12,251
+5,624
+(ii) There were no overdue payment for staff salaries, bonuses, allowances and subsidies payable as at 31 December 2021 (31
+December 2020: Nil).
+(assets)
+6,285
+(assets)
+(1,122)
+(5,106)
+37. SHARE CAPITAL
+Issued and fully paid:
+H shares of RMB1 Yuan each
+A shares of RMB1 Yuan each
+Nominal
+of shares
+value
+(millions)
+The Bank shall distribute dividends for Offshore and Domestic Preference Shares in cash, based on the liquidation preference
+amount for the issued and outstanding Offshore Preference Shares or total amount of issued and outstanding Domestic
+Preference Shares during the corresponding period (i.e. the product of the issue price of Preference Shares and the number
+of the issued and outstanding Preference Shares).
+Non-cumulative dividend is a dividend on Offshore and Domestic Preference Shares which does not cumulate upon omission
+of payment and the passed or omitted dividend of one year is not carried to the following year. After receiving a dividend at
+the agreed dividend rate, preference shareholders of the Bank will not participate in the distribution of residual profits with
+ordinary shareholders.
+For Offshore and Domestic Preference Shares, if the Bank cancels all or part of the dividends to the Preference Shares, the
+Bank shall not make any dividend distribution to ordinary shareholders before the Bank pays the dividends to the preference
+shareholders in full for the current dividend period.
+(iii) Dividend stopper and setting mechanism
+The Bank can pay offshore and domestic dividends when it has distributable after-tax profit after making up previous years'
+losses, contributing to the statutory reserve and making general provisions, and the Bank's capital adequacy ratios meet
+regulatory requirements. Preference shareholders of the Bank are senior to the ordinary shareholders in respect of the right
+to dividends. The order of payment of Domestic Preference Shares is equal to Offshore Preference Shares. The Bank may
+elect to cancel all or part of offshore and domestic dividends and this shall not constitute a default for any purpose, but such
+cancellation will require a shareholder's resolution to be passed.
+differences
+(ii) Conditions to distribution of dividends
+319,327
+79,259
+31 December 2020
+Number
+Offshore and domestic dividends are set at a fixed rate for 5 years after issuance, and are reset every 5 years thereafter to
+the sum of the benchmark rate and the fixed spread. The fixed spread is equal to the spread between the initial dividend
+rate and the benchmark rate at the time of issuance. The fixed spread remains unchanged throughout the term of the
+Preference Shares.
+differences
+271,766
+temporary
+liabilities/
+temporary
+tax
+(deductible)
+tax
+(deductible)
+liabilities/
+Taxable/
+Deferred
+Taxable/
+31 December 2020
+31 December 2021
+Deferred tax liabilities:
+Deferred
+67,713
+Other
+Total
+1 January 2020
+23,280
+(18,568)
+(5,978)
+(1,266)
+Movement during 2020
+1,055
+(9,314)
+(9,162)
+31 December 2020 and 1 January 2021
+22,377
+(27,882)
+(4,923)
+differences
+(903)
+revaluation
+Annual Report 2021
+Investment
+(10,428)
+The investment revaluation reserve records the fair value changes and impairment provision of financial investments
+measured at FVTOCI.
+223
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(e) Foreign currency translation reserve
+The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial
+statements of the subsidiaries and branches incorporated outside Chinese mainland.
+(f) Cash flow hedge reserve
+The cash flow hedge reserve comprises the effective portion of the gains or losses on the hedging instruments.
+(g) Other reserves
+Other reserves represent reserves other than the items listed above, including other comprehensive income recognised under
+the equity method.
+(h) Distributable profits
+The Bank's distributable profit is based on its retained earnings as determined under PRC GAAP and IFRSS, whichever is
+lower. The amount that the Bank's subsidiaries can legally distribute is determined by referring to their profits as reflected
+in their financial statements prepared in accordance with the accounting regulations and principles promulgated by the
+local regulatory bodies. These profits may differ from those dealt with in these financial statements, which are prepared in
+accordance with IFRSS.
+40. OTHER COMPREHENSIVE INCOME
+(a) Other comprehensive income attributable to equity holders of the parent company in
+the consolidated statement of financial position
+Foreign
+currency
+translation
+Movement during 2021
+374
+(12,117)
+28
+8
+Items that may be reclassified subsequently to profit or loss:
+(i)
+Changes in fair value of debt instruments measured at FVTOCI
+Less: Amount transferred to profit or loss from other comprehensive
+income and income tax effect
+5,777
+(5,036)
+(5)
+(4,154)
+1,623
+(3,042)
+(ii) Credit losses of debt instruments measured at FVTOCI
+1,827
+1,051
+(iii) Reserve from cash flow hedging instruments Gain/(loss) during the year
+Less: Income tax effect
+(d) Investment revaluation reserve
+1,994
+15
+1,289
+(1,180)
+1,951
+(7,915)
+31 December 2021
+24,628
+(39,999)
+(2,972)
+(18,343)
+224
+ICBC
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(b) Other comprehensive income in the consolidated statement of profit or loss and other
+comprehensive income
+Items that will not be reclassified to profit or loss:
+2021
+2020
+(i)
+Changes in fair value of equity instruments designated as at FVTOCI
+(ii) Other comprehensive income recognised under the equity method
+(iii) Other
+2,251
+The Bank's subsidiaries appropriate their profits to the general reserve according to the applicable local regulations.
+Pursuant to the resolution of the board of directors' meeting held on 30 March 2022, the total appropriation to general
+reserve of the Bank was RMB97,505 million (2020: RMB33,247 million), The general reserve balance of the Bank as at 31
+December 2021 amounted to RMB426,714 million, which reached 1.5% of the year-end balance of the Bank's risk assets.
+(3) Interests attributable to equity instruments' holders
+(c) General reserve
+80,000
+000
+700
+70,000
+70,000
+700
+n0
+80,000
+70,000
+300
+30,000
+30,000
+300
+30,000
+30,000
+86,691
+70,000
+800
+Total
+Series 2
+6,160
+39,793
+N/A
+NA
+6,160
+39,793
+outstanding
+Offshore
+USD2021 Perpetual bond
+Domestic
+RMB2019 Perpetual bond
+800
+80,000
+80,000
+RMB2021 Perpetual bond
+Series 1
+RMB2021 Perpetual bond
+133,102
+219,793
+(i)
+The Group exercised its call option to redeem all of the outstanding USD2016 Perpetual Bond on 21 July 2021.
+(2) Equity attributable to other equity instrument holders of non-controlling interests
+222
+ICBC
+39. RESERVES
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(a) Capital reserve
+Capital reserve mainly includes share premium arising from the issuance of new shares at prices in excess of par value.
+(b) Surplus reserves
+(i) Statutory surplus reserve
+The Bank is required to appropriate 10% of its profit for the year, as determined under the Accounting Standards for
+Business Enterprises and other relevant requirements ("PRC GAAP"), pursuant to the Company Law of the PRC and the
+Articles of the Bank to the statutory surplus reserve until the reserve balance reaches 50% of its registered capital.
+Subject to the approval of the shareholders, the statutory surplus reserve may be used to offset accumulated losses of the
+Bank, if any, and may also be converted into capital of the Bank, provided that the balance of the statutory surplus reserve
+after such capitalisation is not less than 25% of the registered capital immediately before capitalisation.
+Pursuant to the resolution of the board of directors' meeting held on 30 March 2022, the total appropriation to surplus
+reserve of the Bank was RMB32,494 million (2020: RMB30,550 million), among which an appropriation of 10% of the profit
+of the Bank for the year determined under the PRC GAAP to the statutory surplus reserve, in the amount of RMB32,438
+million (2020: RMB30,449 million) was approved and a total surplus reserve made by overseas branches was RMB56 million
+(2020: RMB101 million) pursuant to the requirements of local authorities.
+(ii) Discretionary surplus reserve
+After making the appropriation to the statutory surplus reserve, the Bank may also appropriate its profit for the year
+determined under the PRC GAAP to the discretionary surplus reserve upon approval by the shareholders in general meeting.
+Subject to the approval by the shareholders, the discretionary surplus reserve may be used to offset accumulated losses of
+the Bank, if any, and may be converted into capital.
+(iii) Other surplus reserve
+The Bank's overseas entities appropriate their profits to other surplus reserves or statutory reserve in accordance with the
+relevant laws and regulations promulgated by the local regulatory bodies.
+16,013
+In accordance with the "Administrative Measures for the Provision of Reserves of Financial Enterprises" (Cai Jin [2012] No.
+20) issued by the MOF, the Bank maintains a general reserve within equity, through the appropriation of profit, which should
+not be less than 1.5% of the period-end balance of its risk assets, to partially cover unidentified possible losses.
+17,503
+16,013
+(146)
+31 December
+31 December
+Items
+2021
+2020
+1.
+Total equity attributable to equity holders of the parent company
+3,257,755
+2,893,502
+2.
+(1) Equity attributable to ordinary shareholders of the parent company
+(2) Equity attributable to other equity instrument holders of the parent company
+Total equity attributable to non-controlling interests
+2,903,424
+2,667,683
+354,331
+225,819
+17,503
+(1) Equity attributable to ordinary shareholders of non-controlling interests
+68
+(a) Structured entities sponsored by third party institutions in which the Group holds an
+interest
+442
+259,562
+7,975
+67,055
+226
+ICBC
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+21,397
+(b) Structured entities sponsored by the Group in which the Group does not consolidate
+but holds an interest
+As at 31 December 2021, the amount of assets held by the unconsolidated non-principal-guaranteed wealth management
+products and investment funds, which are sponsored by the Group, were RMB2,586,393 million (31 December 2020:
+RMB2,708,427 million) and RMB1,810,281 million (31 December 2020: RMB1,462,393 million) respectively.
+In 2021, the amount of the average exposure of financing transactions through placements and reverse repurchase
+agreements from the Group with non-principal-guaranteed wealth management products sponsored by the Group was
+RMB26,699 million (2020: RMB72,587 million). The transactions were conducted in the ordinary course of business under
+normal terms and conditions and at market rates.
+(c) Consolidated structured entities
+The consolidated structured entities of the Group are primarily the principal-guaranteed wealth management products,
+certain investment funds, asset-backed securities and asset management plans issued or initiated and invested by the Group
+or purchased due to regulatory requirements related to wealth management business. The Group controls these entities
+because the Group has power over, is exposed to, or has rights to variable returns from its involvement with these entities
+and has the ability to use its power over these entities to affect the amount of the Group's returns.
+43. TRANSFERRED FINANCIAL ASSETS
+The Group enters into transactions in the ordinary course of business by which it transfers recognised financial assets to
+third parties or structured entities. In some cases these transfers may give rise to full or partial derecognition of the financial
+assets concerned. In other cases where the transferred assets do not qualify for derecognition as the Group has retained
+substantially all the risks and rewards of these assets, the Group continues to recognise the transferred assets.
+Repurchase transactions and securities lending transactions
+The types of unconsolidated structured entities sponsored by the Group include non-principal-guaranteed wealth
+management products and investment funds. The nature and purpose of these structured entities are to generate fees from
+managing assets on behalf of investors. These structured entities are financed through the issuance of investment products
+to investors. Interest held by the Group includes investments in the products issued by these unconsolidated structured
+entities and fees charged for providing management services. As at 31 December 2021 and 31 December 2020, the carrying
+amounts of the investments in the products issued by these structured entities and fee receivables being recognised were
+not material in the consolidated financial statements. Management income earned by the Group was included in fee and
+commission income of personal wealth management and private banking services and corporate wealth management
+services set out in Note 7.
+22,807
+45,658
+7,975
+56,596
+1,435
+19,468
+56,798
+2,740
+76,064
+Financial
+investments
+measured at
+FVTPL
+31 December 2020
+Financial
+investments
+measured at
+FVTOCI
+Financial
+investments
+measured at
+amortised cost
+Investment funds
+Wealth management products
+32,100
+311
+Asset management plans and asset-backed securities
+Trust plans
+204,344
+Transferred financial assets that do not qualify for derecognition mainly include debt securities held by counterparties as
+collateral under repurchase agreements and debt securities lent to counterparties under securities lending agreements.
+The counterparties are allowed to sell or repledge those securities in the absence of default by the Group, but has an
+obligation to return the securities at the maturity of the contract. If the securities increase or decrease in value, the Group
+may in certain circumstances require additional cash collateral from counterparties or return part of the cash collateral
+to counterparties. The Group has determined that it retains substantially all the risks and rewards of these securities and
+therefore has not derecognised them. In addition, it recognises a financial liability for cash received as collateral.
+Annual Report 2021
+227
+Notes to the Consolidated Financial Statements
+361,344
+255,660
+394,383
+32,012
+297,784
+40,760
+Securitisation transactions
+The Group transfers credit assets to structured entities which issue asset-backed securities to investors. The Group may
+acquire some asset-backed securities at the subordinated tranche level and accordingly, may retain parts of the risks and
+rewards of the transferred credit assets. The Group would determine whether or not to derecognise the associated credit
+assets by evaluating the extent to which it retains the risks and rewards of the assets.
+For those in which the Group has neither transferred nor retained substantially all the risks and rewards of the transferred
+credit assets, and retained control of the credit assets, the Group recognises the assets on the consolidated statement
+of financial position to the extent of the Group's continuing involvement and the rest is derecognised. The extent of the
+Group's continuing involvement is the extent of the risks and rewards undertaken by the Group with value changes of the
+transferred financial assets. As at 31 December 2021, loans with an original carrying amount of RMB619,736 million at the
+time of derecognition (31 December 2020: RMB521,314 million) have been securitised by the Group under arrangements in
+which the Group retained a continuing involvement in such assets. The carrying amount of assets that the Group continues
+to recognise on the consolidated statement of financial position was RMB74,121 million as at 31 December 2021 (31
+December 2020: RMB63,808 million).
+As at 31 December 2021, the carrying amount of asset-backed securities held by the Group in securitisation transactions
+that were qualified for derecognition was RMB973 million (31 December 2020: RMB1,029 million), and its maximum
+exposure approximated to the carrying amount.
+With respect to the securitisation of financial assets that do not qualify for derecognition, the relevant financial assets are
+not derecognised, and the consideration received is recorded as a financial liability. As at 31 December 2021, transferred
+credit assets that were not qualified for derecognition of the Group amounted to RMB132 million at the time of transfer (31
+December 2020: Nil).
+44. ASSETS PLEDGED AS SECURITY
+Financial assets of the Group including securities and bills have been pledged as collateral for liabilities or contingent
+liabilities, mainly for repurchase agreements and derivative contracts. As at 31 December 2021, the carrying amount of the
+financial assets of the Group pledged as collateral amounted to approximately RMB319,877 million (31 December 2020:
+approximately RMB249,499 million).
+45. SHARE APPRECIATION RIGHTS PLAN
+The Bank's share appreciation rights plan was approved in 2006, which allows share appreciation rights to be granted to
+eligible participants including directors, supervisors, senior management and other key personnel designated by the board of
+directors. The share appreciation rights will be granted and exercised based on the price of the Bank's H shares and will be
+valid for 10 years. As at the approval date of these financial statements, no share appreciation rights have been granted.
+228
+ICBC
+Securities lending agreements
+2,740
+40,760
+32,012
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+The following table analyses the carrying amount of the aforementioned financial assets transferred to third parties that did
+not qualify for derecognition and their associated financial liabilities:
+31 December 2021
+Carrying
+amount of
+Carrying
+amount of
+31 December 2020
+Carrying
+amount of
+Carrying
+amount of
+transferred
+associated
+assets
+liabilities
+transferred
+assets
+associated
+liabilities
+Repurchase agreements
+33,039
+42,124
+(107)
+18,661
+36,702
+241,109
+Placements with banks and other financial institutions with
+original maturity of three months or less
+157,323
+239,428
+Reverse repurchase agreements with original maturity of three months or less
+649,929
+228,082
+625,784
+1,791,122
+Annual Report 2021
+225
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+42. INTERESTS IN STRUCTURED ENTITIES
+1,436,757
+original maturity of three months or less
+619,968
+338,551
+(253)
+(v)
+(iv) Other comprehensive income recognised under the equity method
+Foreign currency translation differences
+(vi) Other
+541
+14
+(12,353)
+885
+(8,172)
+(16,212)
+1,311
+(15,839)
+41. CASH AND CASH EQUIVALENTS
+31 December
+31 December
+2021
+2020
+Cash on hand
+62,872
+64,833
+Balances with central banks other than restricted deposits
+Deposits with banks and other financial institutions with
+The Group holds an interest in some structured entities sponsored by third party institutions through investments in
+the products issued by these structured entities. Such structured entities include investment funds, wealth management
+products, asset management plans and asset-backed securities, trust plans and the Group does not consolidate these
+structured entities. The nature and purpose of these structured entities are to generate fees from managing assets on behalf
+of investors and are financed through the issuance of investment products to investors.
+The following table sets out an analysis of the carrying amounts and maximum exposure of interests held by the Group in
+the structured entities sponsored by third party institutions:
+31 December 2021
+Carrying
+Maximum
+20,903
+20,903
+44,204
+44,204
+135,602
+135,602
+334,592
+334,592
+The maximum loss exposures in the above investment funds, wealth management products, asset management plans and
+asset-backed securities, trust plans are the carrying amounts which are measured at amortised cost or the fair value of the
+investments held by the Group at the reporting date.
+The following tables set out an analysis of the line items in the consolidated statement of financial position in which assets
+were recognised relating to the Group's interests in structured entities sponsored by third party institutions:
+31 December 2021
+Financial
+investments
+measured at
+Financial
+investments
+measured at
+FVTPL
+FVTOCI
+Financial
+investments
+measured at
+amortised cost
+N/A
+Trust plans
+Asset management plans and asset-backed securities
+Trust plans
+257,977
+77,997
+31 December 2020
+Carrying
+amount
+exposure
+amount
+Investment funds
+36,702
+36,702
+32,100
+Wealth management products
+311
+Maximum
+exposure
+32,100
+311
+Asset management plans and
+asset-backed securities
+77,997
+257,977
+Investment funds
+USD2016 Perpetual bond(i)
+In RMB
+None
+No
+RMB2021
+Perpetual bond Series 2
+24/11/2021
+Equity
+3.65% 100RMB/Unit
+300
+00
+30,000
+None
+30,000
+None
+No
+Total
+219,793
+Less: issue fees
+(76)
+219,717
+(i)
+Book value
+Offshore USD Perpetual Bonds were issued in specific denomination of USD200,000 and integral multiplies of
+USD1,000 in excess thereof at an issue price of 100%.
+None
+70,000
+70,000
+00
+None
+None
+No
+Domestic
+RMB2019
+Perpetual bond
+26/07/2019
+Equity
+4.45%
+100RMB/Unit
+800
+80,000
+80,000
+None
+None
+No
+RMB2021
+Perpetual bond Series 1
+04/06/2021
+Equity
+4.04%
+100RMB/Unit
+700
+(b) Main clauses and basic information
+With the approvals of relevant regulatory authorities, the Bank issued RMB80 billion, RMB70 billion and RMB30 billion of
+undated capital bonds on 26 July 2019, 4 June 2021 and 24 November 2021 (hereinafter referred to as "2019 Domestic
+Perpetual Bond", "2021 Domestic Perpetual Bond Series 1" and "2021 Domestic Perpetual Bond Series 2" respectively,
+collectively "Domestic Perpetual Bonds") in the National Interbank Bond Market.
+The Bank issued USD6.16 billion of undated capital bonds (hereinafter referred to as "Offshore Perpetual Bond") on The
+Stock Exchange of Hong Kong Limited on 24 September 2021. The funds raised by the Bank from the bonds will be used
+to supplement additional tier 1 capital of the Bank in accordance with the relevant laws and approvals by regulatory
+authorities.
+220
+31 December 2021
+In original
+Amount
+currency
+Amount
+currency
+In RMB
+Amount
+currency
+(million units)
+(million)
+(million)
+(million units)
+(million)
+(million)
+(million units)
+(million)
+In RMB
+(million)
+1
+1,000
+6,691
+(1)
+(1,000)
+(6,691)
+Movement during the year
+In original
+39,793
+In original
+instrument
+ICBC
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(i) Interest
+Each Domestic Perpetual Bond has a par value of RMB100, and the interest rate of the bonds for the first five years are
+4.45% for 2019 Domestic Perpetual Bond, 4.04% for 2021 Domestic Perpetual Bond Series 1, and 3.65% for 2021
+Domestic Perpetual Bond Series 2, resetting every 5 years. The rates are determined by a benchmark rate plus a fixed spread.
+The initial fixed spreads are the difference between the interest rate and the benchmark rate as determined at the time
+of issuance. The fixed spread will not be adjusted once determined during the duration period. The interest of Domestic
+Perpetual Bond shall be paid annually.
+The interest rate of Offshore Perpetual Bond for the first five years is 3.20%, resetting every 5 years. The rate is determined
+by a benchmark rate plus a fixed spread. The dividend shall be paid semi-annually.
+(ii) Interest stopper and setting mechanism
+The interest payment for both the Domestic Perpetual Bonds and Offshore Perpetual Bond is non-cumulative. The Bank
+shall have the right to cancel, in whole or in part, distributions on the interest payment and any such cancellation shall not
+constitute an event of default. The Bank may, at its sole discretion, use the proceeds from the cancelled distributions to meet
+other obligations as they fall due. However, the Bank shall not distribute profits to ordinary shareholders until resumption of
+full interest payment.
+(iii) Order of distribution and liquidation method
+The claims in respect of Domestic Perpetual Bonds will be subordinated to claims of depositors, general creditors, and
+subordinated indebtedness that rank senior to Domestic Perpetual Bonds, and will rank in priority to all classes of shares held
+by shareholders of the Bank. The claims in respect of Offshore Perpetual Bonds will be subordinated to claims of depositors,
+general creditors, tier 2 capital bond holders and subordinated indebtedness that rank senior to the Offshore Perpetual
+Bond, and will rank in priority to all classes of shares held by shareholders of the Bank. Domestic Perpetual Bond and
+Offshore Perpetual Bond will rank pari passu with the claims in respect of any other Additional Tier 1 Capital instruments of
+the Bank that rank pari passu with the perpetual bonds.
+(iv) Write down conditions
+For 2019 Domestic Perpetual Bond, upon the occurrence of an Additional Tier 1 Capital Trigger Event (Core Tier 1 Capital
+Adequacy Ratio of the Bank falling to 5.125% or below), the Bank has the right to write down all or part of the total
+nominal amount of the outstanding 2019 Domestic Perpetual Bond with the consent of the CBIRC but without the need for
+the consent of the bond holders, in order to restore the Core Tier 1 Capital Adequacy Ratio of the Bank to above 5.125%.
+Upon the occurrence of a Tier 2 Capital Trigger Event, without the need for consent of the bond holders, the Bank has the
+right to write down all of the total nominal amount of the outstanding 2019 Domestic Perpetual Bond.
+For 2021 Domestic Perpetual Bond Series 1 and 2021 Domestic Perpetual Bond Series 2, upon the occurrence of a Non-
+Viability Trigger Event, the Bank has the right to write down all or part of the nominal amount of the outstanding perpetual
+bonds without the need for the consent of the bond holders.
+For Offshore Perpetual Bond, upon the occurrence of a Non-Viability Trigger Event, the Bank has the right to write down all
+the perpetual bonds issued and outstanding at that time up to the total nominal value without the need for the consent of
+the bond holders.
+Annual Report 2021
+221
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(v) Redemption
+The duration of the Domestic Perpetual Bonds and Offshore Perpetual Bond is the same as the continuing operation of the
+Bank. Five years after the issuance date of the Domestic Perpetual Bonds and Offshore Perpetual Bond, the Bank shall have
+the right to redeem them in whole or in part on each distribution payment date (including the fifth distribution payment
+date since the issuance). In the event that the perpetual bond is not classified as additional tier 1 capital due to unpredicted
+changes in regulations, the Bank shall have the right to redeem Domestic Perpetual Bonds and Offshore Perpetual Bond fully
+instead of partly.
+(c) Changes in perpetual bond outstanding
+Financial
+1 January 2021
+6,160
+DO
+Note (i)
+In RMB
+Amount
+currency
+In RMB
+Amount
+currency
+In RMB
+(million)
+(million shares)
+(million)
+(million) (million shares)
+(million)
+(million)
+Offshore Preference
+Shares:
+EUR
+40
+600
+4,558
+(40)
+(600)
+(4,558)
+USD
+In original
+145
+31 December 2021
+In original
+currency
+(million)
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(iv) Order of distribution and liquidation method
+The offshore preference shareholders and domestic preference shareholders will rank equally for payment. The preference
+shareholders will be subordinated to the depositors, general creditors and holders of convertible bonds, holders of
+subordinated debts, holders of tier 2 capital bonds and holders of other tier 2 capital instruments of the Bank, but will be
+senior to the ordinary shareholders of the Bank.
+(v) Mandatory conversion trigger events
+For Domestic Preference Shares, upon the occurrence of an Additional Tier 1 Capital Trigger Event (Core Tier 1 Capital
+Adequacy Ratio of the Bank falling to 5.125% or below), the Bank shall have the right without the need for the consent of
+the domestic preference shareholders to convert all or part of the outstanding face value of Domestic Preference Shares into
+A shares, in order to restore the Core Tier 1 Capital Adequacy Ratio of the Bank to above 5.125%. If Domestic Preference
+Shares were converted into A shares, they cannot be converted to Preference Shares again under any circumstances. Upon
+the occurrence of a Tier 2 Capital Trigger Event, the Bank shall have the right without the need for the consent of the
+domestic preference shareholders to convert all the outstanding face value of Domestic Preference Shares into A shares. If
+Domestic Preference Shares were converted into A share, they cannot be converted to Preference Shares again under any
+circumstances.
+For Offshore Preference Shares, upon the occurrence of any Non-Viability Trigger Event, the Bank shall have the right
+to irrevocably and compulsorily convert all or part of the outstanding Offshore Preference Shares into H shares, under
+the consent of the CBIRC but without the need for the consent of the offshore preference shareholders or the ordinary
+shareholders. If the Offshore Preference Shares were converted into H shares, they cannot be converted to Preference Shares
+again under any circumstances.
+The initial mandatory conversion prices are HKD5.73 for Offshore Preference Shares per H share; RMB3.44 for Domestic
+2015 Preference Shares and RMB5.43 for Domestic 2019 Preference Shares. In case of stock dividends distribution of H or A
+shares of the Bank or other circumstances, the Bank will make cumulative adjustment to the compulsory conversion price in
+turn.
+(vi) Redemption
+Subject to obtaining the approval of the CBIRC and satisfying the conditions of redemption, the Bank has the right to
+redeem all or part of the Offshore Preference Shares at the first call date and subsequent any dividend payment date.
+Redemption price of Offshore Preference Shares is equal to liquidation preference price plus any declared but unpaid
+dividend in current period. The first redemption date of Offshore Preference Shares is five years after issuance.
+Under the premise of obtaining the approval of the CBIRC and compliance with relevant requirements, the Bank has the
+right to redeem all or part of Domestic Preference Shares, after five years having elapsed since the date of issuance/the date
+of closing. The redemption period of Domestic Preference Shares is from the start date of redemption to the date of full
+redemption or conversion. Redemption price of Domestic Preference Shares is equal to book value plus any declared but
+unpaid dividend in current period.
+N/A
+219
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(c) Changes in preference shares outstanding
+1 January 2021
+Movement during the year
+Financial
+instrument
+Amount
+outstanding
+(million shares)
+In original
+2,900
+Annual Report 2021
+145
+(a) Perpetual bond outstanding
+Financial
+Amount
+In original
+instrument
+Accounting
+(million
+currency
+outstanding
+Issue date
+classification
+Interest rate
+Issue price
+units)
+(million)
+In RMB
+(million) Maturity condition
+Conversion
+Offshore
+USD Perpetual bond
+24/09/2021
+Equity
+3.20%
+19,716
+(2) Perpetual bond
+The Bank redeemed all of the EUR Offshore Preference Shares on 10 December 2021.
+Conversion
+(4,558)
+45
+134,716
+2,900
+19,716
+Domestic Preference
+RMB2015
+450
+45,000
+45,000
+20
+RMB2019
+Shares:
+70,000
+700
+700
+45,000
+450
+45,000
+Total
+70,000
+70,000
+139,274
+70,000
+Internal net interest income/(expense)
+690,680
+Other
+251,367
+146,911
+292,402
+External net interest income
+Total
+Personal
+banking
+banking
+Corporate
+2021
+Segment revenues, expenses, results, assets and liabilities include items directly attributable to a segment as well as those
+that can be allocated on a reasonable basis. The basis for allocation is mainly based on occupation of or contribution to
+resources. Income taxes are managed on a group basis and are not allocated to operating segments.
+Notes to the Consolidated Financial Statements
+Net fee and commission income
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2021
+Treasury
+operations
+17,262
+5,057
+(165,563)
+Operating expenses
+(94,823)
+237
+860,880
+5,057
+111,278
+346,172
+398,373
+148,301
+Operating income
+24,292
+(2,800)
+10,627
+Other income/(expense), net (i)
+133,024
+1,182
+53,760
+78,082
+37,176
+Annual Report 2021
+5.55%
+Management monitors the operating results of the Group's business units separately for the purpose of making decisions
+about resources allocation and performance assessment. Segment information is prepared in conformity with the accounting
+policies adopted for preparing and presenting the financial statements of the Group.
+64,456
+3,214
+Amount Percentage
+Interest expense
+Interest income
+2021
+0.58%
+15,713
+0.55%
+0.68%
+14,895
+0.19%
+47,032
+0.38%
+99,904
+Due to customers
+16.52%
+23,290
+(121,173)
+Credit commitments
+Transactions between segments mainly represent the provision of funding to and from individual segments. The internal
+transfer pricing of these transactions are determined with reference to the market rates and have been reflected in the
+performance of each segment. Net interest income and expense arising on internal fund transfer are referred to as "internal
+net interest income or expense". Net interest income and expense relating to third parties are referred to as "external net
+interest income or expense".
+236
+2020
+This segment covers the Group's assets, liabilities, income and expenses that are not directly attributable or cannot be
+allocated to a segment on a reasonable basis.
+Other
+The treasury operations segment covers the Group's treasury operations which include money market transactions,
+investment securities, foreign exchange transactions and the holding of derivative positions, for its own accounts or on
+behalf of customers.
+Treasury operations
+The personal banking segment covers the provision of financial products and services to individual customers. The products
+and services include personal loans, deposit-taking activities, card business, personal wealth management services and
+various types of personal intermediary services.
+Personal banking
+The corporate banking segment covers the provision of financial products and services to corporations, government agencies
+and financial institutions. The products and services include corporate loans, trade financing, deposit-taking activities,
+corporate wealth management services, custody activities and various types of corporate intermediary services.
+Corporate banking
+ICBC
+The Group is organised into different operating segments, namely corporate banking, personal banking and treasury
+operations, based on internal organisation structure, management requirements and internal reporting system.
+48. SEGMENT INFORMATION
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+0.50%
+6.08%
+66,479
+2,232
+Percentage
+Amount
+(a) Operating segments
+(16,885)
+(In RMB millions, unless otherwise stated)
+(236,227)
+61,782
+35,092,124
+169,482
+14,086,517
+8,399,240
+12,436,885
+31 December 2021
+43,331
+61,782
+215
+19,027
+18,219
+24,848
+125
+3,370
+10,901
+10,452
+Includes intangible assets, goodwill, long-term deferred expenses, right-of-use assets and other non-current assets.
+5,870
+(ii)
+112,952
+43,468
+37,432
+12.27%
+ICBC
+238
+2,730,369
+98,067
+31,896,125
+31,798,058
+198,061
+4,425,332
+120,366
+13,213,984
+35,171,383
+79,259
+80,661
+9,944
+6,304
+20,945
+290,296
+19,546
+13,960,681
+(3,346)
+Includes net trading income, net gains on financial investments and other net operating income.
+1,055,600
+195,658
+140,569
+Profit before taxation
+2,869
+2,869
+Share of results of associates and joint ventures
+422,030
+477
+85,326
+85,326
+140,569
+Operating profit
+(202,623)
+(1,234)
+(9,067)
+(29,341)
+(162,981)
+Impairment losses on assets
+195,658
+(i)
+3,346
+Income tax expense
+1,674,769
+Credit commitments
+Other segment information:
+Total liabilities
+Unallocated liabilities
+Segment liabilities
+Total assets
+Unallocated assets
+424,899
+Other non-current assets (ii)
+Including: Investments in associates and joint ventures
+Segment assets
+Capital expenditure
+Depreciation and amortisation
+Other segment information:
+350,216
+Profit for the year
+(74,683)
+Property and equipment
+(h) Annuity Fund
+8,754
+10.98%
+183,059
+151,307
+4,945
+7,897
+45,958
+45,269
+375,028
+437,377
+30,425
+8,519
+33,753
+2021
+31 December
+775
+1,284
+2020
+Apart from the obligations for defined contributions to the Annuity Fund established by the Bank, Annuity Fund held A
+shares of the Bank with market value of RMB3.16 million (31 December 2020: RMB39.17 million), and bonds issued by the
+Bank of RMB324.13 million as at 31 December 2021 (31 December 2020: RMB10.00 million).
+30,000
+38,000
+31 December
+2020
+31 December
+2020
+31 December
+2021
+5,004
+53,161
+233
+Annual Report 2021
+The major balances and transactions with subsidiaries have been eliminated in the consolidated financial statements.
+6,233
+5,636
+993
+599
+Interest expense on amounts due to banks and other financial institutions
+Fee and commission income
+681
+60,280
+653
+523
+728
+Interest income on amounts due from banks and other financial institutions
+982
+1,386
+Interest income on financial investments
+Transactions during the year:
+2020
+2021
+Interest income on loans and advances to customers
+Notes to the Consolidated Financial Statements
+Credit commitments
+Due to banks and other financial institutions
+665
+Interest income on amounts due from banks and other financial institutions
+18,634
+17,805
+Interest income on debt securities purchased
+Transactions during the year:
+2020
+2021
+12,690
+582
+1,065
+6,318
+917
+8,750
+299,691
+289,661
+20,669
+7,375
+10,610
+3,794
+251,578
+198,607
+20,007
+Derivative financial liabilities
+Interest income on loans and advances to customers
+110
+Derivative financial assets
+Loans and advances to customers
+Due from banks and other financial institutions
+Financial investments
+Balances at end of the year:
+(d) Subsidiaries
+Interest expense on amounts due to customers
+Transactions during the year:
+Due to customers
+52
+Balances at end of the year:
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+ICBC
+232
+54
+10
+1,068
+1,026
+Interest expense on amounts due to banks and other financial institutions
+Interest expense on amounts due to customers
+(c) National Council for Social Security Fund of the People's Republic of China
+National Council for Social Security Fund (the 'SSF') is a public institution managed by the MOF. It is the management and
+operating organisation of the national social security fund. As at 31 December 2021, the SSF held 5.69% (31 December
+2020: 5.69%) of the Bank's issued share capital. The Group entered into banking transactions with the SSF in the ordinary
+course of business under normal commercial terms and the transactions are priced based on market rates. Details of the
+major transactions are as follows:
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(e) Associates and affiliates
+234
+Transactions between the Group and joint ventures and their affiliates were conducted in the ordinary course of business
+under normal terms and conditions and priced based on market rates.
+0
+0
+2
+0
+2020
+2021
+7
+ICBC
+18
+2020
+2021
+31 December
+31 December
+Interest expense on amounts due to customers
+Interest income on loans and advances to customers
+Transactions during the year:
+Due to customers
+Loans and advances to customers
+65
+Balances at end of the year:
+Notes to the Consolidated Financial Statements
+(g) Key management personnel
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements
+235
+Annual Report 2021
+The transactions between the Group and the aforementioned parties were conducted in the ordinary course of business
+under normal terms and conditions and priced based on market rates.
+The aggregate balance of loans and credit card overdrafts to the persons who are considered as related parties according
+to the relevant rules of Shanghai Stock Exchange was RMB12.23 million as at 31 December 2021 (31 December 2020:
+RMB15.29 million).
+In 2021, there were no material transactions and balances with key management personnel individually or in the aggregate
+(2020: Immaterial). The Group entered into banking transactions with key management personnel in the ordinary course of
+business.
+Related parties of the Group include key management personnel of the Group and their close relatives, as well as companies
+controlled, jointly controlled or significantly influenced by key management personnel or their close relatives.
+The total compensation packages for senior management have not been finalised in accordance with the regulations of the
+PRC relevant authorities. The total remuneration not yet accrued is not expected to have a significant impact on the Group's
+2021 financial statements. The total compensation packages will be further disclosed when determined by the relevant
+authorities.
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+The above remuneration before tax payable to key management personnel for 2020 represents the total amount of their
+annual remunerations, which includes the amount disclosed in the 2020 annual report.
+7,142
+In RMB'000
+9,154
+216
+6,787
+355
+In RMB'000
+2020
+2021
+Salaries and other short-term employment benefits
+Post-employment benefits
+The aggregate compensation of key management personnel for the year, other than those disclosed in note 12 above, is as
+follows:
+The key management personnel are those persons who have the authority and responsibility to plan, direct and control the
+activities of the Group, directly or indirectly, including members of the board of directors and the board of supervisors, and
+executive officers.
+9,370
+(f) Joint ventures and affiliates
+Transactions between the Group and the associates and their affiliates were conducted under normal commercial terms and
+conditions and priced based on market rates.
+0
+1,797
+983
+3,672
+8,549
+13,843
+12,680
+13,162
+2020
+2021
+3,244
+31 December
+Credit commitments
+Derivative financial liabilities
+Due to customers
+Due to banks and other financial institutions
+Derivative financial assets
+Loans and advances to customers
+Due from banks and other financial institutions
+Debt securities purchased
+Balances at end of the year:
+31 December
+9,858
+6,051
+638
+0
+186
+95
+Interest expense on amounts due to banks and other financial institutions
+Interest expense on amounts due to customers
+62
+33
+Interest income on loans and advances to customers
+80
+181
+Interest income on amounts due from banks and other financial institutions
+479
+387
+Interest income on debt securities purchased
+Transactions during the year:
+2020
+2021
+3,023
+6,145
+3,283
+2,436
+3
+633,728
+536,655
+2020
+31 December
+91,410
+50,199
+129,015
+114,733
+51,517
+54,466
+446,460
+444,418
+54,361
+497,892
+50,114
+449,141
+2021
+31 December
+31 December
+Credit risk-weighted assets of credit commitments
+With an original maturity of under one year
+With an original maturity of one year or over
+Undrawn credit card limits
+Usance letters of credit and other commitments
+Loan commitments
+Sight letters of credit
+- Non-financing letters of guarantees
+2020
+343,233
+- Financing letters of guarantees
+574,420
+1,021,038
+31 December
+2021
+(d) Legal proceedings and arbitrations
+Over three years but within five years
+Over five years
+Over two years but within three years
+Over one year but within two years
+Within one year
+At the end of the reporting period, the Group's total future minimum lease receivables in respect of non-cancellable
+operating leases of assets are as follows:
+(c) Operating leases
+(In RMB millions, unless otherwise stated)
+1,069,406
+For the year ended 31 December 2021
+229
+Annual Report 2021
+1,106,377
+2020
+2021
+1,082,099
+31 December
+31 December
+2,711,454
+2,730,369
+Notes to the Consolidated Financial Statements
+Guarantees issued
+Bank acceptances
+The contractual amounts of credit commitments by category are set out below. The amounts disclosed in respect of loan
+commitments and undrawn credit card limits are under the assumption that the amounts will be fully advanced. The
+amounts for bank acceptances, letters of credit and guarantees represent the maximum potential losses that would be
+recognised at the end of the reporting period had the counterparties failed to perform as contracted.
+25.78%
+Due from banks and other financial institutions
+212,450
+25.68%
+260,127
+24.04%
+Loans and advances to customers
+7,466
+0.04%
+2,214,553
+15,663
+Derivative financial assets
+9,172
+12.05%
+23,913
+17.82%
+Due to banks and other financial institutions
+299,519
+10.25%
+305,742
+0.09%
+23.53%
+2,178,011
+Financial investments
+The Group has outstanding commitments to extend credit including approved loans and undrawn credit card limits.
+The Group provides letters of credit and financial guarantees to guarantee the performance of customers to third parties.
+Bank acceptances comprise undertakings by the Group to pay bills of exchange drawn on customers. The Group expects
+most acceptances to be settled simultaneously with the reimbursement from the customers.
+(b) Credit commitments
+42,797
+2020
+31 December
+31,307
+2021
+31 December
+Contracted but not provided for
+At the end of the reporting period, the Group had capital commitments as follows:
+46. COMMITMENTS AND CONTINGENT LIABILITIES
+(a) Capital commitments
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+(i) Transactions with state-owned entities in the PRC
+The Group operates in an economic environment predominated by enterprises directly or indirectly owned and/or controlled
+by the Government through its authorities, affiliates or other organisations (collectively the "state-owned entities"). During
+the year, the Group entered into extensive banking transactions with these state-owned entities including, but are not
+limited to, lending and deposit taking, taking and placing of interbank balances, entrusted lending and the provision of
+intermediary services, the sale, purchase, underwriting and redemption of bonds issued by other state-owned entities, and
+the sale, purchase, and leasing of properties and other assets.
+The transactions with state-owned entities are activities conducted in the ordinary course of business under normal terms
+and conditions and priced based on market rates, and that the dealings of the Group have not been significantly or unduly
+affected by the fact that the Group and those state-owned entities are ultimately controlled or owned by the Government.
+The Group has also established pricing policies for products and services and such pricing policies do not depend on whether
+or not the customers are state-owned entities.
+(j) Proportion of major related party transactions
+The major balances and transactions with subsidiaries have been eliminated in the consolidated financial statements. When
+calculating the proportion of related party transactions, transactions with the subsidiaries are excluded.
+31 December 2021
+Balance Percentage
+31 December 2020
+Balance
+Percentage
+31 December
+Derivative financial liabilities
+2020
+17,218
+4,005
+72,472
+64,841
+2020
+2021
+31 December
+31 December
+Due to customers
+Loans and advances to customers
+60,331
+Debt securities purchased
+The Group entered into banking transactions with Huijin in the ordinary course of business under normal commercial terms
+and the transactions are priced based on market rates. Details of the major transactions are as follows:
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements
+231
+Annual Report 2021
+As at 31 December 2021, bonds issued by Huijin ("the Huijin Bonds") held by the Group are of an aggregate face value
+of RMB63.66 billion (31 December 2020: RMB71.39 billion), with terms ranging from one to thirty years and coupon rates
+ranging from 2.15% to 4.38% per annum. The Huijin Bonds are government-backed bonds, short-term bills and medium-
+term notes. The Group's subscription of the Huijin Bonds was conducted in the ordinary course of business, in compliance
+with relevant regulatory and the corporate governance requirements of the Group.
+Central Huijin Investment Ltd. ("Huijin") is a wholly-owned subsidiary of China Investment Corporation, and in accordance
+with the authorisation of the State Government, Huijin makes equity investments in major state-owned financial enterprises,
+and shall, to the extent of its capital contribution, exercise the rights and perform the obligations as an investor on behalf
+of the Government in accordance with applicable laws, to achieve the goal of preserving and enhancing the value of state-
+owned financial assets. Huijin does not conduct any other businesses or commercial activities nor intervene in the day-to-
+day business operations of the financial enterprises in which it invests. Huijin was established on 16 December 2003 with a
+total registered and paid-in capital of RMB828,209 million. As at 31 December 2021, Huijin directly owned approximately
+34.71% (31 December 2020: approximately 34.71%) of the issued share capital of the Bank.
+(b) Huijin
+Balances at end of the year:
+Other related party transactions between the Group and enterprises under the control or joint control of the MOF are
+disclosed in note 47(i) "transactions with state-owned entities in the PRC".
+15,957
+2020
+31 December
+2021
+Credit commitments
+Due to customers
+Derivative financial liabilities
+Due to banks and other financial institutions
+Derivative financial assets
+Loans and advances to customers
+Due from banks and other financial institutions
+Debt securities purchased
+2021
+Balances at end of the year:
+149
+799
+561
+74
+2,360
+2,306
+Interest income on loans and advances to customers
+Interest expense on amounts due to customers
+Interest income on debt securities purchased
+Transactions during the year:
+Huijin holds equity interests in certain other banks and financial institutions under the direction of the State Government.
+The Group enters into transactions with these banks and financial institutions in the ordinary course of business under
+normal commercial terms and the transactions are priced based on market rates. Management considers that these banks
+and financial institutions are competitors of the Group. Details of major transactions during the year conducted with these
+banks and financial institutions are as follows:
+43,609
+42,953
+2020
+31 December
+31 December
+2021
+Designated loans
+Designated funds
+(f) Designated funds and loans
+As at 31 December 2021, the Group's outstanding securities underwriting commitments were RMB6,350 million (31
+December 2020: Nil).
+As an underwriting agent of the MOF, the Bank underwrites certain PRC government bonds and sells the bonds to the
+general public. The Bank is obliged to redeem these bonds at the discretion of the holders at any time prior to maturity. The
+redemption price for the bonds is based on the nominal value of the bonds plus any interest accrued up to the redemption
+date. The MOF will not provide funding for the early redemption of these PRC government bonds on a back-to-back basis
+but is obliged to repay the principal and the respective interest upon maturity. The redemption obligations, which represent
+the nominal value of government bonds underwritten and sold by the Group, but not yet matured as at 31 December 2021
+were RMB75,553 million (31 December 2020: RMB81,112 million). Management expects that the redemption obligation of
+these PRC government bonds by the Bank prior to maturity will not be material.
+(e) Redemption commitments of government bonds and securities underwriting
+commitments
+In the opinion of management, the Group has made adequate allowance for any probable losses based on the current facts
+and circumstances, and the ultimate outcome of these lawsuits and arbitrations will not have a significant impact on the
+financial position or operations of the Group.
+2020
+The Group is involved in lawsuits and arbitrations during its normal course of operations. As at 31 December 2021, there
+were a number of legal proceedings and arbitrations outstanding against the Bank and/or its subsidiaries with a total claimed
+amount of RMB6, 165 million (31 December 2020: RMB4,928 million).
+135,796
+73,626
+59,648
+32,192
+27,840
+18,975
+15,937
+16,043
+15,920
+158,054
+2,361,366
+2,783,961
+2,783,778
+2,361,289
+2021
+1,495,673
+1,563,353
+31 December
+2020
+31 December
+2021
+Interest income on the government bonds
+Transactions during the year:
+The PRC government bonds and the special government bond
+Balances at end of the year:
+The MOF is a ministry under the State Council of the PRC, primarily responsible for, among others, state fiscal revenues,
+expenses and taxation policies. As at 31 December 2021, the MOF directly owned approximately 31.14% (31 December
+2020: approximately 31.14%) of the issued share capital of the Bank. The Group enters into banking transactions with the
+MOF in its ordinary course of business. Details of the major transactions are as follows:
+(a) The MOF
+In addition to the transactions detailed elsewhere in these consolidated financial statements, the Group had the following
+transactions with related parties during the year:
+47. RELATED PARTY DISCLOSURES
+The Group provides custody, trust and asset management services to third parties. Revenue from such activities is included in
+"net fee and commission income" set out in Note 7. Those assets held in a fiduciary capacity are not included in the Group's
+consolidated statement of financial position.
+(g) Fiduciary activities
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+ICBC
+230
+The designated loans represent the loans granted to specific borrowers designated by the trustors on their behalf according
+to the entrust agreements signed by the Group and the trustors. The Group does not bear any risk.
+The designated funds represent the funding that the trustors have instructed the Group to use to make loans to third parties
+as designated by them. The credit risk remains with the trustors.
+16,451
+2021
+43,331
+219,701
+The corporate borrower has the matters refer to in (i) or (ii) above in other financial institutions.
+The Group defines a retail business borrower as in default when any single credit asset of a borrower meets one or more of
+the following criteria:
+(i)
+The principal or interest of loan is past due more than 90 days to the Group;
+(ii) Write-offs of loan; or
+(iii)
+The Group considers the borrower is unlikely to pay its credit obligations to the Group in full.
+Impairment assessment
+A financial asset is generally considered to be credit-impaired if:
+It has been overdue for more than 90 days;
+In light of economic, legal or other factors, the Group has made concessions to a borrower in financial difficulties,
+which would otherwise have been impossible under normal circumstances;
+•
+The corporate borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to
+actions such as liquidation against collateral; or
+•
+Due to serious financial difficulties, the financial asset cannot continue to be traded in an active market;
+There are other objective evidences that indicate the financial asset is impaired.
+Parameters, assumptions and estimation techniques
+ECL for a financial instrument is measured at an amount equal to 12-month ECL or lifetime ECL depending on whether a
+significant increase in credit risk on that financial instrument has occurred since initial recognition and whether an asset is
+considered to be credit-impaired. The loss allowance for loans and advances to customers, other than those corporate loans
+and advance to customers which are credit-impaired, is measured using the risk parameters method. The key parameters
+include Probability of Default ("PD"), Loss Given Default ("LGD"), and Exposure at Default ("EAD"), considering the time
+value of money.
+PD is the possibility that a customer will default on its obligation within a certain period of time in light of forward-looking
+information. The Group's PD is adjusted based on the results of the Internal Ratings-Based Approach under the New Basel
+Capital Accord, taking the forward-looking information into account and deducting the prudential adjustment to reflect the
+debtor's point-in-time PD under the current macro-economic environment.
+LGD is the magnitude of the likely loss if there is a default in light of forward-looking information. LGD depends on the type
+of counterparty, the method and priority of the recourse, and the type of collaterals, taking the forward-looking adjustments
+into account.
+EAD refers to the total amount of on- and off-balance sheet exposures in the event of default and is determined based on
+the historical repayment records.
+The assumptions underlying the ECL calculation, such as how the PDs and LGDs of different maturity profiles change are
+monitored and reviewed on a quarterly basis by the Group.
+There have been no significant changes in estimation techniques or significant assumptions adopted in ECL calculation
+during the year.
+244
+ICBC
+Notes to the Consolidated Financial Statements
+It is probable that the borrower will be insolvent or carry out other financial restructurings;
+(iii)
+(ii)
+The principal or interest of loan is past due more than 90 days to the Group;
+(ii) Includes intangible assets, goodwill, long-term deferred expenses, right-of-use assets and other non-current assets.
+49. FINANCIAL RISK MANAGEMENT
+The board of directors (the "Board") has the ultimate responsibility for risk management and oversees the Group's risk
+management functions through the Risk Management Committee and the Audit Committee of the Board.
+The President supervises risk management and reports directly to the Board. He chairs two management committees
+including the Risk Management Committee and the Asset and Liability Management Committee, which set the risk
+management strategies and appetite, evaluate and formulate risk management policies and procedures, and make
+recommendations through the President to the Risk Management Committee of the Board. The Chief Risk Officer assists the
+President to supervise the Bank's risk management.
+The Group has clearly defined the roles of each department in monitoring financial risks within the Group. The Credit and
+Investment Management Department monitors credit risk, the Risk Management Department together with the Asset and
+Liability Management Department monitor market and liquidity risks, and the Internal Control and Compliance Department
+monitors operational risk. The Risk Management Department is primarily responsible for establishing and coordinating a
+comprehensive risk management framework, preparing consolidated reports on credit risk, market risk and operational risk
+and reporting directly to the Chief Risk Officer.
+The Bank maintains a dual-reporting risk management structure at the branch level. Under this structure, the risk
+management department of the branches report to both the Group risk management department and the management of
+the branches.
+242
+ICBC
+(a) Credit risk
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Definition and scope
+Credit risk is the risk of loss arising from a borrower or counterparty's failure to perform its obligations. Operational failures
+which result in unauthorised or inappropriate guarantees, financial commitments or investments by the Group may also give
+rise to credit risk. The Group's credit risk is mainly attributable to its loans, due from banks and other financial institutions
+and financial investments.
+The Group is also exposed to credit risk in other areas. The credit risk arising from derivative financial instruments is limited
+to derivative financial assets recorded in the consolidated statement of financial position. In addition, the Group provides
+guarantees for customers and may therefore be required to make payments on their behalf. These payments would be
+recovered from customers in accordance with the terms of the agreement. Therefore, the Group assumes a credit risk similar
+to that arising from loans and applies the same risk control procedures and policies to reduce risks.
+Credit risk assessment method
+Stage of financial instruments
+The Group classifies financial instruments into three stages and makes provisions for expected credit loss accordingly,
+depending on whether credit risk on that financial instrument has increased significantly and whether the assets have been
+impaired since initial recognition. Refer to Note 4(10) Impairment of financial assets for the definition of the three stages.
+Significant increase in credit risk
+The assessment of significant increase in credit risk and whether the assets have been impaired since initial recognition is
+performed at least on a quarterly basis for financial instruments held by the Group. The Group takes into consideration all
+reasonable and supportable information (including forward-looking information) that reflects significant change in credit
+risk for the purposes of classifying financial instruments. The main considerations are regulatory and operating environment,
+internal and external credit risk rating, debt-servicing capacity, operating capabilities, contractual terms, and repayment
+records. The Group compares the risk of default of a single financial instrument or a portfolio of financial instruments with
+similar credit risk characteristics as at the end of the reporting period and its risk of default at the date of initial recognition
+to determine changes in the risk of default over the expected lifetime of a financial instrument or a portfolio of financial
+instruments. In determining whether credit risk of a financial instrument has increased significantly since initial recognition,
+the Group considers factors indicating whether the probability of default has risen sharply, whether the financial instrument
+has been past due for more than 30 days, whether the market price has been falling continuously and other indicators.
+The Group has provided credit facilities for further extension of deferral in principal repayment and interest payment to the
+inclusive loans to micro and small-sized businesses in accordance with the government's regulations. The Group classifies the
+credit risk based on the actual situation of the borrower and the judgement of the substantive risk of the business for those
+loans with deferred principal repayment and interest payment. However, the temporary deferral in principal repayment and
+interest payment are not considered as an automatic trigger event for a significant increase in credit risk.
+Annual Report 2021
+243
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Definition of default
+The Group defines a corporate borrower as in default when it meets one or more of the following criteria:
+(i)
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Includes net trading income, net gains or losses on financial investments and other net operating income.
+The impairment loss on credit-impaired corporate loans and advance to customers applied discounted cash flow method. If
+there is objective evidence that an impairment loss on a loan or advance has incurred, the amount of the loss is measured as
+the difference between the asset's gross carrying amount and the present value of estimated future cash flows discounted
+at the asset's original effective interest rate. The allowance for impairment loss is deducted in the carrying amount. The
+impairment loss is recognised in the consolidated statement of profit or loss. In determining allowances on an individual
+basis, the following factors are considered:
+•
+Collaterals and other credit enhancements
+The amount and type of collateral required depends on the assessment of credit risk of the counterparty. Guidelines are in
+place specifying the types of collateral and valuation parameters which can be accepted.
+Reverse repurchase business is mainly collateralised by bills and investment securities. As part of certain reverse repurchase
+agreements, the Group has received securities that it is allowed to sell or repledge in the absence of default by their owners.
+Corporate loans and discounted bills are mainly collateralised by properties or other assets. As at 31 December 2021, the
+gross carrying amount of corporate loans and discounted bills amounted to RMB12,722,464 million (31 December 2020:
+RMB11,509,029 million), of which credit exposure covered by collateral amounted to RMB3,849,616 million (31 December
+2020: RMB3,534,852 million).
+Retail loans are mainly collateralised by residential properties. As at 31 December 2021, the gross carrying amount of retail
+loans amounted to RMB7,944,781 million (31 December 2020: RMB7,115,279 million), of which credit exposure covered by
+collateral amounted to RMB7,056,652 million (31 December 2020: RMB6,269,321 million).
+The Group prefers more liquid collateral with relatively stable market value and does not accept collateral that is illiquid, with
+difficulties in registration or high fluctuations in market value. The value of collateral should be appraised and confirmed by
+the Group or valuation specialists engaged by the Group. The value of collateral should adequately cover the outstanding
+balance of loans. The Group takes into consideration the types of collateral, state of condition, liquidity, price volatility and
+realisation cost to determine the loan-to-value ratio of collateral. All collateral has to be registered in accordance with the
+relevant laws and regulations. The credit officers inspect the collateral and assess the changes in the value of collateral
+regularly.
+The Group monitors the market value of the collaterals and when needed, require additional collateral according to
+agreements. The Group disposes of repossessed assets in an orderly manner.
+In 2021, the Group took possession of collateral held as security with a carrying amount of RMB41 million (2020: RMB377
+million).
+(i)
+Maximum exposure to credit risk without taking into account of any collateral and other
+credit enhancements
+As at the end of the reporting period, the maximum credit risk exposure of the Group without taking into account of any
+collateral and other credit enhancements is set out below:
+31 December
+31 December
+(In RMB millions, unless otherwise stated)
+2021
+Balances with central banks
+Due from banks and other financial institutions
+Derivative financial assets
+Reverse repurchase agreements
+Loans and advances to customers
+3,035,566
+3,472,962
+827,150
+1,081,897
+76,140
+663,496
+20,109,200
+134,155
+739,288
+2020
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements
+245
+The borrower's ability to improve performance when a financial difficulty arises;
+•
+The estimated recoverable cash flows from projects and liquidation;
+•
+The availability of other financial support and the realisable value of collateral; and
+•
+The timing of the expected cash flows.
+It may not be possible to identify a single, or discrete events that result in the impairment, but it may be possible to identify
+impairment through the combined effect of several events. The impairment losses are evaluated at the end of each reporting
+period, unless unforeseen circumstances require more careful attention.
+Forward-looking information contained in ECL
+The calculation of ECL incorporates forward-looking information. The Group has performed historical data analysis and
+identified Gross Domestic Product ("GDP"), Consumer Price Index ("CPI"), Purchasing Managers' Index ("PMI") and other
+macro-economic indicators as impacting the ECL for each portfolio. The impact of these economic variables on the PD and
+LGD has been determined by performing statistical regression analysis to understand the correlations among the historical
+changes of the economic variables, PD and LGD. Forecasts of these economic variables are carried out at least quarterly by
+the Group that provide the best estimate view of the economy over the next year.
+When calculating the weighted average ECL provision, the Group determines the optimistic, neutral and pessimistic scenarios
+and their weightings through a combination of macro-statistical analysis and expert judgement.
+As at 31 December 2021, the Group has taken into account different macro-economic scenarios, combined with the impact
+of factors such as COVID-19 on economic development trends, and made forward-looking forecasts of macro-economic
+indicators. Of which, the year-on-year GDP growth rate used to estimate ECL is 5.5% in the neutral scenario for 2022.
+The Group has carried out sensitivity analysis of macro-economic indicators used in forward-looking measurement. As at
+31 December 2021, when the key economic indicators in the neutral scenario moved up or down by 10%, the ECL did not
+change by more than 5% (31 December 2020: less than 5%).
+Financial assets contract modification
+The Group might modify the terms of loan with a customer based on commercial renegotiations, or when the customer is in
+financial difficulty, with a view to maximise the recovery of loan.
+Such modifications include restructuring the loan to provide extended payment term arrangements, payment holidays
+or payment forgiveness. Restructuring policies and practices are based on indicators or criteria which, in the judgement
+of management, indicate that payment will most likely continue, and reviewed regularly. Such restructures are especially
+common for medium-term loans. The classification of a rescheduled loan shall not be upgraded unless it has met certain
+criteria and after an observation period of at least 6 months.
+The following table includes carrying amount of rescheduled loans and advance to customers:
+Rescheduled loans and advances to customers
+Impaired loans and advances to customers included in above
+31 December
+31 December
+2021
+19,134
+2020
+11,960
+7,455
+4,504
+Annual Report 2021
+The sustainability of the borrower's business plan;
+(i)
+2,711,454
+(2,592,541)
+Annual Report 2021
+241
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Assets by geographical areas
+Including: Investments in associates and
+31 December 2020
+Chinese mainland (HO and domestic branches)
+Yangtze
+Pearl
+Bohai
+51,530
+Central
+Northeastern
+Overseas
+Head Office
+River Delta
+River Delta
+Rim
+China
+China
+China
+and other
+Eliminations
+Total
+Western
+20,457
+1,356
+5,413
+67,383
+76,322
+42,655
+66,598
+2,593
+27,188
+11
+392,126
+(74,441)
+317,685
+Other segment information:
+Depreciation and amortisation
+2,883
+3,168
+2,533
+3,849
+3,382
+3,931
+1,425
+2,277
+23,448
+Capital expenditure
+4,692
+5,269
+3,925
+6,346
+4,072
+9,665,936
+7,183,515
+4,935,763
+4,994,061
+Total assets
+33,345,058
+Liabilities by geographical areas
+7,250,493
+7,840,257
+4,886,621
+7,507,515
+3,203,936
+3,811,490
+1,360,916
+838,331
+(6,356,682)
+30,342,877
+Unallocated liabilities
+92,666
+Total liabilities
+30,435,543
+Other segment information:
+Credit commitments
+1,077,366
+999,018
+683,005
+785,796
+371,823
+565,802
+145,460
+675,725
+67,713
+18,136,328
+Unallocated assets
+25,969
+3,334,445
+4,249,027
+1,246,742
+4,024,527
+(6,356,671)
+33,277,345
+joint ventures
+41,206
+41,206
+Property and equipment
+13,929
+32,725
+12,791
+21,477
+18,374
+23,164
+9,088
+154,731
+286,279
+Other non-current assets (ii)
+14,352
+7,817
+6,065
+7,534
+8,580
+9,950
+2,256
+82,523
+75,295
+Financial investments
+465,064
+1,401,565
+20,667,245
+18,624,308
+Overdue loans and advances to customers
+The composition of the Group's gross overdue loans and advances to customers (excluding accrued interest) by collaterals is
+as follows:
+Overdue
+Overdue for
+for 1 to
+91 days to
+90 days
+1 year
+31 December 2021
+Overdue
+for 1 to
+3 years
+1,720,583
+Overdue
+for over
+Total
+Unsecured loans
+22,405
+22,502
+29,315
+3,269
+77,491
+Guaranteed loans
+10,326
+15,031
+26,406
+6,117
+3 years
+8,703,068
+9,497,898
+2,260,445
+865,326
+Subtotal for personal loans
+7,944,781
+7,115,279
+Discounted bills
+527,758
+406,296
+Total for loans and advances to customers
+20,667,245
+Annual Report 2021
+18,624,308
+247
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+By collaterals
+The composition of the Group's gross loans and advances to customers (excluding accrued interest) by collaterals is analysed
+as follows:
+Unsecured loans
+Guaranteed loans
+Loans secured by mortgages
+Pledged loans
+Total
+31 December
+2021
+31 December
+2020
+6,988,877
+6,259,230
+2,459,887
+57,880
+879,655
+Loans secured by mortgages
+30,029
+Unsecured loans
+Total
+3 years
+3 years
+1 year
+90 days
+Overdue
+for over
+Overdue
+for 1 to
+91 days to
+for 1 to
+Overdue for
+Overdue
+34,753
+31 December 2020
+19,153
+93,247
+70,057
+72,444
+Total
+8,979
+1,221
+4,041
+2,495
+1,222
+Pledged loans
+110,551
+254,901
+23,590
+16,796
+4,107
+ICBC
+248
+267,507
+21,257
+72,467
+74,820
+98,963
+Total
+13,587
+1,350
+4,999
+3,252
+3,986
+Pledged loans
+108,635
+8,161
+31,687
+27,878
+40,909
+Loans secured by mortgages
+66,039
+7,639
+18,985
+20,100
+19,315
+Guaranteed loans
+79,246
+38,491
+Other
+6,249,953
+7,065,126
+Head Office
+Yangtze River Delta
+Pearl River Delta
+Bohai Rim
+791,994
+3.83%
+772,372
+4.15%
+4,163,732
+20.15%
+3,582,682
+19.24%
+Percentage
+3,134,781
+2,746,019
+14.74%
+3,371,325
+16.31%
+3,030,552
+16.27%
+Central China
+3,133,539
+15.16%
+2,789,085
+14.98%
+Western China
+15.17%
+Amount
+Percentage
+Amount
+Financial investments measured at FVTOCI
+1,704,164
+638,485
+1,459,018
+― Financial investments measured at amortised cost
+Other
+6,830,933
+6,265,668
+294,960
+377,563
+34,006,673
+32,305,364
+Credit commitments
+Total maximum credit risk exposure
+(ii) Risk concentrations
+2,730,369
+2,711,454
+36,737,042
+35,016,818
+Credit risk is often greater when counterparties are concentrated in one single industry or geographic location, or have
+comparable economic features. In addition, different geographic areas and industrial sectors have their unique characteristics
+in terms of economic development, and could present a different credit risk.
+246
+ICBC
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(1) Loans and advances to customers
+By geographical distribution
+The composition of the Group's gross loans and advances to customers (excluding accrued interest) by geographical
+distribution is analysed as follows:
+31 December 2021
+31 December 2020
+3,746,867
+18.13%
+3,369,916
+18.09%
+1,152,584
+1,085,151
+Real estate
+932,390
+958,314
+Wholesale and retail
+559,559
+549,412
+Finance
+357,229
+310,559
+Construction
+343,860
+292,748
+Science, education, culture and sanitation
+312,352
+272,189
+Mining
+239,155
+8,546
+Other
+349,997
+341,885
+Subtotal for corporate loans
+12,194,706
+11,102,733
+Personal mortgage and business loans
+Production and supply of electricity, heating, gas and water
+Financial investments measured at FVTPL
+1,177,193
+Water, environment and public utility management
+Northeastern China
+895,238
+4.33%
+841,595
+4.52%
+Overseas and other
+Total
+1,429,769
+20,667,245
+6.92%
+1,492,087
+8.01%
+100.00%
+18,624,308
+100.00%
+By industry distribution
+The composition of the Group's gross loans and advances to customers (excluding accrued interest) by industry is analysed as
+follows:
+31 December
+2021
+31 December
+2020
+Transportation, storage and postal services
+3,017,397
+2,659,916
+Manufacturing
+1,801,933
+1,718,400
+Leasing and commercial services
+1,739,367
+1,517,265
+1,388,883
+34,081
+33,485
+1,304
+3,845
+4,639
+6,089
+Capital expenditure
+24,848
+2,155
+1,450
+3,710
+4,040
+3,939
+2,584
+3,412
+3,910
+Depreciation and amortisation
+Other segment information:
+350,216
+3,358
+4,100
+4,625
+1,501
+River Delta
+River Delta
+Head Office
+Overseas
+Northeastern
+Western
+Central
+Bohai
+Pearl
+Yangtze
+Chinese mainland (HO and domestic branches)
+31 December 2021
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+ICBC
+240
+14,822
+(74,683)
+424,899
+45,015
+1,259
+58,031
+Operating profit
+(202,623)
+(10,715)
+(15,400)
+(22,896)
+(25,034)
+(44,135)
+(21,724)
+(17,638)
+(45,081)
+Impairment losses on assets
+(236,227)
+69
+(21,184)
+(12,923)
+(38,426)
+83,920
+Rim
+59,699
+47,115
+65,477
+47,115
+64,383
+59,699
+83,920
+58,031
+2,869
+2,869
+Profit for the year
+Income tax expense
+Profit before taxation
+ventures
+Share of results of associates and joint
+422,030
+42,146
+1,259
+65,477
+64,383
+China
+China
+China
+Credit commitments
+Other segment information:
+31,896,125
+Total liabilities
+98,067
+Unallocated liabilities
+31,798,058
+(6,133,218)
+1,088,995
+1,539,014
+3,745,729
+3,568,847
+7,928,583
+5,645,178
+8,944,022
+5,470,908
+Liabilities by geographical areas
+1,123,767
+35,171,383
+1,172,580
+450,171
+Head Office
+Overseas
+Northeastern
+Western
+Central
+Bohai
+Pearl
+Yangtze
+Chinese mainland (HO and domestic branches)
+2020
+Includes net trading income, net gains on financial investments and other net operating income.
+Includes intangible assets, goodwill, long-term deferred expenses, right-of-use assets and other non-current assets.
+(ii)
+(i)
+2,730,369
+631,815 (3,200,118)
+147,856
+611,013
+791,688 1,001,597
+(33,208)
+Total assets
+Unallocated assets
+61,782
+joint ventures
+Including: Investments in associates and
+35,092,124
+(6,133,218)
+4,100,318
+1,333,077
+4,553,489
+3,786,925
+5,186,815
+5,870,705
+8,248,981
+8,145,032
+Assets by geographical areas
+Total
+Eliminations
+and other
+61,782
+79,259
+Property and equipment
+33,190
+80,661
+23,613
+2,317
+9,685
+8,457
+7,087
+6,075
+7,371
+16,056
+Other non-current assets (ii)
+290,296
+157,573
+8,865
+23,331
+18,911
+20,726
+13,729
+13,971
+River Delta
+(37,142)
+(34,986)
+92,666
+Unallocated liabilities
+30,342,877
+107,487
+4,376,074
+12,126,286
+13,733,030
+Total liabilities
+Segment liabilities
+Total assets
+67,713
+Unallocated assets
+82,523
+15,357
+6,601
+18,012
+33,345,058
+30,435,543
+Other segment information:
+Credit commitments
+Bohai Rim:
+Central China:
+Pearl River Delta:
+Head Office ("HO"):
+Yangtze River Delta:
+Chinese mainland (Head Office and domestic branches)
+The Group operates principally in Chinese mainland, and also has branches and subsidiaries operating outside Chinese
+mainland. The distribution of the geographical areas is as follows:
+(b) Geographical information
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements
+239
+Annual Report 2021
+(ii) Includes intangible assets, goodwill, long-term deferred expenses, right-of-use assets and other non-current assets.
+Includes net trading income, net gains or losses on financial investments and other net operating income.
+(i)
+2,711,454
+995,360
+1,716,094
+42,553
+Other non-current assets (ii)
+286,279
+36,616
+317
+3,509
+9,262
+10,360
+Depreciation and amortisation
+Other segment information:
+317,685
+Profit for the year
+(74,441)
+Income tax expense
+392,126
+2,555
+68,199
+174,469
+146,903
+Profit before taxation
+1,304
+23,448
+Western China:
+Capital expenditure
+20,475
+37,244
+101,573
+110,846
+Property and equipment
+41,206
+41,206
+Including: Investments in associates and joint ventures
+33,277,345
+117,239
+14,366,145
+7,454,567
+11,339,394
+Segment assets
+31 December 2020
+51,530
+600
+7,696
+22,759
+Northeastern China:
+the HO business divisions (including institutions directly managed by the HO and its offices);
+including Shanghai, Jiangsu, Zhejiang and Ningbo;
+(3,641)
+22,780
+Other income/(expense), net (i)
+(1,572)
+12,120
+2,361
+11,540
+8,623
+17,067
+14,503
+21,368
+47,014
+Net fee and commission income
+(2,025)
+15,066
+12,805
+20,293
+(2,261)
+106,166
+(2,275)
+(2,675)
+(32,376)
+Operating expenses
+860,880
+(69)
+74,045
+29,582
+126,799
+105,357
+145,660
+107,474
+136,544
+135,488
+Operating income
+37,176
+1,503
+25,059
+114
+(1,428)
+(26,051)
+11,381
+(202,860)
+Overseas
+Northeastern
+Western
+Central
+Bohai
+Pearl
+Yangtze
+2021
+Chinese mainland (HO and domestic branches)
+ventures.
+Branches located outside Chinese mainland, domestic and overseas subsidiaries, and investments in associates and joint
+Overseas and other
+including Liaoning, Heilongjiang, Jilin and Dalian.
+including Chongqing, Sichuan, Guizhou, Yunnan, Guangxi, Shaanxi, Gansu, Qinghai, Ningxia,
+Xinjiang, Inner Mongolia and Tibet; and
+including Shanxi, Henan, Hubei, Hunan, Anhui, Jiangxi and Hainan;
+including Beijing, Tianjin, Hebei, Shandong and Qingdao;
+including Guangdong, Shenzhen, Fujian and Xiamen;
+Head Office
+39,174
+River Delta
+Rim
+Internal net interest (expense)/income
+690,680
+38,891
+12,041
+105,129
+77,869
+24,702
+83,851
+79,643
+268,554
+External net interest income
+Total
+Eliminations
+and other
+China
+China
+China
+River Delta
+River Delta
+133,024
+China
+(206,585)
+111
+(20,161)
+(12,127)
+(35,113)
+(29,820)
+(32,781)
+(23,339)
+(30,917)
+(22,438)
+Operating expenses
+800,075
+(100)
+60,588
+32,342
+121,336
+98,851
+145,927
+102,902
+130,424
+107,805
+Operating income
+22,095
+Impairment losses on assets
+Notes to the Consolidated Financial Statements
+(51,286)
+(12,180)
+22,095
+1,304
+Income tax expense
+Profit before taxation
+ventures
+Share of results of associates and joint
+390,822
+11
+25,884
+2,593
+66,598
+42,655
+76,322
+67,383
+75,295
+34,081
+Operating profit
+(202,668)
+(14,543)
+(17,622)
+(19,625)
+(26,376)
+(36,824)
+(24,212)
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+2020
+Corporate
+1,251
+68,199
+174,469
+146,903
+Operating profit
+(202,668)
+(532)
+(1,002)
+(40,107)
+(161,027)
+Impairment losses on assets
+(206,585)
+(2,642)
+(14,730)
+(103,482)
+(85,731)
+Operating expenses
+800,075
+4,425
+83,931
+318,058
+393,661
+Operating income
+390,822
+Share of results of associates and joint ventures
+1,304
+7,338
+Personal
+Treasury
+banking
+banking
+operations
+Other
+Total
+External net interest income
+275,644
+131,043
+240,078
+Rim
+646,765
+32,948
+131,818
+(164,766)
+Net fee and commission income
+76,173
+53,761
+1,281
+131,215
+Other income, net (i)
+8,896
+1,436
+Internal net interest income/(expense)
+Profit for the year
+4,425
+131,215
+Net fee and commission income
+42,859
+23,086
+16,336
+8,646
+12,950
+2,445
+10,729
+(1,269)
+Other income/(expense), net (i)
+14,900
+(3,508)
+(1,304)
+(3,455)
+(1,997)
+(2,936)
+2,902
+16,324
+1,169
+1,587
+13,027
+15,433
+20,533
+China
+China
+and other
+Eliminations
+Total
+External net interest income
+15,508
+69,071
+74,150
+20,128
+270,017
+112,918
+95,814
+13,968
+31,948
+646,765
+Internal net interest (expense)/income
+(219,971)
+41,775
+14,623
+71,669
+(5,073)
+Precious metal leasing
+and lending
+177,581
+Total
+(120)
+951
+161
+393,200 293,640 29,903,568
+178,693
+(479)
+(121)
+29,216,728
+(2,718)
+712
+(530,300)
+(217,446)
+(89,151)
+(223,703)
+293,319 18,248,422
+160 6,270,741
+375,083
+7,819
+17,580,020
+6,262,762
+Financial investments
+to customers
+Loans and advances
+(117)
+(104)
+(2,234)
+326
+(703)
+(92,002)
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(b) Liquidity risk
+Liquidity risk is the risk that funds will not be sufficient or funds will not be raised at a reasonable cost in a timely manner to
+meet the need of asset growth or repayment of debts due, although the Group remains solvent. This may arise from amount
+or maturity mismatches of assets and liabilities.
+The Group manages its liquidity risk through the Asset and Liability Management Department and aims at:
+251
+(240)
+Maintaining the stability of the deposit base;
+-
+Projecting cash flows and evaluating the level of current assets; and
+―
+Maintaining an efficient internal fund transfer mechanism to ensure sufficient liquidity at branch level.
+(i) Maturity analysis of assets and liabilities
+Optimising the structure of assets and liabilities;
+The tables below summarise the maturity profile of the Group's assets and liabilities. The Group's expected remaining
+maturity of its financial instruments may vary significantly from the following analysis. For example, demand deposits from
+customers are expected to maintain a stable or increasing balance although they have been classified as repayable on
+demand in the following tables.
+(2,468)
+(1,732)
+1,873,310
+(2,417)
+(22)
+1,872,272
+(890)
+(3,329)
+(26,710)
+Credit commitments
+24,509
+Total
+4,389
+2,711,454
+(22,021)
+(2,957)
+2,682,556
+Overdue/
+repayable
+on demand
+Less than
+one month
+Total
+Stage 3
+Stage 2
+Stage 1
+Total
+Stage 3
+at FVTOCI
+Stage 2
+Provision for ECL
+Gross carrying amount
+31 December 2020
+Financial assets measured
+(537,420)
+(217,671)
+Stage 1
+Loans and advances
+to customers
+413,633
+One to
+three
+months
+31 December 2021
+Three
+months to
+one year
+One to
+five years
+(22)
+(2,206)
+1,459,018
+53
+326
+1,458,639
+Financial investments
+(861)
+(650)
+(211)
+414,292
+659
+(227,747)
+Annual Report 2021
+239,523
+Undated
+290,342
+Due to customers
+13,002,739
+1,546,301
+1,491,308
+4,409,851
+5,972,715
+18,860
+8,877
+26,441,774
+Other
+9,544
+301,667
+28,189
+86,298
+203,003
+464,341
+791,375
+Total liabilities
+Debt securities issued
+109,507
+106,765
+65,193
+4,243
+87,180
+Derivative financial liabilities
+165
+10,670
+13,773
+26,766
+12,768
+7,195
+71,337
+Due to banks and other financial institutions (**)
+2,268,162
+488,000
+175,347
+278,804
+52,944
+23,715
+3,286,972
+Certificates of deposit
+15,336,010
+3,689
+2,421,997
+(14,262,606)
+repayable
+Less than
+three
+Three
+months to
+One to
+Over
+Undated
+on demand
+One to
+one month
+one year
+five years
+five years
+(***)
+Total
+Assets:
+Cash and balances with central banks
+910,499
+months
+Overdue/
+31 December 2020
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(89,448)
+117,672
+1,935,469
+(415,735)
+170,157
+5,130,013
+(377,347)
+173,032
+124,894
+887,422
+6,429,388
+538,067 14,692,050
+643,248
+31,896,125
+3,190,277
+3,275,258
+(*)
+Includes reverse repurchase agreements.
+(**)
+Includes repurchase agreements.
+(***) Undated loans and advances to customers and financial investments are impaired or not impaired but overdue for more than
+one month.
+252
+ICBC
+Notes to the Consolidated Financial Statements
+Net liquidity gap
+12,378
+1,304
+622
+11,996
+6,666
+76,140
+849,883
+3,116,875
+3,219,890
+11,723,988
+83,219
+29,509
+20,109,200
+-Financial investments measured at FVTPL
+88,573
+6,662
+23,625
+163,412
+81,410
+167,956
+91,585
+Financial investments
+14,924
+12,784
+1,097,463
+17,882
+(***)
+Total
+Assets:
+Cash and balances with central banks
+621,110
+Due from banks and other financial institutions (*)
+(117)
+9,741
+778,638
+1,965
+225,730
+6,220
+2,459,402
+3,098,438
+204,230
+39,484
+3,041
+1,490,646
+Derivative financial assets
+261
+Loans and advances to customers
+623,223
+- Financial investments measured at FVTOCI
+66,225
+206,666
+Total assets
+1,073,404
+2,332,549
+59,652
+1,519,734
+136,411
+4,752,666
+80,479
+6,967,455
+23,055
+15,335,298
+102,151
+787,121
+3,190,277
+35,171,383
+Liabilities:
+Due to central banks
+1,111
+36,252
+2,360
+39,723
+Financial liabilities designated as at FVTPL
+64,944
+279,318
+Over
+five years
+106,055
+290,296
+347,980
+702,386
+380,896
+99,451
+1,803,604
+-Financial investments measured at
+amortised cost
+81,718
+137,289
+748,029
+2,831,810
+3,029,696
+2,391
+6,830,933
+Investments in associates and joint ventures
+61,782
+61,782
+Property and equipment
+290,296
+Other
+584,793
+Financial assets measured
+Reverse repurchase agreements
+By rating distribution
+The Group adopts a credit rating approach to manage the credit risk of the debt securities portfolio held. The ratings are
+obtained from Bloomberg Composite, or major rating agencies where the issuers of debt securities are located. The carrying
+amounts of debt securities investments (excluding accrued interest) analysed by rating as at the end of the reporting period
+are as follows:
+Unrated
+AAA
+31 December 2021
+AA
+A
+Governments and central banks
+1,890,581
+4,454,127
+18,348
+18,747
+Policy banks
+698,003
+38,194
+12,167
+Below A
+28,011
+31
+Total
+6,409,814
+64,556
+56,685
+149,283 8,817,345
+98,708
+233,289
+103,667
+12,010
+4,868
+41,550
+5,259,285
+3,133,938
+8,054,193
+384,700
+Corporate entities
+382,264
+380,276
+financial institutions
+Banks and other
+754,719
+165,078
+6,148,761
+1,439,620
+465,812
+86,077
+Governments and central banks
+amortised cost
+FVTOCI
+FVTPL
+measured at
+479,505
+measured at
+investments
+investments
+Financial
+31 December 2020
+Financial
+Financial
+investments
+8,817,345
+measured at
+942,773
+710,039
+5,203,858
+Policy banks
+660,470
+46,572
+509,422
+104,476
+Corporate entities
+898,658
+Total
+5,769,440
+369,815
+247,628
+Banks and other financial institutions
+725,625
+528,516
+169,478
+27,631
+281,215
+6,710,241
+Annual Report 2021
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+4,621,561
+43,574
+213,421
+162,654
+8,054,193
+(iii) Three-stage analysis of financial instruments' risk exposure
+The Group's credit risk stages of financial instruments are as follows:
+31 December 2021
+Stage 1
+Gross carrying amount
+Stage 2
+Provision for ECL
+Stage 3
+Total
+Stage 1
+Stage 2
+Stage 3
+Total
+505,969
+Reverse repurchase agreements
+(1,091)
+(1,091)
+828,241
+828,241
+660,470
+other financial institutions
+3,098,438
+3,098,438
+with central banks
+Cash and balances
+at amortised cost
+Financial assets measured
+Due from banks and
+62,224
+81,893
+5,317
+26,272
+23,941
+13,444
+3,878,911
+1,826,872
+Governments and central banks
+5,769,440
+Total
+A
+AA
+AAA
+Unrated
+31 December 2020
+(In RMB millions, unless otherwise stated)
+Below A
+249
+Policy banks
+1,703
+369,783
+141,253
+3,012,983
+Corporate entities
+898,658
+72,925
+95,765
+710,867
+23,110
+333,991
+financial institutions
+Banks and other
+725,625
+1,233
+11,822
+372,867
+584,793
+1,686,821
+710,039
+Credit commitments
+(4,589)
+(1,369)
+(355)
+(2,865)
+341 2,238,835
+630
+2,237,864
+Total
+(4,370)
+(1,341)
+(355)
+(2,674)
+1,704,164
+306
+630
+1,703,228
+Stage 1
+Stage 2
+Stage 3
+Total
+at FVTOCI
+Loans and advances
+2,711,256
+to customers
+35
+534,671
+(191)
+(28)
+(219)
+Financial investments
+534,636
+17,598
+1,515 2,730,369
+(19,881)
+Stage 2
+Stage 3
+Total
+with central banks
+3,537,795
+3,537,795
+Stage 1
+Due from banks and
+1,073,777
+9,347
+1,083,124
+(1,214)
+(13)
+(1,227)
+other financial institutions
+Total
+Total
+Stage 2
+(3,581)
+(987)
+(24,449)
+250
+ICBC
+Financial assets measured
+Stage 3
+at amortised cost
+Stage 1
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+31 December 2020
+Gross carrying amount
+Provision for ECL
+Cash and balances
+420,283
+Stage 2 Stage 3
+Provision for ECL
+Financial
+investments
+Financial
+investments
+investments
+measured at
+measured at
+measured at
+FVTPL
+FVTOCI
+amortised cost
+Total
+Governments and central banks
+97,364
+653,774
+5,658,676
+6,409,814
+Policy banks
+61,080
+551,757
+97,202
+2,101
+Corporate entities
+942,773
+31 December 2021
+Financial
+430,758
+201,855
+Banks and other financial institutions
+754,719
+559,727
+171,130
+23,862
+310,160
+The following tables present an analysis of debt securities (excluding accrued interest) by types of issuers and investments:
+By issuers distribution
+(2) Debt securities investments
+Total
+30,811,159
+298
+508,009
+24 166,506
+293,575 31,612,743
+(1,177)
+(58)
+166,184
+(21)
+(277,411)
+(112,907)
+(223,878)
+(614,196)
+31 December 2021
+Gross carrying amount
+(1,256)
+Stage 1
+and lending
+(7,957)
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+505,969
+(128)
+(128)
+Loans and advances
+Precious metal leasing
+to customers
+19,380,019
+6,832,308
+501,286
+6,425
+293,394 20,174,699 (269,376) (110,649)
+157 6,838,890 (5,639) (2,200)
+(223,739)
+(603,764)
+(118)
+Financial investments
+3,238
+-Financial investments measured at FVTOCI
+2,601,656
+Total
+Non-derivative cash flows:
+Financial liabilities:
+Due to central banks
+52
+526
+52,403
+1,987
+54,968
+Financial liabilities designated as at FVTPL
+61,159
+1,671
+5,278
+1,212
+14,658
+Undated
+Over
+five years
+One to
+five years
+31 December 2020
+Three
+months to
+one year
+9,248
+88
+791
+660,910
+3,359,551
+46,122,858
+(*)
+4,540
+Includes reverse repurchase agreements.
+The maturity profile of the rescheduled loans' undiscounted contractual cash flows is determined according to the negotiated
+terms.
+(***) Undated loans and advances to customers and financial investments are impaired or not impaired but overdue for more than
+one month.
+Overdue/
+repayable
+on demand
+Less than
+one month
+One to
+three
+months
+(**)
+8,449
+5,231,400 10,687,256 21,214,128
+88,518
+2,167,704
+25,497,225
+23,469
+5,647 14,894
+1,728,787 4,569,431
+112,222
+353,643
+495,458
+995,804
+62,143
+28,620
+619,198
+5,902,378
+582,365
+30,723,617
+2,743
+Derivative cash flows:
+Derivative financial instruments settled on net basis
+21,395
+5,401,402
+3,957,547
+337,635
+391,443
+203,992
+276,707
+58,071
+32,352
+3,130,269
+Certificates of deposit
+Due to banks and other financial institutions (*)
+Due to customers
+Debt securities issued
+Other
+498,427
+16,233,536
+59,707
+1,233,820 1,376,867
+11,012
+9,467
+1,707,120
+113,008
+154,446
+10,474
+13,506,194
+Derivative financial instruments settled on gross basis
+1,691,662
+1,786,101
+months
+Three
+months to
+one year
+One to
+five years
+Over Undated
+five years
+(***)
+Total
+Financial assets:
+Cash and balances with central banks
+910,499
+2,101
+6,750
+Due from banks and other financial institutions (*)
+227,824
+867,500
+one month
+on demand
+three
+Less than
+65,958 1,097,393 450,359 647,297 179,297
+(65,601) (1,080,685) (449,200) (638,174) (181,812)
+357
+16,708
+1,159 9,123 (2,515)
+23,254
+(22,948)
+2,463,558
+(2,438,420)
+306
+25,138
+(*)
+Includes repurchase agreements.
+341,302
+254
+Non-derivative cash flows:
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+31 December 2020
+Overdue/
+One to
+repayable
+ICBC
+2,152,760
+Loans and advances to customers (**)
+1,041,610
+386,509
+75,956
+1,705,647
+-Financial investments measured at amortised cost
+109,760
+207,927
+761,694
+3,331,990
+3,136,236
+3,150
+7,550,757
+Other
+595,580
+27,405
+19,349
+765,296
+290,770
+104,163
+82,953
+983,897
+20,301
+352,359
+3,570,003 6,424,534
+40,478
+298,328
+17,121,574
+2,601,656 3,541,307
+2,127,791
+527,557 29,710,420
+Financial investments
+-Financial investments measured at FVTPL
+41,245
+10,953
+28,274
+227,824
+115,710
+271,393
+150,441
+826,026
+-Financial investments measured at FVTOCI
+21,431
+Cash outflow
+Including: Cash inflow
+97,545
+(95,502)
+2,043
+Average
+49
+230
+157
+41
+40
+264
+171
+Minimum
+29
+268
+62
+94
+14
+284
+Year end
+64
+1111
+161
+Maximum
+172
+288
+71
+14
+37
+105
+12
+73
+144
+347
+80
+Interest rate risk
+Currency risk
+Commodity risk
+Total portfolio VaR
+2020
+198
+95
+VaR for each risk factor is the derived largest potential loss due to fluctuations solely in that risk factor. As there is a
+diversification effect due to the correlation amongst the risk factors, the individual VaRs do not add up to the total portfolio
+Although VaR is an important tool for measuring market risk under normal market environment, the assumptions on which
+the model is based do give rise to some limitations, mainly including the following:
+2021
+31 December
+2020
+31 December
+2021
+31 December
+2020
+-1%
+(210)
+HKD
+-1%
+566
+(155)
+306
+(448)
+(1,331)
+(402)
+(1,552)
+258
+ICBC
+31 December
+Change in
+currency rate
+Currency
+USD
+Effect on equity
+(1)
+(2)
+(3)
+VaR does not reflect liquidity risk. In the VaR model, a one-day holding period assumes that it is possible to hedge
+or dispose positions within that period without restriction, the price of the financial instruments will fluctuate in the
+specified range, and the correlation between these market prices will remain unchanged. This may not fully reflect
+the market risk arising at times of severe illiquidity, when a one-day holding period may be insufficient to liquidate or
+hedge all positions fully;
+Even though positions may change throughout the day, VaR only represents the risk of the portfolios at the close of
+each business day, and it does not account for any losses that may occur beyond the 99% confidence level; and
+VaR relies heavily on historical data to provide information and may not clearly predict the future changes and
+modifications of the risk factors, especially those of an exceptional nature due to significant market moves.
+Annual Report 2021
+VaR.
+257
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(ii) Currency risk
+The Group conducts its businesses mainly in RMB, with certain transactions denominated in USD, HKD, and other currencies
+to a lesser extent. The exchange rate of RMB to USD is managed under a floating exchange rate system. The HKD exchange
+rate has been pegged to the USD and therefore the exchange rate of RMB to HKD has fluctuated in line with the changes in
+the exchange rate of RMB to USD. Transactions in foreign currencies mainly arise from the Group's foreign currency treasury
+operations, foreign exchange dealings and overseas investments.
+The Group manages its currency risk through various methods, including limit management and risk hedging to hedge
+currency risk, and performs currency risk sensitivity analysis and stress testing regularly.
+The tables below indicate a sensitivity analysis of exchange rate changes to which the Group had significant on- and off-
+balance sheet exposure on its monetary assets and liabilities and its forecasted cash flows. The analysis calculates the effect
+of a reasonably possible movement in the currency rates against RMB, with all other variables held constant, on profit before
+taxation and equity. A negative amount in the table reflects a potential net reduction in profit before taxation or equity,
+while a positive amount reflects a potential net increase. While the table below indicates the effect on profit before taxation
+and equity of a 1% depreciation of USD and HKD against RMB, there will be an opposite effect with the same amount if
+the currencies appreciate by the same percentage. This effect, however, is based on the assumption that the Group's foreign
+exchange exposures as at the end of the reporting period are kept unchanged and, therefore, have not incorporated actions
+that would be taken by the Group to mitigate the adverse impact of this currency risk.
+Effect on profit
+before taxation
+Notes to the Consolidated Financial Statements
+Cash outflow
+46
+88
+One to
+three months
+Three
+months to
+one year
+One to
+five years
+Over
+five years
+Total
+Credit commitments
+1,211,830
+105,556
+215,011
+497,709
+420,178
+280,085
+2,730,369
+Credit commitments
+Less than
+one month
+Repayable
+on demand
+31 December 2021
+Management does not expect all of the commitments to be drawn down before the expiry of the commitments.
+980,305
+(873,719)
+106,586
+655,210 1,119,090 189,256 26,883
+(494,113) (846,380) (179,399) (25,437)
+161,097 272,710
+9,857
+1,446
+3,068,289
+(2,514,550)
+553,739
+(1,860)
+6,822
+(581)
+31 December 2020
+(47)
+(*) Includes repurchase agreements.
+Annual Report 2021
+255
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(iii) Analysis of credit commitments by contractual expiry date
+7,077
+153
+Repayable
+on demand
+One to
+three months
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(i) VaR
+VaR analysis is a statistical technique which estimates the potential maximum losses that could occur on risk positions taken
+due to movements in interest rates, foreign exchange rates or prices over a specified time horizon and at a specified level
+of confidence. The Bank adopts a historical simulation model to calculate and monitor trading portfolio VaR with 250 days'
+historical market data (with a 99% confidence level, and one-day holding period) on a daily basis.
+A summary of VaRs by risk type of trading portfolios is as follows:
+Interest rate risk
+Currency risk
+Commodity risk
+Total portfolio VaR
+2021
+Year end
+Average
+Maximum
+Minimum
+72
+ICBC
+256
+Sensitivity analysis, interest rate repricing gap analysis and foreign exchange risk concentration analysis are the major market
+risk management tools used by the Group. The Bank monitors market risk separately in respect of trading and other non-
+trading portfolios. The Value-at-risk ("VaR") analysis is a major tool used by the Bank to measure and monitor the market
+risk of its trading portfolios. The following sections include a VaR analysis by risk type of the Group's trading portfolios and a
+sensitivity analysis based on the Group's currency risk exposure and interest rate risk exposure (both trading and non-trading
+portfolios).
+The Group considers the market risk arising from stock price fluctuations in respect of its investment portfolios to be
+immaterial.
+Three
+months to
+one year
+One to
+five years
+Over
+five years
+Total
+1,179,024
+113,370
+Less than
+one month
+214,884
+361,217
+314,306
+2,711,454
+(c) Market risk
+Market risk is the risk of loss, in respect of the Group's on- and off-balance sheet activities, arising from adverse movements
+in market rates including interest rates, foreign exchange rates, commodity prices and stock prices. Market risk arises from
+both the Group's trading and non-trading businesses.
+The Group is primarily exposed to structural interest rate risk arising from commercial banking and interest rate risk arising
+from treasury business positions. Interest rate risk is inherent in many of its businesses and largely arises from mismatches
+between the repricing dates of interest-generating assets and interest-bearing liabilities. The analysis of the interest rate risk
+in the banking book is disclosed in note 49(d).
+The Group's currency risk mainly results from the risk arising from exchange rate fluctuations on its foreign exchange
+exposures. Foreign exchange exposures include the mismatch of foreign currency assets and liabilities, and off-balance sheet
+foreign exchange positions arising from derivative transactions.
+528,653
+4,414
+260
+493
+140,973
+Due to banks and other financial institutions (**)
+2,130,667
+390,573
+202,816
+272,281
+54,030
+27,326
+3,077,693
+Certificates of deposit
+59,478
+111,560
+154,694
+9,944
+335,676
+10,887
+15,722
+58,840
+32,207
+51
+555
+52,373
+1,995
+54,974
+Financial liabilities designated as at FVTPL
+60,714
+Due to customers
+1,669
+1,212
+14,535
+4,540
+87,938
+Derivative financial liabilities
+1,738
+21,579
+5,268
+Due to central banks
+13,499,762
+1,336,721
+15,821,513
+1,884,861
+1,789,845
+Net liquidity gap
+(14,309,956)
+335,580
+(209,780)
+4,777,861
+(563,541)
+5,645,015
+516,448
+30,435,543
+981,145 13,324,640
+3,351,427
+2,909,515
+(*)
+Total liabilities
+805,436
+33,956
+95,489
+3,849,682
+5,194,433
+20,908
+25,134,726
+Debt securities issued
+10,717
+19,554
+1,233,220
+90,158
+418,831
+798,127
+Other
+128,581
+167,625
+81,164
+298,621
+258,867
+Includes reverse repurchase agreements.
+Liabilities:
+3,351,427
+743,562
+2,603,777
+3,038,875
+10,659,555
+110,426
+18,136,328
+Financial investments
+- Financial investments measured at FVTPL
+10,868
+21,033
+27,728
+244,359
+79,888
+240,195
+160,412
+943,639
+36,494
+Loans and advances to customers
+134,155
+3,537,795
+Due from banks and other financial institutions (*)
+227,610
+866,392
+339,155
+345,966
+36,773
+784,483
+5,289
+Derivative financial assets
+1,139
+20,613
+25,841
+59,392
+16,793
+10,377
+1,821,185
+33,345,058
+-Financial investments measured at FVTOCI
+102,340
+324,947
+179,867
+138,401
+28,909
+18,471
+39,108
+67,268
+796,971
+Total assets
+1,511,557
+2,220,441
+1,580,065
+4,214,320
+6,626,160
+13,841,088
+Other
+286,279
+286,279
+Property and equipment
+269,234
+683,550
+325,957
+81,970
+1,540,988
+- Financial investments measured at
+amortised cost
+108,859
+77,937
+199,800
+2,751,810
+2,560,607
+2,210
+6,265,668
+Investments in associates and joint ventures
+41,206
+41,206
+642,382
+(**)
+Includes repurchase agreements.
+(***) Undated loans and advances to customers and financial investments are impaired or not impaired but overdue for more than
+one month.
+Over
+five years
+Undated
+Total
+Non-derivative cash flows:
+Financial liabilities:
+Due to central banks
+1
+1,114
+36,614
+2,360
+40,089
+Financial liabilities designated as at FVTPL
+Due to banks and other financial institutions (*)
+64,944
+2,268,538
+One to
+five years
+31 December 2021
+Three
+months to
+one year
+One to
+three
+months
+Less than
+one month
+644,069
+1,070,314
+2,456,896
+1,708,257
+5,657,784 10,613,859
+23,794,660
+3,123,357
+623
+48,425,127
+Includes reverse repurchase agreements.
+(**)
+(***)
+The maturity profile of the rescheduled loans' undiscounted contractual cash flows is determined according to the negotiated
+terms.
+Undated loans and advances to customers and financial investments are impaired or not impaired but overdue for more than
+one month.
+Overdue/
+repayable
+on demand
+(*)
+3
+1,306
+3,701
+26,881,281
+31,300 108,543
+36,804 16,089
+1,863,791 5,093,002 6,750,720
+298,841
+535,026
+984,572
+100,695
+7,190
+447,509
+592,293
+32,040,784
+Derivative cash flows:
+Derivative financial instruments settled on net basis
+Derivative financial instruments settled on gross basis
+Including: Cash inflow
+215
+1,308
+2,138
+21,447
+6,274,552
+291,002
+9,076
+4,249
+87,299
+Certificates of deposit
+Due to customers
+13,003,897
+Debt securities issued
+Other
+12,476
+15,337,379
+175,898
+290,018
+61,495
+24,381
+3,309,032
+106,862
+1,510,507 4,519,399
+109,863
+488,702
+65,201
+1,551,479
+10,862
+286,731
+2,403,599
+5,041
+83,643
+128,358
+Non-derivative cash flows:
+Financial assets:
+Cash and balances with central banks
+621,110
+9,748
+1,978
+6,356
+2,459,402
+3,098,594
+Due from banks and other financial institutions (*)
+239,524
+779,758
+227,507
+208,024
+42,720
+Total
+(***)
+Undated
+Over
+five years
+Annual Report 2021
+253
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(ii)
+Maturity analysis of undiscounted contractual cash flows
+3,340
+The tables below summarise the maturity profile of the Group's financial instruments based on the undiscounted contractual
+cash flows. The balances of some items in the tables below are different from the balances in the consolidated statement
+of financial position as the tables incorporate all cash flows relating to both principal and interest. The Group's actual cash
+flows on these instruments may vary significantly from the following analysis. For example, demand deposits from customers
+are expected to maintain a stable or increasing balance although they have been classified as repayable on demand in the
+following tables.
+One to
+Less than
+on demand
+one month
+three
+months
+31 December 2021
+Three
+months to
+one year
+One to
+five years
+Overdue/
+repayable
+1,500,873
+Loans and advances to customers (**)
+22,930
+777,859
+444,114
+99,726
+1,989,126
+-Financial investments measured at amortised cost
+116,381
+167,261
+385,083
+919,230
+3,666,299
+3,147
+8,276,626
+Other
+98,177
+279,659
+49,188
+3,404,308
+20,301
+212,545
+677,626
+1,194,834
+1,025,340
+3,837,204
+6,198,405
+19,491,028
+468,472
+32,238,213
+69,799
+Financial investments
+88,573
+6,717
+24,438
+173,529
+106,924
+184,838
+92,607
+-Financial investments measured at FVTPL
+6,324
+(6,440,087)
+ICBC
+381,037
+157,713
+6,613
+251,608
+796,971
+29,510,123
+2,332,753
+446,262
+1,055,920
+33,345,058
+Due to central banks
+50,796
+523
+3,655
+54,974
+Financial liabilities designated as at FVTPL
+13,183
+6,207
+179
+68,369
+87,938
+Derivative financial liabilities
+84,174
+32,326
+10,787
+Liabilities:
+13,686
+Total assets
+286,279
+12,656
+784,483
+― Financial investments measured at FVTOCI
+1,089,386
+311,551
+29,136
+110,915
+1,540,988
+― Financial investments measured at amortised cost
+6,078,227
+107,089
+10,743
+69,609
+6,265,668
+Investments in associates and joint ventures
+14,354
+1,019
+169
+25,664
+41,206
+Property and equipment
+147,506
+136,037
+713
+2,023
+Other
+140,973
+Due to banks and other financial institutions (**)
+2,182,407
+2,256,272
+461,495
+714,394
+30,435,543
+Net long/(short) position
+2,506,741
+76,481
+(15,233)
+341,526
+2,909,515
+Credit commitments
+2,001,018
+464,057
+70,784
+175,595
+2,711,454
+(*)
+Includes reverse repurchase agreements.
+(**) Includes repurchase agreements.
+260
+ICBC
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(d) Interest rate risk in the banking book
+Interest rate risk in the banking book is defined as the risk of loss in the overall return and the economic value of the
+banking book arising from adverse movements in interest rate and term structure. This type of risk may occur in the
+following situations:
+27,003,382
+Total liabilities
+805,436
+14,669
+686,933
+32,959
+175,394
+3,077,693
+Certificates of deposit
+39,224
+178,537
+23,957
+93,958
+335,676
+Due to customers
+23,571,992
+5,377
+883,119
+301,916
+25,134,726
+Debt securities issued
+478,569
+272,067
+4,744
+42,747
+798,127
+Other
+583,037
+196,560
+11,170
+377,699
+30,251
+736,199
+-Financial investments measured at FVTPL
+177,383
+20,490
+50,762
+290,342
+Due to customers
+24,914,524
+864,226
+366,861
+296,163
+26,441,774
+Debt securities issued
+528,377
+227,278
+593
+35,127
+791,375
+Other
+Total liabilities
+741,923
+117,020
+9,600
+18,879
+887,422
+28,637,664
+2,131,395
+41,707
+Certificates of deposit
+3,286,972
+186,816
+230,044
+787,121
+31,467,893
+2,210,620
+510,574
+982,296
+35,171,383
+Due to central banks
+37,360
+2,363
+39,723
+Financial liabilities designated as at FVTPL
+446,184
+611
+79,850
+87,180
+Derivative financial liabilities
+18,897
+35,831
+5,687
+10,922
+71,337
+Due to banks and other financial institutions (**)
+2,354,265
+702,938
+42,953
+6,719
+•
+680,882
+Net long position
+Assets:
+3,258,416
+143,125
+21,381
+114,873
+3,537,795
+Due from banks and other financial institutions (*)
+1,083,840
+591,437
+23,981
+121,927
+1,821,185
+Derivative financial assets
+77,834
+31,640
+10,693
+13,988
+134,155
+Loans and advances to customers
+16,643,324
+822,891
+337,456
+332,657
+18,136,328
+Financial investments
+(in RMB
+equivalent)
+(in RMB
+equivalent)
+(in RMB
+equivalent)
+equivalent)
+2,830,229
+79,225
+64,390
+301,414
+3,275,258
+Credit commitments
+2,085,604
+395,773
+76,881
+172,111
+2,730,369
+(*)
+31,896,125
+Includes reverse repurchase agreements.
+Includes repurchase agreements.
+Annual Report 2021
+259
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+USD
+31 December 2020
+HKD
+Other
+Total
+(in RMB
+RMB
+(**)
+•
+The repricing period of different financial instruments are different when the interest rate changes;
+Despite the similarities in maturity periods, changes in the benchmark interest rate vary among on- and off-balance
+sheet business with different pricing benchmark interest rates;
+116,783
+1,803,604
+-Financial investments
+measured at amortised cost
+350,431
+735,724
+2,718,515
+2,939,372
+86,891
+6,830,933
+Investments in associates and
+joint ventures
+61,782
+61,782
+Property and equipment
+290,296
+290,296
+Other
+4,385
+Total assets
+12,232,675
+13,264,209
+70,493
+3,923,479
+712,243
+787,121
+369,260
+642,215
+340,866
+334,480
+202,551
+36,170
+3,041
+41,362
+1,490,646
+Derivative financial assets
+76,140
+76,140
+Loans and advances to customers
+7,520,367
+11,830,293
+386,803
+3,803,984
+327,354
+20,109,200
+Financial investments
+-Financial investments
+measured at FVTPL
+33,045
+150,390
+69,283
+164,957
+205,548
+623,223
+-Financial investments
+measured at FVTOCI
+44,383
+1,207,522
+1,947,036
+Liabilities:
+15,457,811
+4,353,175
+5,951,386
+18,530
+660,872
+290,342
+26,441,774
+Debt securities issued
+Other
+116,340
+1,968
+62,391
+146,410
+456,464
+9,834
+86,118
+7,133
+Total liabilities
+18,672,762
+4,880,504
+6,224,975
+483,674
+9,770
+782,369
+1,634,210
+791,375
+887,422
+31,896,125
+Interest rate mismatch
+Due to customers
+331
+5,947
+109,344
+Due to central banks
+Financial liabilities
+designated as at FVTPL
+1,108
+36,252
+2,360
+1,069
+7,214
+1,066
+3
+39,723
+77,831
+35,171,383
+87,180
+71,337
+71,337
+Due to banks and other financial
+institutions (**)
+2,919,746
+302,294
+31,688
+1,547
+31,697
+3,286,972
+Certificates of deposit
+174,720
+Derivative financial liabilities
+23,585
+other financial institutions (*)
+3,098,438
+income
+equity
+RMB
+(27,350)
+(39,969)
+27,350
+43,662
+USD
+1,551
+(5,873)
+(1,551)
+6,126
+HKD
+(958)
+(140)
+958
+142
+Other
+1,029
+(1,661)
+(1,029)
+1,694
+Total
+(25,728)
+(47,643)
+equity
+income
+Currency
+Effect on
+The Bank or the counterparty can elect to change the level or the maturity of future cash flows of financial instruments
+when the Bank holds equity derivative or when there are embedded option terms or implied options in the on- and
+off-banking book businesses; and
+Due to changes in expected default levels or market liquidity, the market's assessment of the credit quality of financial
+instruments changes, leading to changes in credit spreads.
+The Group manages the interest rate risk in the banking book through the Asset and Liability Management Department, and
+the following methods have been adopted:
+•
+•
+•
+Interest rate prediction: analysing the macro-economic factors that may impact the PBOC benchmark interest rates and
+market interest rates;
+Duration management: optimising the differences in timing between contractual repricing (maturities) of interest-
+generating assets and interest-bearing liabilities;
+Pricing management: managing the deviation of the pricing of interest-generating assets and interest-bearing liabilities
+from the benchmark interest rates or market interest rates;
+Limit management: optimising the positions of interest-generating assets and interest-bearing liabilities and controlling
+the impact on profit or loss and equity; and
+•
+Hedging: using interest rate derivatives for hedging management in a timely manner.
+25,728
+The Group measures interest rate risk mainly by analysing the sensitivity of projected net interest income under various
+interest rate movements (scenario analysis). The Group aims to mitigate the impact of prospective interest rate movements
+which might reduce future net interest income, while balancing the cost of hedging on the current revenue.
+The effect on net interest income is the impact of the assumed changes in interest rates on the net interest income, arising
+from the financial assets and financial liabilities held at the end of the reporting period that are subject to repricing within
+the coming year, including the effect of hedging instruments. The effect on equity is the impact of the assumed changes in
+interest rates on other comprehensive income, calculated by revaluing fixed rate financial assets measured at FVTOCI held at
+the end of the reporting period, including the effect of any associated hedges.
+Annual Report 2021
+261
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+31 December 2021
+Increased by 100 basis points
+Effect on
+net interest
+Decreased by 100 basis points
+Effect on
+Effect on
+net interest
+The following tables demonstrate the sensitivity to a reasonably possible change in interest rate, with all other variables held
+constant, on the Group's net interest income and equity.
+Due from banks and
+51,624
+Currency
+1,769
+(40,883)
+29,219
+43,935
+The interest rate sensitivities set out in the tables above are for illustration only and are based on simplified scenarios. The
+figures represent the effect of the expected movements in net interest income and equity based on the projected yield curve
+scenarios and the Group's current interest rate risk profile. This effect, however, does not incorporate actions other than
+hedging that would be taken by management to mitigate the impact of interest rate risk. The projections above also assume
+that interest rates of all maturities move by the same degree and, therefore, do not reflect the potential impact on net
+interest income and equity in the case where some rates change while others remain unchanged.
+262
+ICBC
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+The tables below summarise the contractual repricing or maturity dates, whichever is earlier, of the Group's assets and
+liabilities.
+31 December 2021
+Less than
+three
+months
+Three
+months to
+one year
+One to
+Over
+Non-
+interest-
+five years
+five years
+bearing
+Total
+Assets:
+Cash and balances with central banks
+2,786,830
+311,608
+30
+(1,766)
+(30)
+(29,219)
+68
+Increased by 100 basis points
+Effect on
+net interest
+Decreased by 100 basis points
+Effect on
+Effect on
+net interest
+Effect on
+income
+equity
+income
+equity
+RMB
+USD
+31 December 2020
+HKD
+Total
+(27,286)
+(31,709)
+27,286
+34,753
+(169)
+(7,340)
+169
+7,345
+(1,734)
+(68)
+1,734
+Other
+8,383,705
+Cash and balances with central banks
+3,537,795
+2,553,846
+6,265,668
+Investments in associates and
+joint ventures
+41,206
+41,206
+Property and equipment
+286,279
+286,279
+Other
+Total assets
+2,688,862
+3,121
+793,780
+796,971
+12,285,726
+11,836,908
+3,816,039
+3,357,478
+2,048,907
+33,345,058
+Liabilities:
+Financial liabilities
+designated as at FVTPL
+70
+574
+638,819
+measured at amortised cost
+6,912,607
+10,463,879
+406,172
+336,693
+16,977
+18,136,328
+Financial investments
+-Financial investments
+measured at FVTPL
+117,682
+130,810
+384,141
+71,188
+317,253
+784,483
+-Financial investments
+measured at FVTOCI
+272,625
+258,282
+614,011
+314,100
+81,970
+1,540,988
+-Financial investments
+147,550
+Loans and advances to customers
+52,373
+35
+571,470
+25,134,726
+Debt securities issued
+169,119
+60,501
+149,678
+418,829
+798,127
+Other
+2,625
+5,987
+20,242
+16,703
+773,695
+805,436
+Total liabilities
+18,664,582
+4,350,806
+5,376,554
+472,750
+1,570,851
+30,435,543
+Interest rate mismatch
+(6,378,856)
+6,426
+1,992
+5,137,289
+15,597,045
+54,974
+4,972
+63
+11,618
+14
+71,271
+87,938
+Derivative financial liabilities
+140,973
+140,973
+Due to banks and other financial
+3,808,680
+institutions (**)
+268,836
+52,264
+27,239
+13,407
+3,077,693
+Certificates of deposit
+174,300
+154,366
+7,010
+335,676
+Due to customers
+2,715,947
+134,155
+134,155
+Derivative financial assets
+- Financial investments measured at FVTOCI
+623,223
+12,505
+6,913
+37,844
+565,961
+- Financial investments measured at FVTPL
+Financial investments
+20,109,200
+303,298
+319,687
+1,300,499
+780,912
+Loans and advances to customers
+76,140
+11,577
+5,804
+33,808
+24,951
+Derivative financial assets
+1,490,646
+78,487
+25,637
+515,224
+18,705,303
+871,298
+338,301
+109,918
+79,085
+454,407
+Liabilities:
+Total assets
+Other
+290,296
+2,137
+673
+143,589
+143,897
+Property and equipment
+54,886
+61,782
+130
+1,010
+35,768
+Investments in associates and joint ventures
+6,830,933
+76,910
+6,607
+106,016
+6,641,400
+-Financial investments measured at amortised cost
+1,803,604
+24,874
+Due from banks and other financial institutions (*)
+3,098,438
+132,546
+31 December 2020
+Less than
+Three
+Non-
+three
+months
+months to
+one year
+One to
+five years
+Over
+interest-
+five years
+bearing
+(In RMB millions, unless otherwise stated)
+Total
+Cash and balances with central banks
+3,190,119
+347,676
+Due from banks and other
+financial institutions (*)
+1,405,431
+345,048
+35,806
+5,289
+29,611
+1,821,185
+Assets:
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements
+263
+66,652
+174,831
+2,724,409
+Cash and balances with central banks
+Total
+(in RMB
+equivalent)
+Other
+(in RMB
+equivalent)
+HKD
+(in RMB
+equivalent)
+(in RMB
+equivalent)
+RMB
+USD
+Assets:
+31 December 2021
+A breakdown of the assets and liabilities analysed by currency is as follows:
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+(2,301,496)
+3,320,310
+N/A
+N/A
+(*)
+Includes reverse repurchase agreements.
+(**)
+Includes repurchase agreements.
+The data set out in the above table includes trading book data.
+Annual Report 2021
+7,486,102
+(1,560,515)
+Due to central banks
+N/A
+(In RMB millions, unless otherwise stated)
+(a) Financial instruments measured at fair value
+Financial assets:
+Level 1
+31 December 2021
+Level 2
+Level 3
+Total
+Derivative financial assets
+4,440
+70,634
+1,066
+For the year ended 31 December 2021
+76,140
+157,655
+157,655
+Loans and advances to customers measured
+at FVTPL
+3,488
+106
+3,594
+Loans and advances to customers measured
+at FVTOCI
+534,671
+534,671
+Financial investments measured at FVTPL
+Reverse repurchase agreements measured
+at FVTPL
+Debt securities
+Notes to the Consolidated Financial Statements
+Annual Report 2021
+16.88%
+(i)
+Refers to risk-weighted assets after the capital floor and adjustments.
+50. FAIR VALUE OF FINANCIAL INSTRUMENTS
+The Group has established policies and internal controls with respect to the measurement of fair values, specifically the
+framework of fair value measurement of financial instruments, fair value measurement methodologies and procedures. Fair
+value measurement policies specify valuation techniques, parameter selection and relevant concepts, models and parameter-
+seeking methods. Operating procedures specify measurement procedures, timing of valuation, market parameter selection
+and corresponding allocation of responsibilities. In the process of fair value measurement, front office is responsible for daily
+transaction management. The Financial Accounting Department plays a lead role in formulating accounting policies of fair
+value measurement, valuation methodologies and system implementation. The Risk Management Department is responsible
+for verifying trade details and validating models.
+Fair value estimates are generally subjective in nature, and are made as of a specific point in time based on the characteristics
+of the financial instruments and relevant market information. The Group uses the following hierarchy for determining and
+disclosing the fair value of financial instruments:
+Level 1 inputs: quoted (unadjusted) prices in active markets for identical assets or liabilities;
+Level 2 inputs: valuation techniques for which all inputs that have a significant effect on the recorded fair value are
+observable, either directly or indirectly; and
+Level 3 inputs: valuation techniques for which certain inputs that have a significant effect on the recorded fair value are not
+based on observable market data.
+266
+ICBC
+267
+Notes to the Consolidated Financial Statements
+The following is a description of the fair value of financial instruments measured at fair value which are determined using
+valuation techniques. They incorporate the Group's estimate of assumptions that a market participant would make when
+valuing the instruments.
+Financial investments
+Financial investments that use valuation techniques for their valuation include debt securities, asset-backed securities and
+unlisted equity instruments. The Group values such securities by incorporating either only observable data or both observable
+and unobservable data. Observable inputs include assumptions regarding current interest rates; unobservable inputs include
+assumptions regarding expected future default rates, prepayment rates and market liquidity discounts.
+The majority of the debt securities classified as level 2 are RMB bonds. The fair value of these bonds are determined based
+on the valuation results provided by China Central Depository & Clearing Co., Ltd., which are determined based on a
+valuation technique for which all significant inputs are observable market data.
+Derivatives
+Derivatives that use valuation techniques with market observable inputs are mainly interest rate swaps, foreign exchange
+forwards, swaps and options. The most frequently applied valuation techniques include discounted cash flow model and
+Black-Scholes model. The models incorporate various inputs including foreign exchange spot and forward rates, foreign
+exchange rate volatility, interest rate yield curves.
+Structured products are mainly valued using dealer's quotations.
+Loans and advances to customers
+The loans and advances to customers that use valuation techniques are mainly the bill business and discounted cash flow
+model is used. For bank acceptance bill, based on the different credit risk of the acceptor, interest rate yield curve is set up
+using the actual market data; for commercial bill, based on the interbank offered rate, interest rate yield curve is constructed
+according to the credit risk and liquidity point difference adjustment.
+Other liabilities at fair value through profit or loss
+For unquoted other liabilities at FVTPL, discounted cash flow model is used based on current yield curve appropriate for
+the remaining term to maturity adjusted for market liquidity and credit spreads; and Heston model is applied based on
+parameters including yields, foreign exchange forward rates, foreign exchange rate volatilities, which are calibrated by active
+market quotes of standard European option with the same underlying items.
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+24,430
+392,013
+3,840
+1,803,604
+396,787
+2,648,936
+153,164
+3,198,887
+Financial liabilities:
+Due to customers
+296,128
+296,128
+Financial liabilities designated as at FVTPL
+15
+56,666
+86,598
+87,180
+Derivative financial liabilities
+4,822
+65,089
+1,426
+71,337
+4,837
+447,815
+1,993
+454,645
+268
+567
+1,447,324
+299,614
+99,440
+420,283
+2,884,728
+15,308
+16,751
+58,687
+90,746
+Funds and other investments
+52,995
+26,400
+32,799
+112,194
+92,733
+435,164
+95,326
+623,223
+Financial investments measured at FVTOCI
+Debt securities
+293,759
+1,407,578
+2,827
+1,704,164
+Equity investments
+5,855
+39,746
+53,839
+18.02%
+Capital adequacy ratio
+Equity investments
+14.94%
+The core tier 1 capital adequacy ratio, the tier 1 capital adequacy ratio and the capital adequacy ratio calculated after
+implementation of the advanced capital measurement approaches approved by the CBIRC are as follows:
+Core tier 1 capital
+Paid-in capital
+Valid portion of capital reserve
+Surplus reserve
+General reserve
+Retained profits
+Valid portion of minority interests
+Other
+Core tier 1 capital deductions
+31 December 2021
+(In RMB millions, unless otherwise stated)
+31 December 2020
+2,669,055
+356,407
+356,407
+148,597
+148,534
+356,849
+322,692
+438,640
+339,486
+1,618,142
+1,508,562
+2,903,516
+For the year ended 31 December 2021
+265
+Annual Report 2021
+14.28%
+N/A
+(*)
+Includes reverse repurchase agreements.
+(**)
+Includes repurchase agreements.
+The data set out in the above table includes trading book data.
+264
+ICBC
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(e) Capital management
+The Group has set the following capital management objectives:
+•
+•
+.
+Maintain sound capital adequacy to meet regulatory requirements on capital, keep stable capital base to ensure the
+Group's business growth and the implementation of business development and strategic plans in order to achieve
+comprehensive, balanced, and sustainable development;
+Adopt the advanced capital measurement approach, improve the internal capital adequacy assessment process
+(ICAAP), publicly disclose information on capital management, cover all types of material risks, and ensure stable
+operations of the Group;
+Leverage on the results of quantitative assessments of material risks for daily risk management, establish a bank-
+wide value management mechanism with a core of economic capital, improve the aligned policies, processes, and
+applications in business management, strengthen the capital constraints and capital incentives mechanism, enhance
+the product pricing and decision-making support, and improve the capital allocation efficiency; and
+Make effective use of various capital instruments, continuously enhance capital strengths, refine the capital structure,
+improve capital quality, reduce capital costs, and maximise shareholders' returns.
+The Group manages its capital structure and makes adjustments in light of changes in economic conditions and the risk
+profiles of its business operations. In order to maintain or adjust the capital structure, the Group may adjust its profit
+distribution policies, issue or repurchase its own shares, qualified additional tier 1 capital instruments, eligible tier 2 capital
+instruments, or convertible bonds.
+The management monitors the capital adequacy ratios regularly based on regulations issued by the CBIRC. The required
+information is semi-annually and quarterly filed with the CBIRC by the Group and the Bank.
+Since 1 January 2013, the Group commenced calculating the capital adequacy ratios in accordance with the Regulation
+Governing Capital of Commercial Banks (Provisional) and other relevant regulations. In April 2014, the CBIRC officially
+approved the Bank to adopt the advanced capital management approach. Within the approved scope of risk exposures that
+meet the regulatory requirements, the Bank can adopt the foundation internal ratings-based (IRB) approach for its corporate
+credit risk exposures, the IRB approach for its retail credit risk exposures, the internal model approach (IMA) for its market
+risk exposures, and the standardised approach for its operational risk exposures.
+According to Regulation Governing Capital of Commercial Banks (Provisional), Measures for the Assessment of Systemically
+Important Banks, Additional Regulation of Systemically Important Banks (Provisional), and the capital surcharge applied to
+global systemically important banks as required by the Basel Committee on Banking Supervision, the minimum core tier 1
+capital adequacy ratio, the tier 1 capital adequacy ratio and the capital adequacy ratio shall not be lower than 9%, 10% and
+12% respectively. In addition, overseas entities are directly regulated by local banking regulators, and the required capital
+adequacy ratios differ by countries or regions.
+The Group calculates the following core tier 1 capital adequacy ratio, the tier 1 capital adequacy ratio and the capital
+adequacy ratio in accordance with the Regulation Governing Capital of Commercial Banks (Provisional) and relevant
+requirements. The requirements pursuant to these regulations may be different from those applicable in Hong Kong SAR and
+other jurisdictions.
+The capital adequacy ratios and related components of the Group are calculated based on the statutory financial statements
+of the Group prepared under the PRC GAAP. During the year, the Group has complied in full with all its externally imposed
+regulatory capital requirements.
+3,539
+3,552
+Notes to the Consolidated Financial Statements
+(10,178)
+3,241,364
+2,872,792
+Tier 2 capital
+668,305
+523,394
+Valid portion of tier 2 capital instruments and related premiums
+418,415
+351,568
+Surplus provision for loan impairment
+248,774
+Valid portion of minority interests
+Net tier 1 capital
+1,116
+Net capital base
+3,909,669
+3,396,186
+Risk-weighted assets (i)
+21,690,349
+20,124,139
+Core tier 1 capital adequacy ratio
+13.31%
+13.18%
+(18,658)
+Tier 1 capital adequacy ratio
+1,114
+647
+170,712
+Cash flow hedge reserve that relates to the hedging of items that
+are not fair-valued on the balance sheet
+16,053
+655
+Goodwill
+7,691
+8,107
+Other intangible assets other than land use rights
+5,669
+4,582
+(4,202)
+(4,616)
+institutions that are under control but not subject to consolidation
+Investments in core tier 1 capital instruments issued by financial
+354,986
+Valid portion of minority interests
+219,143
+354,331
+Additional tier 1 capital instruments and related premiums
+219,790
+7,980
+Additional tier 1 capital
+17,138
+2,886,378
+Net core tier 1 capital
+7,980
+2,653,002
+X22
+339,486
+2c
+1,618,142
+Retained profits
+438,640
+Paid-in capital
+X23
+3
+General reserve
+Accumulated other comprehensive income (and other
+129,939
+1,508,562
+2b
+356,407
+322,692
+356,849
+Surplus reserve
+2a
+2,170,740
+2,413,631
+Retained earnings
+2
+X18
+1
+356,407
+138,356
+X21
+public reserve)
+Goodwill (net of deferred tax liabilities)
+Capital reserve
+8,107
+Reference
+X16
+7,691
+8
+Prudential valuation adjustments
+7
+Core tier 1 capital: Regulatory adjustments
+X25
+3,552
+2,669,055
+2,903,516
+Core tier 1 capital before regulatory adjustments
+3,539
+Valid portion of minority interests
+56
+Fill in 0 for joint stock banks)
+period (only applicable to non-joint stock companies.
+Valid portion to core tier 1 capital during the transition
+4
+X24
+(10,178)
+(18,658)
+Other
+3b
+X19
+148,534
+148,597
+За
+31 December
+2020
+Overseas and other
+Core tier 1 capital:
+10,705
+10,769
+25,489
+27,324
+41,772
+30,210
+28,398
+28,978
+38,411
+37,461
+40,207
+33,400
+46,167
+50,790
+36,358
+35,969
+2020
+2021
+31 December
+31 December
+(iii) Rescheduled loans and advances to customers
+Northeastern China
+Yangtze River Delta
+Pearl River Delta
+Central China
+9
+Western China
+254,901
+267,507
+31 December 2021
+31 December 2020
+Item
+(i) Capital composition
+The disclosure of correspondence between balance sheet in published financial statements and capital composition is based
+on the Notice on Issuing Regulatory Documents on Capital Regulation for Commercial Banks (Yin Jian Fa, No. 33, 2013)
+Appendix 2 Notice on Enhancing Disclosure Requirements for Composition of Capital.
+5. Correspondence between balance sheet in published financial statements and capital
+composition
+The Bank is a commercial bank incorporated in Chinese mainland with its banking business primarily conducted in Chinese
+mainland. As at 31 December 2021 and 31 December 2020, substantial amounts of the Bank's exposures arose from
+businesses with entities or individuals in Chinese mainland. Analyses of various types of exposures by counterparty have been
+disclosed in the respective notes to the financial statements.
+Exposures to non-bank entities in Chinese mainland
+4.
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Information To The Consolidated Financial Statements
+ICBC
+276
+0.05%
+9,905
+31 December
+2021
+0.08%
+(0.01%)
+(2,055)
+(0.01%)
+(2,301)
+overdue for more than three months
+Rescheduled loans and advances overdue
+for less than three months
+Less: Rescheduled loans and advances
+0.06%
+11,960
+advances
+% of total
+loans and
+% of total
+loans and
+advances
+0.09%
+19,134
+Rescheduled loans and advances
+16,833
+Other intangible assets other than land use rights (net of
+deferred tax liabilities)
+at FVTOCI
+4,582
+647
+655
+Valid portion of minority interests
+34
+transition period
+Invalid instruments to additional tier 1 capital after the
+33
+Including: Portion classified as liabilities
+32
+X28+X32
+219,143
+354,331
+Including: Portion classified as equity
+31
+219,143
+354,331
+Additional tier 1 capital instruments and related premiums
+30
+Additional tier 1 capital:
+2,653,002
+2,886,378
+Core tier 1 capital
+29
+16,053
+17,138
+Total regulatory adjustments to core tier 1 capital
+28
+X26
+35
+Including: Invalid portion to additional tier 1 capital
+after the transition period
+354,986
+Bohai Rim
+Notes to the Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+31 December 2020
+Level 1
+Level 2
+Level 3
+Total
+Financial assets:
+Derivative financial assets
+4,691
+127,773
+Reverse repurchase agreements measured
+at FVTPL
+additional tier 1 capital and tier 2 capital
+154,612
+134,155
+154,612
+Loans and advances to customers measured
+at FVTPL
+3,586
+328
+ICBC
+278
+Direct or indirect investments in own additional tier 1
+instruments
+37
+Additional tier 1 capital: Regulatory adjustments
+adjustments
+36 Additional tier 1 capital before regulatory
+219,790
+1,691
+5,669
+Other that should be deducted from core tier 1 capital
+Undeducted shortfall that should be deducted from
+26c
+277
+Annual Report 2021
+Direct or indirect investments in own ordinary shares
+Reciprocal cross-holdings in core tier 1 capital between
+banks, or between banks and other financial institutions
+7
+17
+16
+tax liabilities)
+Defined-benefit pension fund net assets (net of deferred
+15
+risk on fair-valued liabilities
+| | |
+Unrealised gains and losses due to changes in own credit
+14
+Gain on sales related to asset securitisation
+13
+Shortfall of provision for loan impairment
+234
+12
+X20
+(4,616)
+(4,202)
+Cash flow hedge reserve that relates to the hedging of
+items that are not fair-valued on the balance sheet
+11
+those arising from temporary differences (net of
+deferred tax liabilities)
+Deferred tax assets that rely on future profits excluding
+10
+X14-X15
+Unaudited Supplementary Information To The Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Item
+18
+financial institutions that are under control but not
+subject to consolidation
+Shortfall in core tier 1 capital instruments issued by
+26b
+X11
+7,980
+7,980
+Investments in core tier 1 capital instruments issued by
+financial institutions that are under control but not
+subject to consolidation
+26a
+N/A
+N/A
+N/A
+N/A
+Reference
+27
+2020
+31 December
+2021
+Deductible amount exceeding the 15% threshold for
+significant minority capital investments in core tier 1
+capital instruments issued by financial institutions
+that are not subject to consolidation and undeducted
+portion of deferred tax assets arising from temporary
+differences (net of deferred tax liabilities)
+Including: Deductible amount of significant minority
+investments in core tier 1 capital
+instruments issued by financial institutions
+Including: Deductible amount of mortgage servicing
+rights
+Including: Deductible amount in deferred tax assets
+arising from temporary differences
+Deferred tax assets arising from temporary differences
+(amount above 10% threshold, net of deferred tax
+liabilities)
+Deductible amount of significant minority investments
+in core tier 1 capital instruments issued by financial
+institutions that are not subject to consolidation
+Mortgage servicing rights
+investments in core tier 1 capital instruments issued
+by financial institutions that are not subject to
+consolidation
+25
+24
+23
+22
+21
+20
+19
+Deductible amount of non-significant minority
+31 December
+Head Office
+(ii) Overdue loans and advances to customers by geographical distribution
+Loans and advances with a specific repayment date are classified as overdue when the principal or interest is overdue.
+For loans and advances repayable by regular instalments, if part of the instalments is overdue, the whole amount of the
+loans and advances would be classified as overdue.
+(1,027)
+377
+(2)
+(1,596)
+(1,027)
+377
+(2)
+(615)
+22
+85
+(1,644)
+108
+(1,052)
+Derivative financial liabilities
+(23)
+(592)
+Financial liabilities designated as at FVTPL
+(2,211)
+270
+ICBC
+Notes to the Consolidated Financial Statements
+(ii) Transfers between level 2 and level 3
+In 2021, the transfers between level 1 and level 2 of the fair value hierarchy for financial assets and liabilities of the Group
+were not significant.
+Due to changes in market conditions for certain securities, quoted prices in active markets were no longer available for
+these securities. However, there was sufficient information available to measure the fair values of these securities based on
+observable market inputs. Therefore, these securities were transferred from level 1 to level 2 of the fair value hierarchy as at
+the end of the reporting period.
+Due to changes in market conditions for certain securities, quoted prices in active markets were available for these securities.
+Therefore, these securities were transferred from level 2 to level 1 of the fair value hierarchy as at the end of the reporting
+period.
+3,687
+1,006
+2,675
+710
+Financial liabilities:
+1,012
+2020
+2021
+Transfers between level 1 and level 2
+(i)
+(c) Transfers between levels
+Realised
+Unrealised
+Net gains or losses on level 3 financial instruments are set out below:
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+296
+227,018
+(15,485)
+(32,084)
+55,444
+Funds and other investments
+73,710
+(2,182)
+(2,203)
+12,604
+1,319
+64,172
+(117)
+Equity investments
+(19)
+(2,436)
+13,909
+1,679
+52,913
+Debt securities
+Financial investments measured at FVTPL
+328
+66,046
+At the end of the reporting period, certain financial instruments were transferred out from level 2 to level 3 of the fair
+value hierarchy for financial assets and liabilities when significant inputs used in their fair value measurements, which was
+previously observable became unobservable.
+6,575
+(12,071)
+51,883
+(528)
+3,602
+219,630
+59,216
+(1,424)
+(2,025)
+18,298
+(24,268)
+(528)
+Equity investments
+464
+(47)
+464
+47
+Debt securities
+Financial investments measured at FVTOCI
+25,563
+44,895
+At the end of the reporting period, certain financial instruments were transferred out from level 3 of the fair value hierarchy
+for financial assets and liabilities, when significant inputs used in their fair value measurements, which was previously
+unobservable became observable, or when there was a change in valuation technique.
+(d) Valuation of financial instruments with significant unobservable inputs
+Financial instruments valued with significant unobservable inputs primarily include certain structured derivatives, certain debt
+securities and asset-backed securities. These financial instruments are valued using discounted cash flow model. The models
+incorporate various unobservable assumptions such as discount rates and market rate volatilities.
+Derivative financial assets
+Due from banks and other financial institutions
+Cash and balances with central banks
+ASSETS
+31 December 2020
+31 December 2021
+The statement of financial position of the Bank are set out below.
+51. STATEMENT OF FINANCIAL POSITION AND STATEMENT OF CHANGES IN EQUITY OF
+THE BANK
+Reverse repurchase agreements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+ICBC
+272
+All of the aforementioned assumptions and methods provide a consistent basis for the calculation of the fair values of the
+Group's financial assets and financial liabilities. However, other institutions may use different assumptions and methods.
+Therefore, the fair values disclosed by different financial institutions may not be entirely comparable.
+The fair values of subordinated bonds and tier 2 capital bonds are determined with reference to the available market
+values. If quoted market prices are not available, fair values are estimated on the basis of pricing models or discounted
+cash flows.
+The fair values of financial investments measured at amortised cost relating to the restructuring of the Bank are
+estimated on the basis of the stated interest rates and the consideration of the relevant special clauses of the
+instruments evaluated in the absence of any other relevant observable market data, and the fair values approximate
+to their carrying amounts. The fair values of financial investments measured at amortised cost irrelevant to the
+restructuring of the Bank are determined based on the available market values. If quoted market prices are not
+available, fair values are estimated on the basis of pricing models or discounted cash flows.
+(ii)
+(i)
+Subject to the existence of an active market such as an authorised stock exchange, the market value is the best reflection
+of the fair value of a financial instrument. As there is no available market value for certain financial assets held and financial
+liabilities issued by the Group, discounted cash flow or other valuation methods described below are adopted to determine
+the fair values of these financial assets and financial liabilities:
+Notes to the Consolidated Financial Statements
+432,954
+Loans and advances to customers
+Financial investments measured at FVTPL
+6,643,792
+Financial investments measured at amortised cost
+1,265,920
+1,522,578
+Financial investments measured at FVTOCI
+574,295
+396,261
+7,948,361
+Financial investments
+8,562,631
+19,310,688
+560,271
+523,897
+90,669
+47,218
+3,459,273
+1,242,972
+998,406
+2,959,034
+17,307,271
+(760)
+432,954
+Subordinated bonds and tier 2 capital bonds
+6,886,188
+6,830,933
+Financial investments measured at amortised cost
+Financial assets
+Level 3
+Level 2
+Level 1
+Fair value
+29,158
+Carrying
+amount
+There are no significant differences between the carrying amount and the fair value of financial assets and financial liabilities
+not measured at fair value, except for the following items:
+(e) Fair value of financial assets and financial liabilities not carried at fair value
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements
+271
+Annual Report 2021
+As at 31 December 2021, the effects of changing the significant unobservable assumptions to reasonably possible alternative
+assumptions were not significant (31 December 2020: not significant).
+31 December 2021
+430,064
+6,644,213
+Financial liabilities
+Financial liabilities
+138,662
+6,072,770
+88,094
+6,299,526
+6,265,668
+Financial investments measured at amortised cost
+Financial assets
+212,817
+Level 3
+Level 1
+Fair value
+Carrying
+amount
+31 December 2020
+481,954
+481,954
+470,806
+Subordinated bonds and tier 2 capital bonds
+Level 2
+6,108,146
+(61)
+measured at FVTPL
+Notes to the Consolidated Financial Statements
+269
+Annual Report 2021
+922,084
+2,211
+913,696
+6,177
+140,973
+1,596
+133,531
+5,846
+Derivative financial liabilities
+87,938
+615
+86,992
+331
+Financial liabilities designated as at FVTPL
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+(b) Movement of level 3 financial instruments measured at fair value
+The following table shows the movement of level 3 financial assets and financial liabilities measured at fair value during the
+year:
+Loans and advances to customers
+1,066
+98
+(589)
+57
+(191)
+1,691
+Derivative financial assets
+693,173
+31 December
+2021
+Disposals and
+settlements
+Additions
+in other
+comprehensive
+income
+Total
+effects
+Total
+(losses)/gains
+recorded in
+profit or loss
+2021
+1 January
+Financial assets:
+Transfer
+in/(out) of
+level 3
+693,173
+Due to customers
+Financial liabilities:
+224,943
+25,563
+175,252
+24,128
+Funds and other investments
+93,728
+73,710
+2,718
+49,008
+17,300
+465,812
+66,046
+392,186
+7,580
+Debt securities
+Financial investments measured at FVTPL
+414,292
+414,292
+Equity investments
+measured at FVTPL
+570,156
+784,483
+3,032,444
+227,018
+2,393,245
+412,181
+1,540,988
+59,680
+81,970
+59,216
+165,319
+14,250
+1,122,826
+8,504
+Equity investments
+1,459,018
+464
+1,108,576
+349,978
+Debt securities
+Financial investments measured at FVTOCI
+358,482
+328
+(9)
+(213)
+(28)
+(1,426)
+77
+203
+(28)
+(567)
+Financial assets:
+(34)
+203
+(2,211)
+(1,596)
+Derivative financial liabilities
+48
+(615)
+Financial liabilities designated as at FVTPL
+Financial liabilities:
+153,164
+(74,585)
+(82)
+(23,109)
+77
+1 January
+Loans and advances to customers
+1,691
+211
+(345)
+33
+782
+1,010
+Derivative financial assets
+(1,993)
+2020
+Transfer
+in/(out) of
+level 3
+Disposals and
+settlements
+Additions
+comprehensive
+income
+profit or loss
+2020
+Total
+effect
+in other
+Total
+gains/(losses)
+recorded in
+31 December
+1,149
+25,737
+1,040
+Funds and other investments
+58,687
+(4,888)
+(9,187)
+1,878
+(2,826)
+73,710
+Equity investments
+25,563
+3,840
+(356)
+1,001
+(154)
+66,046
+Debt securities
+Financial investments measured at FVTPL
+16
+106
+(62,697)
+(2,937)
+4,220
+(5,559)
+227,018
+53,839
+(6,318)
+(6,894)
+10,733
+(2,898)
+59,216
+Equity investments
+9,976
+2,827
+(311)
+2,092
+(39)
+464
+Debt securities
+Financial investments measured at FVTOCI
+32,799
+(1,401)
+621
+Loans and advances to customers measured
+Investments in subsidiaries
+147,383
+2,066,021
+Forward purchases
+Spot liabilities
+Spot assets
+USD
+Currency concentrations
+2.
+There are no differences between the profit attributable to equity holders of the parent company under PRC GAAP and IFRSS
+for year ended 31 December 2021 and 2020. There are no differences between the equity attributable to equity holders of
+the parent company under PRC GAAP and IFRSS as at 31 December 2021 and 31 December 2020.
+Statement of differences between the financial statements prepared under IFRSS and
+those prepared in accordance with PRC GAAP
+1.
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2021
+Unaudited Supplementary Information To The Consolidated Financial
+Statements
+ICBC
+274
+The consolidated financial statements were approved by the board of directors on 30 March 2022.
+54. APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTS
+31 December 2021
+HKD
+509,771
+Other
+955,285
+Total
+3,531,077
+(2,115,377)
+Net (short)/long position
+3,817
+32
+2,443
+1,342
+Net option position
+(2,944,886)
+(580,802)
+Certain comparative amounts have been reclassified to conform to the current year's presentation.
+(153,095)
+Forward sales
+2,664,771
+385,249
+166,543
+2,112,979
+(3,241,743)
+(680,182)
+(446,184)
+(2,210,989)
+53. COMPARATIVE AMOUNTS
+A final dividend of RMBO.2933 (pre-tax) per share after the appropriation of statutory surplus reserve and general reserve,
+was approved at the board of directors' meeting held on 30 March 2022, and is subject to the approval of the Bank's
+shareholders at the forthcoming annual general meeting. Based on the number of ordinary shares issued as at 31 December
+2021, the final dividend amounted to approximately RMB104,534 million in total. The dividend payable was not recognised
+as a liability in the consolidated financial statements.
+Includes the appropriation made by overseas branches in the amount of RMB47 million (2020: RMB11 million).
+52. EVENTS AFTER THE REPORTING PERIOD
+32,494
+(9,607)
+(9,607)
+97,505
+32,494
+Appropriation to general reserve (ii)
+Appropriation to surplus reserve (i)
+(note 17)
+(32,494)
+other equity instrument holders
+(94,804)
+1
+1
+322,213
+(887) 323,100
+(61)
+86
+(2,676)
+(94,804)
+(146,024)
+97,505
+Capital injection by
+Includes the appropriation made by overseas branches in the amount of RMB56 million (2020: RMB101 million).
+(ii)
+(i)
+2 945,798 1,486,265 3,142,801
+(3,996)
+(4,773)
+354,331 153,348 350,397 426,714 24,106
+356,407
+(97,505)
+Balance as at 31 December 2021
+63
+63
+(4,542)
+other equity instrument holders
+Capital reduction by
+139,730
+139,730
+other equity instrument holders
+(4,479)
+79,478
+79,582
+13,036
+Between 3 and 6 months
+2020
+2021
+31 December
+31 December
+Gross loans and advances to customers of the Group which have been overdue
+with respect to either principal or interest for periods of:
+Loans and advances to customers (excludes accrued interest)
+Overdue loans and advances to customers
+(i)
+28,208
+3.
+For the year ended 31 December 2021
+Unaudited Supplementary Information To The Consolidated Financial Statements
+275
+Annual Report 2021
+investments in overseas subsidiaries, associates and joint ventures.
+•
+capital and statutory reserves of overseas branches; and
+•
+(In RMB millions, unless otherwise stated)
+property and equipment, net of depreciation charges;
+32,328
+41,849
+The definition of overdue loans and advances to customers is set out as follows:
+0.90%
+0.88%
+0.50%
+0.54%
+0.23%
+0.20%
+Over 12 months
+Between 6 and 12 months
+Between 6 and 12 months
+0.14%
+As a percentage of the total gross loans and advances to customers:
+Between 3 and 6 months
+168,544
+182,457
+93,724
+112,400
+Over 12 months
+42,492
+0.17%
+1,764
+•
+148,338
+(2,240,038)
+Total
+3,669,310
+Other
+1,028,233
+31 December 2020
+HKD
+445,380
+2,195,697
+USD
+Net structural position
+Net (short)/long position
+(461,495)
+Net option position
+Forward purchases
+Spot liabilities
+Spot assets
+155,439
+26,055
+803
+128,581
+Net structural position
+Forward sales
+The net option position is calculated using the delta equivalent approach required by the Hong Kong Monetary Authority.
+The net structural position of the Group includes the structural positions of the Bank's overseas branches, banking
+subsidiaries and other subsidiaries substantially involved in foreign exchange. Structural assets and liabilities include:
+(713,341)
+2,856,506
+26,634
+882
+120,822
+55,962
+16,520
+106,019
+(66,577)
+(12,006)
+(3,414,874)
+(1,597)
+(14,060)
+(3,827,849)
+(754,429)
+(208,738)
+(2,864,682)
+3,641,381
+457,654
+327,221
+3,651
+163,283
+(887)
+(61)
+1,397,575
+1,486,265
+Retained earnings
+816,623
+945,798
+Reserves
+219,143
+354,331
+Other equity instruments
+356,407
+356,407
+28,841,131
+30,297,602
+461,743
+503,623
+658,765
+655,515
+TOTAL EQUITY
+3,142,801
+2,789,748
+TOTAL LIABILITIES AND EQUITY
+Share
+Other
+Foreign
+Reserves
+The statement of changes in equity of the Bank are set out below.
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2021
+Notes to the Consolidated Financial Statements
+Share capital
+273
+Finance and Accounting Department
+General Manager of
+Liu Yagan
+Vice Chairman and President
+Liao Lin
+Chen Siqing
+Chairman
+31,630,879
+33,440,403
+Annual Report 2021
+EQUITY
+TOTAL LIABILITIES
+Other liabilities
+39,648
+Due to central banks
+31,630,879
+33,440,403
+642,714
+630,440
+65,858
+76,066
+54,304
+LIABILITIES
+Other assets
+Deferred tax assets
+131,865
+133,698
+Property and equipment
+34,242
+35,042
+Investments in associates
+TOTAL ASSETS
+equity
+capital instruments
+Financial liabilities designated as at FVTPL
+70,938
+Debt securities issued
+87,273
+91,029
+Income tax payable
+24,338,306
+25,659,484
+Due to customers
+90,113
+277,683
+70,256
+238,632
+178,256
+Repurchase agreements
+2,707,115
+2,821,165
+Due to banks and other financial institutions
+94,891
+39,994
+Derivative financial liabilities
+Certificates of deposit
+Investment currency
+Capital Surplus General revaluation translation
+Cash flow
+hedging
+--- - 33,247
+33,247
+(30,550)
+30,550
+30,550
+(8,839)
+(8,839)
+19,687
+(33,247)
+Distributions to
+Dividends ordinary shares 2020 final
+Total comprehensive income
+Other comprehensive income
+Profit for the year
+1 January 2021
+Balance as at 31 December 2020 and
+Other
+transferred to retained earnings
+(note 17)
+Other comprehensive income
+19,687
+(211)
+86
+(2,676)
+1,764
+323,100
+1,397,575 2,789,748
+323,100
+816,623
+63
+(4,082)
+(211)
+(2,097)
+329,209
+153,285 317,903
+219,143
+356,407
+(18)
+(18)
+(18)
+211
+22,342
+(887)
+other equity instrument holders
+Appropriation to general reserve (ii)
+Profit for the year
+756,163 1,259,397 2,571,423
+(89)
+(4,239)
+(76)
+287,353 295,962 23,949
+153,303
+356,407 199,456
+304,267 304,267
+Balance as at 1 January 2020
+reserves
+reserve
+reserve
+reserve
+reserve
+reserve
+reserve
+Other
+Retained
+Total
+Subtotal earnings equity
+Capital injection by
+Other comprehensive income
+157
+Appropriation to surplus reserve (i)
+(note 17)
+other equity instrument holders
+(93,664)
+(93,664)
+301,159
+(3,108) 304,267
+152
+(1,396) (2,021)
+157
+(1,396)
+Distributions to
+(note 17)
+Dividends ordinary shares 2019 final
+3,914
+(3,108)
+(3,108)
+152
+(2,021)
+Total comprehensive income
+Unaudited Supplementary Information To The Consolidated Financial Statements
+parent company
+87,180
+87,180
+Financial liabilities measured at FVTPL
+institutions
+468,616
+468,616
+489,340
+489,340
+Placements from banks and other financial
+54,974
+2,315,643
+2,315,643
+2,431,689
+2,431,689
+Due to banks and other financial institutions
+54,974
+39,723
+39,723
+Due to central banks
+Liabilities
+33,142,554
+33,345,058
+34,920,291
+35,171,383
+Total assets
+440,548
+87,938
+453,592
+87,938
+71,337
+108,897
+32,073
+32,460
+40,659
+41,083
+25,134,726
+25,134,726
+26,441,774
+26,441,774
+Taxes payable
+Employee benefits payable
+Due to customers
+335,676
+335,676
+290,342
+290,342
+Certificates of deposit
+282,458
+293,434
+351,049
+365,943
+Repurchase agreements
+140,973
+140,973
+71,337
+Derivative financial liabilities
+108,871
+430,485
+67,713
+1,803,604
+― Financial investments measured at
+FVTPL
+732,478
+784,483
+560,683
+623,223
+-Financial investments measured at
+8,429,328
+8,591,139
+9,060,427
+9,257,760
+Financial investments
+18,134,777
+18,136,328
+20,107,266
+20,109,200
+Loans and advances to customers
+738,958
+739,288
+662,544
+663,496
+Reverse repurchase agreements
+134,155
+134,155
+1,743,097
+443,997
+1,540,988
+FVTOCI
+67,713
+79,259
+79,259
+Other assets
+Deferred tax assets
+35,166
+35,173
+18,172
+18,182
+Construction in progress
+249,008
+249,067
+269,952
+270,017
+Fixed assets
+49,186
+41,206
+69,762
+61,782
+Long-term equity investments
+6,198,842
+6,265,668
+6,756,647
+6,830,933
+― Financial investments measured at
+amortised cost
+1,498,008
+76,140
+105,380
+Debt securities issued
+16,013
+2,909,515
+3,264,113
+3,275,258
+Total equity
+9,805
+17,503
+Minority interests
+2,891,322
+2,893,502
+3,254,308
+3,257,755
+Equity attributable to equity holders of the
+1,508,562
+1,510,558
+1,618,142
+1,620,642
+Retained profits
+339,486
+339,701
+438,640
+438,952
+General reserve
+322,692
+322,911
+356,849
+9,159
+2,900,481
+357,169
+(*) Prepared in accordance with PRC GAAP.
+Item
+X05
+206
+560,683
+282
+capital instruments issued by financial institutions that
+are not subject to consolidation
+Including: Non-significant minority investments in core tier 1
+Financial investments measured at FVTPL
+Financial investments
+X04
+232,865
+X03
+579,219
+Less: Provision for loan impairment under the internal ratings-based approach
+Including: Valid cap of surplus provision for loan impairment in tier 2
+capital under the internal ratings-based approach
+X02
+15,909
+X01
+24,545
+Less: Provision for loan impairment under the weighted approach
+Including: Valid cap of surplus provision for loan impairment in tier 2
+capital under the weighted approach
+20,711,030
+Total loans and advances to customers
+Reference
+20,107,266
+scope of
+consolidation
+31 December 2021
+Balance sheet
+under regulatory
+Loans and advances to customers
+(iii) Description of related items
+105,356
+Surplus reserve
+(10,428)
+consolidation*
+Consolidated
+balance sheet
+as in published
+financial
+statements*
+31 December 2021
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2021
+Unaudited Supplementary Information To The Consolidated Financial Statements
+281
+Annual Report 2021
+Prepared in accordance with PRC GAAP.
+(*)
+30,242,073
+483,519
+1,994
+2,881
+664,715
+30,435,543
+4,648
+508,191
+31,656,178
+31,896,125
+Total liabilities
+731,818
+Other liabilities
+5,624
+Deferred tax liabilities
+798,127
+798,127
+791,375
+791,375
+31 December 2021
+Balance sheet
+(10,178)
+31 December 2020
+scope of
+(18,658)
+(18,343)
+Other comprehensive income
+148,534
+148,534
+148,597
+148,597
+Capital reserve
+225,819
+225,819
+354,331
+354,331
+356,407
+356,407
+356,407
+356,407
+Other equity instruments
+Share capital
+Equity
+scope of
+consolidation*
+regulatory
+under
+Balance sheet
+31 December 2020
+Consolidated
+balance sheet
+as in published
+financial
+statements*
+under
+regulatory
+Including: Significant minority investments in core tier 1
+76,140
+558,984
+capital instruments issued by financial institutions that
+are not subject to consolidation
+Investments in additional tier 1 capital instruments issued
+by financial institutions that are under control but not
+subject to consolidation
+Shortfall in additional tier 1 capital instruments issued
+by financial institutions that are under control but not
+subject to consolidation
+Other that should be deducted from additional tier 1 capital
+Undeducted shortfall that should be deducted from tier 2
+capital
+Total regulatory adjustments to additional tier 1
+31 December
+2021
+31 December
+2020
+Reference
+capital
+44
+Additional tier 1 capital
+354,986
+219,790
+45
+Tier 1 capital (core tier 1 capital + additional tier 1
+capital)
+3,241,364
+2,872,792
+Tier 2 capital:
+46
+Tier 2 capital instruments and related premiums
+418,415
+351,568
+Significant minority investments in additional tier 1
+X17
+investments in additional tier 1 capital instruments
+issued by financial institutions that are not subject to
+consolidation
+Reciprocal cross-holdings in additional tier 1 capital
+between banks, or between banks and other financial
+institutions
+Institution specific buffer requirements
+64
+16.88%
+18.02%
+Capital adequacy ratio
+63
+14.28%
+14.94%
+Tier 1 capital adequacy ratio
+62
+13.18%
+13.31%
+Core tier 1 capital adequacy ratio
+61
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Item
+38
+39
+40
+40
+41a
+41b
+41c
+42
+43
+Deductible amount of non-significant minority
+4.0%
+47
+20,285
+Shortfall in tier 2 capital instruments issued by financial
+institutions that are under control but not subject to
+consolidation
+X31
+Annual Report 2021
+279
+Unaudited Supplementary Information To The Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Item
+31 December
+2021
+31 December
+2020
+Reference
+56c
+Other that should be deducted from tier 2 capital
+57
+Total regulatory adjustments to tier 2 capital
+58
+Tier 2 capital
+668,305
+59
+Total capital (tier 1 capital+ tier 2 capital)
+3,909,669
+523,394
+3,396,186
+60
+Total risk-weighted assets
+21,690,349
+Investments in tier 2 capital instruments issued by financial
+institutions that are under control but not subject to
+consolidation
+Invalid instruments to tier 2 capital after the transition
+instruments issued by financial institutions that are not
+subject to consolidation
+56a
+40,570
+period
+48
+Valid portion of minority interests
+1,116
+1,114
+X27
+49
+Including: Invalid portion to tier 2 capital after the
+transition period
+50
+51
+Valid portion of surplus provision for loan impairment
+Tier 2 capital before regulatory adjustments
+248,774
+170,712
+X02+X04
+668,305
+523,394
+Tier 2 capital: Regulatory adjustments
+52
+53
+54
+Direct or indirect investments in own tier 2 instruments
+Reciprocal cross-holdings in tier 2 capital between banks,
+or between banks and other financial institutions
+Deductible portion of non-significant minority investments
+in tier 2 capital instruments issued by financial
+institutions that are not subject to consolidation
+55
+Significant minority investments in tier 2 capital
+56b
+558,984
+4.0%
+Including: Capital conservation buffer requirements
+scope of
+under
+regulatory
+Consolidated
+balance sheet
+as in published
+financial
+statements*
+31 December 2021
+Balance sheet
+31 December 2021
+(ii) Consolidated financial statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Information To The Consolidated Financial Statements
+280
+ICBC
+due to cap
+67,463
+37,740
+40,570
+20,285
+Excluded from additional tier 1 capital due to cap
+Valid cap to tier 2 capital instruments for the current
+period due to phase-out arrangements
+Excluded from tier 2 capital for the current period
+85
+84
+83
+current period due to phase-out arrangements
+Valid cap to additional tier 1 capital instruments for the
+82
+the current period due to phase-out arrangements
+Excluded from core tier 1 capital due to cap
+81
+80
+consolidation*
+Valid cap of surplus provision for loan impairment in
+tier 2 capital under the internal ratings-based approach
+Capital instruments subject to phase-out arrangements
+Valid cap to core tier 1 capital instruments for
+31 December 2020
+Consolidated
+balance sheet
+as in published
+financial
+statements*
+under
+480,693
+480,693
+277,705
+277,705
+265,962
+265,962
+489,231
+522,913
+301,191
+346,457
+3,537,795
+3,537,795
+3,098,438
+3,098,438
+Derivative financial assets
+other financial institutions
+Placements with banks and
+Precious metals
+institutions
+Due from banks and other financial
+Cash and balances with central banks
+Assets
+consolidation*
+scope of
+regulatory
+31 December 2020
+Balance sheet
+65
+X04
+232,865
+72
+Amounts below the thresholds for deduction
+8.0%
+8.0%
+6.0%
+6.0%
+5.0%
+5.0%
+71 Capital adequacy ratio
+Tier 1 capital adequacy ratio
+70
+Core tier 1 capital adequacy ratio
+69
+Domestic minima for regulatory capital
+8.18%
+8.31%
+68 Percentage of core tier 1 capital meeting buffers to
+risk-weighted assets
+1.5%
+1.5%
+Including: G-SIB buffer requirements
+67
+Including: Countercyclical buffer requirements
+66
+2.5%
+2.5%
+73
+162,910
+74
+Undeducted portion of non-significant minority
+investments in capital instruments issued by financial
+institutions that are not subject to consolidation
+Undeducted portion of significant minority investments
+in capital instruments issued by financial institutions
+that are not subject to consolidation
+Mortgage servicing rights (net of deferred tax liabilities)
+Deferred tax assets arising from temporary differences
+(net of deferred tax liabilities)
+79
+X03
+507,096
+579,219
+tier 2 capital under the weighted approach
+Surplus provision for loan impairment under the internal
+ratings-based approach
+78
+X02
+7,802
+15,909
+X01
+23,204
+24,545
+Provision for loan impairment under the weighted approach
+Valid cap of surplus provision for loan impairment in
+77
+76
+Valid caps of surplus provision for loan impairment in
+tier 2 capital
+N/A
+65,719
+74,611
+N/A
+X06+X10+X13
+32,452
+28,773
+X05+X07+X08+
+X09+X12+X29+X30
+138,247
+155,815
+75
+20,124,139
+21
+capital instruments issued by financial institutions that
+are not subject to consolidation
+N/A
+N/A
+N/A
+N/A
+N/A
+Including: If temporary write-down,
+Including: If write-down, permanent or temporary
+Including: If write-down, full or partial
+Including: If write-down, write-down trigger(s)
+No
+No
+No
+3
+N/A
+N/A
+The Bank
+Core tier 1 capital
+Mandatory
+The initial conversion price
+is equal to the average
+trading price of the A shares
+of the Bank for the
+20 trading days preceding
+25 July 2014, the date of
+publication of the Board
+resolution in respect of
+the issuance plan
+Trigger Event occurs;
+fully convertible when
+a Tier 2 Capital Trigger
+Event occurs
+convertible when an
+Additional Tier 1 Capital
+Fully or partially
+Capital Trigger Event
+N/A
+름름
+N/A
+N/A
+N/A
+N/A
+N/A
+No
+No
+N/A
+Including: If yes, specify non-compliant features
+Non-compliant transitioned features
+undated additional
+tier 1 capital bonds
+tier 2 capital bonds and
+Subordinated to deposits,
+general debts,
+subordinated debts,
+preference shareholders
+preference shareholders
+debts and
+debts and
+subordinated
+general creditor,
+creditor of the
+general creditor,
+creditor of the
+subordinated
+senior to instrument)
+(specify instrument type immediately
+Subordinated to depositor,
+Subordinated to depositor,
+Position in subordination hierarchy in liquidation
+description of write-up mechanism
+N/A
+N/A
+름름
+N/A
+N/A
+No
+N/A
+름름름
+No
+No
+Non-cumulative
+Non-cumulative
+Non-cumulative
+No
+No
+No
+Fully discretionary
+Yes
+and 22 November 2025
+between 23 November 2020
+23 November 2020,
+4.58% (dividend rate)
+4.5% (dividend rate) before
+Fixed to floating
+conversion of all the
+Domestic Preference Shares
+redemption or
+First Redemption Date
+(18 November 2020) and ends
+on the completion date of
+Commences on the
+is 18 November 2020,
+in full or partial amount
+The First Redemption Date
+Including: Non-cumulative or cumulative
+Convertible or non-convertible
+partially discretionary or mandatory
+cancellation of coupons/dividends
+Including: Redemption incentive mechanism
+Fully discretionary
+Fully discretionary
+Yes
+N/A
+Annual Report 2021
+Unaudited Supplementary Information To The Consolidated Financial Statements
+Write-down feature
+instrument it converts into
+Including: If convertible, specify issuer of
+type convertible into
+Including: If convertible, specify instrument
+optional conversion
+Including: If convertible, mandatory or
+N/A
+N/A
+Including: If convertible, conversion rate
+N/A
+N/A
+Including: If convertible, fully or partially
+Trigger Event or Tier 2
+Additional Tier 1 Capital
+N/A
+N/A
+Including: If convertible, conversion trigger(s)
+Preference shares
+(Domestic)
+Ordinary shares
+(H share)
+Ordinary shares
+(A share)
+capital instrument
+Main features of regulatory
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2021
+285
+Including: Fully discretionary,
+N/A
+ICBC
+Yes
+3.58% (dividend rate)
+before 23 September 2025
+Yes
+Fixed to floating
+Fixed to floating
+4.2% (dividend rate)
+before 24 September 2024
+Yes
+Fixed to floating
+4.45% (interest rate)
+before 30 July 2024
+regulatory rules
+they are issued due to
+unpredictable changes in
+Undated additional tier 1
+capital bonds (Domestic)
+Redemption of present bonds
+in full or in part on each
+Distribution Payment Date
+since the First Redemption
+Date (30 July 2024).
+The Issuer has the right to
+redeem the present bonds in
+full rather than in part if the
+present bonds are no longer
+qualified as additional tier 1
+capital after
+Date
+Preference shares
+(Offshore)
+23 September in each year
+after the First Redemption
+Preference shares
+(Domestic)
+Commences on the
+First Redemption Date
+(24 September 2024) and
+ends on the completion date
+of redemption or conversion
+of all the Domestic Preference
+Shares
+Including: Subsequent call dates, if applicable
+capital instrument
+Main features of regulatory
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2021
+Unaudited Supplementary Information To The Consolidated Financial Statements
+287
+Annual Report 2021
+30 July 2024, in
+full or partial amount
+The First Redemption Date is
+Yes
+No maturity date
+The First Redemption Date is
+23 September 2025, in
+full or partial amount
+No maturity date
+Yes
+Fully discretionary
+The First Redemption Date is
+24 September 2024, in
+full or partial amount
+Fully discretionary
+Coupons/dividends
+ICBC
+288
+N/A
+NA
+Event occurs
+Fully or partially convertible
+when a Non-viability Trigger
+N/A
+Non-viability Trigger Event
+No
+Yes
+Non-cumulative
+Non-cumulative
+No
+No
+Fully or partially convertible
+when an Additional Tier 1
+Capital Trigger Event occurs;
+fully convertible when a Tier 2
+Capital Trigger Event occurs
+Trigger Event
+Yes
+Additional Tier 1 Capital
+Trigger Event or Tier 2 Capital
+Non-cumulative
+No
+Including: If convertible, fully or partially
+Including: If convertible, conversion trigger(s)
+Including: Redemption incentive mechanism
+Including: Non-cumulative or cumulative
+Convertible or non-convertible
+of coupons/dividends
+Including: Existence of a dividend stopper
+Including: Fully discretionary, partially
+discretionary or mandatory cancellation
+Including: Fixed or floating dividend/coupon
+Including: Coupon rate and any related index
+Fully discretionary
+286
+No maturity date
+Yes
+26 July 2019
+Additional tier 1 capital
+Additional tier 1 capital
+Including: Post-transition arrangement of
+Additional tier 1 capital
+Additional tier 1 capital
+Additional tier 1 capital
+of Regulation Governing Capital
+of Commercial Banks (Provisional)
+Including: Transition arrangement
+Regulatory treatment
+Bond Issuance in China's
+Inter-bank Bond Market, as
+well as other applicable laws,
+regulations and normative
+documents/China
+Republic of China, the
+Regulation Governing
+Capital of Commercial Banks
+(Provisional) and the Measures
+for Administration of Financial
+Governed by the Commercial
+Banking Law of the People's
+The creation and issue of the
+Offshore Preference Shares
+and the rights and obligations
+(including non-contractual
+rights and obligations)
+attached to them are governed
+by, and shall be construed in
+accordance with, PRC law
+Company Law of the People's
+Republic of China, Securities
+Law of the People's Republic
+of China, Guidance of the
+State Council on Launch of
+Preference Shares Pilot, Trial
+Administrative Measures on
+Preference Shares, Guidance
+on the Issuance of Preference
+Shares of Commercial Banks to
+Replenish Tier 1 Capital/China
+The Bank
+1928018
+Undated additional tier 1
+capital bonds (Domestic)
+Preference shares
+(Offshore)
+The Bank
+4620
+Preference shares
+(Domestic)
+The Bank
+360036
+Governing law(s) of the instrument
+Unique identifier
+Issuer
+capital instrument
+Main features of regulatory
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Information To The Consolidated Financial Statements
+Additional tier 1 capital
+Perpetual
+Regulation Governing Capital of
+Including: Eligible to the parent
+Other equity
+RMB80,000
+instrument
+RMB79,987
+23 September 2020
+Perpetual
+USD2,900
+Other equity
+RMB70,000
+Other equity
+19 September 2019
+Perpetual
+RMB equivalent 19,687
+instrument
+RMB69,981
+Parent company/Group
+Additional tier 1 capital
+Additional tier 1 capital
+instrument
+Additional tier 1 capital
+Parent company/Group
+Parent company/Group
+call dates and redemption amount
+Including: Optional call date, contingent
+Issuer call (subject to prior supervisory approval)
+Including: Original maturity date
+Perpetual or dated
+Original date of issuance
+Accounting treatment
+Par value of instrument (in millions)
+(in millions, as at the latest reporting date)
+Amount recognised in regulatory capital
+Instrument type
+company/group level
+Commercial Banks (Provisional)
+X06
+N/A
+Including: Existence of a dividend stopper
+219,717
+Including: Perpetual bonds
+X28
+134,614
+Including: Preference shares
+354,331
+Other equity instruments
+X18
+356,407
+Share capital
+X17
+418,415
+Including: Valid portion of tier 2 capital instruments and their premiums
+791,375
+Debt securities issued
+115,381
+Other
+3,946
+Repossessed assets
+5,541
+Long-term deferred expenses
+X16
+7,691
+Goodwill
+274,468
+X32
+Other receivables
+Capital reserve
+X19
+Including: Valid portion of core tier 1 capital
+Minority interests
+Retained profits
+General reserve
+Surplus reserve
+Other
+Foreign currency translation reserve
+Changes in share of other owners' equity of associates and joint ventures
+Item
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2021
+Unaudited Supplementary Information To The Consolidated Financial Statements
+283
+Annual Report 2021
+X20
+(4,202)
+items that are not fair-valued on the balance sheet
+Including: Cash flow hedge reserve that relates to the hedging of
+(4,243)
+Reserve for cash flow hedging
+24,435
+Reserve for changes in fair value of financial assets
+X24
+(18,658)
+Other comprehensive income
+148,597
+Including: Valid portion of additional tier 1 capital
+X15
+Including: Land use rights
+13,052
+1,743,097
+scope of
+consolidation
+Balance sheet
+under regulatory
+31 December 2021
+capital instruments issued by financial institutions that
+are not subject to consolidation
+Including: Significant minority investments in tier 2
+capital instruments issued by financial institutions that
+are not subject to consolidation
+Financial investments measured at amortised cost
+Including: Non-significant minority investments in tier 2
+capital instruments issued by financial institutions that
+are not subject to consolidation
+Including: Non-significant minority investments in tier 2
+capital instruments issued by financial institutions that
+are not subject to consolidation
+Including: Significant minority investments in core tier 1
+Including: Non-significant minority investments in core tier 1
+capital instruments issued by financial institutions that
+are not subject to consolidation
+Financial investments measured at FVTOCI
+Item
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Information To The Consolidated Financial Statements
+ICBC
+capital instruments issued by financial institutions that
+are not subject to consolidation
+X08
+140,871
+X07
+Including: Non-significant minority investments in tier 2
+Including: Non-significant minority investments in additional tier 1
+capital instruments issued by financial institutions that
+are not subject to consolidation
+Reference
+15,506
+X09
+X10
+X14
+21,175
+Intangible assets
+2,283
+430,485
+Interest receivable
+Other asset
+are not subject to consolidation
+X13
+26,284
+Including: Undeducted portion of significant minority investments in
+capital instruments issued by financial institutions that
+financial institutions that are not subject to consolidation
+investments in capital instruments issued by
+X12
+1,686
+Including: Undeducted portion of non-significant minority
+X11
+7,980
+Including: Investments in core tier 1 capital instruments issued by financial
+institutions that are under control but not subject to consolidation
+69,762
+Long-term equity investments
+X31
+X30
+6,756,647
+X29
+2,468
+N/A
+Including: Valid portion of tier 2 capital
+Main features of regulatory
+RMB86,795
+capital instrument
+RMB168,374
+Core tier 1
+capital instrument
+Additional tier 1
+Group
+Preference shares
+(Domestic)
+Parent company/
+Share capital,
+capital reserve
+19 October 2006
+Perpetual
+RMB269,612
+capital instrument
+RMB336,554
+Including: Original maturity date
+Perpetual or dated
+Original date of issuance
+Accounting treatment
+Par value of instrument (in millions)
+(in millions, as at the latest reporting date)
+Amount recognised in regulatory capital
+Instrument type
+Group
+Group
+Core tier 1
+Ordinary shares
+(H share)
+Parent company/
+Parent company/
+Including: Eligible to the parent company/
+group level
+Ordinary shares
+(A share)
+capital instrument
+Share capital,
+capital reserve
+19 October 2006
+Main features of regulatory
+RMB44,947
+Other equity
+N/A
+N/A
+Including: Coupon rate and any related index
+Floating
+Floating
+Including: Fixed or floating dividend/coupon
+Coupons/dividends
+N/A
+N/A
+N/A
+N/A
+if applicable
+Including: Subsequent call dates,
+dates and redemption amount
+Including: Optional call date, contingent call
+approval)
+Issuer call (subject to prior supervisory
+Yes
+No maturity date
+No maturity date
+No
+No
+No maturity date
+Perpetual
+Perpetual
+18 November 2015
+RMB45,000
+(iv) Main features of eligible capital instruments
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+ICBC
+X27
+1,116
+X26
+655
+X25
+3,539
+9,805
+X23
+1,618,142
+X22
+438,640
+X21
+356,849
+1,609
+(39,707)
+(752)
+Reference
+scope of
+consolidation
+31 December 2021
+Balance sheet
+under regulatory
+Including: Transition arrangement
+Regulatory treatment
+Governing law(s) of the instrument
+Unique identifier
+Issuer
+capital instrument
+Ordinary shares
+(A share)
+The Bank
+601398
+Unaudited Supplementary Information To The Consolidated Financial Statements
+Ordinary shares
+(H share)
+The Bank
+1398
+284
+Commercial Banks (Provisional)
+Regulation Governing Capital of
+Additional tier 1 capital
+Core tier 1 capital
+Core tier 1 capital
+Including: Post-transition arrangement of
+of Regulation Governing Capital
+of Commercial Banks (Provisional)
+Additional tier 1 capital
+Core tier 1 capital
+Core tier 1 capital
+Commercial Banks
+to Replenish Tier 1
+Capital/China
+the Issuance of
+Preference Shares of
+Guidance on
+Preference Shares,
+Administrative Measures on
+Shares Pilot, Trial
+State Council on
+Launch of Preference
+Guidance of the
+Securities Law of the
+People's Republic of China.
+Company Law of the
+People's Republic of China,
+360011
+The Bank
+Securities and Futures
+Ordinance of Hong Kong/
+Hong Kong SAR, China
+Securities Law of the
+People's Republic of
+China/China
+Preference shares
+(Domestic)
+Requirements for capital adequacy ratio and reserve capital
+ICBC
+ECONOMIC, FINANCIAL AND REGULATORY ENVIRONMENTS
+11,781
+8,044
+3,737
+46.5
+Total
+37,176
+22,095
+15,081
+68.3
+Other non-interest related gains amounted to RMB37,176 million, RMB15,081 million or 68.3% higher than that of the
+previous year. Specifically, the increase in net trading income was mainly attributable to the increase in gains on derivative
+financial instruments; the increase in net gains on financial investments was primarily due to the increase in gains on equity
+instruments and bond investments; and the increase in other net operating income was mainly because of the increase in net
+gains on exchange and exchange rate products.
+Operating Expenses
+Item
+2021
+2020
+In RMB millions, except for percentages
+Increase/ Growth rate
+(decrease)
+(%)
+Staff costs
+139,363
+126,572
+12,791
+10.1
+Other operating income, net
+39.0
+4,611
+11,829
+1,809
+1.4
+In 2021, the Bank's net fee and commission income was RMB133,024 million, an increase of RMB1,809 million over last
+year. Specifically, income from settlement, clearing business and cash management increased by RMB2, 169 million, mainly
+driven by the growth of third party payment business income; income from investment banking business registered an
+increase of RMB956 million, mainly due to the income increase from securitization service etc.; asset custody business
+income increased by RMB1,193 million, principally attributable to the increasing income from mutual fund custody business.
+The Bank adhered to the business transformation and implemented the policy of fee reduction and profit concessions,
+resulting in the income decrease on bank card, corporate wealth management, guarantee and commitment businesses.
+Annual Report 2021
+25
+Discussion and Analysis
+Other Non-Interest Related Gains
+In RMB millions, except for percentages
+Increase/
+Growth rate
+Property and equipment expenses
+Item
+2020
+(decrease)
+(%)
+Net trading income
+8,955
+2,222
+6,733
+303.0
+Net gains on financial investments
+16,440
+2021
+28,822
+27,960
+862
+Income Tax Expense
+Income tax expense increased by RMB242 million or 0.3% to RMB74,683 million as compared to the previous year. The
+effective tax rate stood at 17.58%. Please see "Note 15. to the Consolidated Financial Statements: Income Tax Expense" for
+the reconciliation of income tax expense applicable to profit before tax at the PRC statutory income tax rate and the effective
+income tax expense.
+26
+ICBC
+Summary Geographical Segment Information
+Discussion and Analysis
+In RMB millions, except for percentages
+2020
+2021
+Percentage
+Share of results of associates and joint ventures stood at RMB2,869 million, representing an increase of RMB1,565 million
+or 120.0% over last year, mainly due to the increase in the Bank's share of results from Standard Bank, an associate of the
+Bank.
+Percentage
+Amount
+(%)
+Amount
+(%)
+Operating income
+860,880
+100.0
+800,075
+100.0
+Head Office
+Item
+131,215
+Share of Results of Associates and Joint Ventures
+Impairment Losses on Assets
+3.1
+Taxes and surcharges
+9,318
+8,524
+794
+9.3
+Amortisation
+3,125
+2,607
+518
+In 2021, the Bank set aside the impairment losses on assets of RMB202,623 million, a decrease of RMB45 million as
+compared to that of last year. Specifically, the impairment losses on loans was RMB168,267 million, indicating a decrease
+of RMB3,563 million or 2.1%. Please refer to "Note 23. to the Consolidated Financial Statements: Loans and Advances to
+Customers; Note 14. to the Consolidated Financial Statements: Impairment Losses on Assets" for details.
+19.9
+Total
+55,599
+40,922
+14,677
+35.9
+236,227
+206,585
+29,642
+14.3
+In 2021, operating expenses amounted to RMB236,227 million, an increase of RMB29,642 million or 14.3% over last year.
+Other
+133,024
+Net fee and commission income
+1.6
+1.61
+24
+24
+ICBC
+Discussion and Analysis
+Interest Expense on Due to Banks and Other Financial Institutions
+Interest expense on due to banks and other financial institutions was RMB44,387 million, RMB7,090 million or 13.8% lower
+than that of last year, principally attributable to the decline in cost as affected by the factors such as market interest rates
+and product maturities.
+Interest Expense on Debt Securities Issued
+Interest expense on debt securities issued was RMB29,526 million, indicating a decrease of RMB580 million or 1.9% over
+last year. Please refer to "Note 35. to the Consolidated Financial Statements: Debt Securities Issued" for the debt securities
+issued by the Bank.
+Non-interest Income
+364,173
+In 2021, non-interest income was RMB170,200 million, RMB16,890 million or 11.0% higher than that of last year,
+accounting for 19.8% of the operating income. Specifically, net fee and commission income increased by 1.4% to
+RMB133,024 million, and other non-interest related gains rose by 68.3% to RMB37,176 million.
+Item
+2021
+2020
+In RMB millions, except for percentages
+Increase/
+(decrease)
+Growth rate
+(%)
+Settlement, clearing business and
+41,270
+39,101
+2,169
+Net Fee and Commission Income
+5.5
+22,670,373
+397,625
+11,429,562
+189,118
+18,678
+207,796
+2.98 5,723,692
+167,153
+2.92
+0.37
+4,509,984
+17,243
+0.38
+1.82
+1.62
+10,233,676
+1.80
+Overseas business
+984,304
+9,981
+1.01
+892,484
+14,048
+1.57
+Total deposits
+24,477,111
+184,396
+135,419
+cash management
+30,001
+7,545
+1,193
+15.8
+Trust and agency services
+1,808
+1,617
+191
+11.8
+Other
+2,894
+8,738
+3,037
+(4.7)
+Fee and commission income
+148,727
+146,668
+2,059
+1.4
+Less: Fee and commission expense
+15,703
+15,453
+250
+(143)
+Personal wealth management and
+Asset custody business
+(345)
+29,630
+371
+1.3
+private banking services
+Investment banking business
+22,416
+21,460
+956
+4.5
+Bank card business
+(3.4)
+16,679
+(1,944)
+(10.4)
+Corporate wealth management services
+15,165
+15,554
+(389)
+(2.5)
+Guarantee and commitment business
+9,756
+10,101
+18,623
+Subtotal
+15.8
+13.5
+739,288
+2.2
+1,215,339
+3.4
+1,258,611
+3.8
+35,171,383
+100.0
+33,345,058
+100.0
+Note: (1) Please see "Note 23. to the Consolidated Financial Statements: Loans and Advances to Customers".
+Loan
+The Bank continued to improve the quality and efficiency
+of serving the real economy, actively supported the
+construction of ongoing infrastructure projects and major
+projects for making up shortcomings, and implemented
+strategic arrangements such as new urbanization initiatives
+and building a country with strong transportation
+network. It fully supported the high-quality development
+of the manufacturing industry, served the state's energy
+supply security and low-carbon transformation strategy,
+and grasped the development opportunities of green
+finance comprehensively. It mainly supported the state's
+food security, stable production and supply of important
+agricultural products, transformation and upgrading
+of agricultural industries and integrated development
+of industrial chains. As at the end of 2021, total loans
+amounted to RMB20,667,245 million, RMB2,042,937
+million or 11.0% higher compared with the end of the
+previous year, of which RMB denominated loans of
+domestic branches were RMB18,929,925 million, up by
+RMB2,124,707 million or 12.6%.
+DISTRIBUTION OF LOANS BY BUSINESS LINE
+At 31 December 2021
+In RMB millions, except for percentages
+At 31 December 2020
+Percentage
+Percentage
+Item
+Corporate loans
+1.9
+663,496
+Total assets
+Other
+Percentage
+(%)
+Net loans and advances to customers(1)
+Investment
+20,109,200
+57.2
+18,136,328
+54.4
+9,257,760
+26.3
+8,591,139
+25.8
+Amount
+12,194,706
+Cash and balances with central banks
+8.8
+3,537,795
+10.6
+Due from banks and other
+827,150
+2.4
+1,081,897
+3.2
+financial institutions
+Reverse repurchase agreements
+3,098,438
+(%)
+59.0
+Amount
+11,102,733
+30.8
+Personal consumption loans
+187,316
+0.9
+183,716
+0.9
+Personal business loans
+702,441
+3.4
+521,638
+5,728,315
+2.8
+692,339
+3.3
+681,610
+3.7
+Total
+20,667,245
+100.0
+18,624,308
+100.0
+28
+Credit card overdrafts
+530,300
+30.8
+Residential mortgages
+(%)
+59.6
+Short-term corporate loans
+2,737,742
+13.2
+2,643,212
+14.2
+Medium to long-term corporate loans
+9,456,964
+45.8
+6,362,685
+8,459,521
+Discounted bills
+527,758
+2.6
+406,296
+2.2
+Personal loans
+7,944,781
+38.4
+7,115,279
+38.2
+Discussion and Analysis
+42,320
+Amount
+18,624,308
+(%)
+29,582
+3.4
+32,342
+4.0
+Overseas and other
+74,045
+8.6
+60,588
+7.6
+Profit before taxation
+Northeastern China
+424,899
+392,126
+100.0
+Head Office
+58,031
+13.6
+34,092
+8.7
+Yangtze River Delta
+83,920
+19.8
+100.0
+75,295
+15.2
+14.7
+Yangtze River Delta
+136,544
+15.9
+130,424
+16.3
+Pearl River Delta
+107,474
+12.5
+102,902
+12.9
+121,336
+Bohai Rim
+16.9
+145,927
+18.1
+Central China
+105,357
+12.2
+98,851
+12.4
+Western China
+126,799
+145,660
+107,705
+19.2
+59,699
+27,188
+6.9
+Note: Please see "Note 48. to the Consolidated Financial Statements: Segment Information" for details.
+Balance Sheet Analysis
+In 2021, in response to the changes in external
+development trends, the Bank earnestly implemented
+macro-economic and financial policies and regulatory
+requirements, and continued to enhance the foresight,
+scientificity and initiative of asset and liability management,
+and appropriately arranged the aggregate amount,
+structure and pace of assets and liabilities. While
+maintaining a moderate growth of the total assets and
+liabilities, the Bank earnestly followed the regulatory
+orientation, continued to promote liability quality
+management, and gradually established a liability quality
+management system that is commensurate with the
+development of liability business. Besides, it strived to
+cement the foundation for deposit development, and
+maintained steady development of liability business. The
+Bank deeply promoted the continuous optimization of the
+asset and liability structure and coordinated development
+of quantity and price, and enhanced the adaptability,
+competitiveness and inclusiveness of serving the real
+economy.
+Assets Deployment
+As at the end of 2021, total assets of the Bank amounted
+to RMB35,171,383 million, RMB1,826,325 million or
+5.5% higher than that at the end of the previous year.
+Specifically, total loans and advances to customers
+(collectively referred to as "total loans") increased by
+RMB2,042,937 million or 11.0% to RMB20,667,245
+million, investment increased by RMB666,621 million or
+7.8% to RMB9,257,760 million, and cash and balances
+with central banks decreased by RMB439,357 million or
+12.4% to RMB3,098,438 million.
+Annual Report 2021
+27
+Discussion and Analysis
+10.5
+Item
+Add: Accrued interest
+Less: Allowance for impairment losses on
+loans and advances to customers
+measured at amortised cost
+In RMB millions, except for percentages
+At 31 December 2020
+At 31 December 2021
+Percentage
+Amount
+20,667,245
+45,719
+603,764
+Total loans and advances to customers
+Pearl River Delta
+45,015
+0.7
+14.1
+67,383
+17.2
+Bohai Rim
+64,383
+15.2
+76,322
+19.4
+Central China
+47,115
+Overseas and other
+11.1
+10.9
+Western China
+65,477
+15.4
+66,598
+17.0
+Northeastern China
+1,259
+0.3
+2,593
+42,655
+5,091,927
+45.4
+6,337,635
+Loans and advances to customers
+19,996,414
+832,136
+4.16
+17,979,409
+766,407
+4.26
+Investment
+7,999,530
+262,827
+3.29
+7,223,638
+243,545
+3.37
+Due from central banks (2)
+2,888,381
+42,027
+1.46
+2,848,543
+42,022
+1.48
+cost (%)
+Item
+Assets
+income/ Average yield/
+expense
+1,878
+1,779
+99
+5.6
+Annual Report 2021
+21
+Discussion and Analysis
+Net Interest Income
+In 2021, net interest income was RMB690,680 million, RMB43,915 million or 6.8% higher than that of last year, accounting
+for 80.2% of the Bank's operating income. Interest income grew by RMB69,697 million or 6.4% to RMB1,162,218 million
+and interest expenses increased by RMB25,782 million or 5.8% to RMB471,538 million. Net interest spread and net interest
+margin ("NIM") came at 1.92% and 2.11% respectively, down 5 basis points and 4 basis points respectively from the
+previous year, mainly because the Bank continued to provide favorable fee policy for the real economy and further reduced
+the financing cost of enterprises.
+AVERAGE YIELD OF INTEREST-GENERATING ASSETS AND AVERAGE COST OF INTEREST-BEARING LIABILITIES
+Due from banks and other
+In RMB millions, except for percentages
+Interest
+2021
+Interest
+Average
+income/ Average yield/
+Average
+balance
+expense
+cost (%)
+balance
+2020
+1,772,522
+25,228
+1.42
+22,670,373
+364,173
+1.61
+Due to banks and other
+3,287,917
+44,387
+1.35
+2,938,129
+51,477
+1.75
+1.62
+financial institutions(3)
+1,072,667
+29,526
+2.75
+1,028,929
+30,106
+2.93
+Total interest-bearing liabilities
+28,837,695
+471,538
+1.64
+Debt securities issued
+Non-controlling
+interests
+397,625
+Deposits
+2,003,882
+40,547
+2.02
+financial institutions(3)
+Total interest-generating assets
+32,656,847
+1,162,218
+3.56
+30,055,472
+1,092,521
+24,477,111
+3.64
+2,659,895
+2,865,115
+Allowance for impairment losses on
+(574,932)
+(506,316)
+assets
+Total assets
+34,741,810
+32,414,271
+Liabilities
+Non-interest-generating assets
+under PRC GAAP and Those
+under IFRSS
+Statements Prepared
+33 Reconciliation of Differences
+between the Financial
+•
+Summary Geographical
+Segment Information
+27 Balance Sheet Analysis
+• Assets Deployment
+• Liabilities
+• Shareholders' Equity
+Income Statement Analysis
+In 2021, facing the complicated and tough business environment, the
+Bank maintained sound business quality, constantly elevated the quality
+and efficiency of financial services, and further improved its capability in
+balancing and coordinating sustainable development. In the year, the Bank
+realized a net profit of RMB350,216 million, representing an increase of
+RMB32,531 million or 10.2% as compared to the previous year. Return
+on average total assets stood at 1.02%, and return on weighted average
+equity was 12.15%. Operating income amounted to RMB860,880 million,
+representing an increase of 7.6%, of which, net interest income grew
+by 6.8% to RMB690,680 million; non-interest income was RMB170,200
+million, up by 11.0%. Operating expenses amounted to RMB236,227
+million, representing an increase of 14.3%, and the cost-to-income ratio
+was 26.36%. Impairment losses on assets were RMB202,623 million.
+Income tax expense rose by 0.3% to RMB74,683 million.
+CHANGES OF KEY INCOME STATEMENT ITEMS
+In RMB millions, except for percentages
+Increase/ Growth rate
+• Income Tax Expense
+Item
+2020
+(decrease)
+(%)
+Net interest income
+690,680
+646,765
+43,915
+6.8
+Non-interest income
+170,200
+2021
+153,310
+• Share of Results of
+Associates and Joint
+Ventures
+Operating Expenses
+Demand deposits
+In 2021, the global economy recovered on the whole, but
+in the second half of the year, affected by the impact of
+the epidemic, energy shortage, supply chain bottleneck
+and other factors, the economic recovery momentum
+witnessed marginal slowdown and rising inflation. The
+monetary policy shift of major developed economies
+accelerated, with increasing fluctuation in the international
+financial market.
+China's economy continued to recover steadily. In 2021,
+China's gross domestic product (GDP), retail sales of
+consumer goods, fixed asset investment (excluding rural
+households), industrial added value of enterprises above
+designated size, and total (RMB-denominated) imports
+and exports of trade in goods rose by 8.1%, 12.5%,
+4.9%, 9.6% and 21.4% year on year respectively, while
+consumer price index (CPI) increased mildly by 0.9% year
+on year.
+Proactive fiscal policy was implemented to improve quality
+and efficiency. China deepened the reform of the fiscal
+and tax systems, carried out the tax and fee reduction
+policy, optimized the management of special bonds of
+local governments, and improved the regular mechanism
+for targeted allocation of fiscal funds. It continuously
+increased investment in science and technology and
+people's livelihood, and stabilized the industrial chain and
+supply chain. Moreover, China promoted coordinated
+development between urban and rural areas, and
+supported the effective link between the achievements of
+poverty alleviation and rural revitalization.
+The prudent monetary policy was flexible, targeted and
+appropriate. PBC maintained reasonable and adequate
+liquidity by comprehensive use of various tools such as
+reserve requirement ratio (RRR) cut and structural policies.
+It created tools supporting carbon emission reduction,
+launched special relending for clean and efficient utilization
+of coal, and made good use of relending for supporting
+agriculture and small enterprises and two directly targeting
+instruments, to strengthen support for key areas such as
+scientific and technological innovation, manufacturing,
+small and micro enterprises and green development.
+By playing a role of the Loan Prime Rate (LPR), PBC
+pushed forward to reduce comprehensive financing cost
+of enterprises while maintaining it at an overall stable
+level, and optimized the method of determining the self-
+disciplined capping of deposit interest rate, to improve the
+freedom and accuracy of independent pricing of deposit
+interest rate of commercial banks and promote orderly
+competition in the industry. Besides, PBC deepened the
+market-oriented reform of exchange rates and kept the
+flexibility of RMB exchange rates.
+Annual Report 2021
+19
+Discussion and Analysis
+Regulatory policies have
+supported high-quality
+development. The real estate loan concentration
+management, green finance evaluation plan, education
+opinion of "easing the burden of excessive homework and
+off-campus tutoring for students undergoing compulsory
+education" and measures for regulating the economic
+development of internet platforms were promulgated and
+implemented to prevent risks and monopolies in promoting
+development. The Guidelines on Macro Prudential Policies
+(Trial), the Measures for Regulatory Rating of Commercial
+Banks and the Additional Regulation on Systemically
+Important Banks (Trial) were successively issued to enhance
+risk management capability and prudential operation
+of banks. The Guidelines on Corporate Governance of
+Banking and Insurance Institutions and other regulations
+were issued to strengthen shareholder equity supervision
+and regulate the performance of directors and supervisors.
+The pilot program of pension wealth management
+products was launched, and relevant policies on equity-
+convertible capital bonds were improved to support capital
+replenishment of small and medium-sized banks.
+• Impairment Losses on
+Assets
+The financial system ran smoothly. At the end of 2021,
+the balance of broad money supply (M2) was RMB238.3
+trillion, up 9.0% year on year. The existing social financing
+scale size stood at RMB314.1 trillion, up 10.3% year on
+year. The outstanding RMB loans reached RMB192.7
+trillion, increasing by 11.6% year on year. The balance
+of RMB deposits amounted to RMB232.3 trillion, up
+9.3% year on year. The total issuance amount of various
+bonds in the bond market reached RMB61.4 trillion, up
+7.8% year on year. The stock market index fluctuated
+upward, with the Shanghai Composite Index and the
+Shenzhen Component Index increasing by 4.8% and
+2.7% respectively over the end of last year. The central
+parity of RMB against the US dollar was RMB6.3757, an
+appreciation of 2.3% from the end of last year.
+In 2021, ICBC steadily pushed forward the strategic
+pattern of "bringing out our strengths to make up for
+our weaknesses and laying a solid foundation and base",
+reinforced the working method of "Three Comparisons,
+Three Reviews and Three Improvements" and achieved
+operating results of making progress while maintaining
+stability and improving quality. The Bank continued
+to consolidate its scale advantage, and ranked first in
+the industry in terms of asset scale, green loans, loans
+to strategic emerging industries, balance of loans to
+manufacturing and balance of deposits. The Bank
+continued to enhance its profitability, and maintained a
+leading position among peers in terms of income scale and
+total profit. Asset quality continued to be consolidated and
+the risk offsetting capacity continued to be enhanced. The
+Bank maintained its advantage in international influence,
+ranking the 1st place among the Top 1000 World Banks by
+The Banker, the 1st place in the Global 2000 by Forbes, and
+the 1st place in the list of commercial banks of the Global
+500 in Fortune for the ninth consecutive year.
+20
+ICBC
+FINANCIAL STATEMENTS ANALYSIS
+Discussion and Analysis
+21 Income Statement Analysis
+• Net Interest Income
+• Interest Expense
+• Non-interest Income
+•
+The asset scale of commercial banks grew steadily,
+with continuously improving asset quality, stronger
+risk offsetting capacity, robust profitability and steadily
+enhanced global competitiveness. At the end of 2021,
+the RMB and foreign-currency assets of commercial banks
+totaled RMB288.6 trillion, up 8.6% year on year. The
+balance of NPLs reached RMB2.8 trillion, with a NPL ratio
+of 1.73% and allowance to NPLs of 196.9%. The capital
+adequacy ratio was 15.13%. Specifically, the RMB and
+foreign-currency assets of large commercial banks totaled
+RMB138.4 trillion, accounting for 48.0%. The balance of
+NPLs of large commercial banks reached RMB1.1 trillion,
+with a NPL ratio of 1.37% and allowance to NPLs of
+239.2%. The capital adequacy ratio was 17.29%. Among
+the Top 1000 World Banks 2021 by The Banker, six major
+state-owned commercial banks ranked in the top 15.
+26,637,431
+16,890
+Operating income
+Profit before taxation
+424,899
+392,126
+32,773
+8.4
+33 Analysis on Statement of
+Cash Flows
+Less: Income tax expense
+Net profit
+74,683
+74,441
+242
+joint ventures
+0.3
+317,685
+32,531
+10.2
+Attributable to: Equity holders
+348,338
+315,906
+32,432
+10.3
+of the parent
+company
+350,216
+11.0
+• Off-balance Sheet Items
+1,565
+860,880
+800,075
+60,805
+7.6
+Less: Operating expenses
+236,227
+206,585
+29,642
+14.3
+Less: Impairment losses on assets
+120.0
+202,623
+(45)
+(0.0)
+Operating profit
+422,030
+390,822
+31,208
+8.0
+Share of results of associates and
+2,869
+1,304
+202,668
+445,756
+• Interest Income
+Non-interest-bearing liabilities
+9,461,995
+400,605
+4.23
+Discounted bills
+380,678
+10,266
+2.70
+443,764
+11,883
+2.68
+Personal loans
+7,415,770
+349,572
+4.71
+6,606,897
+314,940
+4.77
+Overseas business
+1,412,759
+32,723
+2.32
+4.08
+439,575
+10,787,207
+Corporate loans
+4.26
+advances to customers
+Annual Report 2021
+23
+Discussion and Analysis
+ANALYSIS OF THE AVERAGE YIELD OF LOANS AND ADVANCES TO CUSTOMERS BY BUSINESS LINE
+In RMB millions, except for percentages
+2021
+2020
+Average
+1,466,753
+Interest
+Average
+Interest
+Average yield
+Item
+balance
+income
+(%)
+balance
+income
+(%)
+Average yield
+38,979
+2.66
+Total loans and
+Time deposits
+4,929,388
+121,230
+2.46
+4,757,009
+111,977
+2.35
+Demand deposits
+7,133,857
+58,618
+Corporate deposits
+0.82
+179,848
+1.49
+6,787,204
+11,544,213
+53,752
+0.79
+165,729
+1.44
+Personal deposits
+1.67
+Time deposits
+12,063,245
+766,407
+(%)
+In RMB millions, except for percentages
+2020
+Interest
+expense
+19,996,414
+832,136
+4.16
+17,979,409
+766,407
+4.26
+advances to customers
+Interest Income on Investment
+Interest income on investment amounted to RMB262,827 million, representing an increase of RMB19,282 million or 7.9% as
+compared to that of last year, mainly due to the increased scale in investment.
+Interest Income on Due from Banks and Other Financial Institutions
+Average cost
+Interest income on due from banks and other financial institutions was RMB25,228 million, representing a decrease of
+RMB15,319 million or 37.8% as compared to that of last year, principally due to the factors such as reduced lending size
+and low interest rate environment.
+Interest Expense on Deposits
+Interest expense on deposits amounted to RMB397,625 million, representing an increase of RMB33,452 million or 9.2%
+over the previous year, principally due to the expansion in the size of due to customers.
+ANALYSIS OF AVERAGE DEPOSIT COST BY PRODUCTS
+2021
+Item
+Average
+balance
+Interest
+expense
+Average cost
+(%)
+Average
+balance
+Interest Expense
+17,979,409
+Subtotal
+832,136
+Loans and advances to customers
+83,708
+(17,979)
+65,729
+Investment
+25,061
+(5,779)
+19,282
+Due from central banks
+575
+Net increase/
+(decrease)
+(570)
+Due from banks and other financial institutions
+(3,296)
+(12,023)
+(15,319)
+Changes in interest income
+106,048
+(36,351)
+69,697
+Liabilities
+Deposits
+5
+31,185
+Interest rate
+Comparison between 2021 and 2020
+Increase/(decrease) due to
+1,991,928
+30,829,623
+4.16
+Total liabilities
+2,114,998
+28,752,429
+Net interest income
+690,680
+646,765
+Net interest spread
+1.97
+Net interest margin
+Volume
+2.11
+Notes: (1) The average balances of interest-generating assets and interest-bearing liabilities represent their daily average balances. The
+average balances of non-interest-generating assets, non-interest-bearing liabilities and the allowance for impairment losses on
+assets represent the average of the balances at the beginning of the year and at the end of the year.
+(2) Due from central banks mainly includes mandatory reserves and surplus reserves with central banks.
+(3) Due from banks and other financial institutions includes the amount of reverse repurchase agreements, and due to banks and
+other financial institutions includes the amount of repurchase agreements etc.
+22
+ICBC
+ANALYSIS OF CHANGES IN INTEREST INCOME AND EXPENSE
+Item
+Assets
+Discussion and Analysis
+In RMB millions
+2.15
+2,267
+1.92
+Due to banks and other financial institutions
+Average
+(%)
+balance
+Interest
+income
+Average yield
+(%)
+Short-term loans
+4,045,145
+142,549
+3.52
+Average yield
+3,934,831
+3.64
+Medium to long-term loans
+15,951,269
+4.32
+14,044,578
+623,364
+19,996,414
+4.44
+33,452
+Total loans and
+143,043
+2020
+689,587
+Average
+balance
+(7,090)
+2021
+Interest
+income
+Debt securities issued
+1,272
+(1,852)
+Changes in interest expenses
+37,120
+(11,338)
+25,782
+Changes in net interest income
+68,928
+(580)
+(11,753)
+Item
+(25,013)
+ANALYSIS OF THE AVERAGE YIELD OF LOANS AND ADVANCES TO CUSTOMERS BY MATURITY STRUCTURE
+Interest income on loans and advances to customers was RMB832,136 million, RMB65,729 million or 8.6% higher as
+compared to that of last year, mainly due to the increase in the size of loans and advances to customers.
+In RMB millions, except for percentages
+4,663
+Interest Income
+Note: Changes in volume are measured by the changes in average balances, while the changes in interest rate are measured by the changes
+in average interest rates. Changes resulted from the combination of volume and interest rate have been allocated to the changes
+resulted from business volume.
+43,915
+Interest Income on Loans and Advances to Customers
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the
+Regulation Governing
+Capital of Commercial Banks
+(Provisional) and the Measures
+for Administration of Financial
+Bond Issuance in China's
+Inter-bank Bond Market, as
+well as other applicable laws,
+regulations and normative
+documents
+Bond Issuance in China's
+Inter-bank Bond Market, as
+well as other applicable laws,
+regulations and normative
+documents
+Republic of China, the
+Regulation Governing
+Capital of Commercial Banks
+(Provisional) and the Measures
+for Administration of Financial
+Governed by the Commercial
+Banking Law of the People's
+ISIN: USY39656AC06
+The Notes and the Fiscal
+Agency Agreement shall be
+governed by, and shall be
+construed in accordance with
+New York law, except that
+the provisions of the Notes
+relating to subordination shall
+be governed by, and construed
+in accordance with PRC law
+Tier 2 capital
+ISIN: US455881AD47
+Regulation S
+Main features of regulatory
+Tier 2 capital bonds
+The Bank
+1728022
+Tier 2 capital bonds
+The Bank
+1728021
+Including: Transition arrangement
+of Regulation Governing Capital
+Regulatory treatment
+Governing law(s) of the instrument
+Tier 2 capital
+Unique identifier
+Issuer
+capital instrument
+Rule 144A
+Tier 2 capital bonds
+The Bank
+Including: Eligible to the parent
+of Commercial Banks (Provisional)
+Accounting treatment
+Par value of instrument (in millions)
+Amount recognised in regulatory capital
+(in millions, as at the latest reporting date)
+Instrument type
+(In RMB millions, unless otherwise stated)
+company/group level
+RMB equivalent 10,127
+Tier 2 capital instrument
+Tier 2 capital instrument
+Tier 2 capital
+Tier 2 capital instrument
+Parent company/Group
+Parent company/Group
+Banks (Provisional)
+Governing Capital of Commercial
+arrangement of Regulation
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Including: Post-transition
+Parent company/Group
+Unaudited Supplementary Information To The Consolidated Financial Statements
+For the year ended 31 December 2021
+N/A
+Annual Report 2021
+Non-viability Trigger Event
+Full or partial write-down
+when a Non-viability Trigger
+Event occurs
+Permanent write-down
+Yes
+N/A
+N/A
+N/A
+N/A
+Including: If write-down, permanent or temporary
+Including: If write-down, full or partial
+Including: If write-down, write-down trigger(s)
+Write-down feature
+instrument it converts into
+Including: If convertible, specify issuer of
+type convertible into
+Including: If convertible, specify instrument
+optional conversion
+Original date of issuance
+Including: If convertible, mandatory or
+N/A
+Including: If convertible, conversion rate
+N/A
+N/A
+Yes
+Non-viability Trigger Event
+Full or partial write-down
+when a Non-viability Trigger
+Event occurs
+Permanent write-down
+N/A
+N/A
+N/A
+No
+No
+No
+debts and tier 2 capital bonds
+general debts, subordinated
+Subordinated to deposits,
+291
+Subordinated to deposits,
+general debts, subordinated
+debts and tier 2 capital bonds
+N/A
+Including: If yes, specify non-compliant features
+Non-compliant transitioned features
+(specify instrument type immediately senior to
+instrument)
+Position in subordination hierarchy in liquidation
+description of write-up mechanism
+Including: If temporary write-down,
+Non-viability Trigger Event
+Full or partial write-down
+when a Non-viability Trigger
+Event occurs
+Permanent write-down
+N/A
+Yes
+Subordinated to deposits,
+general debts, subordinated
+debts and tier 2 capital bonds
+Perpetual or dated
+Tier 2 capital bonds
+Issuer call (subject to prior supervisory approval)
+N/A
+N/A
+N/A
+Including: If convertible, specify instrument type
+optional conversion
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+No
+No
+convertible into
+Including: If convertible, specify issuer of
+N/A
+N/A
+Including: If write-down, permanent or temporary
+Partial or full
+write-down
+N/A
+non-viable
+Issuer would become
+(i) CBIRC having decided that
+a write-down is necessary,
+without which the Issuer
+would become non-viable;
+or (ii) any relevant authority
+having decided that a public
+sector injection of capital
+or equivalent support is
+necessary, without which the
+Whichever occurs earlier:
+Issuer would become
+non-viable
+Partial or full
+write-down
+Whichever occurs earlier:
+(i) CBIRC having decided that
+a write-down is necessary,
+without which the Issuer
+would become non-viable;
+or (ii) any relevant authority
+having decided that a public
+sector injection of capital
+or equivalent support is
+necessary, without which the
+No
+Yes
+(i) CBIRC having decided that
+a write-down is necessary,
+without which the Issuer
+would become non-viable;
+or (ii) any relevant authority
+having decided that a public
+sector injection of capital
+or equivalent support is
+necessary, without which the
+Including: If write-down, full or partial
+Yes
+Whichever occurs earlier:
+Yes
+Including: If write-down, write-down trigger(s)
+Write-down feature
+instrument it converts into
+N/A
+Issuer would become
+non-viable
+Partial or full
+write-down
+Tier 2 capital bonds
+Tier 2 capital bonds
+Including: If convertible, mandatory or
+8 November 2022, in full
+amount
+N/A
+N/A
+N/A
+22 November 2027
+8 November 2027
+Yes
+No
+21 September 2025
+Debt securities issued
+20 November 2017
+Dated
+RMB44,000
+Yes
+22 November 2022, in full
+RMB44,000
+RMB44,000
+RMB44,000
+Debt securities issued
+21 September 2015
+Dated
+USD2,000
+ICBC
+292
+Including: Fixed or floating dividend/coupon
+Including: Coupon rate and any related index
+Including: Existence of a dividend stopper
+Including: Fully discretionary, partially discretionary
+or mandatory cancellation of coupons/dividends
+Including: Redemption incentive mechanism
+Including: Non-cumulative or cumulative
+call dates and redemption amount
+Including: Subsequent call dates, if applicable
+Coupons/dividends
+Including: Optional call date, contingent
+Debt securities issued
+6 November 2017
+Dated
+Including: Original maturity date
+amount
+N/A
+4.875%
+Including: If convertible, conversion rate
+Including: If convertible, conversion trigger(s)
+Including: If convertible, fully or partially
+Convertible or non-convertible
+capital instrument
+Main features of regulatory
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Information To The Consolidated Financial Statements
+Non-cumulative
+Non-cumulative
+Fixed
+Non-cumulative
+No
+No
+Mandatory
+No
+No
+Mandatory
+No
+Mandatory
+4.45%
+Fixed
+Fixed
+4.45%
+No
+N/A
+documents/China
+N/A
+N/A
+No
+No
+capital bonds
+N/A
+capital bonds
+No
+Including: If yes, specify non-compliant features
+Non-compliant transitioned features
+general debts, subordinated
+debts and tier 2 capital bonds
+Subordinated to deposits,
+N/A
+debts, tier 2 capital bonds
+and undated additional tier 1
+Subordinated to deposits,
+general debts, subordinated
+N/A
+N/A
+debts, tier 2 capital bonds
+and undated additional tier 1
+Subordinated to deposits,
+general debts, subordinated
+N/A
+N/A
+N/A
+Annual Report 2021
+289
+Unaudited Supplementary Information To The Consolidated Financial Statements
+and construed in accordance
+with PRC law and regulations
+ISIN: XS2383421711
+The Notes and any other non-
+contractual obligations arising
+out of or in connection with
+them shall be governed by
+and construed in accordance
+with English law. However,
+the provisions in the terms
+and conditions of the Notes
+relating to subordination of
+the Notes shall be governed by
+The Bank
+Regulation S
+Undated additional tier 1
+capital bonds (Offshore)
+Bond Issuance in China's
+Inter-bank Bond Market, as
+well as other applicable laws,
+regulations and normative
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the
+Regulation Governing
+Capital of Commercial Banks
+(Provisional) and the Measures
+for Administration of Financial
+The Bank
+2128021
+Undated additional tier 1
+capital bonds (Domestic)
+arrangement of Regulation
+description of write-up mechanism
+Position in subordination hierarchy in liquidation
+(specify instrument type immediately
+senior to instrument)
+Including: Post-transition
+Including: Transition arrangement
+of Regulation Governing Capital
+Regulatory treatment
+Governing law(s) of the instrument
+Unique identifier
+Issuer
+capital instrument
+Main features of regulatory
+(In RMB millions, unless otherwise stated)
+For the year ended 31 December 2021
+of Commercial Banks (Provisional)
+Undated additional tier 1
+capital bonds (Domestic)
+Including: If temporary write-down,
+Including: If write-down, permanent
+Write-down feature
+issuer of instrument it converts into
+Including: If convertible, specify
+instrument type convertible into
+Including: If convertible, specify
+Including: If convertible, mandatory or
+optional conversion
+N/A
+N/A
+Undated additional tier 1
+capital bonds (Domestic)
+the issuance plan
+Preference shares
+(Offshore)
+The initial conversion price is
+equal to the average trading
+price of the H shares of the
+Bank for the 20 trading days
+preceding 30 August 2018,
+the date of publication of the
+Board resolution in respect of
+issuance plan
+Mandatory
+equal to the
+average trading price of the
+A shares of the Bank for the
+20 trading days preceding
+30 August 2018, the date
+of publication of the Board
+resolution in respect of the
+The initial conversion price is
+Preference shares
+(Domestic)
+Including: If convertible, conversion rate
+capital instrument
+Permanent write-down
+Main features of regulatory
+Including: If write-down, write-down trigger(s)
+Including: If write-down, full or partial
+Mandatory
+Core tier 1 capital
+Trigger Event occurs
+Permanent write-down
+Trigger Event occurs; full write-
+down when a Tier 2 Capital
+Additional Tier 1 Capital
+write-down when an
+Full or partial
+N/A
+N/A
+Trigger Event
+Trigger Event or Tier 2 Capital
+or temporary
+Additional Tier 1 Capital
+N/A
+Yes
+No
+No
+N/A
+The Bank
+The Bank
+N/A
+Core tier 1 capital
+N/A
+The Bank
+2128044
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the
+Regulation Governing
+Capital of Commercial Banks
+(Provisional) and the Measures
+for Administration of Financial
+Undated additional tier 1
+capital bonds (Offshore)
+Fully discretionary
+4.04% (interest rate) before
+8 June 2026
+Yes
+Fixed to floating
+Undated additional tier 1
+capital bonds (Domestic)
+Including: If convertible, fully or partially
+Including: If convertible, conversion trigger(s)
+Convertible or non-convertible
+mandatory cancellation of coupons/dividends
+Including: Redemption incentive mechanism
+Including: Non-cumulative or cumulative
+partially discretionary or
+Including: Existence of a dividend stopper
+Including: Fully discretionary,
+Including: Fixed or floating dividend/coupon
+Including: Coupon rate and any related index
+Coupons/dividends
+capital instrument
+Main features of regulatory
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Information To The Consolidated Financial Statements
+ICBC
+290
+Fixed to floating
+3.20% (interest rate) before
+24 September 2026
+Yes
+Fully discretionary
+Undated additional tier 1
+capital bonds (Domestic)
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+No
+No
+regulatory rules
+No
+Non-cumulative
+Non-cumulative
+No
+No
+No
+Fully discretionary
+Yes
+3.65% (interest rate) before
+26 November 2026
+Fixed to floating
+Non-cumulative
+in full or in part on each
+Distribution Payment Date
+since the First Redemption
+Date (26 November 2026).
+The Issuer has the right to
+redeem the present bonds in
+full rather than in part if the
+present bonds are no longer
+qualified as additional tier 1
+capital after
+they are issued due to
+unpredictable changes in
+26 November 2026
+in full or partial amount
+Redemption of present bonds
+No maturity date
+Yes
+The First Redemption Date is
+Par value of instrument (in millions)
+capital (in millions, as at the latest reporting date)
+Amount recognised in regulatory
+USD6,160
+Other equity
+RMB equivalent 39,742
+RMB70,000
+Other equity
+Parent company/Group
+Additional tier 1 capital
+instrument
+instrument
+RMB69,992
+Additional tier 1 capital
+Accounting treatment
+Parent company/Group
+Banks (Provisional)
+Governing Capital of Commercial
+Additional tier 1 capital
+Additional tier 1 capital
+Additional tier 1 capital
+Additional tier 1 capital
+Additional tier 1 capital
+Additional tier 1 capital
+Bond Issuance in China's
+Inter-bank Bond Market, as
+well as other applicable laws,
+regulations and normative
+documents/China
+Including: Eligible to the parent company/group level
+Instrument type
+N/A
+Original date of issuance
+Including: Original maturity date
+Perpetual
+24 November 2021
+RMB30,000
+Other equity
+RMB29,997
+instrument
+Parent company/Group
+Additional tier 1 capital
+capital after
+they are issued due to
+unpredictable changes in
+regulatory rules
+The Issuer has the right to
+redeem the present bonds in
+full rather than in part if the
+present bonds are no longer
+qualified as additional tier 1
+24 September 2026,
+in full or partial amount
+Redemption of present bonds
+in full or in part on each
+Distribution Payment Date
+since the First Redemption
+Date (24 September 2026).
+Perpetual or dated
+The First Redemption Date is
+24 September 2021
+Perpetual
+they are issued due to
+unpredictable changes in
+regulatory rules
+capital after
+Date (8 June 2026).
+The Issuer has the right to
+redeem the present bonds in
+full rather than in part if the
+present bonds are no longer
+qualified as additional tier 1
+in full or in part on each
+Distribution Payment Date
+since the First Redemption
+The First Redemption
+Date is 8 June 2026,
+in full or partial amount
+Redemption of present bonds
+4 June 2021
+Perpetual
+No maturity date
+Yes
+Including: Subsequent call dates, if applicable
+Issuer call (subject to prior supervisory approval)
+Including: Optional call date, contingent call dates
+and redemption amount
+No maturity date
+Yes
+Permanent write-down
+Issuer call (subject to prior supervisory approval)
+Including: Optional call date, contingent
+Including: If temporary write-down,
+hybrid capital bonds; pari
+passu with other subordinated
+debts that have been issued by
+the Issuer and are pari passu
+with the present bonds; and
+pari passu with other tier 2
+capital instruments that will
+possibly be issued in the future
+and are pari passu with the
+present bonds
+No
+N/A
+Subordinated to depositor and
+general creditor; but senior
+to equity capital, additional
+tier 1 capital instruments and
+hybrid capital bonds; pari
+passu with other subordinated
+debts that have been issued by
+the Issuer and are pari passu
+with the present bonds; and
+pari passu with other tier 2
+capital instruments that will
+possibly be issued in the future
+and are pari passu with the
+present bonds
+No
+N/A
+N/A
+Subordinated to depositor and
+general creditor; but senior
+to equity capital, additional
+tier 1 capital instruments and
+hybrid capital bonds; pari
+passu with other subordinated
+debts that have been issued by
+the Issuer and are pari passu
+with the present bonds; and
+pari passu with other tier 2
+capital instruments that will
+possibly be issued in the future
+and are pari passu with the
+present bonds
+No
+N/A
+296
+ICBC
+Unaudited Supplementary Information To The Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Main features of regulatory
+capital instrument
+Tier 2 capital bonds
+The Bank
+1928012
+Issuer
+Subordinated to depositor and
+general creditor; but senior
+to equity capital, additional
+tier 1 capital instruments and
+Including: If yes, specify non-compliant features
+Non-compliant transitioned features
+Including: If write-down, permanent or temporary
+Including: If temporary write-down, description
+of write-up mechanism
+Position in subordination hierarchy in liquidation
+(specify instrument type immediately
+senior to instrument)
+Tier 2 capital bonds
+Tier 2 capital bonds
+N/A
+N/A
+N/A
+Yes
+Whichever occurs earlier:
+(i) CBIRC having decided that
+a write-down is necessary,
+without which the Issuer
+would become non-viable;
+or (ii) any relevant authority
+having decided that a public
+sector injection of capital
+or equivalent support is
+necessary, without which the
+Yes
+Whichever occurs earlier:
+(i) CBIRC having decided that
+a write-down is necessary,
+without which the Issuer
+would become non-viable;
+or (ii) any relevant authority
+having decided that a public
+sector injection of capital
+or equivalent support is
+necessary, without which the
+Unique identifier
+Issuer would become
+non-viable
+Partial or full
+write-down
+Permanent write-down
+Issuer would become
+non-viable
+Partial or full
+write-down
+Permanent write-down
+N/A
+Yes
+Whichever occurs earlier:
+(i) CBIRC having decided that
+a write-down is necessary,
+without which the Issuer
+would become non-viable;
+or (ii) any relevant authority
+having decided that a public
+sector injection of capital
+or equivalent support is
+necessary, without which the
+Issuer would become
+non-viable
+Partial or full
+write-down
+Permanent write-down
+Including: If write-down, full or partial
+N/A
+Tier 2 capital bonds
+Governing law(s) of the instrument
+in China's Inter-bank
+Bond Market, as well
+Par value of instrument (in millions)
+Accounting treatment
+Original date of issuance
+Perpetual or dated
+Including: Original maturity date
+call dates and redemption amount
+Including: Subsequent call dates, if applicable
+Coupons/dividends
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Parent company/Group Parent company/Group Parent company/Group Parent company/Group
+Tier 2 capital
+instrument
+RMB10,000
+Tier 2 capital
+instrument
+RMB60,000
+(in millions, as at the latest reporting date)
+Amount recognised in regulatory capital
+Instrument type
+Including: Eligible to the parent
+company/group level
+as other applicable
+laws, regulations and
+normative documents
+Tier 2 capital bonds
+The Bank
+2028041
+Governed by the
+Commercial Banking
+Law of the People's
+Republic of China, the
+Regulation Governing
+Capital of Commercial
+Banks (Provisional)
+and the Measures
+for Administration of
+Financial Bond Issuance
+in China's Inter-bank
+Bond Market, as well
+as other applicable
+laws, regulations and
+normative documents
+Tier 2 capital bonds Tier 2 capital bonds
+The Bank
+2028049
+Governed by the
+Commercial Banking
+Law of the People's
+Republic of China, the
+Regulation Governing
+Capital of Commercial
+Banks (Provisional)
+and the Measures
+for Administration of
+Financial Bond Issuance
+in China's Inter-bank
+Bond Market, as well
+Governed by the
+Commercial Banking
+Law of the People's
+Republic of China, the
+Regulation Governing
+Capital of Commercial
+Banks (Provisional)
+and the Measures
+for Administration of
+Financial Bond Issuance
+as other applicable
+laws, regulations and
+normative documents
+Governed by the
+Commercial Banking
+Law of the People's
+Republic of China, the
+Regulation Governing
+Capital of Commercial
+Banks (Provisional)
+and the Measures
+for Administration of
+Financial Bond Issuance
+in China's Inter-bank
+Bond Market, as well
+as other applicable
+laws, regulations and
+normative documents
+Regulatory treatment
+Including: Transition arrangement
+of Regulation Governing Capital
+of Commercial Banks (Provisional)
+Including: Post-transition
+arrangement of Regulation
+Governing Capital of Commercial
+Banks (Provisional)
+The Bank
+2028050
+Including: If write-down, write-down trigger(s)
+Write-down feature
+instrument it converts into
+25 March 2029
+25 March 2034
+Issuer call (subject to prior supervisory approval)
+Yes
+Yes
+26 April 2029
+Yes
+Including: Optional call date, contingent call dates 25 March 2024, in full amount 25 March 2029, in full amount
+26 April 2024, in full amount
+and redemption amount
+Including: Subsequent call dates, if applicable
+N/A
+N/A
+N/A
+Coupons/dividends
+Including: Fixed or floating dividend/coupon
+Including: Coupon rate and any related index
+Including: Existence of a dividend stopper
+Including: Fully discretionary, partially discretionary
+or mandatory cancellation of coupons/dividends
+Including: Redemption incentive mechanism
+Including: Non-cumulative or cumulative
+Convertible or non-convertible
+Including: If convertible, conversion trigger(s)
+Including: Original maturity date
+Debt securities issued
+21 March 2019
+Dated
+Debt securities issued
+21 March 2019
+Dated
+Perpetual or dated
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Amount recognised in regulatory capital
+(in millions, as at the latest reporting date)
+Par value of instrument (in millions)
+Accounting treatment
+Original date of issuance
+Parent company/Group
+Parent company/Group
+Parent company/Group
+Fixed
+Tier 2 capital instrument
+Tier 2 capital instrument
+RMB45,000
+RMB10,000
+RMB45,000
+RMB10,000
+RMB45,000
+RMB45,000
+Debt securities issued
+24 April 2019
+Dated
+Tier 2 capital instrument
+4.26%
+Fixed
+4.51%
+Fixed
+No
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+No
+N/A
+N/A
+N/A
+Annual Report 2021
+295
+Unaudited Supplementary Information To The Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Main features of regulatory
+capital instrument
+Including: If convertible, specify issuer of
+N/A
+RMB60,000
+No
+Non-cumulative
+4.40%
+No
+No
+No
+Mandatory
+Mandatory
+Mandatory
+Including: If convertible, fully or partially
+Including: If convertible, conversion rate
+Non-cumulative
+Including: If convertible, mandatory or
+Including: If convertible, specify instrument type
+N/A
+N/A
+N/A
+convertible into
+No
+No
+No
+Non-cumulative
+optional conversion
+Permanent write-down
+Tier 2 capital
+instrument
+RMB30,000
+N/A
+N/A
+write-up mechanism
+298
+ICBC
+Including: Eligible to the parent
+Banks (Provisional)
+Governing Capital of Commercial
+arrangement of Regulation
+Tier 2 capital bonds
+Tier 2 capital
+Tier 2 capital bonds
+Tier 2 capital
+Tier 2 capital bonds
+Tier 2 capital
+Including: Post-transition
+capital instrument
+Main features of regulatory
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Information To The Consolidated Financial Statements
+Tier 2 capital
+Tier 2 capital
+Permanent write-down
+Permanent write-down
+non-viable
+Partial or full
+write-down
+non-viable
+Partial or full
+write-down
+relevant authority
+having decided that a
+public sector injection
+of capital or equivalent
+support is necessary,
+without which the
+Issuer would become
+non-viable
+Partial or full
+write-down
+Permanent write-down
+permanent or temporary
+Including: If temporary write-down,
+description of
+N/A
+Including: If write-down,
+Yes
+Whichever occurs
+Tier 2 capital
+earlier: (i) CBIRC having
+decided that a write-
+down is necessary,
+without which the
+Issuer would become
+non-viable; or (ii) any
+N/A
+Yes
+Whichever occurs
+earlier: (i) CBIRC having
+decided that a write-
+down is necessary,
+without which the
+Issuer would become
+non-viable; or (ii) any
+relevant authority
+having decided that a
+public sector injection
+of capital or equivalent
+support is necessary,
+without which the
+Issuer would become
+Yes
+Whichever occurs
+earlier: (i) CBIRC having
+decided that a write-
+down is necessary,
+without which the
+Issuer would become
+non-viable; or (ii) any
+relevant authority
+having decided that a
+public sector injection
+of capital or equivalent
+support is necessary,
+without which the
+Issuer would become
+relevant authority
+having decided that a
+public sector injection
+of capital or equivalent
+support is necessary,
+without which the
+Issuer would become
+non-viable
+Partial or full
+write-down
+Permanent write-down
+Whichever occurs
+earlier: (i) CBIRC having
+decided that a write-
+down is necessary,
+without which the
+Issuer would become
+non-viable; or (ii) any
+regulations and normative
+documents
+Republic of China, the
+Regulation Governing
+Capital of Commercial Banks
+(Provisional) and the Measures
+for Administration of Financial
+Tier 2 capital bonds
+Subordinated to depositor and
+hybrid capital bonds; pari
+passu with other subordinated
+debts that have been issued by
+the Issuer and are pari passu
+with the present bonds; and
+pari passu with other tier 2
+capital instruments that will
+possibly be issued in the future
+and are pari passu with the
+present bonds
+Tier 2 capital bonds
+Subordinated to depositor and
+general creditor; but senior
+to equity capital, additional
+tier 1 capital instruments and
+pari passu with other
+subordinated debts
+senior to instrument)
+general creditor,
+(specify instrument type immediately
+Tier 2 capital bonds
+Subordinated to depositor and
+Position in subordination hierarchy in liquidation
+capital instrument
+Main features of regulatory
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Information To The Consolidated Financial Statements
+For the year ended 31 December 2021
+293
+Annual Report 2021
+N/A
+N/A
+N/A
+description of write-up mechanism
+general creditor; but senior
+to equity capital, additional
+tier 1 capital instruments and
+hybrid capital bonds; pari
+passu with other subordinated
+debts that have been issued by
+the Issuer and are pari passu
+with the present bonds; and
+pari passu with other tier 2
+capital instruments that will
+possibly be issued in the future
+and are pari passu with the
+present bonds
+Non-compliant transitioned features
+Tier 2 capital bonds
+The Bank
+1928011
+Governed by the Commercial
+Banking Law of the People's
+Bond Issuance in China's
+Inter-bank Bond Market, as
+well as other applicable laws,
+regulations and normative
+documents
+Tier 2 capital bonds
+The Bank
+1928007
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the
+Regulation Governing
+Capital of Commercial Banks
+(Provisional) and the Measures
+for Administration of Financial
+Bond Issuance in China's
+Inter-bank Bond Market, as
+well as other applicable laws,
+regulations and normative
+documents
+Tier 2 capital bonds
+The Bank
+1928006
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the
+Regulation Governing
+Capital of Commercial Banks
+(Provisional) and the Measures
+for Administration of Financial
+No
+N/A
+N/A
+No
+ICBC
+Bond Issuance in China's
+Inter-bank Bond Market, as
+well as other applicable laws,
+294
+Regulatory treatment
+Governing law(s) of the instrument
+Unique identifier
+Issuer
+capital instrument
+Main features of regulatory
+N/A
+Including: If yes, specify non-compliant features
+No
+Including: Transition arrangement
+of Regulation Governing Capital
+of Commercial Banks (Provisional)
+Yes
+Including: If write-down, full or partial
+Including: If write-down, write-down trigger(s)
+Including: Fully discretionary,
+Mandatory
+4.20%
+No
+Mandatory
+4.15%
+4.45%
+No
+Mandatory
+No
+Mandatory
+partially discretionary or
+mandatory cancellation of coupons/dividends
+Annual Report 2021
+297
+Unaudited Supplementary Information To The Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Main features of regulatory
+capital instrument
+Including: Redemption incentive mechanism
+Including: Non-cumulative or cumulative
+Convertible or non-convertible
+Including: If convertible, conversion trigger(s)
+Including: If convertible, fully or partially
+No
+Including: Existence of a dividend stopper
+4.69%
+Fixed
+RMB30,000
+Debt securities issued
+12 November 2020
+Dated
+instrument
+RMB10,000
+RMB10,000
+Debt securities issued
+12 November 2020
+Dated
+RMB10,000
+Debt securities issued
+24 April 2019
+Dated
+26 April 2034
+Yes
+Debt securities issued
+22 September 2020
+Dated
+24 September 2030
+Yes
+16 November 2030
+Yes
+Including: If convertible, conversion rate
+amount
+N/A
+16 November 2035
+Yes
+16 November 2030, in
+full amount
+N/A
+N/A
+N/A
+Including: Fixed or floating dividend/coupon
+Including: Coupon rate and any related index
+Fixed
+Fixed
+Fixed
+26 April 2029, in full 24 September 2025, in 16 November 2025, in
+full amount
+full amount
+Including: If convertible, mandatory or
+optional conversion
+Including: If convertible, specify instrument type
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+름름
+N/A
+N/A
+름름
+N/A
+N/A
+N/A
+N/A
+NA
+N/A
+N/A
+Tier 2 capital
+N/A
+N/A
+convertible into
+Including: If convertible, specify issuer of
+instrument it converts into
+Write-down feature
+Tier 2 capital bonds Tier 2 capital bonds Tier 2 capital bonds Tier 2 capital bonds
+No
+No
+No
+No
+N/A
+Non-cumulative
+Non-cumulative
+Non-cumulative
+No
+No
+No
+No
+N/A
+N/A
+N/A
+Non-cumulative
+Unaudited Supplementary Information To The Consolidated Financial Statements
+company/group level
+Instrument type
+Loans to financial institutions
+1,959,342
+150,050
+14
+Other contractual funding obligations
+77,534
+Credit and liquidity facilities
+77,512
+Other contingent funding obligations
+5,289,975
+16
+Total cash outflows
+106,897
+7,572,721
+Cash inflows
+15
+13
+Outflows related to loss of funding on debt products
+12
+1,111,158
+1,111,158
+Outflows related to derivative exposures and other collateral requirements
+1,261,208
+3,070,500
+Additional requirements, of which:
+11
+10
+11,893
+Secured funding
+69,361
+69,361
+Unsecured debt
+17
+2,541,472
+Secured lending (including reverse repos and securities borrowing)
+292,256
+Quantitative Information Disclosure of Net Stable Funding Ratio (NSFR) Using
+Advanced Capital Management Approach
+8.
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Information To The Consolidated Financial Statements
+112.20%
+5,207,733
+5,840,091
+ICBC
+302
+Data of the above table are the simple arithmetic average of the 92 calendar days' figures of the recent quarter.
+Liquidity coverage ratio (%)
+23
+Total net cash outflows
+22
+Total HQLA
+21
+Value
+18
+Inflows from fully performing exposures
+1,501,023
+963,271
+10
+19
+528,439
+Other cash inflows
+1,109,461
+20
+Total cash inflows
+3,141,741
+2,364,988
+Total Adjusted
+1,112,279
+5,699,530
+Non-operational deposits (all counterparties)
+789
+301
+Annual Report 2021
+8.14%
+8.69%
+35,300,338
+37,292,522
+Balance of adjusted on- and off-balance sheet assets
+Leverage ratio
+22
+21
+2,872,792
+3,241,364
+Net tier 1 capital
+20
+2,059,325
+Unaudited Supplementary Information To The Consolidated Financial Statements
+2,244,477
+19
+(3,668,662)
+(4,084,283)
+Less: Adjustments for conversion to credit equivalent amounts
+18
+5,727,987
+6,328,760
+Off-balance sheet exposure at gross notional amount
+17
+427,396
+448,122
+Total securities financing transaction exposures
+16
+Agent transaction exposures
+Balance of adjusted off-balance sheet assets
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+7.
+banking activities)
+2,187,318
+8,996,693
+Operational deposits (excluding those generated from correspondent
+4,798,151
+14,765,584
+Unsecured wholesale funding, of which:
+1,314,997
+13,149,973
+Less stable deposits
+2,063
+56,472
+Stable deposits
+3 4 5 6
+1,317,060
+13,206,445
+Retail deposits and deposits form small business customers of which:
+Quantitative Information Disclosure of Liquidity Coverage Ratio Using Advanced
+Capital Management Approach
+The Group discloses liquidity coverage ratio using Advanced Capital Management Approach in accordance with Measures for
+the Disclosure of Information on Liquidity Coverage Ratio by Commercial Banks (Yin Jian Fa [2015] No. 52).
+S/N Item
+High-quality liquid assets
+1
+Fourth-quarter 2021
+Total
+The Group discloses net stable funding ratio information in accordance with Measures for the Disclosure of Information on
+Net Stable Funding Ratio by Commercial Banks (Yin Bao Jian Fa [2019] No. 11).
+unweighted
+value
+value
+Total high-quality liquid assets (HQLA)
+5,840,091
+Cash outflows
+2
+Total
+weighted
+31 December 2021
+Unweighted value
+No. Item
+No maturity
+Loans to financial institutions
+18
+1,266
+Loans and securities:
+17
+operational purposes
+other financial institutions for
+104,314
+914
+1,457
+37,813
+165,913
+Deposits held at
+16
+3,844,322
+479,994
+liquid assets (HQLA)
+24,308,968
+Total NSFR high-quality
+15
+Required stable funding (RSF) item
+Total ASF
+14
+in the above categories
+equities not included
+629,422
+47,918
+606,619
+24,738
+1,002,488
+10,434
+All other liabilities and
+979,487
+2,622,168
+1,701
+16,955,026
+136
+Annual Report 2021
+credit risk
+standardised approach for
+under the Basel II
+less than or equal to 35%
+607,380
+298,663
+360,373
+491,444
+With a risk weight of
+21
+PSES, of which:
+sovereigns, central banks and
+non-financial institutions,
+small business customers,
+9,550,942 10,295,054
+2,194,968
+17,156,499
+72,421
+secured by Level 1 HQLA
+19
+Loans to financial institutions
+745,042
+247,457
+13
+171,280
+secured by non-Level 1 HQLA
+and unsecured loans to
+financial institutions
+20
+Loans to retail and
+2,327,769
+406,765
+15
+NSFR derivative liabilities
+629,422
+7 Wholesale funding:
+Less stable deposits
+Stable deposits
+5698 -
+9
+small business customers:
+12,295,976
+10,164
+17,538
+7,093,483
+6,534,836
+Retail deposits and deposits from
+4
+Other capital instruments
+37,393
+3,932,964
+3,932,964
+3,514,552
+Regulatory capital
+3
+2
+418,412
+3,514,552
+Capital:
+1
+Available stable funding (ASF) item
+value
+≥ 1 year
+Weighted
+6 months to
+< 1 year
+< 6 months
+418,412
+42,896
+10,502
+6,973
+654,537
+24,738
+1,002,488
+10,434
+Other liabilities:
+11
+matching interdependent assets
+10 Liabilities with
+3,025,033
+222,275
+294,806
+5,990,923
+344,641
+Other wholesale funding
+4,425,573
+4,293
+14,226
+93,225
+6,497,443
+7,050,587
+7,036
+3,191
+12,202,751
+12
+8,598,100
+309,032
+226,568
+7,450,606
+Operational deposits
+8,253,459
+574,876
+6,565,799
+29,188
+40,027
+CCR exposure for SFT assets
+299
+Annual Report 2021
+Debt securities issued
+13 December 2021
+RMB10,000
+RMB10,000
+Debt securities issued
+13 December 2021
+Debt securities issued
+19 January 2021
+RMB50,000
+RMB50,000
+RMB30,000
+RMB30,000
+Original date of issuance
+Accounting treatment
+Par value of instrument (in millions)
+Unaudited Supplementary Information To The Consolidated Financial Statements
+latest reporting date)
+Amount recognised in regulatory
+Instrument type
+company/group level
+Tier 2 capital instrument
+Tier 2 capital instrument
+Tier 2 capital instrument
+Parent company/Group
+Parent company/Group
+Parent company/Group
+Including: Eligible to the parent
+Banks (Provisional)
+Governing Capital of Commercial
+arrangement of Regulation
+Tier 2 capital
+capital (in millions, as at the
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Main features of regulatory capital instrument
+Perpetual or dated
+No
+Non-cumulative
+Non-cumulative
+Non-cumulative
+No
+No
+No
+Mandatory
+No
+No
+Mandatory
+Mandatory
+No
+3.74%
+3.48%
+Fixed
+Fixed
+Fixed
+4.15%
+Tier 2 capital bonds
+Dated
+Tier 2 capital bonds
+Dated
+Tier 2 capital bonds
+Dated
+Including: Original maturity date
+Issuer call (subject to prior supervisory approval)
+Including: Optional call date,
+contingent call dates and redemption amount
+Including: Subsequent call dates, if applicable
+Coupons/dividends
+Tier 2 capital
+Including: Fixed or floating dividend/coupon
+Including: Coupon rate and any related index
+Including: Existence of a dividend stopper
+Including: Fully discretionary, partially discretionary
+or mandatory cancellation of coupons/dividends
+Including: Redemption incentive mechanism
+Including: Non-cumulative or cumulative
+Convertible or non-convertible
+21 January 2031
+Yes
+21 January 2026, in full
+amount
+N/A
+15 December 2031
+Yes
+15 December 2026, in full
+amount
+15 December 2036
+Yes
+15 December 2031,
+in full amount
+N/A
+N/A
+Including: If convertible, conversion trigger(s)
+No
+Tier 2 capital
+Capital of Commercial Banks (Provisional)
+by the Issuer and are
+that have been issued
+subordinated debts
+instruments and
+hybrid capital bonds;
+pari passu with other
+Tier 2 capital bonds
+Subordinated to
+depositor and general
+creditor; but senior
+to equity capital,
+additional tier 1 capital
+No
+N/A
+present bonds
+that will possibly be
+issued in the future and
+are pari passu with the
+passu with other tier
+2 capital instruments
+pari passu with the
+present bonds; and pari
+by the Issuer and are
+that have been issued
+subordinated debts
+instruments and
+hybrid capital bonds;
+pari passu with other
+pari passu with the
+present bonds; and pari
+Subordinated to
+depositor and general
+creditor; but senior
+to equity capital,
+additional tier 1 capital
+No
+N/A
+present bonds
+are pari passu with the
+instruments and
+hybrid capital bonds;
+pari passu with other
+subordinated debts
+that have been issued
+by the Issuer and are
+pari passu with the
+present bonds; and pari
+passu with other tier
+2 capital instruments
+that will possibly be
+issued in the future and
+Subordinated to
+depositor and general
+creditor; but senior
+to equity capital,
+additional tier 1 capital
+Tier 2 capital bonds
+Including: If yes, specify non-compliant features
+Non-compliant transitioned features
+(specify instrument type immediately
+senior to instrument)
+Position in subordination hierarchy in liquidation
+capital instrument
+Main features of regulatory
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Information To The Consolidated Financial Statements
+Tier 2 capital bonds
+passu with other tier
+2 capital instruments
+that will possibly be
+issued in the future and
+are pari passu with the
+Regulation Governing
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Including: Transition arrangement of
+Bond Issuance in China's
+Inter-bank Bond Market, as
+well as other applicable laws,
+regulations and normative
+documents
+Republic of China, the
+Regulation Governing
+Capital of Commercial Banks
+(Provisional) and the Measures
+for Administration of Financial
+The Bank
+2128052
+Governed by the Commercial
+Banking Law of the People's
+Bond Issuance in China's
+Inter-bank Bond Market, as
+well as other applicable laws,
+regulations and normative
+documents
+Republic of China, the
+Regulation Governing
+Capital of Commercial Banks
+(Provisional) and the Measures
+for Administration of Financial
+Bond Issuance in China's
+Inter-bank Bond Market, as
+well as other applicable laws,
+regulations and normative
+documents
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the
+Regulation Governing
+Capital of Commercial Banks
+(Provisional) and the Measures
+for Administration of Financial
+Tier 2 capital bonds
+The Bank
+2128002
+Tier 2 capital bonds
+Regulatory treatment
+Governing law(s) of the instrument
+present bonds
+No
+N/A
+Tier 2 capital bonds
+Subordinated to
+depositor and general
+creditor; but senior
+to equity capital,
+additional tier 1 capital
+instruments and
+hybrid capital bonds;
+pari passu with other
+subordinated debts
+that have been issued
+Including: Post-transition
+by the Issuer and are
+pari passu with the
+present bonds; and pari
+are pari passu with the
+present bonds
+No
+N/A
+Main features of regulatory capital instrument
+Issuer
+Unique identifier
+passu with other tier
+2 capital instruments
+that will possibly be
+issued in the future and
+303
+No
+N/A
+31 December
+Less: Asset amounts deducted in determining Basel III tier 1 capital
+Balance of adjusted on-balance sheet assets (excluding derivatives and SFTs)
+Replacement cost associated with all derivatives transactions (i.e. net of
+eligible cash variation margin)
+On-balance sheet items (excluding derivatives and SFTs, but including
+collateral)
+56
+234
+1
+Item
+S/N
+(ii) Leverage Ratio, Net Tier 1 Capital, Balance of Adjusted On- and Off-balance Sheet Assets
+and Related Information
+35,300,338
+(16,053)
+2,059,325
+29,188
+85,324
+2021
+33,345,058
+(202,504)
+104,865
+(251,092)
+31 December
+2020
+31 December
+2021
+Balance of adjusted on- and off-balance sheet assets
+Other adjustments
+Adjustment for off-balance sheet items
+Adjustment for securities financing transactions
+Adjustments for derivative financial instruments
+Adjustments for fiduciary assets
+the scope of regulatory consolidation
+Total consolidated assets as per published financial statements
+Consolidated adjustments for accounting purposes but outside
+8
+3 4 5 6 7∞
+40,027
+2,244,477
+(17,138)
+37,292,522
+31 December
+2020
+34,436,056
+32,598,277
+14
+SFT assets
+gross
+Less: Netted amounts of cash payables and cash receivables of
+13
+398,208
+408,095
+Gross SFT assets (with no recognition of netting), after adjusting for sale
+accounting transactions
+12
+231,393
+181,005
+(12,858)
+(33,407)
+Less: Adjusted effective notional deductions for written credit derivatives
+Total derivative exposures
+11
+10
+42,669
+(17,138)
+34,418,918
+84,898
+(16,053)
+32,582,224
+146,069
+91,940
+67,843
+7
+2
+Add-on amounts for PFE associated with all derivatives transactions
+Gross-up for derivatives collateral provided where deducted from the
+balance sheet assets pursuant to the operative accounting framework
+Less: Deductions of receivables assets for cash variation margin provided in
+derivatives transactions
+Less: Exempted CCP leg of client-cleared trade exposures
+(128)
+(12,330)
+9
+Effective notional amount of written credit derivatives
+37,702
+8
+N/A
+1
+S/N
+Including: If write-down, full or partial
+Including: If write-down, write-down trigger(s)
+Write-down feature
+specify issuer of instrument it converts into
+Including: If convertible,
+specify instrument type convertible into
+Including: If convertible,
+optional conversion
+Including: If convertible, mandatory or
+Including: If convertible, conversion rate
+Including: If convertible, fully or partially
+Yes
+Yes
+N/A
+Including: If write-down, permanent or temporary
+Including: If temporary write-down,
+NA
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+description of write-up mechanism
+Position in subordination hierarchy in liquidation
+(specify instrument type immediately senior
+to instrument)
+Non-compliant transitioned features
+(i) Correspondence between Regulatory Leverage Ratio Items and Accounting Items and their
+differences
+The following information is disclosed in accordance with the Administrative Measures for Leverage Ratio of Commercial
+Banks (Revised) (CBRC No.1, 2015).
+6. Disclosure of Leverage Ratio
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Information To The Consolidated Financial Statements
+ICBC
+300
+N/A
+No
+the present bonds; and pari
+passu with other tier 2 capital
+instruments that will possibly
+be issued in the future and are
+pari passu with the present
+bonds
+other subordinated debts
+that have been issued by the
+Issuer and are pari passu with
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with
+(i) CBIRC having decided that
+a write-down is necessary,
+without which the Issuer
+would become non-viable;
+or (ii) any relevant authority
+having decided that a public
+sector injection of capital
+or equivalent support is
+necessary, without which the
+Issuer would become
+non-viable
+Partial or full write-down
+Permanent write-down
+N/A
+Whichever occurs earlier:
+Yes
+N/A
+other subordinated debts
+that have been issued by the
+Issuer and are pari passu with
+the present bonds; and pari
+passu with other tier 2 capital
+instruments that will possibly
+be issued in the future and are
+pari passu with the present
+bonds
+No
+Including: If yes, specify non-compliant features
+Whichever occurs earlier:
+(i) CBIRC having decided that
+a write-down is necessary,
+without which the Issuer
+would become non-viable;
+or (ii) any relevant authority
+having decided that a public
+sector injection of capital
+or equivalent support is
+necessary, without which the
+Issuer would become
+non-viable
+Partial or full write-down
+Permanent write-down
+N/A
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with
+other subordinated debts
+that have been issued by the
+Issuer and are pari passu with
+the present bonds; and pari
+passu with other tier 2 capital
+instruments that will possibly
+be issued in the future and are
+pari passu with the present
+bonds
+Item
+No
+Whichever occurs earlier:
+(i) CBIRC having decided that
+a write-down is necessary,
+without which the Issuer
+would become non-viable;
+or (ii) any relevant authority
+having decided that a public
+sector injection of capital
+or equivalent support is
+necessary, without which the
+Issuer would become
+non-viable
+Partial or full write-down
+Permanent write-down
+N/A
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with
+N/A
+19
+Unaudited Supplementary Information To The Consolidated Financial Statements
+For the year ended 31 December 2021
+No.
+Tel: 0451-84668023/84668577
+Fax: 0451-84698115
+HUBEI BRANCH
+Address: No. 31 Zhongbei Road,
+Wuchang District, Wuhan
+City, Hubei Province, China
+Postcode: 430071
+Tel: 027-69908676/69908658
+Fax: 027-69908040
+HUNAN BRANCH
+Address: No. 619 Furong Middle
+Road Yi Duan, Changsha
+City, Hunan Province,
+China
+Postcode: 410011
+Tel: 0731-84428833/84420000
+Fax: 0731-84430039
+JILIN BRANCH
+Postcode: 150010
+Address: No. 9559 Renmin Avenue,
+Jilin Province, China
+Postcode: 130022
+Tel: 0431-89569718/89569007
+Fax: 0431-88923808
+JIANGSU BRANCH
+Address: No. 408 Zhongshan
+South Road, Nanjing City,
+Jiangsu Province, China
+Postcode: 210006
+Tel: 025-52858000
+Fax: 025-52858111
+JIANGXI BRANCH
+Address: No. 233, Fuhe North Road,
+Nanchang City, Jiangxi
+Province, China
+Changchun City,
+China
+Daoli District, Harbin City,
+Heilongjiang Province,
+Address: No. 218 Zhongyang Street,
+GANSU BRANCH
+Address: No. 408 Qingyang Road,
+Chengguan District,
+Lanzhou City, Gansu
+Province, China
+Postcode: 730030
+Tel: 0931-8434172
+Fax: 0931-8435166
+GUANGDONG BRANCH
+Address: No. 123 Yanjiang West Road,
+Guangzhou City,
+Guangdong Province,
+China
+Postcode: 510120
+Tel: 020-81308130
+Fax: 020-81308789
+GUANGXI BRANCH
+Address: No. 15-1 Jiaoyu Road,
+Nanning City, Guangxi
+Zhuang Autonomous
+Region, China
+Postcode: 530022
+Tel: 0771-5316617
+Fax: 0771-5316617/2806043
+GUIZHOU BRANCH
+Address: No. 200 Zhonghua North
+Road, Yunyan District,
+Guiyang City, Guizhou
+Province, China
+Postcode: 550001
+Tel: 0851-88606280/88620018
+Fax: 0851-85963911
+HEILONGJIANG BRANCH
+Tel: 0371-65776888/65776808
+Fax: 0371-65776889/65776988
+Postcode: 450011
+Address: No. 99 Jingsan Road,
+Zhengzhou City, Henan
+Province, China
+HENAN BRANCH
+Tel: 0311-66000001
+Fax: 0311-66000002
+Postcode: 330008
+Postcode: 050051
+HEBEI BRANCH
+Tel: 0898-65303138/65342829
+Fax: 0898-65342986
+Postcode: 570203
+Road, Haikou City, Hainan
+Province, China
+Address: No. 54 Heping South
+HAINAN BRANCH
+Address: Tower B, Zhonghua
+Shangwu Tower, No. 188
+Zhongshan West Road,
+Shijiazhuang City, Hebei
+Province, China
+Fax: 0591-83353905/83347074
+Tel: 0791-86695682/86695018
+LIAONING BRANCH
+Address: No. 310 Jingsi Road, Jinan
+City, Shandong Province,
+China
+Postcode: 250001
+Tel: 0531-66681114
+Fax: 0531-87941749/66681200
+SHANXI BRANCH
+Address: No. 145 Yingze Street,
+Taiyuan City, Shanxi
+Province, China
+Postcode: 030001
+Tel: 0351-6248888/6248011
+Fax: 0351-6248004
+SHAANXI BRANCH
+Address: No. 395 Dongxin Street,
+Xi'an City, Shaanxi
+Province, China
+Postcode: 710004
+SHANDONG BRANCH
+Tel: 029-87602608/87602630
+SHANGHAI BRANCH
+Address: No. 8 Yincheng Road,
+Pudong New District,
+Shanghai, China
+Postcode: 200120
+Tel: 021-58885888/68088888
+Fax: 021-58882888
+SHENZHEN BRANCH
+Address: North Block Financial
+Center, No. 5055
+Shennan East Road, Luohu
+District, Shenzhen City,
+Guangdong Province,
+China
+Postcode: 518015
+Tel: 0755-82246400
+Fax: 0755-82246247
+SICHUAN BRANCH
+Address: No. 45 Zongfu Road,
+Jinjiang District, Chengdu
+City, Sichuan Province,
+China
+Fax: 029-87602999
+Fax: 0971-6152326
+Tel: 0971-6169722/6152326
+Postcode: 810001
+Address: No. 88 Nanjing North
+Road, Heping District,
+Shenyang City, Liaoning
+Province, China
+Postcode: 110001
+Tel: 024-23491600
+Fax: 024-23491609
+INNER MONGOLIA BRANCH
+Address: No. 10 East 2nd Ring Road,
+Xincheng District, Hohhot
+City, Inner Mongolia
+Autonomous Region,
+China
+Postcode: 010060
+Tel: 0471-6940833/6940297
+Fax: 0471-6940048
+NINGBO BRANCH
+Address: No. 218 Zhongshan
+West Road, Ningbo City,
+Zhejiang Province, China
+Postcode: 315010
+Tel: 0574-87361162
+Fax: 0574-87361190
+Annual Report 2021
+307
+China
+Address: No. 2 Shengli Road, Xining
+City, Qinghai Province,
+QINGHAI BRANCH
+Fax: 0532-85814711
+Tel: 0532-66211001
+Postcode: 266071
+Fax: 0791-86695230
+City, Shandong Province,
+China
+QINGDAO BRANCH
+Fax: 0951-5890917
+Tel: 0951-5890912
+Postcode: 750002
+NINGXIA BRANCH
+Address: No. 67 Zhonghai Road,
+Jinfeng District, Yinchuan
+City, Ningxia Autonomous
+Region, China
+List of Domestic and Overseas Branches and Offices
+Address: No. 25 Shandong Road,
+Shinan District, Qingdao
+Postcode: 610020
+Tel: 0591-88087819/88087000
+Fuzhou City, Fujian
+Province, China
+credit risk
+Annual Report 2021
+305
+Unaudited Supplementary Information To The Consolidated Financial Statements
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+No.
+Item
+24
+Securities that are not in
+default and do not qualify as
+HQLA, including
+exchange-traded equities
+30 September 2021
+Unweighted value
+standardised approach for
+No maturity
+1,204
+6 months to
+< 1 year
+≥ 1 year
+122,331
+837,786
+Weighted
+value
+954,346
+25
+Assets with matching
+interdependent liabilities
+225
+26
+Other assets:
+27
+Physical traded commodities,
+including gold
+< 6 months
+358,325
+under the Basel II
+less than or equal to 35%
+5,248,281
+12,105
+secured by non-Level 1 HQLA
+and unsecured loans to
+financial institutions
+20
+20
+Loans to retail and
+2,285,305
+2,251,951
+9,481,714
+10,237,311
+small business customers,
+non-financial institutions,
+sovereigns, central banks and
+PSES, of which:
+21
+With a risk weight of
+387,544
+380,370
+6,174,334
+16,370
+426
+2,854
+1,811
+428
+With a risk weight of
+Residential mortgages, of which:
+28
+22
+22
+standardised approach for
+credit risk
+under the Basel II
+less than or equal to 35%
+562,690
+292,979
+23
+Postcode: 350005
+Assets posted as initial margin for
+398,452
+Net Stable Funding Ratio (%)
+128.18%
+The amount of derivative liabilities shall be filled in for this item, which is the amount of NSFR derivative liabilities without
+regard to maturity before deducting variation margin. It is excluded from the item 26 "Other assets".
+306
+ICBC
+List of Domestic and Overseas Branches and Offices
+Domestic Institutions
+ANHUI BRANCH
+Address: No. 189 Wuhu Road,
+Hefei City, Anhui Province,
+China
+Postcode: 230001
+Tel: 0551-62869178/62868101
+Fax: 0551-62868077
+BEIJING BRANCH
+34
+Address: Tower B, Tianyin Mansion,
+No. 2 Fuxingmen South
+Street, Xicheng District,
+Beijing, China
+Tel: 010-66410579
+Fax: 010-66410579
+CHONGQING BRANCH
+Address: No. 61 Taichang Road,
+Nan'an District,
+Chongqing, China
+Postcode: 400061
+Tel: 023-62918002
+Fax: 023-62918059
+DALIAN BRANCH
+Address: No. 5 Zhongshan Square,
+Dalian City, Liaoning
+Province, China
+Postcode: 116001
+Tel: 0411-82378888
+Fax: 0411-82808377
+FUJIAN BRANCH
+Address: No. 108 Gutian Road,
+Postcode: 100031
+246,740
+19,015,607
+Total RSF
+33
+33,460
+127,440
+767,339
+39,435
+35,643
+30,297
+derivative contracts and
+contributions to
+default funds of CCPs
+29
+23
+NSFR derivative assets
+30
+NSFR derivative liabilities with
+63,978
+18,076
+50,086*
+8,051,576
+Off-balance sheet items
+32
+in the above categories
+669,514
+27,819
+338,265
+46,394
+33,460
+291,871
+All other assets not included
+31
+posted
+additional variation margin
+10,017
+398,452
+Tel: 028-82866000
+Fax: 028-82866025
+TIANJIN BRANCH
+Address: No. 123 Weidi Road, Hexi
+District, Tianjin, China
+Weighted
+value
+≥ 1 year
+6 months to
+< 1 year
+< 6 months
+No maturity
+Regulatory capital
+Available stable funding (ASF) item
+No.
+2
+Capital:
+1
+Item
+30 September 2021
+Unweighted value
+For the year ended 31 December 2021
+(In RMB millions, unless otherwise stated)
+3,379,104
+Unaudited Supplementary Information To The Consolidated Financial Statements
+304
+The amount of derivative liabilities shall be filled in for this item, which is the amount of NSFR derivative liabilities without
+regard to maturity before deducting variation margin. It is excluded from the item 26 "Other assets".
+(*)
+247,195
+19,262,629
+126.20%
+Net Stable Funding Ratio (%)
+34
+Total RSF
+33
+8,033,526
+Off-balance sheet items
+32
+the above categories
+731,640
+82,150
+ICBC
+358,573
+3,379,104
+358,573
+7,724,111
+228,739
+286,206
+6,778,034
+8,877,598
+Wholesale funding:
+7
+12,178,241
+3,751
+6,666
+7,150,972
+6,369,573
+Less stable deposits
+96,838
+6,613
+5,065
+50,721
+3,737,677
+3,737,677
+3
+Other capital instruments
+4
+Retail deposits and deposits from
+6,408,762
+37,139
+7,201,693
+10,364
+12,275,079
+small business customers:
+569% o
+Stable deposits
+39,189
+11,731
+8
+418,055
+All other assets not included in
+default and do not qualify as
+962,321
+856,337
+174,658
+289,424
+1,266
+Securities that are not in
+24
+credit risk
+10,029
+14,451
+value
+5,419,938
+6,376,331
+3,384
+429
+HQLA, including
+2,093
+428
+Weighted
+6 months to
+< 1 year
+< 6 months
+No maturity
+Unweighted value
+31 December 2021
+standardised approach for
+under the Basel II
+less than or equal to 35%
+With a risk weight of
+23
+Residential mortgages, of which:
+22
+Item
+≥ 1 year
+exchange-traded equities
+25
+Assets with matching
+31
+posted
+11,320
+56,602*
+13,883
+61,801
+additional variation margin
+NSFR derivative liabilities with
+NSFR derivative assets
+default funds of CCPs
+contributions to
+derivative contracts and
+30
+2
+29
+3,942
+4,638
+interdependent liabilities
+25
+26
+Other assets:
+27
+Physical traded commodities,
+312,841
+329,722
+16,881
+37,139
+148,589
+775,134
+14,349
+including gold
+28
+Assets posted as initial margin for
+418,055
+Operational deposits
+8,523,272
+590,924
+Xicheng District, Beijing,
+China
+Postcode: 100033
+Tel: 010-66583349
+Fax: 010-66583158
+ICBC Financial Leasing Co., Ltd.
+Address: Taida MSD-B1,
+No. 62 Second Street,
+Economic Development
+Zone, Tianjin, China
+Postcode: 300457
+Tel: 022-66283766/010-66105888
+Fax: 022-66224510/010-66105999
+ICBC-AXA Assurance Co., Ltd.
+Address: 19/F Mirae Asset Tower,
+No. 166 Lujiazui Ring
+Road, Pudong New Area,
+Shanghai, China
+Postcode: 200120
+Tel: 021-58792288
+Fax: 021-58792299
+ICBC Financial Asset Investment
+Co., Ltd.
+Address: 19-20/F, Tower B, Yang
+Zi S&T Innovation Center
+Phase I, Jiangbei New
+Area, No. 211 Pubin Road,
+Nanjing City, Jiangsu
+Province, China
+Postcode: 211800
+No. 5 Financial Street,
+Tel: 025-58172219
+Address: No. 6 Financial Street,
+Xicheng District,
+Beijing, China
+Postcode: 100032
+Tel: 010-86509184
+Fax: 010-86509901
+Chongqing Bishan ICBC Rural
+Bank Co., Ltd.
+Address: No.8 Xianshan Road,
+Biquan Street, Bishan
+District, Chongqing, China
+Postcode: 402760
+Tel: 023-85297704
+Fax: 023-85297709
+Zhejiang Pinghu ICBC Rural
+Bank Co., Ltd.
+ICBC Wealth Management Co.,
+Ltd.
+Address: Tower A, Xinsheng Plaza,
+Management Co., Ltd.
+ICBC Credit Suisse Asset
+Postcode: 300074
+Tel: 022-28400648
+Fax: 022-28400123/022-28400647
+XIAMEN BRANCH
+Address: No. 17 Hubin North
+Road, Xiamen City, Fujian
+Province, China
+Postcode: 361012
+Tel: 0592-5292000
+Fax: 0592-5054663
+XINJIANG BRANCH
+Address: No. 231 Renmin Road,
+Tianshan District, Urumqi,
+Xinjiang Autonomous
+Region, China
+Postcode: 830002
+Tel: 0991-5981888
+Fax: 0991-2828608
+TIBET BRANCH
+Address: No. 31 Jinzhu Mid-Rd.,
+Lhasa, Tibet Autonomous
+Region
+Postcode: 850000
+Fax: 0571-87808207
+Tel: 0571-87803888
+Postcode: 310016
+Hangzhou City, Zhejiang
+Province, China
+Address: No. 66 Juyuan Road,
+Jianggan District,
+ZHEJIANG BRANCH
+Address: No.258 Chengnan West
+Fax: 0871-63134637
+Postcode: 650021
+Qingnian Road, Kunming
+City, Yunnan Province,
+China
+Address: Bank Mansion, No. 395
+YUNNAN BRANCH
+Fax: 0891-6898001
+Tel: 0891-6898002
+Tel: 0871-65536313
+Road, Pinghu City,
+Zhejiang Province, China
+Postcode: 314200
+the above categories
+equities not included in
+637,737
+45,902
+609,266
+32,890
+893,556
+12,026
+All other liabilities and
+13
+NSFR derivative liabilities
+12
+637,737
+655,168
+32,890
+893,556
+12,026
+Other liabilities:
+9
+Other wholesale funding
+354,326
+6,187,110
+6,131
+280,075
+1,459
+14
+4,561,622
+3,162,489
+10
+Liabilities with
+matching interdependent assets
+123
+11
+227,280
+(In RMB millions, unless otherwise stated)
+Total ASF
+15
+Tel: 0573-85139616
+Fax: 0573-85139626
+308
+ICBC
+secured by Level 1 HQLA
+450,640
+150,690
+338,972
+869,764
+16,962,615
+72,037
+16,646,113
+1,589
+2,716,285
+177
+3,989,223
+474,018
+Loans to financial institutions
+18
+1,204
+Loans and securities:
+Required stable funding (RSF) item
+Total NSFR high-quality
+928,319
+liquid assets (HQLA)
+16
+Deposits held at
+24,374,604
+169,469
+2,362
+828
+110,594
+other financial institutions for
+operational purposes
+17
+47,218
+Tier 2 capital bonds
+The Bank
+2128051
+Governed by the Commercial
+Banking Law of the People's
+35,171,383
+Address: 1185 Avenue of the Americas,
+16th Floor, New York,
+Email: icbcsg@sg.icbc.com.cn
+Tel: +65-65381066
+Fax: +65-65381370
+SWIFT: ICBKSGSG
+PT. Bank ICBC Indonesia
+Address: The City Tower 32nd Floor,
+JI. M.H. Thamrin No. 81,
+Jakarta Pusat 10310,
+Indonesia
+Email: cs@ina.icbc.com.cn
+Tel: +62-2123556000
+Fax: +62-2131996016
+SWIFT: ICBKIDJA
+Industrial and Commercial Bank
+of China (Malaysia) Berhad
+Address: Level 10, Menara Maxis,
+Kuala Lumpur City Centre,
+50088 Kuala Lumpur,
+Malaysia
+Email: icbcmalaysia@my.icbc.com.cn
+Tel: +603-23013399
+Fax: +603-23013388
+SWIFT: ICBKMYKL
+Industrial and Commercial Bank
+of China Limited, Manila Branch
+Address: 24F, The Curve,
+Address: 6 Raffles Quay #12-01,
+Singapore 048580
+32nd Street Corner,
+Email: info@ph.icbc.com.cn
+Tel: +63-282803300
+Fax: +63-284032023
+SWIFT: ICBKPHMM
+Industrial and Commercial Bank
+of China (Thai) Public Company
+Limited
+Address: 622 Emporium Tower
+11th-13th Fl., Sukhumvit
+3rd Ave, BGC, Taguig City,
+Manila 1634, Philippines
+Industrial and Commercial Bank
+of China Limited, Singapore
+Branch
+Fax: +976-77108866
+Email: mgdbcgw@dccsh.icbc.com.cn
+Tel: +976-77108822,
++976-77106677
+Tel: +853-28555222
+Fax: +853-28338064
+SWIFT: ICBKMOMX
+Industrial and Commercial Bank
+of China Limited, Macau Branch
+Address: Alm. Dr. Carlos
+d'Assumpcao,
+No.393-437, 9 Andar,
+Edf. Dynasty Plaza,
+Macau SAR, China
+Tel: +853-28555222
+Fax: +853-28338064
+SWIFT: ICBKMOMM
+Asia-Pacific
+Industrial and Commercial Bank
+of China Limited, Tokyo Branch
+Address: 5-1 Marunouchi 1-Chome,
+Chiyoda-Ku Tokyo,
+100-6512, Japan
+Email: icbctokyo@icbc.co.jp
+Tel: +813-52232088
+Fax: +813-52198525
+SWIFT: ICBKJPJT
+Industrial and Commercial Bank
+of China Limited, Seoul Branch
+Address: 16th Floor, Taepyeongno
+Bldg., #73 Sejong-daero,
+Jung-gu, Seoul 100-767,
+Korea
+Email: icbcseoul@kr.icbc.com.cn
+Tel: +82-237886670
+Fax: +82-27553748
+SWIFT: ICBKKRSE
+Industrial and Commercial Bank
+of China Limited, Busan Branch
+Address: 1st Floor, ABL Life Bldg.,
+# 640 Jungang-daero,
+Busanjin-gu, Busan 47353,
+Korea
+Email: busanadmin@kr.icbc.com.cn
+Tel: +82-514638868
+Fax: +82-514636880
+SWIFT: ICBKKRSE
+Industrial and Commercial Bank
+of China Limited, Mongolia
+Representative Office
+Address: Suite 1108, 11th floor,
+Shangri-la Office,
+Shangri-la Centre,
+19A Olympic Street,
+Sukhbaatar District-1,
+Ulaanbaatar, Mongolia
+Road, Khlong Ton, Khlong
+Toei, Bangkok, Thailand
+Email: icbc@mc.icbc.com.cn
+Tel: +66-26295588
+Industrial and Commercial Bank
+of China Limited, Hanoi Branch
+Address: 3rd Floor Daeha Business
+Email: icbckh@kh.icbc.com.cn
+Tel: +855-23955880
+Fax: +855-23965268
+SWIFT: ICBKKHPP
+Industrial and Commercial
+Bank of China Limited, Yangon
+Branch
+Address: ICBC Center, Crystal
+Street 106, Phnom Penh,
+Cambodia
+Tower, Kyun Taw Road,
+Tel: +95-019339258
+Fax: +95-019339278
+SWIFT: ICBKMMMY
+Industrial and Commercial Bank
+of China (Almaty) Joint Stock
+Company
+Address: 150/230, Abai/Turgut
+Ozal Street, Almaty,
+Kazakhstan. 050046
+Email: office@kz.icbc.com.cn
+Tel: +7-7272377085
+SWIFT: ICBKKZKX
+Kamayut Township,
+Yangon, Myanmar
+Square, No. 19-20,
+Address: 17th Floor, Exchange
+Industrial and Commercial Bank
+of China Limited, Phnom Penh
+Branch
+Center, No.360, Kim Ma
+Str., Ba Dinh Dist., Hanoi,
+Vietnam
+Email: admin@vn.icbc.com.cn
+Tel: +84-2462698888
+Fax: +84-2462699800
+SWIFT: ICBKVNVN
+Annual Report 2021
+309
+List of Domestic and Overseas Branches and Offices
+Industrial and Commercial Bank
+of China Limited, Ho Chi Minh
+City Representative Office
+Address: 12th floor Deutsches Haus
+building, 33 Le Duan
+Street, District 1, Ho Chi
+Minh City, Vietnam
+Email: hcmadmin@vn.icbc.com.cn
+Tel: +84-28-35208991
+Industrial and Commercial Bank
+of China Limited, Vientiane
+Branch
+Address: Asean Road, Home
+No.358, Unit 12,
+Sibounheuang Village,
+Chanthabouly District,
+Vientiane Capital, Lao PDR
+Email: icbcvte@la.icbc.com.cn
+Tel: +856-21258888
+Fax: +856-21258897
+SWIFT: ICBKLALA
+Fax: +66-26639888
+SWIFT: ICBKTHBK
+Macau SAR, China
+Macau Landmark, 555
+Avenida da Amizade,
+Industrial and Commercial Bank
+of China (Macau) Limited
+Address: 18th Floor, ICBC Tower,
+Email: panama.branch@pa.icbc.com.cn
+Tel: +507-3205901
+Republic of Panama
+Panama City,
+Costa del Este
+Address: MMG Tower | 20th Floor |
+Ave. Paseo del Mar |
+Bank of China Limited, Panama
+Branch
+Industrial and Commercial
+SWIFT: ICBKPAPA
+Tel: +54-1148202200
+Email: alpha.sales@icbc.com.ar
+Tel: +54-1143949432
+ICBC Investments Argentina
+S.A.U. Sociedad Gerente de
+Fondos Comunes de Inversión
+Address: Blvd. Cecilia Grierson 355,
+Piso 14, (C1107CPG)
+CABA, Argentina
+Buenos Aires, Argentina
+Email: gongwen@ar.icbc.com.cn
+Tel: +54-1148203784
+Fax: +54-1148201901
+SWIFT: ICBKARBA
+Industrial and Commercial Bank
+of China (Argentina) S.A.U.
+Address: Blvd. Cecilia Grierson 355,
+(C1107 CPG)
+Email: consultas@pe.icbc.com.cn
+Tel: +51-16316800
+Fax: +51-16316802
+SWIFT: ICBKPEPL
+ICBC PERU BANK
+Address: Calle Las Orquideas 585,
+Oficina 501, San Isidro,
+Lima, Peru
+SWIFT: ICBKBRSP
+Inversora Diagonal S.A.U.
+Address: Florida 99, (C1105CPG)
+CABA, Argentina
+Africa
+Industrial and Commercial
+Bank of China Limited, African
+Representative Office
+Industrial and Commercial Bank
+of China (USA) NA
+55 Fuxingmennei Avenue, Xicheng District, Beijing, China
+www.icbc.com.cn, www.icbc-ltd.com
+中國北京市西城區復興門內大街55號
+Post Code: 100140
+郵編:100140
+ICBC
+呂
+ICBC
+312
+Tel: +27-608845323
+Email: icbcafrica@afr.icbc.com.cn
+South Africa, 2196
+Johannesburg, Gauteng,
+Rosebank,
+Address 2: T11, 2nd Floor East,
+30 Baker Street,
+Constantia, Cape Town,
+South Africa, 7806
+Address 1: 47 Price Drive,
+Tel: +55-1123956600
+Email: bxgw@br.icbc.com.cn
+Address: Av. Brigadeiro Faria Lima,
+3477-Block B-6 andar-SAO
+PAULO/SP-Brasil
+Industrial and Commercial Bank
+of China (Brasil) S.A.
+Address: 33/F, ICBC Tower,
+3 Garden Road, Central,
+Hong Kong SAR, China
+Email: icbchk@icbcasia.com
+Tel: +852-25881188
+Fax: +852-25881160
+SWIFT: ICBKHKHH
+Industrial and Commercial Bank
+of China (Asia) Limited
+Address: 33/F, ICBC Tower,
+3 Garden Road, Central,
+Hong Kong SAR, China
+Email: enquiry@icbcasia.com
+Tel: +852-35108888
+Fax: +852-28051166
+SWIFT: UBHKHKHH
+ICBC International Holdings
+Limited
+Address: 37/F, ICBC Tower,
+3 Garden Road, Central,
+Hong Kong SAR, China
+Email: info@icbci.com.hk
+Tel: +852-26833888
+Fax: +852-26833900
+SWIFT: ICILHKH1
+Industrial and Commercial Bank
+of China Limited, Hong Kong
+Branch
+Industrial and Commercial Bank
+of China Limited, Karachi Branch
+Address: 15th & 16th Floor, Ocean
+Hong Kong SAR and Macau
+SAR
+List of Domestic and Overseas Branches and Offices
+Email: info@icbc.com.mx
+Tel: +52-5541253388
+SWIFT: ICBKMXMM
+Del. Cuauhtemoc,
+Ciudad de Mexico
+Industrial and Commercial Bank
+of China Mexico S.A.
+Address: Paseo de la Reforma 250,
+Piso 18, Col. Juarez,
+C.P.06600,
+Fax: +1-4166072000
+SWIFT: ICBKCAT2
+Tel: +1-4163665588
+Email: info@icbk.ca
+Address: Unit 3710, Bay Adelaide
+Centre, 333 Bay Street,
+Toronto, Ontario,
+M5H 2R2, Canada
+Industrial and Commercial Bank
+of China (Canada)
+Tel: +1-2129937300
+Fax: +1-2129937349
+SWIFT: ICBKUS3F
+Email: info@icbkfs.com
+28th Floor, New York,
+NY, 10019, USA
+Industrial and Commercial Bank
+of China Financial Services LLC
+Address: 1633 Broadway,
+SWIFT: ICBKUS3N
+Fax: +1-2122193211
+Tel: +1-2122388208
+Email: info@us.icbc.com.cn
+NY 10036
+Overseas Institutions
+Tower, G-3,
+Email: icbc@mc.icbc.com.cn
+Pakistan.P.C:75600
+SWIFT: ICBKESMM
+Industrial and Commercial Bank
+of China (Europe) S.A. Poland
+Branch
+Address: Plac Trzech Krzyży 18,
+00-499, Warszawa, Poland
+Email: info@pl.icbc.com.cn
+Tel: +48-222788066
+Fax: +48-222788090
+SWIFT: ICBKPLPW
+Industrial and Commercial Bank
+of China (Europe) S.A. Greece
+Representative Office
+Address: Amerikis 13, Athens 106
+72 Greece
+Email: GAD@gr.icbc.com.cn
+Tel: +30-2166868888
+Fax: +30-2166868889
+ICBC (London) PLC
+Address: 81 King William Street,
+London EC4N 7BG, UK
+Fax: +34-912168866
+Email: admin@icbclondon.com
+Fax: +44-2073978899
+SWIFT: ICBKGB2L
+Industrial and Commercial
+Bank of China Limited, London
+Branch
+Address: 81 King William Street,
+London EC4N 7BG, UK
+Email: admin@icbclondon.com
+Tel: +44-2073978888
+Fax: +44-2073978890
+SWIFT: ICBKGB3L
+ICBC Standard Bank PLC
+Address: 20 Gresham Street,
+London, United Kingdom,
+EC2V 7JE
+Email: londonmarketing@
+icbcstandard.com
+Tel: +44-2073978888
+Address: Paseo de Recoletos, 12,
+28001, Madrid, España
+Email: gad.dpt@es.icbc.com.cn
+Tel: +34-912168837
+Industrial and Commercial Bank
+of China (Europe) S.A. Sucursal
+en España
+Email: hradmin@it.icbc.com.cn
+Tel: +39-0200668899
+Fax: +39-0200668888
+SWIFT: ICBKITMM
+Industrial and Commercial Bank
+of China (Europe) S.A. Paris
+Branch
+Address: 73 Boulevard Haussmann,
+75008, Paris, France
+Email: administration@fr.icbc.com.cn
+Tel: +33-140065858
+Fax: +33-140065899
+SWIFT: ICBKFRPP
+Industrial and Commercial
+Bank of China (Europe) S.A.
+Amsterdam Branch
+Address: Johannes Vermeerstraat
+7-9, 1071 DK,
+Amsterdam,
+the Netherlands
+Email: office@nl.icbc.com.cn
+Tel: +31-205706666
+Fax: +31-205706603
+SWIFT: ICBKNL2A
+Industrial and Commercial Bank
+of China (Europe) S.A. Brussels
+Branch
+Address: 81, Avenue Louise,
+1050 Brussels, Belgium
+Email: info@be.icbc.com.cn
+Tel: +32-2-5398888
+Fax: +32-2-5398870
+SWIFT: ICBKBEBB
+Industrial and Commercial Bank
+of China (Europe) S.A. Milan
+Branch
+Address: Via Tommaso Grossi 2,
+20121, Milano, Italy
+Tel: +44-2031455000
+Fax: +44-2031895000
+SWIFT: SBLLGB2L
+Bank ICBC (joint stock
+company)
+Address: Building 29,
+Serebryanicheskaya
+embankment, Moscow,
+Russia Federation 109028
+Email: service@ch.icbc.com.cn
+Tel: +41-58-9095588
+Fax: +41-58-9095577
+SWIFT: ICBKCHZZ
+ICBC Austria Bank GmbH
+Address: Kolingasse 4,
+1090 Vienna, Austria
+Email: generaldept@at.icbc.com.cn
+Tel: +43-1-9395588
+Fax: +43-1-9395588-6800
+SWIFT: ICBKATWW
+Americas
+Industrial and Commercial Bank
+Block-9, Scheme # 5,
+Main Clifton Road,
+Karachi,
+Address: 725 Fifth Avenue,
+20th Floor, New York,
+NY 10022, USA
+Email: info-nyb@us.icbc.com.cn
+Tel: +1-2128387799
+Fax: +1-2125752517
+SWIFT: ICBKUS33
+CH-8001, Zurich,
+Switzerland
+SWIFT: ICBKLULU
+Address: Nüschelerstrasse 1,
+SWIFT: ICBKCZPP
+Email: info@ms.icbc.com.cn
+Tel: +7-4952873099
+Fax: +7-4952873098
+SWIFT: ICBKRUMM
+ICBC Turkey Bank Anonim
+Şirketi
+Address: Maslak Mah. Dereboyu,
+2 Caddesi
+No:13 34398 Sariyer,
+İSTANBUL
+Email: gongwen@tr.icbc.com.cn
+Tel: +90-2123355011
+SWIFT: ICBKTRIS
+Annual Report 2021
+311
+List of Domestic and Overseas Branches and Offices
+Industrial and Commercial
+Bank of China Limited, Prague
+Branch, odštěpný závod
+Address: 12F City Empiria,
+Na Strži 1702/65,
+14000 Prague 4-Nusle,
+Czech Republic
+Email: info@cz.icbc.com.cn
+Tel: +420-237762888
+Fax: +420-237762899
+Industrial and Commercial Bank
+of China Limited, Beijing,
+Zurich Branch
+Fax: +352-26866666
+of China Limited, New York
+Branch
+Email: office@eu.icbc.com.cn
+Tel: +974-44072758
+Fax: +974-44072751
+SWIFT: ICBKQAQA
+Industrial and Commercial Bank
+of China Limited, Riyadh Branch
+Address: Level 4&8, A1 Faisaliah
+Tower Building
+No: 7277-King Fahad Road
+Al Olaya, Zip Code: 12212,
+Additional No.: 3333,
+Unit No.:95,
+Kingdom of Saudi Arabia
+Email: service@sa.icbc.com.cn
+Tel: +966-112899800
+Fax: +966-112899879
+SWIFT: ICBKSARI
+Industrial and Commercial
+Bank of China Limited, Kuwait
+Branch
+Address: Building 2A(Al-Tijaria
+Tower), Floor 7&8,
+Al-Soor Street, Al-Morqab,
+Block 3, Kuwait City,
+Kuwait
+Email: info@kw.icbc.com.cn
+Tel: +965-22281777
+Fax: +965-22281799
+Email: ICBCDOHA@doh.icbc.com.cn
+SWIFT: ICBKKWKW
+P.O. BOX: 11217
+Industrial and Commercial Bank
+of China Limited, Doha (QFC)
+Branch
+Email: service@pk.icbc.com.cn
+Tel: +92-2135208988
+Fax: +92-2135208930
+SWIFT: ICBKPKKA
+Tel: +352-2686661
+Industrial and Commercial
+Bank of China Limited, Mumbai
+Branch
+Industrial and Commercial Bank
+of China Limited, Dubai (DIFC)
+Branch
+Address: Floor 5&6, Gate Village
+Building 1, Dubai
+International Financial
+Center, Dubai,
+United Arab Emirates
+P.O. Box: 506856
+Email: dboffice@dxb.icbc.com.cn
+Tel: +971-47031111
+Fax: +971-47031199
+SWIFT: ICBKAEAD
+Industrial and Commercial Bank
+of China Limited, Abu Dhabi
+Branch
+Address: Addax Tower Offices
+5207, 5208 and 5209,
+Al Reem Island, Abu Dhabi,
+United Arab Emirates
+P.O. Box 62108
+Email: dboffice@dxb.icbc.com.cn
+Tel: +971-24998600
+Fax: +971-24998622
+SWIFT: ICBKAEAA
+Address: Level 20, Burj Doha, Al
+Corniche Street, West Bay,
+Doha, Qatar
+Industrial and Commercial
+Bank of China Limited, Sydney
+Branch
+Address: 801, 8th Floor, A Wing,
+One BKC, C-66, G
+Block, Bandra Kurla
+Complex, Bandra East,
+Mumbai-400051, India
+Email: icbcmumbai@india.icbc.com.cn
+Tel: +91-2271110300
+Fax: +91-2271110353
+SWIFT: ICBKINBB
+100 Barangaroo Avenue,
+Sydney NSW 2000
+Australia
+Email: icbc@icbc-ffm.de
+Tel: +49-6950604700
+Fax: +49-6950604708
+SWIFT: ICBKDEFF
+Industrial and Commercial Bank
+of China Limited, Luxembourg
+Branch
+Address: 32, Boulevard Royal,
+L-2449 Luxembourg,
+B.P.278 L-2012
+Luxembourg
+Address: Bockenheimer Anlage 15,
+60322 Frankfurt am Main,
+Germany
+Email: office@eu.icbc.com.cn
+Fax: +352-26866666
+SWIFT: ICBKLULL
+Industrial and Commercial Bank
+of China (Europe) S.A.
+Address: 32, Boulevard Royal,
+Address: Level 42, Tower 1,
+International Towers,
+Luxembourg
+Tel: +352-2686661
+Industrial and Commercial Bank
+of China Limited, Frankfurt
+Branch
+L-2449 Luxembourg,
+SWIFT: ICBKNZ22
+Email: info@icbc.com.au
+Tel: +612-94755588
+Europe
+Fax: +612-82885878
+SWIFT: ICBKAU2S
+Industrial and Commercial Bank
+of China (New Zealand) Limited
+Address: Level 11, 188 Quay Street,
+Auckland 1010,
+New Zealand
+Email: info@nz.icbc.com.cn
+Tel: +64-93747288
+Fax: +64-93747287
+B.P.278 L-2012
+310
+SWIFT: ICBKNZ2A
+Email: info@nz.icbc.com.cn
+Tel: +64-93747288
+Address: Level 11, 188 Quay Street,
+Auckland 1010,
+New Zealand
+Fax: +64-93747287
+Industrial and Commercial Bank
+of China Limited, Auckland
+Branch
+ICBC
+List of Domestic and Overseas Branches and Offices
+4
+ICBC
+34
+New breakthroughs have been achieved in customer base. The
+Bank deeply conducted the "net making and patching" program,
+expanded the customer base, improved customer quality, activated
+customer transactions, and enhanced customer expansion and
+maintenance capability. While focusing on high-quality customer
+marketing, the Bank vigorously expanded medium-sized enterprise
+customer groups to establish a coordinated, active and loyal
+customer base comprising large, medium and small enterprises. At
+the end of 2021, the number of corporate customers increased by
+12.1% over the end of the previous year to 9,691 thousand.
++
+51 Outlet Development
+Adhering to using corporate banking services as an important means
+to boost the high-quality development of the real economy, the Bank
+innovated the corporate credit layout of new manufacturing, new services,
+new basic industries and high-tech customer groups, improved the supply
+of financial resources for the key areas and weak links in the real economy,
+and actively shouldered the responsibilities as a large bank. At the end
+of 2021, corporate loans reached RMB12,194,706 million, representing
+an increase of RMB1,091,973 million or 9.8% over the end of last year.
+Corporate deposits stood at RMB13,331,463 million, representing an
+increase of RMB386,603 million or 3.0%.
+61 Major Controlled Subsidiaries
+and Equity Participating
+Company
+0.6
+54 Internationalized Operation
+Management, Employees
+and Institutions
+52 Human Resources
+51 Service Improvement
+Note: Please see "Note 48. to the Consolidated Financial Statements: Segment
+Information" for details.
+Corporate Banking
+4
+Discussion and Analysis
+by industry of loan customers
+67,325.58
+9.7%
+2,555
+Production and supply of
+74,551.60
+75,331.10
+12.5%
+Corporate loans of domestic branches
+● Water, environment and public
+utility management
+Manufacturing
+15.2%
+Leasing and commercial services
+25.8%
+Transportation, storage and
+Unit: RMB100 millions
+Corporate Deposits
+15.1%
+postal services
+140,569
+3,346
+100.0
+424,899
+Profit before
+0.6
+4,425
+0.6
+5,057
+Other
+42 Financial Market Business
+10.5
+83,931
+12.9
+111,278
+electricity, heat, gas and water
+Treasury operations
+392,126
+100.0
+taxation
+44 FinTech
+Other
+17.4
+68,199
+20.1
+85,326
+Treasury operations
+48 Internet Finance
+0.8
+44.5
+46.0
+195,658
+Personal banking
+37.5
+146,903
+33.1
+Corporate banking
+174,469
+⚫ Real estate
+Institutional Banking
+Wholesale and retail
+37
+Annual Report 2021
+At the end of 2021, the Bank maintained
+11,216 thousand corporate settlement accounts,
+representing an increase of 1,110 thousand over the
+end of the previous year. It had 1,609 thousand cash
+management customers, including 9,615 global cash
+management customers. The volume of corporate
+settlements reached RMB2,598.13 trillion.
+The Bank deeply served the broadest customer
+base, and made a breakthrough in "net making
+and patching" program. It gave full play to the
+advantages of settlement finance to serve large
+customers, and provided comprehensive financial
+services for group enterprises and large and
+medium enterprises relying on the advantages of
+cash management business. It served medium-sized
+customers with high-quality settlement products,
+upgraded the "ICBC Pooling" platform, embedded
+the "ICBC E Enterprise Payment" into the trading
+platform, and provided efficient online payment
+and settlement services for traders. It offered
+digital batch service for small and micro customers,
+embedded "non-financial + financial" services in
+enterprise operation and management through
+small and micro financial service platform, realized
+targeted marketing, big data operation and digital
+risk control, and effectively improved the coverage
+and capability of services for small and micro
+enterprises.
+The Bank provided high-quality account services in a
+customer-centric manner. It actively implemented the
+requirements for "delegating power, streamlining
+administration and optimizing government
+services" and strengthened the digital convenient
+service coverage of settlement accounts in various
+typical scenarios. It enhanced cooperation with
+government departments, and provided enterprises
+with source account opening services through the
+"Enterprise Link" business. It broadened customer
+base by platform, and made the account opening
+appointment interface available to help improve the
+business environment.
++
+Settlement and Cash Management
+of multi-level capital market, strove to be the capital
+hub and leading bank in the capital market, and
+signed a tripartite strategic cooperation agreement
+with the National Equities Exchange and Quotations
+Co., Ltd. and Beijing Stock Exchange. It helped
+with interbank risk prevention and control through
+FinTech, and provided nearly 30 small and medium
+banks, securities companies, insurance and other
+interbank customers with five categories of scientific
+and technological products, including "ICBC
+BRAINS" intelligent anti-money laundering system
+and credit management system.
+registration and settlement, guarantee funds,
+payment systems and other financial infrastructure
+customers, and facilitated the development of
+financial institutions through platform services. It was
+among those first successfully participating in the
+commodity clearing business in Shanghai Clearing
+House, and ranked first in the market in terms of
+contractual customers and clearing amount. It was
+also among those first obtaining the online financing
+qualification of standard warehouse receipts on
+Dalian Commodity Exchange and carried out the first
+interbank transaction. The Bank served the building
+The Bank built a new model of cooperation in
+financial institutions to serve the real economy.
+It improved the mechanism for customer service,
+established a "systematic, digital, ecological and
+professional" service system, and served thousands
+of customers of different types identified by level,
+class, group or category. It launched the "Gong
+Tong Ying", an innovative comprehensive service
+platform for financial customers, which provides
+customers with all-round and one-stop services. The
+Bank deepened financial infrastructure cooperation,
+optimized innovation support for exchanges,
+The Bank gave full play to the advantages of FinTech
+and tapped the growth potential in education,
+healthcare, public resources, social organizations and
+other fields. In the field of education, it took the lead
+in the industry to launch the "Education and Training
+Cloud" supervision platform, carried out IT-based
+fund supervision cooperation with 938 education
+authorities at all levels in China, and assisted to
+strengthen the management of education and
+training institutions and the supervision of training
+funds. In the medical field, the Bank launched
+the "ICBC Cloud Healthcare", an open platform
+of intelligent healthcare, and formed a matrix of
+intelligent healthcare products and services in 45
+sub-categories out of five categories, covering all
+services and products in line with the major policies
+on the national "healthcare, medical insurance and
+medicine" interconnection reform. It was awarded
+the "excellent case of digital healthcare innovation
+services" at the 16th China Health Information
+Technology Application and Exchange Conference
+of the Information Center of the National Health
+Commission. In the field of public resource trading,
+the Bank independently developed the "e-Enterprise
+Guarantee", a blockchain e-guarantee platform that
+provides a new online service mode of e-guarantee
+with automatic processing, real-time receiving and
+whole-process management in the field, and helps
+improve the business environment. In the field of
+social organizations, the Bank launched a "Civil
+Affairs Capital Verification Link" and cooperated
+with local civil affairs departments to provide
+online capital verification services for new social
+organizations.
++
++
+Discussion and Analysis
+ICBC
+Discussion and Analysis
+Strengthening Settlement Finance Support and
+Coordination to Serve the Bank's Strategy
+Facilitating to build the "No.1 Personal Bank”. The Bank promoted the interactions among government, business
+and consumption ("GBC") through ICBC e BillPay. In 2021, it handled payment services of RMB713 billion for
+customers, served 144 million individual customers in total, and saw an increase in the flows of both corporate and
+individual customer. In 2021, ICBC e Bill Pay was awarded the "Best Aggregate Payment Product in China" by The
+Asian Banker.
+Facilitating to build the "Preferred Bank for Foreign Exchange Business". It took a global response approach
+to extend global cash management services to more than 80 countries and regions. It deepened bank-enterprise
+cooperation, and effectively served 64 "going global" state-owned enterprises directly under the central government,
+accounting for 77% of total, and 149 customers out of the Fortune Global 500. In 2021, the Bank was awarded the
+"Best Asian International Cash Management Bank in Asia Pacific" by The Asian Banker.
+39.7
+ICBC
+38
+In 2021, the Bank acted as the lead underwriter for
+2,673 Chinese bond projects with a total value of
+RMB1,807,765 million, ranking first in the market for
+15 consecutive years. It acted as the lead underwriter
+for a total of RMB81,357 million worth of ESG bonds
+such as green bonds (including carbon neutrality
+bonds), sustainability-linked bonds and rural
+revitalization bonds, ranking first in the market.
+environmental protection and other industries.
+The Bank innovated equity financing products to
+help enterprises optimize their capital structure
+and provide fund support for major infrastructure
+projects. The Bank expanded actively managed
+asset securitization business to meet the needs of
+enterprises for comprehensive financial services.
+The Bank accelerated the financing rearrangement
+and enterprise debt restructuring, and mitigated the
+liquidity pressure and potential risks of customers.
+The Bank enriched the mobile scenarios of customer
+services, upgraded the functions of "ICBC e
+Confirmation Service", "ICBC e Intelligence", "ICBC
+e Security", "ICBC e RM" and "ICBC ISP" and
+enhanced the new driving force of digital services.
++
+advanced manufacturing, green
+36
+The Bank actively participated in publicly offered
+REITS to support infrastructure construction, and
+strengthened services for scientific and technological
+innovation,
+between
+commercial banking and
+The Bank assisted with the supply-side structural
+reform through the new model of investment-
+loan interconnection and interaction
++ The Bank served the high-quality development
+of the real economy, focusing on key areas such
+as the reform of state-owned enterprises, capital
+market, industrial integration, and the Belt and Road
+Initiative. As the first bank to issue more than RMB1
+trillion of M&A financing accumulatively, the Bank
+increased credit supply in manufacturing industry
+and maintained a leading position in domestic and
+overseas M&A markets. By number of M&A deals
+led by the Bank, the Bank ranked first in China
+in Refinitiv's ranking of Any Chinese Involvement
+Completed and first in the ranking of China
+Outbound Announced M&A.
+Investment Banking
+Facilitating to implement the Urban-Rural Collaborative Development Strategy. It was the first to launch
+the "rural collective intelligent account opening service", provided door-to-door services with portable intelligent
+terminals, and comprehensively improved the service experience of agro-related non-enterprise accounts. It carried
+out chain marketing with a focus on leading enterprises in agricultural industrialization, and assisted high-quality
+enterprises with reserve grain purchase projects.
+Facilitating to implement the Strategy for Sharpening Competitive Edge in Key Regions. Focusing on the
+building of two zones in Beijing, it launched the pilot project of domestic and foreign currency integrated cash pool.
+Focusing on the building of Guangdong-Hong Kong-Macao Greater Bay Area, the Bank took the lead in the industry
+to launch the universal free trade (FT) cash pool business in Guangzhou and Hengqin. Focusing on the Yangtze River
+Delta Integration, the Bank provided strategic customers with innovative services for cross-border cash pool under the
+Shanghai Free Trade Zone policy.
+investment banking.
+6.5%
+The Bank consolidated its dominant position in
+traditional fields such as finance and social security,
+and served the national reform. In the financial field,
+the Bank strengthened basic financial services for
+financial funds and provided high-quality financial
+services to financial departments and budget units
+at all levels; in the field of social security, "ICBC
+e Social Security" services were made available in
+all provinces and autonomous regions in China; in
+the field of agriculture, rural areas and farmers, it
+took the lead in the industry to launch the "Digital
+Villages" comprehensive service platform to assist
+agricultural and rural authorities at all levels in
+strengthening the standardized management of rural
+collective economy and improving the smart public
+services and social governance in rural areas, which
+have covered 31 provinces, 260 prefectures and
+cities across the country. The Bank has established
+information technology-based cooperation with
+770 district and county-level agricultural and rural
+departments. Its project was rated as "2021 Excellent
+Project of New Technology, New Product and New
+Model of Digital Agriculture in Rural Areas" by the
+Ministry of Agriculture and Rural Affairs.
+upgraded and built version 2.0 of the "ICBC Business
+Matchmaker", a cross-border matchmaking platform
+that provides intelligent, full-process and closed-
+loop cross-border matchmaking services consisting
+of five features, i.e. events, marketplace, feature
+zone, financial service and information message, and
+allows 7x24-hour, one-point access to the global
+industrial chain for small and medium enterprises.
+Time deposits
+0.7%
+Lodging and catering
+Others
+2019
+1.9%
+● Mining
+and sanitation
+2.6%
+Science, education, culture
+2.9%
+●Construction
+52,957.04
+54,897.00
+57,983.53
+4.2%
+2020
+2021
+Demand deposits
+2.9%
+Innovation of inclusive finance products was
+advanced constantly. The Bank upgraded the "Quick
+Lending for Operation", accelerated the integration
+and application of multidimensional data, and
+improved the non-contact service mode. The Bank
+launched innovative scenarios such as "Technical
+Innovation Loan", "Prosperous Agriculture Loan"
+and "Solar Power Loan" to better meet the needs
+of market segments. The Bank continued to
+promote the online transformation of the whole
+process of "e-Mortgage Quick Loan" product, to
+improve business processing efficiency and customer
+experience; "e-Enterprise Quick Loan", an innovative
+financing product, was launched to further enrich
+online collateral products. The Bank optimized the
+financial service platform for supply chain, created
+a unified service portal for digital supply chain
+financing, and further enhanced its service capability.
+The Bank continuously enhanced the capability
+of inclusive finance services. It deeply identified
+customer needs, strengthened strategic coordination,
+and leveraged the Group's comprehensive business
+advantages to render the inclusive finance services
+that combined financing, consulting and commercial
+services; it continued to carry out a series of
+activities such as "ICBC Inclusive Finance Travel",
+"One Thousand Experts Serving Small and Micro
+Enterprises", "Ten Thousand Small and Micro
+Enterprises Growth Plan" and "Specialization,
+Refinement, Differentiation and Innovation •
+Chunfeng Action", and gradually formed a set
+of inclusive finance service models with strategic
+value; it gave full play to the advantages of the
+Group's domestic and foreign service outlets,
+The Bank provided targeted support for the key
+links of inclusive finance. Catering for the needs
+of the real economy, it increased first loans, loan
+renewal, credit loans and manufacturing loans for
+small and micro enterprises. It optimized the regional
+layout, and promoted the rapid business growth
+in the regions with active operation of small and
+micro enterprises, to attain the key regions-driven
+development. It stepped up support for regions with
+weak business foundation to achieve sustainable
+regional development.
+The Bank continuously provided stable and efficient
+inclusive credits. It adhered to digital inclusive
+development, accelerated the improvement of
+the centralized operation system and online and
+offline integrated service channels in line with
+the characteristics of "digital inclusive finance",
+and supported the sustained and rapid growth of
+inclusive loans and customers.
+4
++
+Discussion and Analysis
+35
+At the end of 2021, inclusive small and micro
+enterprise loans amounted to RMB1,099,012 million,
+representing an increase of RMB378,448 million or
+52.5% over the beginning of the year; inclusive small
+and micro enterprise loan customers numbered 795
+thousand, representing an increase of 204 thousand;
+the average interest rate of newly granted inclusive
+loans was 4.10%. The balance of agriculture-related
+loans was RMB2,661,317 million, representing an
+increase of RMB404,101 million or 17.9% over the
+beginning of the year; the Bank had 1,182 thousand
+agriculture-related loan customers, representing
+an increase of 240 thousand; the average interest
+rate of newly granted agriculture-related loans was
+4.13%, down 19 basis points from the previous year.
+The Bank had 342 small and micro financial business
+centers, up 18 over the end of the previous year.
+Annual Report 2021
+Inclusive Finance
+The Bank actively integrated into the regional
+coordinated development strategy. It stepped
+up financial support focusing on coordinated
+development of the Beijing-Tianjin-Hebei region,
+integrated development of the Yangtze River
+Delta, Guangdong-Hong Kong-Macao Greater Bay
+Area, the rise of central China, and the Chengdu-
+Chongqing economic circle. At the end of 2021,
+RMB corporate loans in key regions reached
+RMB7.54 trillion, accounting for 71% of the balance
+of RMB corporate loans of domestic branches,
+representing an increase of RMB884.0 billion over
+the end of the previous year.
+green industries such as clean energy and green
+transportation. At the end of 2021, the balance of
+green loans amounted to RMB2.48 trillion. The Bank,
+as the lead underwriter, underwrote RMB63,637
+million worth of green bonds (including carbon
+neutrality bonds) in the year.
+The Bank drove green development with green
+finance. It actively supported green and low-carbon
+transformation, especially the financial needs of
+The Bank provided comprehensive financial
+services for private enterprises. It implemented the
+"Eight Comprehensive Measures" to serve private
+enterprises, and carried out the "Project of Improving
+Services for Private Enterprise Partners". At the end
+of 2021, the balance of loans to private enterprises
+reached RMB3.39 trillion.
+The Bank supported the high-level self-reliance
+and self-improvement in science and technology.
+It upgraded the financial service system for
+technological innovation, signed a strategic
+cooperation agreement with the Ministry of Science
+and Technology, carried out the campaign of
+"Financial Service for National High-tech Industrial
+Development Zones and High-tech Enterprises"
+and initially formed a service pattern driven by
+"technological innovation and strategic emerging
+industries". At the end of 2021, the balance of loans
+to enterprises in key high-tech fields and strategic
+emerging industries supported by the state both
+exceeded RMB1 trillion.
+The Bank served the high-quality development of the
+manufacturing. It has carried out the campaign of
+"Year of Financial Services for Manufacturing" for
+three consecutive years, and has signed a strategic
+cooperation agreement with the Ministry of Industry
+and Information Technology to strengthen product
+innovation and resource guarantee. At the end of
+2021, the balance of manufacturing loans exceeded
+RMB2 trillion, ranking first among peers in terms of
+both the balance and increment.
+In light of China's 14th Five-Year Plan and vision for the
+year 2035, the Bank implemented the new development
+concept, served the new development paradigm,
+and promoted high-quality development in the new
+development stage. With the high-quality development
+of inclusive finance as an important measure to better
+serve the real economy and enhance its competitiveness,
+the Bank continued to push forward product innovation,
+strengthen service channels, improve comprehensive
+services and promote the high-quality and sustainable
+development of inclusive financial services.
+Discussion and Analysis
+Corporate loans rose by RMB1,091,973 million or
+9.8% from the end of last year. Specifically, short-term
+corporate loans and medium to long-term corporate
+loans increased by RMB94,530 million and RMB997,443
+million respectively. The Bank continued to increase credit
+allocation to manufacturing, strategic emerging industries,
+inclusive finance, green finance, rural revitalization and
+other key fields, and the Bank's corporate loans in key
+strategic areas such as the Beijing-Tianjin-Hebei region,
+Yangtze River Delta, Guangdong-Hong Kong-Macao
+Greater Bay Area, Central China and Chengdu-Chongqing
+economic circle continued to grow.
+58 Diversified Operation and
+Subsidiary Management
+7,533,110
+Demand deposits
+21.8
+5,489,700
+21.9
+5,798,353
+Time deposits
+(%)
+Percentage
+Amount
+In RMB millions, except for percentages
+At 31 December 2020
+(%)
+Amount
+Percentage
+At 31 December 2021
+Corporate deposits
+Item
+DISTRIBUTION OF DUE TO CUSTOMERS BY BUSINESS LINE
+RMB837,432 million or 7.2%. In terms of maturity
+structure, time deposits increased by RMB952,110 million
+or 8.0%, while demand deposits increased by RMB271,925
+million or 2.1%. In terms of currency structure, RMB
+deposits stood at RMB24,914,524 million, an increase of
+RMB1,342,532 million or 5.7%. Foreign currency deposits
+were equivalent to RMB1,527,250 million, a decrease of
+RMB35,484 million or 2.3%.
+Due to customers is the Bank's main source of funds. As at
+the end of 2021, due to customers was RMB26,441,774
+million, RMB1,307,048 million or 5.2% higher than that
+at the end of the previous year. In terms of customer
+structure, corporate deposits increased by RMB386,603
+million or 3.0%; and personal deposits increased by
+Due to Customers
+Discussion and Analysis
+31
+28.5
+7,455,160
+29.7
+Subtotal
+250,349
+46.4
+11,660,536
+47.3
+12,497,968
+20.7
+5,196,607
+20.4
+5,390,582
+25.7
+6,463,929
+Annual Report 2021
+26.9
+Total
+Accrued interest
+Other deposits (1)
+Subtotal
+Demand deposits
+Time deposits
+Personal deposits
+51.5
+12,944,860
+50.4
+13,331,463
+7,107,386
+0.9
+100.0
+100.0
+Percentage
+(%)
+Amount
+Item
+In RMB millions, except for percentages
+At 31 December 2020
+At 31 December 2021
+Liabilities
+Note: (1) Excludes stage 1 allowance for impairment losses set aside in accordance with the expected credit loss model.
+5 February 2025
+3.81
+13,435
+Policy bank bonds 2015
+16 November 2030
+3.74
+13,500
+Policy bank bonds 2020
+20 October 2030
+3.70
+14,256
+Policy bank bonds 2020
+26 October 2030
+3.79
+15,135
+Policy bank bonds 2020
+Percentage
+Due to customers
+26,441,774
+82.9
+4.7
+1,424,997
+4.3
+1,376,004
+31,896,125
+Total liabilities
+Other
+2.6
+798,127
+2.5
+791,375
+Debt securities issued
+30,435,543
+1.0
+1.1
+365,943
+Repurchase agreements
+9.1
+2,784,259
+9.2
+2,921,029
+Due to banks and other financial institutions
+82.6
+(%)
+Amount
+25,134,726
+293,434
+☐ ☐
+261,389
+361,994
+Discussion and Analysis
+33
+Annual Report 2021
+In respect of the financial statements of the Bank prepared
+under PRC GAAP and those under IFRSS, net profit
+attributable to equity holders of the parent company for
+the year ended 31 December 2021 and equity attributable
+to equity holders of the parent company as at the end of
+the reporting period have no differences.
+Reconciliation of Differences between
+the Financial Statements Prepared
+under PRC GAAP and Those under IFRSS
+Net cash outflows from financing activities amounted
+to RMB11,553 million. Specifically, cash inflows were
+RMB975,234
+an
+million, representing
+increase of
+RMB27,759 million over last year, mainly due to the
+increased cash proceeds from the issuance of other equity
+instruments; and cash outflows were RMB986,787 million,
+representing a decrease of RMB7,637 million mainly due
+to the decreased cash payment for repayment of debt
+securities.
+Net cash outflows from investing activities amounted
+to RMB674,556 million. Specifically, cash inflows were
+RMB2,718,919 million, representing an increase of
+RMB613,048 million over last year, mainly due to the
+increased cash proceeds from the sale and redemption
+of financial investments; and cash outflows were
+RMB3,393,475 million, representing an increase of
+RMB152,507 million, mainly due to the increase in cash
+payment for financial investments.
+Net cash inflows from operating activities amounted
+to RMB360,882 million, representing a decrease of
+RMB1,196,734 million as compared to last year, principally
+due to the decrease of cash inflows resulted from the
+decrease of net increase of due to customers and due to
+banks and other financial institutions. Specifically, cash
+outflows of operating assets increased by RMB8,130
+million; and cash inflows of operating liabilities decreased
+by RMB1,185,927 million.
+Analysis on Statement of Cash Flows
+The off-balance sheet items of the Bank mainly include
+derivative financial instruments, contingencies and
+commitments. For details on the nominal amount and
+fair value of derivatives financial instruments, please refer
+to "Note 21. to the Consolidated Financial Statements:
+Derivative Financial Instruments". For details on
+contingencies and commitments, please refer to "Note 46.
+to the Consolidated Financial Statements: Commitments
+and Contingent Liabilities".
+Off-balance Sheet Items
+As at the end of 2021, shareholders' equity totaled
+RMB3,275,258 million, RMB365,743 million or 12.6%
+higher than that at the end of the previous year. Equity
+attributable to equity holders of the parent company
+recorded an increase of RMB364,253 million or 12.6% to
+RMB3,257,755 million. Please refer to the "Consolidated
+Financial Statements: Consolidated Statement of Changes
+in Equity" for details.
+Shareholders' Equity
+Discussion and Analysis
+ICBC
+32
+100.0
+3.9
+975,900
+25,134,726
+100.0
+26,441,774
+Total
+3.7
+BUSINESS OVERVIEW
+34 Corporate Banking
+SUMMARY OPERATING SEGMENT INFORMATION
+In RMB millions, except for percentages
+318,058
+40.2
+346,172
+Personal banking
+49.2
+393,661
+46.3
+398,373
+Corporate banking
+41 Asset Management Services
+100.0
+955,294
+800,075
+860,880
+Operating income
+Percentage
+(%)
+Amount
+(%)
+Amount
+Item
+Percentage
+39 Personal Banking
+2020
+2021
+100.0
+1.0
+Overseas and other
+1,308,155
+0.2
+42,611
+0.1
+38,290
+Head Office
+(%)
+Amount
+Percentage
+Percentage
+(%)
+Amount
+Item
+At 31 December 2021
+At 31 December 2020
+In RMB millions, except for percentages
+DISTRIBUTION OF DUE TO CUSTOMERS BY GEOGRAPHIC AREA
+Note: (1) Includes outward remittance and remittance payables.
+100.0
+25,134,726
+100.0
+26,441,774
+1.1
+267,941
+1.4
+Yangtze River Delta
+5,436,282
+20.6
+5,057,963
+5.3
+1,410,376
+Northeastern China
+16.2
+4,072,459
+16.3
+4,320,355
+Western China
+14.4
+3,608,490
+14.8
+5.2
+3,900,441
+26.8
+6,733,969
+26.0
+6,885,411
+Bohai Rim
+13.3
+3,335,179
+13.2
+3,495,325
+Pearl River Delta
+20.0
+Central China
+7 April 2025
+As at the end of 2021, total liabilities reached RMB31,896,125 million, an increase of RMB1,460,582 million or 4.8%
+compared with the end of last year.
+4.29
+DISTRIBUTION OF INVESTMENT IN BONDS BY REMAINING MATURITY
+Discussion and Analysis
+29
+Annual Report 2021
+In terms of distribution by issuers, government bonds increased by RMB634,239 million or 11.1% over the end of last year,
+mainly due to the increase in local government bonds and national bonds; central bank bonds increased by RMB6,135
+million or 19.1%; policy bank bonds went up by RMB29,094 million or 4.0%; and other bonds increased by RMB93,684
+million or 6.0%.
+100.0
+19.4
+1,559,128
+8,054,193
+100.0
+18.7
+1,652,812
+8,817,345
+9.0
+725,625
+8.6
+754,719
+0.4
+32,072
+0.4
+38,207
+71.2
+5,737,368
+72.3
+6,371,607
+Remaining maturity
+Undated(1)
+Less than 3 months
+3 to 12 months
+978,923
+13.9
+1,228,144
+6.1
+495,137
+5.8
+514,685
+0.0
+35
+0.0
+167
+(%)
+(%)
+(%)
+Amount
+Percentage
+Percentage
+8 January 2029
+In RMB millions, except for percentages
+At 31 December 2021
+Note: (1) Refers to overdue bonds.
+Total
+Over 5 years
+1 to 5 years
+Amount
+Amount
+(%)
+Amount
+93.8
+8,054,193
+95.2
+8,817,345
+(%)
+Amount
+(%)
+Amount
+Percentage
+Percentage
+In RMB millions, except for percentages
+At 31 December 2020
+190,186
+At 31 December 2021
+Accrued interest
+Funds and other
+Equity instruments
+Bonds
+Item
+In 2021, the Bank continued to reinforce its financial
+service capability for the real economy and scaled up its
+investments in local government bonds, green bonds and
+other bonds. As at the end of 2021, investment amounted
+to RMB9,257,760 million, representing an increase of
+RMB666,621 million or 7.8% from the end of the previous
+year. Among these, bonds rose by RMB763,152 million or
+9.5% to RMB8,817,345 million.
+Investment
+Please see the section headed "Discussion and Analysis
+Risk Management" for detailed analysis of the Bank's loans
+and their quality.
+good reputation and increasing market shares of online
+inclusive finance product "e-Mortgage Quick Loan".
+Personal loans increased by RMB829,502 million
+11.7% from the end of last year. Specifically, residential
+mortgages grew by RMB634,370 million or 11.1%;
+personal business loans increased by RMB180,803 million
+or 34.7%, and the rapid growth is mainly because of the
+or
+Total
+12.2
+2.1
+2.0
+Percentage
+Percentage
+At 31 December 2021
+At 31 December 2020
+In RMB millions, except for percentages
+Total
+Other bonds
+Policy bank bonds
+Central bank bonds
+Government bonds
+Item
+175,698
+DISTRIBUTION OF INVESTMENT IN BONDS BY ISSUERS
+8,591,139
+100.0
+9,257,760
+1.1
+98,448
+1.1
+102,063
+3.1
+262,800
+1.6
+148,166
+100.0
+3,517,415
+At 31 December 2020
+3,493,342
+for
+Allowance
+In RMB millions, except for percentages
+Discussion and Analysis
+39.9
+ICBC
+30
+1 Financial bonds refer to the debt securities issued by financial institutions on the bond market, including bonds issued by policy banks,
+banks and non-bank financial institutions but excluding debt securities related to restructuring and central bank bonds.
+As at the end of 2021, the Group held RMB1,607,183 million of financial bonds', including RMB754,719 million of policy
+bank bonds and RMB852,464 million of bonds issued by banks and non-bank financial institutions, accounting for 47.0%
+and 53.0% of financial bonds, respectively.
+100.0
+8,591,139
+100.0
+9,257,760
+Total
+73.0
+6,265,668
+73.8
+6,830,933
+17.9
+1,540,988
+19.5
+1,803,604
+Financial investments measured at fair value
+through other comprehensive income
+Financial investments measured at amortised
+cost
+Nominal
+Bond name
+value
+Annual
+interest rate (%)
+16,250
+Policy bank bonds 2015
+3.48
+17,071
+Policy bank bonds 2019
+20 September 2029
+3.45
+17,663
+Policy bank bonds 2019
+17 April 2030
+2.96
+9.1
+18,440
+23 March 2030
+3.23
+19,461
+Policy bank bonds 2020
+13 April 2025
+4.21
+20,700
+Policy bank bonds 2015
+losses(1)
+Maturity date
+impairment
+Policy bank bonds 2020
+(%)
+TOP 10 FINANCIAL BONDS HELD BY THE BANK
+In RMB millions, except for percentages
+At 31 December 2020
+Amount
+(%)
+Amount
+Percentage
+Percentage
+At 31 December 2021
+At 31 December 2020
+In RMB millions, except for percentages
+Total
+Other foreign currency bonds
+USD-denominated bonds
+RMB-denominated bonds
+Item
+DISTRIBUTION OF INVESTMENT IN BONDS BY CURRENCY
+100.0
+8,054,193
+100.0
+Percentage
+38.3
+3,086,756
+40.4
+3,556,934
+43.4
+(%)
+8,110,061
+8,817,345
+7,388,349
+92.0
+784,483
+6.7
+Amount
+At 31 December 2021
+623,223
+Financial investments measured at fair value
+through profit or loss
+Amount
+Item
+DISTRIBUTION OF INVESTMENT BY MEASURING METHOD
+In terms of currency structure, RMB-denominated bonds rose by RMB721,712 million or 9.8% over the end of last year;
+USD-denominated bonds increased by an equivalent of RMB14,066 million or 3.2%; other foreign currency bonds increased
+by an equivalent of RMB27,374 million or 11.9%. During the reporting period, the Bank improved the investment portfolio
+structure of foreign currency bonds and moderately increased the investment in bonds denominated in other currencies.
+100.0
+Percentage
+(%)
+100.0
+8,054,193
+450,447
+436,381
+5.4
+256,837
+5.1
+2.9
+229,463
+2.8
+8,817,345
+91.8
+Innovating in ecosystem cooperation. The Bank built
+the "1+N" intelligent government services product
+system and established the "all-in-one network"
+government service platform to fully empower
+government services. It promoted integration
+of government service data across the board
+and launched more than 300 bank-government
+cooperation scenarios in 29 branches. The Bank
+I was one of the first contracted data traders of
+the Shanghai Data Exchange, concluded the first
+transaction and the first financing based on the data
+asset voucher at the Shanghai Data Exchange, and
+strengthened innovation in cooperation with local
+data markets. The Bank built an intelligent industry
+ecosystem, by establishing a series of platforms
+such as Julian and Jurong, connecting to supply
+chain scenarios in the upstream and downstream
+sections of large enterprises such as procurement
+and sales management, providing a package of
+personalized financial services, and empowering the
+transformation and upgrading into digital supply
+chains.
+Promoting model innovation. The Bank encouraged
+innovation in non-contact services. It was the first
+among its peers to launch the "Cloud ICBC" brand
+system. By integrating and optimizing diverse service
+scenarios such as cloud business handling, screen-
+to-screen handling of urgent matters, around-the-
+clock communication, service integration, open-
+type intelligent ecosystem, etc., the system allows
+customers to handle their banking business anytime
+anywhere. The Bank promoted innovation in
+integration of data and intelligent technology. The
+Bank was the first in the industry to establish the
+enterprise-level data middle-office and was also
+the first to load the whole group's data into the
+data lake. It deposited 14 categories of customer
+features and provided more than 1,000 enterprise-
+level data services to business systems in the fields of
+customer marketing, product innovation, risk control,
+operation management, etc., which fully improved
+the capability to convert enterprise data into value.
+The Bank upgraded "intelligent brain" marketing
+and offered intelligent service solutions that are
+unique to 700 million personal customers. By
+using interactive techniques such as digital human,
+intelligent Q&As and voice interaction, the Bank
+intensified application of "Machine substitution" at
+the front office of customer service, the back office
+of business operation, etc. and launched more than
+600 intelligent application scenarios with digital
+employee attributes.
++
+Discussion and Analysis
+ICBC
+46
+Strengthening product innovation. The Bank
+upgraded the intelligent custody platform,
+launched the featured deposit product "Intelligent
+Corporate Deposit Express", added e-CNY support
+into ICBC e Bill Pay and bank-enterprise interlink,
+and completed the industry's first public e-CNY
+payment with the State Grid e-commerce platform,
+the first of its kind in the industry. The Bank
+empowered cross-border finance. It established
+the "Southbound Bond Connect" business system
+to support the development of cross-border
+RMB business. It promoted the innovation and
+application of the Intelligent Trade Finance Platform.
+It was the first among its peers to join the cross-
+border financial blockchain service platform of
+the State Administration of Foreign Exchange
+as an authentication node, it was among the
+first institutions in the industry to complete the
+connection to the electronic L/C forfaiting system
+of PBC, and it was also the first in the industry
+to embed L/C products into the customs' Single
+Window platform. The Bank innovated in inclusive
+finance and launched "ICBC Inclusive", the three-
+in-one online channel brand that combines "an
+exclusive version of personal mobile banking, a
+WeChat applet, and a dedicated zone in enterprise
+mobile banking". It upgraded the cross-border
+business matchmaking platform, "ICBC Business
+Matchmaker", and launched its 2.0, which provides
+intelligent, whole-process closed-loop cross-border
+business matchmaking services to small and medium
+enterprises. The Bank empowered rural revitalization.
+It creatively launched the ICBC Xingnongtong APP,
+an online financial service channel for rural areas
+featured by services and functions concerning
+people's livelihood, agency services, inclusive finance
+services, village affairs, etc. It also established
+three service platforms, namely, the Xingnong
+matchmaking platform, the rural revitalization
+statistical monitoring platform, and the "Digital
+Villages" comprehensive service platform, to assist in
+the digital transformation of rural finance.
++
+Accelerating Reforms of Technology
+Governance Mechanisms
+45
+Centering on the needs of national strategies such as
+serving the real economy, preventing financial risks and
+deepening the financial reform, based on the intelligent
+banking ecosystem development project ECOS, the Bank
+deepened technological empowerment from the three
+dimensions of model innovation, production innovation,
+and ecosystem opening up and innovation and developed a
+series of quality services that the people are satisfied with.
+Promoting Innovation as a Drive of High-
+quality Development of the Bank
+Discussion and Analysis
+Annual Report 2021
+Group's information security protection
+capability was further improved. The Bank promoted
+the implementation of version 2.0 of network
+security rating and protection regulations and
+completed external evaluations for all its protection
+systems, all of were granted the highest grade
+of "Excellent". The Bank established the group-
+wide integrated intelligent information security
+management sub-center, allowing tier-one (directly
+managed) branches to conduct automated and
+visual management of tier-two branches within their
+jurisdiction. The Bank preliminarily established a
+financial attack-defense range and a safe operation
+model that uses attack to improve defense which
+won the first place in many security competitions
+held by the relevant departments. As the first
+financial institution member of the technology team
+of the China National Vulnerability Database (CNVD),
+the Bank fulfilled its responsibilities as a large bank
+and actively looked for 0 day vulnerabilities.
+The
+The Bank deepened the layout of FinTech consisting of
+"one department, three centers, one subsidiary, and one
+research institute". It stepped up efforts in mechanism
+innovation, promoted penetration of the technology
+gene, continued to improve financial innovation response
+efficiency and supply capability, and unleashed the
+vitality of the Bank's FinTech innovation. The Bank
+invested RMB25,987 million in FinTech in 2021, and it
+had 35 thousand FinTech personnel at the end of 2021,
+accounting for 8.1% of all employees across the Bank.
+The transformation of production and operation
+maintenance was carried out in an orderly manner.
+The Bank strengthened technical support capacity.
+Based on the distributed system framework,
+it realized the betterment of high-availability
+architecture deployment of key business lines such
+as mobile banking, internet banking, fast payment,
+financial markets, etc. The Bank improved emergency
+response capability. It was the first among its peers
+to complete the total switching drill of the cloud
+platform, and successfully simulated cross-park quick
+emergency switch at the ten-thousand node level
+under large-scale, complex fault scenarios. The drill
+verified the high availability level of key technology
+infrastructure. The Bank optimized the business
+operation monitoring system and realized full-link
+integrated monitoring of application and equipment
+in key applications, and formed correlation analysis
+and full-link tracking capabilities of cross-application
+transactions.
++
++
+The Bank actively adapted to new needs of the digital
+development of the national economy. Based on key
+strategies, it accelerated reform and innovation, made
+overall plans for all channels, services via all channels and
+online customer operation, promoted the development
+of e-ICBC 4.0, and built the "One Body, Two Wings"
+development pattern featuring "own platforms + open
+banking". In 2021, transaction volume via electronic
+channels hit RMB732.85 trillion, an increase of 14.4%
+from the previous year, and business handled via electronic
+channels accounted for 98.8%. The Bank won a number of
+important awards in the field of internet finance, including
+"Best Digital Consumer Bank in China" and "Best
+Corporate/Institutional Digital Bank in China" from Global
+-
+The Bank took the initiative to deal with the new
+challenges brought by the complex and volatile external
+situation and technological reforms, adhered to the
+bottom line of safe production, further promoted the
+transformation of production, operation and maintenance,
+and upgraded and built in an information security defense
+system for the whole group and the whole process. The
+Group's production safety was maintained at a high level.
+A series of leading enterprise-level independent
+innovation technology platforms were built. The
+Bank built the first, reliable, efficient and scalable
+big data platform among peers, and established a
+big data service ecosystem integrating technology,
+data and services. It upgraded Al technology systems.
+It was the first among its peers to complete the
+enterprise-level Robot Process Automation ("RPA")
+platform, and also the first to pass the application
+maturity assessment of RPA systems and tools by
+the Ministry of Industry and Information Technology
+and the China Academy of Information and
+Communications Technology. A blockchain platform
+with proprietary intellectual property rights was built,
+which has integrated more than 150 technology
+breakthroughs. It was among the first batch to pass
+the five certifications under special evaluation for
+"Trusted Blockchain" by the Ministry of Industry and
+Information Technology and the China Academy of
+Information and Communications Technology, and
+was selected as part of the 2021 Blockchain 50 by
+Forbes.
+ICBC
+48
+Deepening online and offline integrated
+development. A total of 16 thousand "cloud"
+outlets, 28 thousand wealth managers, over 100
+remote customer service representatives provided
+online and offline integrated services in the
+"intelligent manual" and "text + voice + video"
+forms via "cloud outlets, cloud studios and cloud
+customer service", making the Bank, employees
+and services available online. The services and
+functions of "cloud" outlets were upgraded, and
+capabilities in online and offline marketing and
+publicity, characteristic operation and collaborative
+output were improved. Twelve cloud outlets with
+ancient building characteristics and benchmarking
+"cloud" outlets on Universal City Walk were created,
+and marketing of characteristic outlet brands was
+strengthened. Enterprise-level WeChat accounts
+were integrated and upgraded, resulting in resource
+concentration and efficient operation of the WeChat
+ecosystem. Moreover, connection between mobile
+banking and remote banking and outlets was
+deepened, with the launch of the real-time same-
+screen tutoring service, an upgrade from "face
+Improving the functions and user experience of
+enterprise mobile banking and internet banking.
+The Bank launched Enterprise Mobile Banking 4.0,
+improved the basic platform service capability of
+enterprise internet finance, and carried out the
+"Excellence Project" of frequently used functions
+of corporate internet banking. In 2021, average of
+the monthly active customers of corporate internet
+banking hit 4.41 million, and that of Enterprise
+Mobile Banking 1.60 million. The Bank maintained a
+leading position by customer activity in the industry.
+Deepening government-business-consumption
+coordination and assisting in "net making and
+patching" program. Seizing the opportunities of
+reforms to streamline administration and delegate
+power, improve regulation, and upgrade services
+and the development of digital economy, the Bank
+promoted bank-government-enterprise cooperation
+in depth. Through "Ju Fu Tong", it connected to
+nearly 200 platforms and served 73 government
+and public service platforms. The Bank assisted
+customers in traditional manufacturing circulation
+fields in going online and served 26 thousand
+corporate customers. In the field of consumer
+internet, the Bank actively explored cross-border
+e-commerce business, intensified marketing of cross-
+border e-commerce platforms, and strengthened
+cooperation with rural revitalization related
+platforms. In this field, it served 19.60 million
+personal customers.
+Building No.1 Personal Mobile Bank and empowering
+the No.1 Personal Bank Strategy. The Bank launched
+Version 7.0 of personal mobile banking that features
+"five intelligent companionships", namely, wealth
+companionship, cloud companionship, exclusive
+companionship, account companionship, and
+privilege companionship and provides interaction
+in all respects and companionship throughout the
+whole customer journey. The Bank established a
+personalized service system. It released exclusive
+versions including Happy Life Version 2.0, Beautiful
+Home Version 2.0, Inclusive Finance for Small and
+Micro Enterprises Version 1.0, the English version
+and the payroll payment agency service zone, "ICBC
+Salary Manager", improved exclusive services for
+key customer groups such as elderly customers,
+customers in counties, small and micro enterprises,
+cross-border service customers and payroll payment
+agency service customers, and met customers'
+diversified financial needs. The Bank improved
+user experience of mobile banking by upgrading a
+number of frequently used transaction functions.
+It also intensified precision marketing of financial
+products. Wealth management, fund and insurance
+transaction volume via online channels accounted
+for over 95%. At the end of 2021, personal mobile
+banking customers recorded 469 million, and ICBC
+Mobile Banking became the first application in
+banking industry that topped 100 million monthly
+active users ("MAU"), with over 150 million MAUS
+at mobile terminals, leading the industry in terms of
+customer size and activity.
+Accelerating Platform Innovation and
+Deepening Synergy among Channels
+Finance.
+Internet Finance
+Discussion and Analysis
+47
+Annual Report 2021
+launch", which has supported and assisted in the
+spreading of creativity across the Bank.
+-
+-
+Building an innovation culture. The Bank has held
+the ICBC Cup FinTech Innovation Competition for
+National College Students outside the Bank for
+12 consecutive years. In 2021, more than 40,000
+students from some 700 universities across the
+country signed up and submitted over 8,000 works.
+The Competition focused on hot issues and key
+fields, stimulated students' innovation vitality, and
+created a good technological innovation atmosphere.
+Within the Bank, by holding "Creative ICBC" series
+activities and establishing the incubation system,
+the Bank has formed the long-acting mechanism
+of "gathering tutoring - testing incubation
+Deepening industry-university-research-application.
+The Bank gave play to the R&D capabilities of the
+FinTech Institute and laboratories and strengthened
+joint innovation and R&D. Centering on prospective
+technology fields such as secure multi-party
+computation, federal learning, quantum technology,
+blockchain, 5G application, etc., joint laboratories
+such as financial information infrastructure, financial
+application of 5G, Al, etc. were built, assisting in
+China's independent technological innovation. The
+Bank cooperated with scientific research institutes
+and leading enterprises and focused on cutting-edge
+technologies. The Bank was the first in the industry
+to release the White Paper on Privacy Computing in
+Promoting the Development of the Data Ecosystem
+of the Financial Industry, and a total of 12 projects
+were designated as the pilot projects for innovation
+and supervision of FinTech, among which "IoT-
+based Item Traceability Certification Management
+and Supply Chain Finance" was among the first pilot
+projects completed for whole-process innovation and
+supervision of FinTech in China.
+targeted incentives to unleash talents' innovation
+vitality. Meanwhile, the Bank established the open
+competition mechanism to encourage innovation,
+implemented the agile R&D model across the board,
+and organized more than one hundred flexible teams
+for agile R&D, who efficiently responded market
+demand. ICBC Information and Technology (Beijing)
+Co., Ltd. was established to reinforce the value
+output capability and market influence.
+Building an active pattern and increasing innovation
+supply. The Bank implemented the FinTech talent
+development project, carried out the "Tech Elite"
+training program, and actively introduced high-
+end social technical personnel. It fully promoted
+the "trained by technology used by business"
+talent pool mechanism and used layered and
+Reinforcing Production Safety
+stack basic resources for independent innovation.
+The Bank sought technology breakthroughs in key
+fields such as cloud platforms, operating system
+and database in a centralized way, connected
+key breakpoints in the independent innovation
+and transformation of the financial industry, and
+developed a complete package of technical solutions
+that can be copied and promoted for various fields
+including office management, data analysis, risk
+control, business management, regulatory reporting,
+etc., providing a model template for independent
+innovation, transformation, upgrading, application
+and promotion for the financial industry.
+39
+61,496.54
+64,639.29
+71,073.86
+2019
+Time deposits
+2020
+2021
+Demand deposits
+2020
+2021
+ICBC Deepened the No.1 Personal Bank Strategy
+In 2021, the Bank quickened the pace of deepening the No.1 Personal Bank Strategy, made new progress and new
+breakthroughs, and took on a new look.
+Focusing on the financial business "serving, benefiting and reassuring the people", the Bank improved the
+adaptability, competitiveness and inclusiveness of financial services, with the total number of personal customers
+topping 700 million. Among them, the number of mobile banking customers reached 469 million. Credit card
+consumption tended to recover gradually, giving an impetus to services for the strategy of expanding domestic
+demand. Focusing on the goal of common prosperity, the Bank vigorously developed wealth management business,
+managed personal financial assets of nearly RMB17 trillion, remaining in the leading position in the industry. The
+balance of personal wealth management products under the new rules stood at RMB1.71 trillion, representing an
+increase of 102.71% over the end of the previous year. Relying on "Rural Revitalization • Funong Card", the Bank
+quickened the pace of expanding county markets, and promoted financial services at the grass-roots level. It launched
+the "ICBC with You" service brand, created products, services, channels and theme activities suitable for the elderly,
+and accelerated the building of all-in-one social security card as a move to fulfill the responsibility of a large bank. It
+held nearly half of the newly increased market share of social security cards.
+In light of the core objective of strategic breakthrough, the Bank strengthened the upgrading of financial supply side
+services, and promoted high-quality business development. Personal deposits exceeded RMB12 trillion, hitting a new
+high. The cost was effectively controlled and the capacity of volume-price coordination was significantly enhanced. The
+balance of personal loans approached to RMB8 trillion. The quality of assets improved steadily, and the balance and
+ratio of non-performing loans both declined. Income from fee-based personal banking increased steadily.
+In light of the "customer-centric" business philosophy, the Bank comprehensively promoted the transformation from
+"business-oriented" to "customer-oriented", strengthened the overall planning to meet the needs of customers, and
+significantly improved the cohesion and competitiveness of personal banking. Focusing on the building of personal
+customer ecosystem and customers' needs to spend money, make money, borrow money and manage money, the
+Bank promoted the comprehensive building of wealth management, consumer finance, payment and settlement
+and smart account business system, with the operation of key customer groups as the foothold. The Bank further
+strengthened capacity-building, assessment orientation and digital transformation, and established a digital operation,
+investment research and consulting, and innovation empowerment team of the Head Office, providing stronger
+support and guarantee for building the No.1 Personal Bank to the satisfaction of the people.
+ICBC
+Discussion and Analysis
+Private Banking
++
++
+In line with the buyer's market trend of wealth
+management, the Bank grasped the diversified needs
+of private banking customers, shifted from single
+product marketing to comprehensive service, and
+built a comprehensive service ecosystem for private
+banking customers jointly built in multiple scenarios
+of "individuals, families, enterprises and social
+responsibility".
+The Bank adhered to product and service innovation.
+It made efforts to build a service ecosystem
+for entrepreneurs, and listed 100 branches as
+"Entrepreneurs Service Center". It jointly issued
+the Report on ICBC Entrepreneur Wealth Health
+Index with renowned universities. The Bank strove
+to build a comprehensive service platform for
+family customers, vigorously developed family trust
+consulting business, and successfully launched
+insurance trust, fund trust, equity trust and other
+full-spectrum family wealth management services.
+The Bank spared no effort to promote innovation
+in the field of green finance, worked with ICBC
+Wealth Management to create "Hengrui" series of
+green finance themed products, helped serve major
+strategies such as national rural revitalization and
+common prosperity, and carried forward China's
+contemporary entrepreneurship.
+The Bank was awarded the "Overall Best State-
+Owned Private Bank in China" by the Asiamoney, the
+"Excellent Private Bank of the Year" by the National
+Business Daily, and the "The Competitive Private
+Bank in 2021" by the China Business Journal.
+At the end of 2021, the Bank had 199.5 thousand
+private banking customers, representing an increase
+of 17.6 thousand or 9.7% over the end of the
+previous year. The assets under management
+totaled RMB2.32 trillion, representing an increase of
+RMB144.2 billion or 6.6%.
+Bank Card Business
+Based on the crossover scenario of "finance plus
+tourism", the Bank issued the co-branded credit
+card of ICBC Universal Beijing Resort with exclusive
+authorization. It also issued various innovative
+debit cards and carried out continuous promotional
+campaigns such as "Palace Museum Card Applicant
+Gifts" and "CNPC UnionPay Cloud Flash Pay
+Discount".
+HE H
+The Bank accelerated the building of ICBC e Life
+platform by creatively promoting "credit card plus
+e-CNY" closed loop where both e-CNY payment and
+QR code payment could be completed with the e
+Life APP. The Bank supported the acceptance of Visa
+overseas cards in its e-CNY wallet to back up the
+Winter Olympic Games.
+Ht
+71,152.79
+The Bank explored new "highlands" in cutting-
+edge technologies. By integrating satellite remote
+sensing technology with Al technology and using
+high-definition satellite remote sensing data and
+intelligent monitoring models, the Bank conducted
+post-lending monitoring of crop growth and
+construction of large engineering projects. The
+Bank was the first in the industry to complete the
+homemade intelligent POS monitoring system with
+the Beidou Navigation Satellite System as its only
+signal source. It made breakthroughs in the feasibility
+testing and pilot application of quantum technology
+in important financial encryption scenarios. It
+employed the privacy computation technology to
+develop innovative post-lending risk monitoring
+measures regarding small and micro enterprises.
+Discussion and Analysis
+Discounted Bills
++
+The Bank grasped the development trend of financial
+services, successfully made a debut of banker's
+acceptance rediscounting service of supply chain bill
+in China, and launched featured products such as
+"Monthly Discount", "Weekend Discount", "ICBC
+i Green Discount", "Supply Chain Bill Pay Plus",
+"ICBC e Discount + Agreed Interest". The "bill
+business platform scenario" project was connected
+with the high-quality industrial platform to further
+improve the user function experience of bill business
+in corporate internet banking channels.
+In 2021, discounted bills amounted to
+RMB1,708,223 million, representing an increase of
+15.8% year on year, ranking first in the market.
+Discounted bills for small and micro enterprises
+reached RMB473,966 million. At the end of 2021,
+the balance of discounted bills for small and micro
+enterprises was RMB213,796 million.
+Personal Banking
+In 2021, the Bank continued to deepen the No.1 Personal
+Bank Strategy, to make it a bank satisfactory to the
+people. Focusing on the building of an individual customer
+ecosystem, the Bank promoted the high-quality business
+development relying on the "intelligent brain" decision
+pivot and full-spectrum operation system.
++
+It upgraded the "intelligent brain" decision pivot.
+Relying on the "intelligent brain", the Bank drew
+up a plan for differentiated and targeted services,
+and developed the overall plan and strategy for
+personal customer marketing services through online
+and offline multi-channel service outlets. A total of
+34 intelligent models have been developed and put
+into operation to realize automatic triggering and
+real-time response, strengthen the empowerment
+support for marketing and management
+personnel, and promote the digital and intelligent
+transformation of personal banking.
+4
+The broadest customer base service system was
+upgraded comprehensively. Being customer-centric,
+the Bank launched "ICBC Star Privileges", a brand-
+new high-star personal customer value-added
+equity brand, and deeply carried out the activities,
+including "March Forward with Wealth and Gift", a
+medium and high-end customer marketing activity,
+"Treasure Hunt", a credit reward activity, and "Star
+Promotion", a targeted marketing activity. The
+number of customers with the average monthly/daily
+financial assets of RMB50,000 and above increased
+by 6.5% over the end of the previous year.
+The
+Bank promoted the transformation and
+development of wealth management business. It
+organized and carried out activities such as "828
+ICBC Wealth Season" and "AXA Theme Day",
+launched a series of wealth management products
+that are open, selected, best-selling and exclusive
+under new financial regulations, and promoted
+intelligent asset allocation services.
+The Bank fully met customers' consumer financing
+needs. Adhering to the guideline that "housing is
+for living in, not for speculation", the Bank satisfied
+the reasonable needs of customers, including first
+time home buyers, and continued to carry out
+special marketing activities, such as "Home-backed
+Finance", "Merchants Mate", "Online Merchants
+Loan" and "Entrepreneurship Dream".
+At the end of 2021, the number of personal
+customers increased by 23.41 million over the end of
+the previous year to 704 million. Personal financial
+assets totaled RMB 16.96 trillion. Specifically,
+personal deposits reached RMB12,497,968 million,
+representing an increase of RMB837,432 million
+or 7.2%. Personal loans stood at RMB7,944,781
+million, representing an increase of RMB829,502
+million or 11.7%. Funds under agency sales
+amounted to RMB645.4 billion, government bonds
+under agency distribution were valued at RMB57
+billion, and personal insurance products under
+agency sales reported at RMB108.2 billion.
+Annual Report 2021
+Discussion and Analysis
+40
+Personal Deposits
+Unit: RMB100 millions
+Personal Loans
+Unit: RMB100 millions
+43,280.90
+51,966.07
+53,905.82
+63,836.24
+79,447.81
+By the end of 2021, the Bank had issued 1,169
+million bank cards, an increment of 41.70 million
+compared with the end of last year. Specifically,
+1,006 million debit cards and 163 million credit
+cards had been issued. The overdraft balance of
+credit cards reached RMB692,339 million. In 2021,
+ICBC bank cards registered a spending volume of
+RMB22.99 trillion, including RMB20.43 trillion from
+debit cards and RMB2.56 trillion from credit cards.
+2019
+The Bank firmly implemented the regulatory requirements,
+seized development opportunities, pushed forward
+the transformation of asset management business
+and products in a steady and compliant manner and
+comprehensively enhanced investment management and
+research capabilities. It established an asset management
+business system allowing allocation of capital in all markets
+and value creation across the whole value chain by relying
+on the strength of the Group's asset management, custody
+and pension businesses as well as its comprehensive
+subsidiaries specialized in fund, insurance, leasing,
+investment banking and wealth management, to serve
+direct financing, and provide diversified, integrated and
+specialized services for customers.
+The Bank reasonably adjusted the financing structure
+based on liquidity management requirements, and
+operating benefit improved steadily. It actively
+advanced the development of the business system,
+improved the level of refined business management,
+and promoted the steady development of the
+financing business. For details on the Bank's CDs and
+debt securities issued, please refer to "Note to the
+Consolidated Financial Statements: 33. Certificates of
+Deposit; 35. Debt Securities Issued".
+Discussion and Analysis
+Treasury Trading Business on Behalf of
+Customers
+In terms of foreign exchange settlement and sales on
+behalf of customers and foreign exchange trading,
+the Bank continuously enriched foreign exchange
+settlement and sales and foreign exchange trading
+currencies, improved the trading functions of online
+channels, and provided convenient service for
+enterprises in exchange rate risk management. In
+terms of corporate commodity derivative trading,
+under the routine pandemic control mechanism, the
+Bank actively carried out online business promotion
+and marketing to attract customers, delivered good
+service to existing customers, promptly responded
+to customer queries and trading needs, and helped
+corporate customers properly respond to commodity
+price fluctuation risks during the pandemic. In terms
+of RMB interest rate derivative business, the Bank
+continued to provide interest rate risk management
+service to corporate customers like small and micro
+enterprises and manufacturing enterprises. In terms
+of the over-the-counter ("OTC") bond business,
+the Bank distributed China Development Bank's
+financial bonds with the themes of "Coordinated
+Development of the Beijing-Tianjin-Hebei Region"
+"Carbon Neutrality" and "Ecological Protection and
+High-quality Development of the Yellow River Basin",
+Agricultural Development Bank of China's "Carbon
+Neutrality" financial bonds and the OTC local
+government bonds in 36 provinces (autonomous
+regions, municipalities directly under the Central
+Government, and cities specifically designated in
+the state plan) to investors in the OTC market,
+contributing to the coordinated development of
+key regions and assisting in green finance, rural
+revitalization and regional development. The Bank
+was awarded the "Excellent Underwriter Award
+for Over-the-counter Circulating Bonds" and
+"Excellent Underwriter Award for Over-the-
+Counter Local Government Bonds" by China Central
+Depository & Clearing Co., Ltd. In terms of foreign
+institutional investors trading business in China's
+inter-bank market, the Bank took an active part in
+serving foreign institutional investors from more
+than 60 countries and regions. It won the "Opening-
+Up Contribution Award" granted by the National
+Interbank Funding Center and the "Excellent
+Settlement Agent under Global Connect Business"
+granted by China Central Depository & Clearing Co.,
+Ltd.
+an
+Annual Report 2021
+43
+Discussion and Analysis
+Asset Securitization Business
++
+The asset securitization business effectively
+supported the Bank in disposing of non-performing
+assets and optimizing credit structure, and further
+improved the Bank's capability to serve the real
+economy. In 2021, the Bank issued 19 asset-backed
+securities totaling RMB112,592 million, including the
+first green vehicle installment asset-backed securities
+issued by a commercial bank in China. By introducing
+cross-border funds via "Bond Connect", it further
+promoted financial cooperation between domestic
+and foreign institutions and the two-way opening up
+of the Chinese green bond market.
+Precious Metal Business
++
+the
+transformation and
+The Bank promoted
+development of the physical precious metal
+business, to meet customers' demands for quality
+improvement in investment and consumption. It
+launched physical precious metal products with the
+theme of China International Import Expo, and on
+the basis of the "Magnificent China" theme, it rolled
+out "Most Beautiful Hometown" and "Beautiful
+Countryside" physical precious metal product
+series to fully demonstrate the appearance of rural
+revitalization. It also promoted the green and low-
+carbon development of the precious metal leasing
+business and opened up new space for business
+development. In 2021, the Bank ranked first among
+all dealers in Shanghai Gold Exchange in terms of
+gold and silver trading volume, clearing amount and
+gold leasing scale, was reelected "First Prize Winner
+of the Excellent Financial Member" by Shanghai Gold
+Exchange, and was named "Best Provider of Precious
+Metals Services" by Global Finance.
+FinTech
+Asset Management Services
+In 2021, the Bank was ranked at first place in the
+banking industry for the eighth consecutive year in
+CBIRC's IT supervision ratings. The intelligent banking
+ecosystem ECOS won PBC's special award of the "FinTech
+Development Awards". The Bank became the first
+enterprise in the Chinese financial industry to obtain the
+highest Data Management Capability Maturity (DCMM)
+rating (Level 5), and it won the "Best Financial Innovation
+Award" from The Chinese Banker for the sixth consecutive
+year.
+Fortifying Digital Infrastructure
+The Bank adhered to technology self-reliance, promoted
+technology breakthrough in key fields of infrastructure
+system, and strengthened research and application of
+cutting-edge technologies. A series of new enterprise-
+level technology platforms with strong service capability
+and industry-leading advantages were built up based on
+5G+ABCDI'. As at the end of 2021, the Bank had the most
+newly added and accumulated patents among Chinese
+banks.
+The Bank built the world-leading "cloud computing
++ distributed" technology architecture, leading the
+industry to transform from a traditional centralized
+one to a fully distributed one. The Bank completed
+the world's largest financial cloud platform with the
+strongest technological capacity and full coverage
+of business scenarios. With the platform, it realized
+automated and intensive management and full
+stack independent innovation cloud service supply.
+The Bank was the first among its peers to meet the
+Level 4 security capacity requirement for private
+clouds and the Level 3 security capacity requirement
+for ecosystem clouds, and it declared more than
+200 patents for invention. It also established the
+distributed technology system with the most systems
+and the most extensive application among its peers,
+with an average daily service invocation of over 12.0
+billion times.
+The Bank spared no effort to promote technology
+breakthroughs in key fields. The Bank was the first
+among its peers to realize the deployment of the
+"one cloud with multiple cores" architecture and to
+complete the compatible adaption of cloud platforms
+with general open platforms and the independent
+innovation technology system, which provided the
+Bank with the large-scale supply capacity of full
+1 Refers to AI, BLOCK-CHAIN, Cloud Computing, Big Data and IoT.
+44
+ICBC
+Discussion and Analysis
++
+Financing
+Centering on the FinTech development plan (2021-2023),
+the Bank practiced technology self-reliance, strengthened
+the "dual wheel drive" of technological innovation
+and system reform, built new advantages in FinTech
+development, and empowered the development of
+"D-ICBC" with technology, which assisted in the Bank's
+high-quality development and better fostered a new
+development pattern.
+In terms of foreign-currency bonds, the Bank
+steadily increased investments, moderately expanded
+portfolio investments, optimized the portfolio
+structure, and intensified support to the real
+economy and green finance. It completed the first
+batch of foreign-currency bond transactions via
+"Southbound Connect".
+In 2021, the Bank was honored as the "Top
+Investment Houses in Asian G3 Bonds" by The Asset.
+Wealth Management Services
+In compliance with regulatory requirements and
+New Rules on Asset Management, the Bank made
+comprehensive use of wealth management product
+undertaking, asset return to the balance sheet and
+market-based transfer and other measures that
+comply with the new regulations, and overdid the
+task of rectifying and reducing existing wealth
+management products during the transition
+period. At the end of 2021, the balance of wealth
+management products reached RMB2,586.9 billion.
+Please refer to the section headed "Business
+Overview Diversified Operation and Subsidiary
+Management" for details on the business
+development of ICBC Wealth Management.
+Annual Report 2021
+41
+Discussion and Analysis
++
+4
++
+New breakthroughs were made in key products,
+and the Bank's leading position in the industry
+was further consolidated. The mutual funds under
+custody amounted to RMB3.7 trillion, representing
+an increase of RMB663.7 billion over the end of
+the previous year. The pension funds under custody
+totaled RMB2.3 trillion, an increase of RMB359.1
+billion. The enterprise annuity funds, occupational
+annuity funds and pension fund products under
+custody ranked first in the industry. The insurance
+asset under custody was RMB5.9 trillion, an increase
+of RMB479.8 billion. The Bank achieved an important
+breakthrough in global custody business, and was
+approved eligible for the first batch of pilot custody
+and clearing bank under "Southbound Bond
+Connect" scheme. The outsourcing business of asset
+management products developed rapidly, with a size
+over RMB2.5 trillion.
+The building of intelligent custodian bank was
+advanced steadily. The Bank officially released the
+"ICBC Intelligent Custody System", launched the
+ICBC custody mobile banking and the intelligent
+investment service platform, and comprehensively
+improved its custody service.
+The Bank was awarded the "Best Custodian Bank in
+China" and the "Best Insurance Custodian Bank in
+China" by The Asset and the "Best Custodian Bank
+in China (Mega Bank)" by The Asian Banker.
+At the end of 2021, the size of custody business
+reached RMB22.1 trillion.
+Pension Services
+Asset Custody Services
+The Bank won the "Tianji Award for Pension
+Financial Services Bank of the Year" by the
+Securities Times, the "2021 Top 10 Supply Wealth
+Management Innovation" by The Chinese Banker,
+and the "2020-2021 Investible Pension Financial
+Institution" by the Economic Observer.
+In light of China's strategy of actively responding to
+the aging population, the Bank made every effort
+to promote the transformation and development of
+pension business to pension finance business, build
+a business ecosystem centering on pension fund
+finance, senior care service finance and senior care
+industry finance, help improve people's well-being
+and fulfill the responsibilities of a large bank.
++
+Investment
+42
+In terms of RMB bonds, the Bank continued to
+strengthen its capability to serve the real economy.
+It actively invested in local government bonds in
+strategic regions and key fields, and the scale of
+new investment in local government bonds ranked
+No.1 in the market for the seventh consecutive year.
+The Bank actively practiced green and low-carbon
+development and the rural revitalization strategy.
+It was among the first banks to invest in carbon
+neutrality bonds and sustainability linked bonds,
+and increased investment in rural revitalization
+bonds. Meanwhile, the Bank actively invested
+in energy supply guarantee related bonds, and
+bonds of advanced manufacturing industry and
+private enterprises, to give full play to the financial
+guarantee for energy security effect.
+In terms of foreign currencies, the Bank continued
+to strengthen research of global central banks'
+monetary policies and closely tracked changes in the
+fund liquidity and interest rates of foreign currency
+markets. While ensuring liquidity safety, it flexibly
+employed foreign currency market operation tools to
+support the foreign currency financing needs of the
+real economy. The Bank was among the first on the
+market to make foreign currency repurchase with
+domestic foreign currency NCD and bonds under
+custody of China Bond as collaterals. In 2021, the
+Bank won many honors, including the "Best Foreign
+Currency Lending Panel Bank", the "Best Foreign
+Currency Lending Member" and the "Best Foreign
+Currency Repo Member" conferred by China Foreign
+Exchange Trade System.
+ICBC
+Money Market Activities
+Financial Market Business
+At the end of 2021, the annuity funds under custody
+amounted to RMB407.0 billion. The Bank managed
+11.98 million individual enterprise annuity accounts,
+and the annuity funds under custody reached
+RMB1,152.3 billion. The Bank obtained the trustee,
+custodian and investment manager qualifications
+for occupational annuities in 33 regions under
+overall planning, with the total size of occupational
+annuities of the three qualifications ranking first in
+the market. The Bank ranked first among peers in
+terms of the scale of enterprise annuity funds under
+custody, number of individual enterprise annuity
+accounts and annuity funds under custody.
++
+In terms of RMB, the Bank actively fulfilled its
+responsibilities as a large bank and assisted in
+maintaining the smooth operation of the money
+market. It rationally devised financing maturities,
+varieties and counterparty structure, and constantly
+improved the profitability of fund operation. As
+it steadily promoted business innovation and
+development, it completed the first batch of offshore
+RMB negotiable certificate of deposit ("NCD")
+investments via "Southbound Connect".
+152
+42
+253
+152
+African Representative Office
+1
+1
+Eliminations
+(51,999)
+2,859
+Subtotal
+451,549
+418,192
+3,084
+421
+426
+51,106
+3,870
+Investment in Standard Bank(1)
+(44,378)
+59,548
+950
+75
+3,887
+102
+108
+Macau SAR
+Asia-Pacific Region
+145,860
+118,253
+1,057
+91
+90
+90
+(except Hong Kong SAR
+and Macau SAR)
+Europe
+83,726
+89,030
+401
+302
+75
+America
+330
+Institutions (country/region)
+Total
+Yangon Branch (Myanmar)
+ICBC (Almaty) (Kazakhstan)
+Karachi Branch (Pakistan)
+Mumbai Branch (India)
+Dubai (DIFC) Branch (UAE)
+Abu Dhabi Branch (UAE)
+Doha Branch (Qatar)
+Riyadh Branch (Saudi Arabia)
+Kuwait Branch (Kuwait)
+Sydney Branch (Australia)
+ICBC (New Zealand) (New
+Zealand)
+Auckland Branch (New Zealand)
+Europe
+14.2
+Frankfurt Branch (Germany)
+Luxembourg Branch (Luxembourg)
+ICBC (Europe) (Luxembourg)
+Paris Branch (France)
+Amsterdam Branch
+(the Netherlands)
+Brussels Branch (Belgium)
+Milan Branch (Italy)
+Madrid Branch (Spain)
+Warsaw Branch (Poland)
+Greece Representative Office
+(Greece)
+ICBC (London) (UK)
+London Branch (UK)
+ICBC Standard Bank (UK)
+Bank ICBC (JSC) (Russia)
+ICBC Turkey (Turkey)
+Prague Branch (Czech Republic)
+Zurich Branch (Switzerland)
+ICBC (Austria) (Austria)
+Hong Kong SAR and Macau SAR
+Institutions (country/region)
+Hong Kong Branch
+(Hong Kong, China)
+ICBC (Asia) (Hong Kong, China)
+ICBC International
+1,565
+Phnom Penh Branch (Cambodia)
+158
+Vientiane Branch (Lao PDR)
+Hanoi Branch (Vietnam)
+455,419
+422,079
+3,414
+3,017
+421
+426
+Note: (1) The assets represent the balance of the Bank's investment in Standard Bank and the profit before taxation represents the Bank's
+gain on investment recognized by the Bank during the reporting period.
+As at the end of 2021, total assets of overseas
+institutions (including overseas branches, subsidiaries
+and investment in Standard Bank) of the Bank were
+USD455,419 million, representing an increase of
+USD33,340 million or 7.9% from the end of the
+previous year, and they accounted for 8.2% of the
+Group's total assets. Profit before taxation during the
+reporting period was USD3,414 million, representing
+an increase of USD397 million or 13.2% and
+accounting for 5.1% of the Group's profit before
+taxation. Total loans amounted to USD197,279
+million, representing a decrease of USD5,565 million
+or 2.7% from the end of the previous year; and total
+deposits were USD149,273 million, representing an
+increase of USD1,052 million or 0.7%.
+56
+ICBC
+DISTRIBUTION OF OVERSEAS INSTITUTIONS
+Discussion and Analysis
+Asia-Pacific Region (except Hong Kong SAR and Macau SAR)
+Institutions (country/region)
+Tokyo Branch (Japan)
+Seoul Branch (South Korea)
+Busan Branch (South Korea)
+Mongolia Representative
+Office (Mongolia)
+Singapore Branch (Singapore)
+ICBC (Indonesia) (Indonesia)
+ICBC (Malaysia) (Malaysia)
+Manila Branch (Philippines)
+ICBC (Thai) (Thailand)
+Ho Chi Minh City Representative
+Office (Vietnam)
+1,373
+3.8
+214,414
+22.2
+87,859
+20.2
+Northeastern China
+1,333,077
+(Hong Kong, China)
+1,639
+9.9
+41,900
+9.6
+Overseas and other
+4,100,318
+11.7
+554
+3.3
+23,323
+5.4
+Eliminated and
+(6,053,959)
+3,678
+(17.3)
+12.9
+Western China
+16.7
+1,983
+11.9
+48,234
+11.1
+Bohai Rim
+5,186,815
+14.7
+2,713
+16.4
+68,065
+15.7
+Central China
+3,786,925
+10.8
+3,453
+20.8
+83,257
+19.2
+4,553,489
+204,181
+unallocated assets
+35,171,383
+Discussion and Analysis
+MAJOR INDICATORS FOR OVERSEAS INSTITUTIONS
+Assets
+(in USD millions)
+Profit before taxation
+(in USD millions)
+Number of institutions
+At the end
+At the end
+At the end
+At the end
+Item
+of 2021
+of 2020
+2021
+2020
+of 2021
+of 2020
+Hong Kong SAR and
+55
+Total
+Annual Report 2021
+Cross-border RMB business: The Bank pressed head
+with the construction of cross-border RMB product
+system and multi-scenario services, fostered offshore
+RMB market, innovated offshore RMB investment
+and financing products, and continued to promote
+RMB-denominated settlement in the whole process
+of bulk commodity transactions. The Bank promoted
+the construction of the account system of the
+separate accounting units in free trade zones, and
+supported the innovative development of cross-
+border RMB business in key areas such as Shanghai
+Lingang Special Area, Greater Bay Area and Hainan
+Free Trade Port. The Bank strengthened cooperation
+with payment institutions, cross-border e-commerce
+platforms and other entities, continuously optimized
+the cross-border payment business platform of
+"Cross-border e-Business Connect", and supported
+the development of new cross-border e-commerce
+firms. In 2021, cross-border RMB business exceeded
+RMB8.5 trillion.
+100.0
+16,590
+100.0
+434,089
+100.0
+Note: Overseas and other assets include investments in associates and joint ventures.
+Internationalized Operation
+The Bank served and integrated into the high-level
+opening-up of the state, actively grasped changes in
+foreign investment and trade patterns, deeply implemented
+the strategy to become the preferred bank for foreign
+exchange business, officially unveiled the financial product
+brand of "YES ICBC" for foreign exchange, and proactively
+drove domestic business development and the Group's
+market competitiveness enhancement through high-quality
+internationalized development.
++
+Corporate banking: The Bank provided "one-stop"
+financial services in local and foreign currencies for
+Chinese enterprises "Going Global" and foreign
+enterprises "Bringing In" by making comprehensive
+use of financial products such as overseas bond
+issuance, cross-border merger and acquisition,
+project financing, international trade financing,
+derivative trading and global cash management.
+The Bank has remained the first place in terms
+of the number of deals completed for the cross-
+border acquisition transactions of Chinese-invested
+enterprises according to the ranking promulgated
+by Refinitiv. The Bank was among market leaders in
+Hong Kong IPO underwriting and sponsorship, and
+the underwriting of overseas bonds and offshore
+China bonds.
+Personal banking: The Bank was the first to launch
+"Cross-boundary Wealth Management Connect"
+business in Guangdong-Hong Kong-Macao Greater
+Bay Area, providing "Southbound Connect" and
+"Northbound Connect" investment services for the
+customers in nine cities in the Pearl River Delta, Hong
+Kong SAR and Macau SAR. The Bank built a cross-
+border service platform for entrepreneurs through
+"Entrepreneurs Service Center" in the Greater
+Bay Area. The Bank gathered pace in overseas
+bank card product innovation and digital service
+improvement, rolled out new products (digital bank
+card, private banking credit card and debit card of
+wealth management) abroad and diversified online
+financial services (such as card opening, installment
+and acquiring). The Bank continued to optimize the
+functions of overseas mobile payment and acquiring
+products of bank cards, promoted ICBC e Payment,
+and further promoted the interconnection of cross-
+border payment in the Greater Bay Area.
+54
+ICBC
+Discussion and Analysis
++
+Internet financial services: Through internet banking,
+mobile banking and other online channels, the Bank
+offered services across 46 countries and regions
+in 15 languages. A full range of financial services,
+including account query, transfer and remittance,
+investment and wealth management, payroll, fund
+payment and cross-border payment were available
+to customers. Focusing on key products, scenarios
+and regions, the Bank promoted online business
+innovation and characteristic development of
+overseas institutions.
+Financial market business: The Bank completed
+"Southbound Connect" investment trading with
+its own funds in the first batch, assisted overseas
+institutions in financing in the interbank market
+through panda bond underwriting service, and
+established the interbank bond and foreign
+exchange market business partnership with
+overseas institutional investors from more than 60
+countries and regions. The Bank provided prime
+trading services for "Going Global" and "Bringing
+In" customers, and increased foreign exchange
+settlement and sale business for spot (10 currencies
+such as CZK) and forward (6 currencies such as HKD)
+difference delivery. The Bank entered the first prime
+brokerage trading for foreign exchange swap in
+RMB in the interbank foreign exchange market and
+the first USD rate swap of USD-linked SOFR, and
+constantly enhanced market making capabilities and
+market competitiveness of foreign exchange trading.
+Global asset management business: The Bank
+further advanced the steady development of foreign
+exchange and cross-border wealth management
+business. At the end of 2021, China CGB Index Fund
+"ICBC CSOP WGBI CGB Index ETF" for which ICBC
+Wealth Management and ICBC Asset Management
+(Global) provided investment advisory service, as
+the world's largest offshore pure CGB ETF product,
+become an important channel for overseas funds to
+invest in CGB assets. "ICBC CSOP Bloomberg CGB+
+Policy Bank Bond Index ETF" became the largest
+Chinese rate bond ETF product in Hong Kong's
+market.
+Global custody business: The global custody
+business hit another record high. Specifically,
+the custody of domestic investment by overseas
+customers surpassed RMB200.0 billion. The Bank
+was approved eligible for pilot custody clearing bank
+of the first batch of "Southbound Bond Connect"
+and completed the first batch of trading. The
+Bank was among the first batch to support QFIs
+to complete securities investment and refinancing
+securities lending in Beijing Stock Exchange, and
+the first exercise of employees' CDR right. It further
+reinforced innovation advantages of cross-border
+custody.
+The Bank continued to improve its global network
+layout. Panama Branch was officially opened. At
+the end of 2021, the Bank established 421 overseas
+institutions in 49 countries and regions and indirectly
+covered 20 African countries as a shareholder of
+Standard Bank Group. It had 125 institutions in 21
+countries along the Belt and Road. The Bank also
+established correspondent banking relationships with
+1,404 overseas banking institutions in 142 countries
+and regions, making its service network covering
+six continents and important international financial
+centers around the world.
+ICBC (Macau) (Macau, China)
+by the Head Office, 459 branches in capital cities
+and tier-two branches, 15,508 outlets, 32 Head
+Office-level profitability units along with their
+directly managed institutions and branches, and 133
+subsidiaries and their branches.
+Africa
+0
+Educational Background of Employees
+As at the end of 2021, the Bank had a total of 434,089 employees, including 410,766 employees in the Head Office
+and domestic branches, 7,467 employees in domestic subsidiaries, and 15,856 employees in overseas institutions.
+Basic Information on Employees and Institutions
+The Bank's 2021 remuneration plan was prepared
+and implemented as per the internal decision-making
+process. The execution of total annual salaries was
+reported to the authority for filing according to
+national regulations. During the reporting period, the
+Bank's Senior Management fulfilled the indicators
+concerning economic, risk and social responsibilities
+well, and final results will be determined after
+deliberation by the Board of Directors.
+The Bank continuously optimized the remuneration
+resource allocation mechanism with value creation
+as the core, resolutely maintained a fair allocation
+concept with incentive commensurate with restraint,
+transmitted the Group's strategic objectives
+for business management, and allocated more
+remuneration resources to the grassroots employees,
+for the purpose of mobilizing and inspiring the
+business vitality of institutions at all tiers.
++
+Discussion and Analysis
+ICBC
+52
+remuneration consisted of basic
+remuneration, performance-based remuneration and
+welfare income. In particular, the basic remuneration
+depended on an employee's value contribution and
+ability to perform duties, and the performance-based
+remuneration was based on the overall situation of
+the Bank, the employee's institution or department,
+and the employee's personal performance
+measurement results. Meanwhile, the performance-
+based remuneration to the Senior Management and
+employees on key positions was subject to a deferred
+payment and recourse deduction mechanism, so
+as to balance risks and incentives. For employees
+who violated regulations and disciplines or had
+abnormal exposure of risk losses within their duties,
+the performance-based remuneration for the
+corresponding period shall be deducted, stopped in
+payment and recovered according to the severity.
+During the reporting period, according to relevant
+measures, the Bank deducted or stopped payment of
+corresponding performance-based remuneration to
+employees who were subject to disciplinary action or
+other treatment due to violation of regulations and
+disciplines or abnormal exposure of risk losses within
+their duties.
+Employee
+The Bank adopted a remuneration policy that was
+in line with corporate governance requirements,
+combination with high-quality development
+targets, in adaptation to risk management system
+and talent development strategy, and well-matched
+with employees' value contribution, so as to advance
+the sound operation and high-quality development
+of the whole bank. The Bank's remuneration
+management policy was formulated and adjusted
+in strict accordance with applicable national
+regulations, regulatory requirements and corporate
+governance procedures.
+in
+Remuneration Policy
+management and executive English training for
+managers to enhance their management capabilities.
+The Bank continued to carry out thematic training
+on FinTech, inclusive finance, AML and ESG to
+improve the professional competency and business
+capabilities of professionals. The Bank started cross-
+provincial rotating training for the heads of front-
+line outlets, coordinated and strengthened training
+for personnel on other positions, extensively
+carried out the bank-wide reading campaign and
+helped employees perform duties and grow up on
+appropriate positions.
+The Bank continued to develop tiered and
+classified training programs to meet the needs of
+business development and talent team building.
+The Bank concentrated efforts on implementing
+leadership training camp, Mini MBA Program, credit
+⚫ Master
+Bachelor
+The Bank endeavored to promote the acceptance of
+corporate culture. The Bank, focusing on its strategy,
+expanded the connotation of corporate culture,
+strengthened cultural transmission, and reinforced
+employees' strategic consensus and cultural identity
+by preparing and publishing white papers on cultural
+building and producing micro-videos to interpret the
+strategy. The Bank carried forward the "Innovative
+ICBC" project, put into production the incubation
+system, and created an atmosphere of innovation
+for all employees. ICBC continued to implement
+the cultural event "That's China, That's ICBC" to
+promote cultural integration and dissemination. The
+Bank launched "Red Financial Footprint" campaign
+to guide employees to inherit the tradition and spirit
+of revolution. The Bank produced special educational
+films such as "Comprehensive and Strict Governance
+Iover Party and ICBC", carried out special warning
+education on "Financial Criminal Cases", to foster a
+clean and honest financial culture.
+Doctorate
+60.5%
+29.5%
+Above 51 years old
+23.0%
+41-50 years old
+Macau Branch (Macau, China)
+31-40 years old
+20.6%
+●Below 30 years old
+0
+Structure of Employee Age
+Male
+O
+Structure of Employee Gender
+7.2%
+Below associate
+22.3%
+Associate
+0.2%
+9.8%
+With the focus on high-quality development of
+operation and areas vital to market competition,
+the Bank assigned more human resources to
+strategic areas. The Bank deepened technological
+empowerment, moved ahead with the construction
+of retail and FinTech teams and improved operation
+through the transformation and upgrading of
+human resources. The Bank expanded frontline
+marketing service personnel to strongly support
+the competitiveness enhancement of outlets. In
+line with the trend of digital transformation, the
+Bank optimized institutional function setting and
+deepened online and offline integrated development.
+The Bank increased support for personnel in key
+counties and rural areas and promoted financial
+service resources to lower tiers.
++
++
+Establishing a diversified service system. A personalized service system has been established to meet customers'
+diversified financial service needs. For elderly customers, the Bank has launched Happy Life 2.0, which helps elderly
+customers cross the "digital divide" with larger characters and simpler interaction. For people with visual impairment,
+barrier-free services have been upgraded. By adding the screen reading function on the function interface, it has made
+it easier for people with visual impairment to use the mobile application. For key markets in counties, the Bank has
+launched Beautiful Home 2.0. It has developed exclusive products designed to bring tangible benefits to the people,
+business and customers in rural areas and made quality financial services available in counties, towns and villages,
+making financial contributions to the implementation of the national strategy of rural revitalization. For small and
+micro enterprise customers, the Bank has launched the Inclusive Finance version. With "one-stop" inclusive financial
+services with financing at the core and a series of "Small and Micro Enterprise e Loan" products including credit loans,
+pledged loans and digital supply chain, it has improved the inclusiveness and availability of financial services.
+The new version of mobile banking has strengthened value creation with "human + digital" resources, and it has
+focused more on leveraging platform advantages, paid more attention to users' mindset and experience and attached
+more importance to common growth with users' wealth. It has delivered a value to users, that is, "companionship
+itself is the best wealth". It has completed the transformation from "face to face" interaction at traditional physical
+outlets to online "screen to screen" interaction, from traditional wealth management product recommendation and
+sales to professional wealth investment advice giving that focuses on long-term growth, and from simple recording
+of account payments to deep connection of finance with scenarios. It has made financial life more convenient and
+friendlier to users, and has injected new vitality and connotation into the Bank's brand of "By Your Side and As Your
+Trust".
+Innovating in "cloud" service modes. The new version has launched the same-screen tutoring service. When having
+difficulties transferring or remitting money via mobile banking, customers can contact a remote customer service
+representative via one button, and the remote customer service representative will assist customers completing the
+whole business procedures by "checking the page via video and explaining services and instructing customers via
+voice", thus solving customers' difficulties in a "screen-to-screen" way. In addition, "cloud" outlets, "cloud" studios
+and "cloud" customer service have introduced "online malls" of 16 thousand ICBC outlets and 28 thousand wealth
+managers to provide "one-to-one" exclusive service to customers online.
+Upgrading the wealth management service. The new version has upgraded from wealth management product sales
+to wealth companionship and established a set of wealth companionship service system running through the whole
+investment process (before, during and after investment). Before investment, it can detect the health condition of
+the customer's asset allocation via one button and generate personalized investment advice; during investment, it
+can provide friendly interactive experience of product transaction; and after investment, it can provide customers
+with bank statements and fund taking services. In addition, the new version has added the intelligent payroll
+planning service, which, with a focus on salary payment, check and use journeys, can meet customers' remuneration
+management needs.
+Building the "intelligent operation engine". The new version of mobile banking has adopted the leading "intelligent
+brain operation engine" technology. Supported by strong GPU server computing power and data storage
+and management capabilities and hundreds of intelligent algorithms, it can push suitable contents like product
+information, news and privileges in a targeted manner to customers when they use relevant services of mobile
+banking, thus providing personalized, guided journey services.
+On 18 November 2021, the Bank officially launched Mobile Banking 7.0. After a decade, ICBC Mobile Banking has
+become the most trustworthy banking APP with the most users. Themed by "companionship", with comprehensive
+upgrades in wealth management, services, personality, interaction and privileges, Mobile Banking 7.0 aims to provide
+all-round interaction and whole-journey companionship to nearly 470 million customers.
+ICBC Launched Mobile Banking 7.0
+Discussion and Analysis
+49
+Annual Report 2021
+In serving consumption relating to people's
+livelihood, the Bank assisted in ensuring basic
+living standards and improving the quality of and
+expanding consumption. Centering on the fields
+of education, healthcare, etc., the Bank provided
+convenient online financial services such as "Campus
+Affairs Management Cloud" "Commercial Medical
+Cloud", electronic certificates of medical insurance
+and electronic social insurance cards to more than
+25 thousand schools, some 100 medical institutions
+and over ten million personal customers. Using the
+strategy of expanding domestic consumption as an
+opportunity, with a focus on the fields of travel,
+shopping, catering, entertainment, e-commerce,
+etc., the Bank continued to carry out series payment
+activities aimed to benefit the people, and expanded
+e-CNY application scenarios, contributing to quality
+improvement and expansion of consumption.
+In serving small and micro enterprises, the Bank
+actively implemented bailout policy and inclusive
+finance. The Bank rolled out the exclusive personal
+mobile banking version of Inclusive Finance for Small
+and Micro Enterprises and the inclusive finance zone
+on Enterprise Mobile Banking. By putting together
+urgent financial services such as online credit limit
+testing and speedy loan granting and adopting
+video interview, face recognition and other technical
+means, it improved the efficiency and risk control
+level of application, approval, contract signing, draw-
+down, payment and repayment procedures.
+payment, village affairs and business matchmaking,
+the Bank launched four types of agriculture-
+related services, namely, people's livelihood related
+finance, inclusive finance, government services
+related finance, and agricultural assistance finance,
+and developed new farm tools, new supermarkets
+and new platforms that are easy to operate for
+"Sannong" (agriculture, farmers and rural areas)
+customers and which they are willing to use. The
+Bank also upgraded the county edition of mobile
+banking to version 2.0. At the end of 2021,
+customers of the county version 2.0 of mobile
+banking reached 16.03 million. Moreover, the Bank
+continued to use ICBC Mall to assist Sannong. Rural
+revitalization related transaction volume of ICBC Mall
+recorded RMB2.76 billion.
+In serving the rural revitalization strategy, the
+Bank promoted common prosperity and interactive
+development of urban and rural areas. Adhering to
+going online, going digital and going ecological,
+the Bank established the new-type rural financial
+service system in which online and offline services
+are integrated and complement each other, and
+developed the "ICBC Xingnongtong" APP. Based on
+its core financial capabilities such as account, loan,
+Serving the Real Economy and Building an
+Ecological Bank
+to face" service at outlets to "screen to screen"
+interaction online. The scope of remote online
+video review business was expanded to include
+more frequently used services including debit card
+password changing, cancellation of loss reporting of
+debit cards, etc. Card-free and certificate-free service
+scenarios at outlets and medialess service scenarios
+of intelligent devices were enriched by launching
+the "Scan and take a queue number" function and
+the counter service evaluation function on mobile
+banking. The "ordering online and mailing offline"
+service of mobile banking covered ten scenarios
+including issuance of credit certification, printing of
+details of history, query of loan details, etc., and its
+replacement rate of outlet services exceeded 90%.
+Accelerating interconnection between domestic
+and overseas business and serving domestic and
+international circulations. Centering on mobile
+finance, corporate service and cross-border scenarios,
+the Bank worked faster to improve the quality and
+standard of overseas online financial services. Version
+6.0 of overseas personal mobile banking was fully
+upgraded at pilot institutions including ICBC (Asia),
+ICBC (Macau), Singapore Branch, and ICBC (Thai).
+Overseas corporate internet financial services were
+further improved, and the global version of corporate
+internet banking was continuously promoted at
+overseas institutions. New highlights such as overseas
+study remittance and payment were developed
+in cross-border business scenarios, the overseas
+study remittance product was launched in personal
+mobile banking, and the overseas services of ICBC
+e-Payment were promoted, making overseas mobile
+payment more convenient.
++
+Discussion and Analysis
+50
+ICBC
+Discussion and Analysis
+Outlet Development
+Human Resources Management
+Human Resources Management,
+Employees and Institutions
+intelligent services were provided, up 11% from last
+year. In the First Intelligent Service Robot Contest
+held by China Banking Association, the Bank was
+ranked No. 1 in intelligent audio robot and No. 2 in
+intelligent text robot.
+Discussion and Analysis
+51
+Annual Report 2021
+The intelligent transformation of customer services
+was accelerated. The Bank expanded the intelligent
+service entrances of ICBC intelligent robot "Gino
+(Gong Xiao Zhi)" to 96, including incoming and
+outgoing calls, audio + text, online + offline and
+inside + outside of the Bank. The accuracy of audio
+and text recognition was above 97%. 630 million
+experience monitoring and evaluation
+system was established. The Bank launched a
+special campaign to solve the hotspot problems
+complained by customers. The Bank established a
+system for "feedback of customers" and "voice
+of employees", set up a customer satisfaction
+monitoring system combining instant feedback and
+special survey, conducted experience monitoring
+in multiple dimensions and strove to enhance
+customer satisfaction. In 2021, the Bank's customer
+satisfaction stood at 86.8%, and 92.9% of problems
+reported via phone by customers were solved at first
+instance, ranking at the forefront among its peers.
+Employee Specialization
+An
+Outlet services were improved continuously. The
+Bank carried out the campaign of "Financial
+Standards for the Benefit of People and Enterprises",
+took a combination of measures to improve the
+service quality of outlets and endeavored to become
+a service benchmark of outlets. The Bank enriched
+barrier-free facilities, upgraded 4,691 outlets for the
+elderly, promoted the service functions of self-service
+devices for the elderly, and put in place ATMs with
+passbook function to meet the needs of the elderly
+to provide them with more convenient and intimate
+and faster services. In 2021, 110 outlets of the Bank
+were named 1,000 Best Role Model Units in China's
+banking industry.
+At the end of 2021, the Bank had 15,767 outlets,
+24,145 self-service banks, 79,793 intelligent
+devices, and 66,563 ATMs with trading volume of
+RMB5,312.6 billion.
++
+Continuing to enrich outlets' pan-finance services
+and functions. With a focus on reforms to streamline
+administration and delegate power, improve
+regulation, and upgrade services, the Bank promoted
+one-stop government services and added 3,020
+outlets that offer "outlet +" one-stop government
+services. The Bank led the industry in launching such
+functions as issuance of electronic social insurance
+cards, printing of credit reports and issuance of
+electronic medical insurance vouchers in intelligent
+devices. As a result, outlets' "finance + pan-finance"
+comprehensive service capability further improved.
+Accelerating digital transformation of outlets. The
+Bank extensively applied new technological means
+such as big data, Al, intelligent voice and RPA in the
+layout, location selection, systems & platforms, self-
+service devices, business operation, etc. of outlets,
+which further improved the resource utilization
+efficiency of outlets. It continued to promote the
+mode of operations services featuring convenient
+online acceptance, intensive and efficient handling
+and speedy delivery of services at outlets, and
+completed its promotion and application in the
+scenarios of the five major fields of products in kind,
+information, cash, account, and foreign exchange.
+In addition, the Bank continuously optimized
+the combined service process of intelligent teller
+machines and expanded "medialess" services at
+outlets to cover more than 150 high-frequency
+transactions including debit card deposit and draw-
+down, transfer & remittance, account information
+query, etc.
+Service Improvement
+Steadily promoting outlet optimization and
+adjustment. Throughout 2021, the Bank optimized
+the layout of 714 outlets, and renovated 1,528
+outlets. The Bank effectively increased service
+supply in counties by setting up 151 new outlets in
+counties, including 15 counties that had never had
+an ICBC outlet before. The Bank practiced the green
+financial development philosophy. It piloted "zero
+carbon outlets" in Guangdong, Tianjin, Guangxi,
+etc. and actively fulfilled its responsibilities as a large
+bank.
+4
+4
+More services were supplied for the people's
+livelihood. Relying on 15.5 thousand "ICBC Sharing
+Stations", the Bank carried out more than 40
+thousand diverse public welfare activities with the
+theme of warm care in winter, volunteer service
+publicity, support for national college entrance
+exam and anti-fraud on the Double Ninth Festival
+etc., cumulatively serving more than 40 million
+person-times customers. It constantly enriched the
+connotation of public welfare service of "ICBC
+Sharing Stations" and cooperated with All-China
+Federation of Trade Unions to build "Trade Union's
+Service Stations for Outdoor Workers ICBC Sharing
+Stations".
+Personal banking
+26.9%
+● Operation and comprehensive 16.5%
+support
+ICBC CREDIT SUISSE ASSET MANAGEMENT
+ICBC Credit Suisse Asset Management is mainly engaged
+in fund raising, fund sales, asset management and other
+businesses approved by CSRC. It had many business
+qualifications such as mutual fund, QDII, enterprise
+annuity, specific asset management, domestic (foreign)
+investment manager of social security fund, RQFII,
+insurance fund management, special asset management,
+occupational annuity and basic endowment insurance
+investment manager, and was one of the "fully qualified"
+fund companies in the industry.
++
+ICBC Credit Suisse Asset Management quickened
+steps in high-quality development, and continuously
+improved the value contribution. The investment
+performance remained in a leading position and
+the average yields of equity funds and bond funds
+actively managed remained in the forefront of
+large fund companies. ICBC Credit Suisse Asset
+Management practiced the concept of socially
+responsible investing, and won the "Gold Fund SRI
+(ESG) Return Fund Management Company Award"
+of Shanghai Securities News.
+ICBC Credit Suisse Asset Management served the
+wealth management needs of residents. It upgraded
+the customer service mode and provided the
+whole process companion service of "investment +
+advisory". It set up an investor protection committee,
+strengthened the protection of investors' legitimate
+rights and interests, and further promoted investor
+education, which was evaluated as excellent in the
+assessment of the national securities and futures
+investor education base.
+At the end of 2021, ICBC Credit Suisse Asset
+Management managed 207 mutual funds, and more
+than 690 annuities, special accounts and special
+portfolios, with assets totaling RMB1.72 trillion.
+ICBC LEASING
+ICBC Leasing was mainly engaged in financial leasing
+of large-scale equipment in key areas such as aviation,
+shipping, energy and power, rail transit and equipment
+manufacturing, and provided a number of financial and
+industrial services such as rent transfer, investment fund,
+investment asset securitization, asset trading and asset
+management.
+58
+ICBC
+15.3
+2,537
+41.9%
+8,248,981
+Yangtze River Delta
+4.6
+19,812
+The Bank strictly abided by local regulatory requirements,
+developed the Group's unified risk management strategy
+and risk appetite based on the work idea of "plan
+ahead, see the big from the small, remedy in time and
+draw inferences", promoted inclusion of investment and
+financing data of domestic subsidiaries into the data lake
+to effectively identify, measure, monitor, control and report
+various risks, and enhanced enterprise risk management.
+The Bank adopted strict consolidated and penetration
+management, improved risk prevention & control and
+internal control & compliance capabilities, and pursued
+high-quality development.
+0.2
+The Bank optimized the governance structure of
+subsidiaries, strengthened the support for duty
+performance by directors and supervisors assigned
+to subsidiaries, promoted the organic integration of
+Party building and corporate governance of domestic
+subsidiaries, and continuously improved the effectiveness
+of corporate governance of subsidiaries. The Bank
+promoted the deep and accurate transmission of the
+Group's strategy to subsidiaries, and improved the Group's
+full-product, full-market, full-process and full-lifecycle
+service system and value chain. The Bank improved the
+efficiency of capital use, and optimized the assessment
+mechanism and resource allocation. The industry influence,
+core competitiveness and customer service capability of
+subsidiaries were constantly enhanced.
+The Bank made unremitting efforts in perfecting the
+management system of "Four Beams and Eight Columns",
+issued the Rules for Management of Overseas Institutions,
+Rules for Management of Domestic Integrated Subsidiaries
+and other important policies, and established a subsidiary
+management mechanism featuring "leading coordination
+and focusing on lines" to promote the perfection of the
+subsidiary management system.
+Institutions (country/region)
+Investments in Standard Bank
+(South Africa)
+African Representative Office
+(South Africa)
+ДД
+America
+Institutions (country/region)
+New York Branch (USA)
+ICBC (USA) (USA)
+ICBCFS (USA)
+ICBC (Canada) (Canada)
+ICBC (Mexico) (Mexico)
+ICBC (Brasil) (Brazil)
+ICBC (Peru) (Peru)
+ICBC (Argentina) (Argentina)
+ICBC Investments
+Argentina (Argentina)
+Inversora Diagonal (Argentina)
+Panama Branch (Panama)
+Annual Report 2021
+57
+Discussion and Analysis
+Diversified Operation and Subsidiary
+Management
+The Bank remained committed to serving the real
+economy and supply-side structural reform, focused on
+main business, refined specialized business, and gradually
+created a diversified operation pattern covering fund,
+leasing, overseas investment banking, insurance, wealth
+management, debt-for-equity swap and technology.
+Strategic coordination efficiency was continuously raised.
+61,639
+33
+23.5
+8,145,032
+⚫ Others
+1.0%
+Non-banking business
+2.1%
+23.2
+management
+6.5%
+Risk and compliance
+8.1%
+⚫ FinTech
+49.3%
+⚫ Female
+8.9%
+◆ Operation management
+50.7%
+12.7%
+Corporate banking
+2.3%
+Annual Report 2021
+Emerging business
+Discussion and Analysis
+Head Office
+(%)
+53
+(%)
+institutions
+(%)
+millions)
+Item
+employees
+employees
+Percentage of
+Number of
+As at the end of 2021, the Bank had a total of
+16,590 institutions. Among them, there were
+16,169 domestic institutions and 421 overseas ones.
+Domestic institutions included the Head Office, 36
+tier-one branches and branches directly managed
+5,870,705
+GEOGRAPHIC DISTRIBUTION OF ASSETS, INSTITUTIONS AND EMPLOYEES
+Pearl River Delta
+Percentage
+of assets
+Number of
+Percentage of
+institutions
+Assets
+(in RMB
+NPLs
+(%)
+Loan
+(%)
+NPLs
+Head Office
+791,994
+3.8
+2.74
+772,372
+4.1
+(%)
+21,668
+0.28
+21,603
+650
+861
+1 January 2021
+Transfer:
+to stage 1
+17,860
+(15,581)
+(2,279)
+to stage 2
+(9,856)
+14,056
+(4,200)
+to stage 3
+(3,534)
+(35,319)
+Total
+38,853
+Stage 3
+Stage 1
+211
+impairment losses on loans and advances to
+customers measured at amortised cost
+Movements of allowance for
+Item
+Stage 1
+Stage 2
+Balance at
+223,703
+89,151
+impairment losses on loans and advances to
+customers measured at FVTOCI
+Stage 3
+Total
+217,446
+530,300
+Stage 2
+Movements of allowance for
+Charge/(reverse)
+58,906
+(564)
+110,649
+(2,268)
+(3,460)
+(7)
+223,739
+603,764
+191
+(7)
+28
+219
+31 December 2021
+Note: Please see "Note 23. to the Consolidated Financial Statements: Loans and Advances to Customers" for details.
+As at the end of 2021, the allowance for impairment losses on loans stood at RMB603,983 million, of which RMB603,764
+million at amortised cost, and RMB219 million at fair value through other comprehensive income. Allowance to NPLs was
+205.84%, showing an increase of 25.16 percentage points over the end of last year; allowance to total loans ratio was
+2.92%, showing an increase of 0.07 percentage points.
+68
+ICBC
+(628)
+269,376
+41,831
+Balance at
+previously written off
+67,614
+168,351
+(13)
+(71)
+(84)
+Write-offs and
+(100,447)
+(100,447)
+(551)
+(551)
+transfer out
+Recoveries of loans
+9,020
+9,020
+and advances
+Other movements
+(%)
+In RMB millions
+1.58
+Bohai Rim
+3,371,325
+16.3
+72,241
+2.14
+3,030,552
+16.3
+71,763
+2.37
+Central China
+3,133,539
+15.2
+40,046
+1.28
+2,789,085
+1.15
+15.0
+31,540
+2,746,019
+2.80
+Yangtze River Delta
+4,163,732
+20.2
+35,149
+0.84
+3,582,682
+19.2
+45,304
+1.26
+Pearl River Delta
+3,134,781
+15.2
+33,860
+1.08
+14.8
+MOVEMENTS OF ALLOWANCE FOR IMPAIRMENT LOSSES ON LOANS
+38,584
+Western China
+6.9
+12,834
+0.90
+1,492,087
+8.0
+8,985
+0.60
+Total
+20,667,245
+100.0
+293,429
+1.42
+18,624,308
+100.0
+293,978
+1,429,769
+1.38
+Overseas and other
+28,411
+3,746,867
+18.1
+47,031
+1.26
+3,369,916
+18.1
+47,788
+1.42
+Northeastern China
+895,238
+4.3
+30,600
+3.42
+841,595
+4.5
+3.38
+Personal
+Loan
+NPL ratio
+of electricity, heat,
+0.40
+3,977
+10.2
+995,232
+0.81
+8,653
+gas and water
+9.7
+Production and supply
+management
+and public utility
+0.73
+8,425
+11.8
+1,154,201
+1,065,459
+0.83
+Real estate
+6.5
+Construction
+13.78
+60,272
+4.5
+437,283
+8.31
+38,558
+705,714
+4.2
+Wholesale and retail
+2.32
+16,238
+7.2
+701,094
+4.79
+33,820
+464,169
+312,849
+11,379
+1,370,252
+and postal services
+0.84
+20,683
+25.2
+2,467,959
+0.88
+24,762
+Leasing and
+25.8
+Transportation, storage
+(%)
+NPLs
+(%)
+Loan
+(%)
+NPLs
+2,816,789
+12.5
+1,667,376
+33,824
+Water, environment
+4.20
+65,361
+15.9
+1,555,382
+3.72
+61,602
+15.2
+15.1
+Manufacturing
+commercial services
+2.17
+31,242
+14.8
+1,441,688
+2.03
+1,654,610
+(%)
+2.9
+1.77
+Risk management departments and internal control &
+compliance departments of branches and subsidiaries
+Market Risk
+Management Committee
+Operational Risk
+Management Committee
+Internal Audit Bureau
+Internal Audit Sub-bureau
+Second line of defense
+Primary reporting line
+Secondary reporting line
+Credit Risk
+Management Committee
+-Third line of defense ―
+At the level of branches
+At the level of Head Office
+At the level of the Board of Directors
+Credit Risk
+Credit Risk Management
+Credit risk is the risk where loss is caused to the banking
+business when the borrower or counterparty fails to
+meet its contractual obligations. The Bank's credit risks
+mainly originate from loans, treasury operations (including
+deposits with banks and other financial institutions,
+placements with banks and other financial institutions,
+reverse repurchase agreements, corporate bonds and
+financial bonds investment), receivables and off-balance
+sheet credit business (including guarantees, commitments
+and financial derivatives trading).
+The Bank strictly adheres to regulatory requirements
+regarding credit risk management, diligently fulfills
+established strategies and objectives under the leadership
+of the Board of Directors and the Senior Management,
+and implements an independent, centralized and vertical
+credit risk management mode. The Board of Directors
+assumes the ultimate responsibility for the effectiveness
+of credit risk management. The Senior Management is
+responsible for executing the strategies, overall policy
+and system regarding credit risk management approved
+by the Board of Directors. The Credit Risk Management
+Committee of the Senior Management is the reviewing
+and decision-making organ of the Bank in respect of credit
+risk management, is responsible for reviewing material and
+Risks not mentioned above have been incorporated
+into the enterprise risk management system.
+64
+Risk Management
+Committee
+Senior management of subsidiaries
+branches and subsidiaries
+First line of defense
+Credit risk
+Liquidity risk, interest rate risk
+in the banking book
+Credit and Investment
+Management Department
+Asset & Liability
+Management Department
+Internal Control &
+Asset & Liability
+Management Committee
+Operational risk, compliance risk Compliance Department
+Strategic risk
+IT risk
+Legal risk
+Executive Office
+Office of Steering Group
+for Deepening Reform
+Financial Technology
+Department
+Legal Affairs Department
+Board of directors of subsidiaries
+Reputational risk
+5,538
+ICBC
+important affairs of credit risk management, and performs
+its duty in accordance with the Charters of the Credit
+Risk Management Committee. The credit and investment
+management departments at different levels undertake
+the responsibility of coordinating credit risk management
+at respective levels, and the business departments
+implement credit risk management policies and standards
+for their respective business areas in accordance with their
+functions.
+203,130
+Mining
+culture and sanitation
+2.23
+5,462
+2.5
+245,378
+1.9
+2.42
+2.6
+287,601
+Science, education,
+3.31
+8,636
+2.7
+260,667
+6,947
+Discussion and Analysis
+3,470
+177,408
+According to the regulatory requirement on loan risk
+classification, the Bank implemented five-category
+classification management in relation to loan quality
+and classified loans into five categories: pass, special
+mention, substandard, doubtful and loss, based on the
+possibility of collecting the principal and interest of loans.
+In order to implement sophisticated management of credit
+asset quality and improve risk management, the Bank
+implemented the twelve-category internal classification
+system for corporate loans. The Bank applied five-category
+classification management to personal credit assets and
+ascertained the category of the loans based on the number
+of months in default, expected loss ratio, credit rating,
+collateral and other quantitative and qualitative factors.
+The Bank accurately grasped the layout and direction
+of investment and financing business and strengthened
+credit risk management. The Bank continued to strengthen
+the construction of credit policy system, optimized
+credit product rules, and continuously consolidated the
+foundation of non-standard agency investment policies.
+The Bank highlighted support for key industries, key
+regions, key customers, key projects and other "four
+key and one major" quality credit markets. The Bank
+actively supported the consumption upgrading service
+sectors such as "New infrastructure, New urbanization
+initiatives and Major projects", high-quality development
+of manufacturing industry, medical care, education and
+senior care. The Bank provided key support for strategic
+emerging industries, inclusive finance, green finance, rural
+revitalization, etc. The Bank actively implemented the
+development strategies of five key regions (namely, Beijing-
+Tianjin-Hebei region, Yangtze River Delta, Guangdong-
+Hong Kong-Macao Greater Bay Area, central China and
+Chengdu-Chongqing economic circle), kept improving
+differentiated region credit policies, and actively supported
+the financing needs of relevant industries boosting
+domestic and international circulations and improving
+the global supply chain in the Chinese market. The Bank
+constantly promoted "mobile, digital, intelligent and
+specialized" credit risk management of personal loans,
+continued to strengthen the application of "smart brain"
+to empower personal loan credit risk management,
+improved the comprehensive risk monitoring system of
+personal loans, enhanced the credit risk management
+capability of key business links, and stepped up efforts in
+the risk prevention and control of important risk points
+such as customer access and mortgage projects.
+The Bank imposed stringent control over risks in fields
+of local government debt, real estate, high polluting,
+etc.
+high energy-consuming industries,
+The Bank
+strictly implemented the national laws and regulations
+and regulatory policies on local debt management
+and financing platforms, continued with credit access
+management and monitoring, firmly held the bottom
+line for regional systemic risks, and actively studied and
+prevented operation risks in commercial construction.
+The Bank steadily cooperated with local governments
+and financing platform companies to resolve the risks in
+existing financing due, and devoted great efforts in debt
+risk mitigation and financing monitoring & analysis. The
+Bank strictly implemented the national policy guidance for
+real estate, steadily carried out the prudential management
+requirements for real estate, continued to implement limit
+management for commercial real estate investment and
+financing, paid close attention to the changes of real estate
+market risks in various regions, strictly guarded against
+the risks of real estate group customers engaging high-
+leverage expansion, and improved refined management.
+The Bank implemented the concept of green development,
+further strengthened the investment and financing
+control over the high polluting, high energy-consuming
+industries, and strengthened the adjustment of investment
+and financing structure and risk prevention & control in
+a forward-looking manner, to promote the "low-carbon
+transformation" of high-carbon industries.
+Credit Risk Analysis
+At the end of 2021, the Bank's maximum exposure to
+credit risk, without taking into account of any collateral
+and other credit enhancements, was RMB36,737,042
+million, an increase of RMB1,720,224 million compared
+with the end of the previous year. Please refer to "Note
+49.(a)(i) to the Consolidated Financial Statements:
+Maximum Exposure to Credit Risk Without Taking
+Into Account of Any Collateral and Other Credit
+Enhancements". For mitigated risk exposures of credit
+risk asset portfolio of the Bank, please refer to the section
+headed "Credit Risk" of the 2021 Capital Adequacy
+Ratio Report of Industrial and Commercial Bank of China
+Limited.
+Annual Report 2021
+65
+1.71
+Discussion and Analysis
+Item
+Pass
+Special mention
+NPLs
+Substandard
+7,593
+1.8
+DISTRIBUTION OF LOANS BY FIVE-CATEGORY CLASSIFICATION
+Business departments of
+Loan
+NPL ratio
+(%)
+NPLs
+(%)
+Corporate loans
+12,194,706
+59.0
+254,887
+Loan
+2.09
+59.6
+253,815
+2.29
+Short-term corporate
+2,737,742
+13.2
+107,390
+11,102,733
+3.92
+(%)
+(%)
+29,614
+0.16
+20,667,245
+100.00
+18,624,308
+100.00
+According to the five-category classification, pass loans amounted to RMB19,961,778 million at the end of 2021,
+representing an increase of RMB2,043,348 million when compared with the end of the previous year and accounting for
+96.59% of total loans. Special mention loans stood at RMB412,038 million, representing an increase of RMB138 million, and
+accounting for 1.99% of the total, with a drop of 0.22 percentage points. NPLs amounted to RMB293,429 million, showing
+a decrease of RMB549 million, and NPL ratio was 1.42%, with a decrease of 0.16 percentage points.
+NPLs
+DISTRIBUTION OF LOANS AND NPLS
+At 31 December 2021
+Percentage
+NPL ratio
+Percentage
+NPL ratio
+Item
+Loan
+In RMB millions, except for percentages
+At 31 December 2020
+0.14
+2,643,212
+130,893
+7,944,781
+38.4
+38,542
+0.49
+7,115,279
+38.2
+39,541
+Personal loans
+0.56
+6,362,685
+30.8
+15,460
+0.24
+5,728,315
+30.8
+16,207
+Residential mortgages
+14.2
+0.15
+2.2
+4.95
+loans
+Medium to long-term
+9,456,964
+45.8
+147,497
+1.56
+622
+8,459,521
+122,922
+1.45
+corporate loans
+Discounted bills
+527,758
+2.6
+406,296
+45.4
+Item
+29,551
+149,926
+12,906
+3.7
+681,610
+1.90
+13,179
+3.3
+692,339
+1.89
+Credit card overdrafts
+1.30
+6,760
+2.8
+521,638
+0.97
+6,811
+3.4
+loans
+702,441
+Total
+100.0
+Percentage
+NPL ratio
+Percentage
+At 31 December 2021
+In RMB millions, except for percentages
+At 31 December 2020
+DISTRIBUTION OF CORPORATE LOANS AND NON-PERFORMING CORPORATE LOANS OF DOMESTIC BRANCHES BY
+INDUSTRY OF LOAN CUSTOMERS
+Discussion and Analysis
+20,667,245
+ICBC
+Corporate NPLs were RMB254,887 million, showing an increase of RMB1,072 million when compared with the end of the
+previous year, and representing a NPL ratio of 2.09%, with a decrease of 0.20 percentage points. Personal NPLs amounted
+to RMB38,542 million, showing a decrease of RMB999 million, and represented a NPL ratio of 0.49%, with a decrease of
+0.07 percentage points.
+1.58
+293,978
+100.0
+18,624,308
+1.42
+293,429
+66
+0.81
+Personal business
+2.00
+(%)
+96.21
+412,038
+1.99
+411,900
+2.21
+293,429
+Amount
+17,918,430
+1.42
+1.58
+134,895
+0.66
+114,438
+0.61
+128,983
+0.62
+293,978
+consumption loans
+96.59
+(%)
+3,668
+0.9
+183,716
+1.65
+3,092
+0.9
+187,316
+19,961,778
+Doubtful
+Total
+At 31 December 2021
+In RMB millions, except for percentages
+At 31 December 2020
+Percentage
+Percentage
+Amount
+Loss
+Item
+Management of Branches
+Enterprise risk, market risk,
+country risk
+(in USD
+Institution
+Principal business
+paid-in capital
+millions)
+millions)
+Net profit
+(in USD
+millions)
+Net assets
+Industrial and Commercial Bank of China
+HKD44,188 million
+118,979.38
+18,416.05
+726.58
+(Asia) Limited
+ICBC International Holdings Limited
+Investment banking
+Commercial banking
+HKD5,963 million
+Total assets
+(in USD
+Issued share
+Non-standard debt assets
+Other assets
+Total
+98,541
+4.7
+233,083
+11.1
+capital/
+2,103,354
+60
+ICBC
+Discussion and Analysis
+Major Controlled Subsidiaries and Equity Participating Company
+Major Overseas Subsidiaries
+At 31 December 2021
+2021
+100.0
+48.3
+7,954.56
+2.74
+THB20,132 million
+9,120.79
+1,114.66
+81.88
+Commercial banking
+KZT8,933 million
+599.72
+Commercial banking
+83.51
+Industrial and Commercial Bank of China
+(New Zealand) Limited
+Commercial banking
+NZD234 million
+1,530.75
+192.38
+7.89
+Industrial and Commercial Bank of China
+(Europe) S.A.
+18.80
+1,680.45
+Industrial and Commercial Bank of China
+(Thai) Public Company Limited
+Industrial and Commercial Bank of China
+(Almaty) Joint Stock Company
+299.77
+Industrial and Commercial Bank of China
+Commercial banking
+MOP589 million
+54,595.95
+3,720.41
+282.98
+(Macau) Limited
+11.01
+PT. Bank ICBC Indonesia
+Industrial and Commercial Bank of China
+(Malaysia) Berhad
+Commercial banking
+IDR3.71 trillion
+MYR833 million
+4,421.83
+435.04
+13.87
+987.88
+Commercial banking
+Commercial banking
+1,016,593
+bonds under reverse repurchase agreements
+2.22
+242,380
+100.0
+10,938,653
+Total
+1.80
+5,732
+247,866
+9,768,044
+2.9
+Other
+14.00
+11,743
+0.9
+83,886
+11.08
+8,095
+317,641
+0.7
+2.5
+2.22
+Percentage
+NPL ratio
+Percentage
+At 31 December 2020
+In RMB millions, except for percentages
+At 31 December 2021
+DISTRIBUTION OF LOANS AND NPLS BY GEOGRAPHIC AREA
+5,495
+Discussion and Analysis
+Annual Report 2021
+The Bank continued to strengthen risk management of
+financing in various industries, intensified the disposal
+of non-performing assets with RMB190.1 billion NPLs
+recovered or disposed accumulatively, and actively
+promoted the transformation of risk asset management.
+Except for the deterioration of loans to customers in
+some industries due to external factors such as COVID-19
+pandemic, the loan quality was generally stable.
+mainly for steadily satisfying the investment and financing
+needs arising from significant projects and projects for
+people's livelihood in the areas of urban infrastructure
+construction, ecological environment protection and
+public services. Manufacturing loans rose by RMB99,228
+million, an increase of 6.4%, mainly due to continuously
+increased support for manufacturing, faster credit granting
+structure adjustment and fast growth of loans to leading
+and backbone enterprises in manufacturing of electrical
+equipment, general equipment, food and medicine.
+The Bank continued to propel the optimization and
+adjustment of the industry's credit structure and stepped
+up efforts to shore up the development of the real
+economy. Loans to transportation, storage and postal
+services increased by RMB348,830 million as compared
+with the end of the previous year, representing a growth
+rate of 14.1%, mainly due to active support for the
+liquidity needs of highway, railway, airport and berth
+projects and large transportation group companies.
+Loans to leasing and commercial services increased by
+RMB225,688 million, representing a growth rate of 15.7%,
+mainly for supporting the financing needs of developing
+projects for "New infrastructure, New urbanization.
+initiatives and Major projects", people's wellbeing, projects
+for strengthening areas of weaknesses in infrastructure,
+and of enterprise headquarters, parks and commercial
+complex management service customers. Loans to water,
+environment and public utility management grew by
+RMB216,051 million, representing a growth rate of 18.7%,
+2.51
+245,127
+100.0
+67
+Bonds
+73,063
++
++
+It fully accommodated the requirements of the new
+regulations on wealth management business, pushed
+forward the net-worth transformation of products,
+and continued to develop products and services. It
+was the first among peers to exceed RMB2 trillion in
+wealth management products, significantly increased
+the proportion of non-cash management and open
+net worth products, and provided customers with
+richer asset allocation choices. In 2021, it won more
+than 30 important awards in the industry such
+as the "Golden Bull Award for Banking Wealth
+Management Company" from China Securities
+Journal. It was ranked first among domestic wealth
+management companies on the list of IPE Top 500
+Global Asset Management Companies.
+It accelerated business transformation and
+innovation, continuously enhanced the adaptability
+and competitiveness of serving the high-quality
+development of the real economy, and shouldered
+its social responsibility. It innovated financial services
+for senior care, became the first batch of pilot
+institutions for wealth management business for
+senior care in China, and released ICBC Wealth
+Management Yi Xiang An Tai wealth management
+products for senior care and helped the construction
+of the national multi-level senior care system. It
+innovated green finance services, and was the
+first in the industry to issue "carbon neutrality"
+asset allocation index and green finance themed
+wealth management products. It innovated inclusive
+finance services, developed fixed-income products
+suitable for the risk-return appetite of county and
+rural residents, and expanded the coverage of
+rural wealth by financial services. It innovated and
+opened up financial services, steadily promoted the
+establishment of joint ventures, actively participated
+in the pilot business of "Cross-boundary Wealth
+Management Connect" in the Greater Bay Area,
+innovated and developed new wealth management
+products with the theme of "Southbound Connect"
+under new regulations, and contributed to the
+internationalization of RMB and the interconnection
+between Hong Kong and Chinese mainland.
+As at the end of 2021, the balance of ICBC Wealth
+Management's wealth management products was
+RMB2,021,804 million, an increase of RMB951,731
+million over the end of the previous year, all of which
+were net-worth products. By fundraising methods,
+the balance of public offering wealth management
+products was RMB1,975,907 million, an increase
+of RMB940,656 million, accounting for 97.73%;
+the balance of private offering wealth management
+products was RMB45,897 million, an increase of
+RMB11,075 million, accounting for 2.27%. By
+customer types, the balance of personal wealth
+management products was RMB1,714,603 million,
+an increase of RMB889,838 million, accounting
+for 84.81%. The balance of corporate wealth
+management products was RMB307,201 million,
+an increase of RMB61,893 million, accounting for
+15.19%.
+DIRECT AND INDIRECT INVESTMENTS IN WEALTH MANAGEMENT PRODUCTS AS AT THE END OF 2021
+In RMB millions, except for percentages
+ICBC Wealth Management engages mainly in the issuance
+of wealth management products, wealth management
+advisory and consulting service and other activities
+approved by CBIRC.
+Asset type
+Placement with banks and other financial institutions and
+Amount
+Percentage
+(%)
+718,591
+34.2
+36,546
+1.7
+Cash, deposits and negotiable certificate of deposit
+Lodging and catering
+ICBC WEALTH MANAGEMENT
+59
+Discussion and Analysis
+It effectively consolidated its market position in terms
+of aviation business, deeply developed high-quality
+customers, and explored innovative business areas
+such as cargo aircraft leasing. It actively implemented
+the Belt and Road Initiative in terms of maritime
+business. It deepened strategic cooperation with
+key customers, boosted the transformation and
+upgrading of China's shipbuilding industry, and
+supported domestic shipyards to build high-tech and
+high value-added ships.
+Regarding domestic comprehensive leasing
+business, it continuously stepped up marketing
+and business development efforts in the fields of
+"New infrastructure", "New infrastructure, New
+urbanization initiatives and Major projects", "New
+manufacturing, New services, New basic industries
+and High-tech industries", concretely promoted
+innovation and transformation, actively optimized
+asset structure, extensively carried out marketing
+interconnection between banks and companies,
+deeply tapped needs of key customers, strengthened
+business reserves and investment, and drove key
+strategic regional markets through key projects.
+ICBC INTERNATIONAL
+ICBC International is a Hong Kong licensed financial service
+integrated platform wholly owned by the Bank, mainly
+providing various financial services such as corporate
+financing, investment management, sales transaction and
+asset management.
++
+Focusing on key industries and fields, it provided
+all-round investment and financing services for the
+real economy, and made every effort to build the
+characteristic brand of investment banking. The four
+business segments, i.e. investment banking, sales
+and trading, investment management and asset
+management, achieved smooth development. ICBC
+International was among the top-tier market players
+of Hong Kong market by IPO underwriting volume,
+and stayed ahead in the bond market for Chinese
+offshore investment-grade enterprises by overseas
+bond underwriting. It was still among the Class-B
+securities firms on the Hong Kong Stock Exchange. It
+made a breakthrough in double GP actively managed
+fund business. It was awarded "Best Bond Advisor in
+Hong Kong" by The Asset.
+Discussion and Analysis
+ICBC-AXA
++
+It took a customer-centric approach to improve
+services. It greatly expanded the customer coverage
+of the service, continued to adequately settle
+customer claims, and optimized the claim settlement
+process, with the odds of small claims reaching
+99.34%. Operations were digitally transformed in a
+push for online underwriting, policy owner service
+and claim settlement for personal insurance.
+It gave full play to the role of insurance as a
+social stabilizer, activated the contingency plan
+against natural disasters such as rainstorm in a
+timely manner, and opened a green channel for
+claim settlement, so as to ensure full and fast
+compensation. It adhered to the principle of
+"insurance for the benefit of people", boosted
+inclusive insurance projects, and actively participated
+in the "Huimin Insurance" business.
+ICBC INVESTMENT
+ICBC Investment is one of the first pilot banks in China to
+conduct debt-for-equity swap. It holds the franchise license
+of non-bank financial institution and is mainly engaged in
+debt-for-equity swap and the supporting business.
+ICBC Investment actively and steadily expanded and
+improved market-oriented debt-for-equity swap
+business, focused on supply-side structural reform,
+strengthened coordination with the Group, exerted
+strict customer access and diversified fund-raising
+channels. The "headquarters-to-headquarters"
+cooperation based on fund of funds was innovatively
+carried out to boost the clean energy development
+and continuously improve the quality and efficiency
+in serving the real economy. ICBC Investment actively
+played its part as a shareholder, and sent directors
+and supervisors to the shareholding subsidiaries in
+which it conducted debt-for-equity swap. It provided
+comprehensive financial services for debt-for-equity
+swap enterprises, and energetically supported the
+reform and development of these enterprises.
+Annual Report 2021
+ICBC-AXA operated various insurance businesses such as
+life insurance, health insurance and accident insurance,
+as well as reinsurance of the aforesaid businesses,
+business permitted by national laws and regulations to use
+insurance funds and other businesses approved by CBIRC.
+Risk Management
+Department
+EUR437 million
+687.53
+Insurance
+125.05
+2,581.34
+183.01
+16.07
+ICBC Financial Asset Investment Co., Ltd.
+Financial asset
+ICBC-AXA Assurance Co., Ltd.
+270
+401.23
+101.97
+investment
+ICBC Wealth Management Co., Ltd.
+Wealth management
+160
+187.91
+1,725.91
+177.00
+22.36
+2,948.03
+2021
+capital/
+Institution
+Principal business
+paid-in capital
+Total assets
+Net assets
+399.90
+Net profit
+2
+176.27
+140.92
+27.94
+ICBC Financial Leasing Co., Ltd.
+Leasing
+180
+ICBC Credit Suisse Asset Management Co., Ltd. Fund management
+4.28
+8.92
+STANDARD BANK GROUP LIMITED
+Business departments
+Corporate Banking
+Department
+Personal Banking
+Department
+InDepartmanking
+Bank Card
+Department
+Global Market
+Department
+Senior Executive
+Vice Presidents
+Board of Directors
+Board of Supervisors
+Risk Management Committee
+Audit Committee of
+US Risk Committee
+of the Board of Directors
+the Board of Directors
+Chief Risk Officer
+President
+Major Equity Participation Company
+The Bank's organizational structure of risk management comprises the Board of Directors and its special committees, the
+Board of Supervisors, the Senior Management and its special committees, the risk management departments, the internal
+audit departments, etc. The risk management organizational structure is illustrated below:
+63
+Standard Bank is the largest commercial bank in Africa. Its
+scope of business covers commercial banking, investment
+banking, life insurance business and other areas. The Bank
+holds 20.06% ordinary shares of Standard Bank. Based
+on mutual benefit and win-win cooperation, the two
+sides furthered their cooperation in equity cooperation,
+customer expansion, project financing, product innovation,
+risk management, FinTech and staff exchange. At the
+end of 2021, Standard Bank recorded total assets of
+ZAR2,725,817 million and net assets of ZAR242,849
+million. It generated a net profit of ZAR28,059 million
+during the year.
+62
+RISK MANAGEMENT
+Discussion and Analysis
+63 Enterprise Risk Management
+System
+64 Credit Risk
+Discussion and Analysis
+71 Market Risk
+74 Liquidity Risk
+76 Operational Risk
+78 Reputational Risk
+Enterprise Risk Management System
+Enterprise risk management is a process to effectively identify, assess,
+measure, monitor, control or mitigate and report risks in order to ensure
+the realization of the Group's operating and strategic objectives by setting
+up effective and balanced risk governance structure, fostering robust and
+prudent risk culture, formulating unified risk management strategies and
+risk appetite, and implementing the risk limit and risk management policies.
+The principles of enterprise risk management of the Bank include full
+coverage, matching, independence, perspectiveness and effectiveness, etc.
+In 2021, the Bank adhered to the risk management path of "active
+prevention, smart control and comprehensive management", promoted
+the implementation of key measures for "management of personnel,
+assets, defense lines and bottom lines" and improved enterprise risk
+management results. The Bank developed and implemented a three-
+year plan for risk management, perfected the risk management system,
+reinforced three lines of defense for risk management, and carried out risk
+management responsibilities. The Bank strengthened risk appetite and limit
+management, intensified risk monitoring and early warning, and made
+risk prevention and control more proactive and foresighted. Relying on
+intelligent platforms such as ICBC e Shield, the Bank accelerated the digital
+and intelligent transformation of risk management. The Bank strengthened
+risk management in emerging fields, incorporated climate risk into the
+enterprise risk management system, established a climate risk governance
+framework, stepped up climate risk identification and management, and
+carried out climate risk stress testing.
+78 Country Risk
+Annual Report 2021
+72 Interest Rate Risk in the
+Banking Book
+7,148.71
+Issued share
+Major Domestic Subsidiaries
+Commercial banking
+TRY860 million
+2,978.87
+125.03
+14.10
+ICBC Austria Bank GmbH
+Commercial banking
+ICBC Turkey Bank Anonim Şirketi
+Industrial and Commercial Bank of China
+(USA) NA
+EUR200 million
+USD369 million
+975.56
+218.02
+(0.56)
+2,991.49
+404.80
+14.92
+Commercial banking
+Industrial and Commercial Bank of China
+Financial Services LLC
+13.49
+1,252.37
+(7.58)
+ICBC (London) PLC
+Commercial banking
+USD200 million
+1,432.36
+466.86
+15.35
+167.08
+ICBC Standard Bank PLC
+USD1,083 million
+26,268.36
+1,369.84
+98.50
+Bank ICBC (Joint stock company)
+Commercial banking
+RUB10,810 million
+Banking
+At 31 December 2021
+Broker dealer,
+24,631.67
+(2.17)
+ICBC PERU BANK
+Commercial banking
+Industrial and Commercial Bank of China
+Commercial banking
+USD120 million
+ARS28,415 million
+1,477.99
+35.20
+99.11
+4,767.40
+877.76
+82.17
+(Argentina) S.A.
+Annual Report 2021
+61
+Discussion and Analysis
+7.95
+USD50 million
+260.49
+Commercial banking
+80.76
+(20.61)
+securities margin
+trading
+Industrial and Commercial Bank of China
+(Canada)
+Commercial banking
+CAD208 million
+1,801.00
+BRL202 million
+291.67
+Industrial and Commercial Bank of China
+Mexico S.A.
+Commercial banking
+MXN1,597 million
+269.41
+34.16
+2.39
+Industrial and Commercial Bank of China
+(Brasil) S.A.
+13.97
+In RMB100 millions
+ICBC
+ICBC
+% of total
+Borrower
+Borrower A
+Industry
+Amount
+loans
+Transportation, storage and postal services
+141,457
+0.8
+Borrower B
+In RMB millions, except for percentages
+Transportation, storage and postal services
+0.3
+Borrower C
+Finance
+50,828
+0.2
+Borrower D
+Finance
+49,479
+0.2
+67,107
+The table below shows the details of the loans granted to the top ten single borrowers of the Bank as at the end of 2021.
+12.6
+14.8
+19.2
+15.6
+Annual Report 2021
+69
+Discussion and Analysis
+Large Exposures Management
+The Bank carried out large exposures management in strict accordance with regulatory requirements, improved the large
+exposures management system, optimized large exposures limit management, promoted the construction of large exposures
+management related systems, and continuously improved the Group's large exposures management.
+BORROWER CONCENTRATION
+As at the end of 2021, the total amount of loans granted by the Bank to the single largest borrower and top ten single
+borrowers accounted for 3.6% and 14.2% of the Bank's net capital base respectively. The total amount of loans granted to
+the top ten single borrowers was RMB554,249 million, accounting for 2.7% of the total loans.
+Item
+Loan concentration to the single largest borrower (%)
+Loan concentration to the top ten borrowers (%)
+At
+At
+At
+31 December
+2021
+3.6
+31 December
+2020
+3.5
+31 December
+2019
+3.1
+14.2
+Borrower E
+14.3
+Transportation, storage and postal services.
+0.2
+The Bank strictly complies with regulatory requirements
+on market risk management, has implemented an
+independent, centralized and coordinated market
+risk management model, and formed a management
+organizational structure featuring the segregation of the
+front, the middle and the back offices in the financial
+market business. The Board of Directors assumes the
+ultimate responsibility for monitoring market risk
+management. The Senior Management is responsible
+for executing the strategies, overall policy and system
+concerning market risk management approved by
+the Board of Directors. The Market Risk Management
+Committee of the Senior Management is the reviewing and
+decision-making organ of the Bank in respect of market
+risk management, is responsible for reviewing material
+affairs of market risk management, and performs its duty
+in accordance with the Working Regulations for the Market
+Risk Management Committee. The risk management
+departments at different levels undertake the responsibility
+of coordinating market risk management at respective
+levels, and the business departments implement market
+risk management policies and standards for their respective
+business areas in accordance with their functions.
+In 2021, the Bank continued to deepen the Group's market
+risk management, tightened the Group's market risk limit
+control, and verified and issued the Group's market risk
+limit plan for 2021. A forward-looking analysis of interest
+rate, exchange rate and commodity risks was conducted in
+a timely manner. It continuously conducted global financial
+market monitoring and perfected the fast risk reporting
+mechanism. Empowered by technologies, the market risk
+management system was more intelligent. It continuously
+promoted the extended application of Global Market Risk
+Management ("GMRM") system to overseas institutions
+and steadily pushed forward the implementation of the
+standardized market risk approach of Basel III Final Reform
+Package issued by Basel Committee.
+Management of Market Risk in the Trading
+Book
+The Bank kept strengthening trading book market risk
+management and product control, and adopted the value-
+at-risk (VaR), stress testing, sensitivity analysis, exposure
+analysis, profit/loss analysis, price monitoring and other
+means to measure and manage trading book products.
+It continued to improve the portfolio-based market
+risk limit management system, refined limit indicators,
+ameliorated the dynamic management mechanism to meet
+the requirements of new products and businesses for
+timeliness, and realized quick and flexible limit monitoring
+and dynamic adjustments based on the GMRM system.
+For VaR of the trading book, please refer to "Note 49. (c)(i)
+to the Consolidated Financial Statements: VaR".
+Currency Risk Management
+Currency risk is the risk of adverse movements of exchange
+rate resulting in losses on the foreign currency exposure,
+which is due to the currency structure's mismatch between
+foreign currency assets and liabilities. The Bank's objective
+of currency risk management is to control the impact of
+exchange rate fluctuations on the Bank's financial position
+and shareholders' equity within a tolerable extent. The
+Bank mitigates such risk principally by limit management
+and hedging of risks. The Bank carries out sensitivity
+analysis and stress testing of currency risk on a quarterly
+basis, and the Senior Management and the Market Risk
+Management Committee review the currency risk reports
+on a quarterly basis.
+In 2021, the Bank closely watched the changes in external
+environment and market conditions, actively took a
+combination of measures such as limit management
+and hedging of risks to improve the matching degree of
+the Group's foreign exchange assets and liabilities, and
+strengthened capital fund preservation management of
+overseas institutions. The currency risk was controllable in
+general.
+Market risk is defined as the risk of loss to the Bank's
+on- and off-balance sheet activities caused by adverse
+movements in market rates (including interest rates,
+exchange rates, stock prices and commodity prices). The
+Bank is primarily exposed to interest rate risk and currency
+risk (including gold). Market risk management is the
+process of identifying, measuring, monitoring, controlling
+and reporting market risk. The objective of market risk
+management is to control market risk exposures within a
+tolerable level and maximize risk-adjusted return according
+to the Bank's risk appetite.
+Annual Report 2021
+Discussion and Analysis
+FOREIGN EXCHANGE EXPOSURE
+At 31 December 2021
+In RMB (USD) millions
+At 31 December 2020
+USD
+USD
+Item
+RMB
+71
+Market Risk
+Discussion and Analysis
+ICBC
+Borrower F
+Transportation, storage and postal services
+42,660
+0.2
+Borrower G
+Transportation, storage and postal services
+42,375
+0.2
+Borrower H
+Borrower I
+Borrower J
+Total
+Finance
+Finance
+Finance
+40,095
+0.2
+36,781
+0.2
+34,468
+0.2
+554,249
+2.7
+For credit risk capital measurement, please refer to the section headed "Credit Risk" of the 2021 Capital Adequacy Ratio
+Report of Industrial and Commercial Bank of China Limited.
+70
+48,999
+equivalent
+36.0
+41.2
+2,260,445
+12.1
+Unsecured loans
+Total
+6,988,877
+20,667,245
+33.8
+6,259,230
+33.6
+100.0
+11.9
+18,624,308
+OVERDUE LOANS
+Overdue periods
+Less than 3 months
+3 months to 1 year
+1 to 3 years
+Over 3 years
+Total
+In RMB millions, except for percentages
+At 31 December 2021
+100.0
+2,459,887
+Guaranteed loans
+7.5
+DISTRIBUTION OF LOANS BY COLLATERAL
+Discussion and Analysis
+In RMB millions, except for percentages
+At 31 December 2020
+At 31 December 2021
+Percentage
+Percentage
+Item
+Amount
+(%)
+Amount
+(%)
+Loans secured by mortgages
+9,497,898
+46.0
+8,703,068
+46.8
+Pledged loans
+1,720,583
+8.3
+1,401,565
+At 31 December 2020
+60.9
+% of total
+Amount
+RESCHEDULED LOANS
+Rescheduled loans and advances amounted to RMB19,134 million, representing an increase of RMB7,174 million as
+compared to the end of the previous year. Rescheduled loans and advances overdue for over 3 months amounted to
+RMB2,301 million, representing an increase of RMB246 million.
+LOAN MIGRATION RATIO
+Item
+Special mention
+Substandard
+Doubtful
+In percentages
+At
+Overdue loans stood at RMB254,901 million, representing a decrease of RMB12,606 million from the end of the previous
+year. Among which, loans overdue for over 3 months amounted to RMB182,457 million, representing an increase of
+RMB13,913 million.
+At
+31 December
+2021
+31 December
+2020
+1.6
+1.7
+31 December
+2019
+1.5
+20.1
+36.4
+26.1
+At
+Note: Loans and advances to customers are deemed overdue when either the principal or interest is overdue. For loans and advances to
+customers repayable by installments, the total amount of loans is deemed overdue if part of the installments is overdue.
+1.44
+267,507
+loans
+Amount
+loans
+72,444
+0.35
+98,963
+0.54
+70,057
+0.34
+74,820
+0.40
+93,247
+0.45
+72,467
+0.39
+19,153
+0.09
+21,257
+0.11
+254,901
+1.23
+% of total
+Exposure of on-balance sheet foreign
+Pass
+69,919
+71.6
+Note: The regulatory indicators in the table are calculated in accordance with related regulatory requirements, definitions and accounting
+standards applicable to the current period. The comparative figures are not adjusted or restated.
+Net stable funding ratio aims to ensure commercial banks
+have sufficient stable sources of funding to meet the needs
+for stable funding of assets and off-balance sheet risk
+exposures. The net stable funding ratio is the ratio of the
+available stable funding to the required stable funding. As
+at the end of the fourth quarter of 2021, the net stable
+funding ratio was 126.20%, 1.98 percentage points lower
+than that at the end of the previous quarter, mainly due
+to the rapid growth of stable funds required. For the
+quantitative information for net stable funding ratio in
+accordance with Disclosure Rules on Net Stable Funding
+Ratio of Commercial Banks, please refer to the section
+headed "Unaudited Supplementary Information to the
+Consolidated Financial Statements".
+The daily average liquidity coverage ratio for the fourth
+quarter of 2021 was 112.20%, 0.96 percentage points
+higher than the previous quarter, mainly because of the
+continuous growth of qualified high-quality liquid assets.
+High-quality liquid assets cover cash, available central bank
+reserve under stress and primary and secondary bond
+assets that can be included in the liquidity coverage ratio
+under the regulatory requirements. For the quantitative
+information for liquidity coverage ratio based on the
+Administrative Measures for the Information Disclosure
+of Liquidity Coverage Ratio of Commercial Banks, please
+refer to the section headed "Unaudited Supplementary
+Information to the Consolidated Financial Statements".
+As at the end of 2021, the liquidity exposure for less
+than 1 month turned negative from positive from the end
+of last year, mainly due to the increase of matured due
+to customers within corresponding term. The negative
+liquidity exposure for 1 to 3 months expanded, mainly
+due to the increase of matured due to customers within
+corresponding term. The negative liquidity exposure for
+3 months to 1 year decreased slightly, mainly due to the
+increase of matured loans and advances to customers with
+corresponding term. The positive liquidity exposure for 1
+to 5 years decreased slightly mainly due to the increase
+of matured due to customers within corresponding
+term. The positive liquidity exposure for the category
+of over 5 years expanded, which was mainly due to the
+increase in matured loans and advances to customers and
+bond investments within corresponding term. Deposits
+maintained steady growth with a high deposition rate,
+and at the same time the Bank made major investment in
+highly liquid bond assets, and possessed sufficient liquidity
+reserves. Therefore, the overall liquidity of the Bank was
+maintained at a safe level.
+Annual Report 2021
+75
+Discussion and Analysis
+LIQUIDITY EXPOSURE ANALYSIS
+72.8
+Overdue/
+In RMB millions
+on
+Less than
+1 to 3 3 months to
+1 to 5
+Over 5
+demand
+1 month
+months
+repayable
+77.3
+85.9
+91.4
+At the end of 2021, RMB liquidity ratio and foreign currency liquidity ratio of the Bank were 41.5% and 88.9% respectively,
+both meeting the regulatory requirements. Loan-to-deposit ratio was 77.3%.
+Item
+Liquidity ratio (%)
+Loan-to-deposit ratio (%)
+At
+At
+At
+Regulatory
+criteria
+31 December
+2021
+31 December
+2020
+31 December
+2019
+RMB
+>=25.0
+41.5
+43.2
+43.0
+Foreign currency
+RMB and foreign
+currency
+>=25.0
+88.9
+1 year
+The Bank assesses liquidity risk status by comprehensive use of a variety of methods and tools such as liquidity indicator
+analysis and liquidity exposure analysis.
+years
+(415,735)
+In 2021, the Bank continued to strengthen legal risk
+management, by improving the risk prevention and control
+capacity in legal risk management, ensuring the legal and
+compliant operation, healthy business development and
+overall business stability of the Group. In accordance with
+new laws and regulations such as the Personal Information
+Protection Law, its business rules and relevant agreements
+were continuously improved, and legal risk prevention and
+control in key areas and links was further pushed forward
+in line with new requirements of financial regulators.
+The Bank also conducted ongoing monitoring of legal
+risks and improved both the vertical interconnection and
+horizontal coordination mechanism between the Head
+Office and branches. By systematically embedding legal risk
+prevention and control into business negotiations, product
+design, contract signing and other links, the Bank made
+risk prevention and control more prospective, proactive
+and targeted. It improved the cross-border coordination
+and management for legal work and strengthened the
+legal risk management of overseas institutions, properly
+responding to cross-border legal issues emerging in the
+development of international operations. Moreover, the
+Bank ameliorated the function design and management
+mechanic for the electronic signing system, to strengthen
+its strict control of seal use in business contracts during
+the whole process, and effectively prevent and control
+operational risk, legal risk and reputational risk caused
+by misuse of contract seal. It reinforced authorization
+management, related party management, trademark
+management and intellectual property protection, and
+made efforts to effectively institutionalize risk management
+and control, and refine the structure of the system.
+The Bank devoted great energy to strongly deal with
+lawsuit cases to protect the Bank's rights and interests
+in accordance with law and avoid and reduce risk losses.
+In addition to the active assistance in online judicial
+inquiry and enforcement, the Bank played a positive role
+in improving the efficiency of law enforcement and case
+handling by competent authorities and building a social
+credibility system.
+Anti-Money Laundering
+In strict compliance with anti-money laundering ("AML")
+laws and regulations of China and host countries (regions)
+of overseas institutions, the Bank sincerely fulfilled the
+legal obligations and social responsibilities concerning
+AML. The Bank actively adapted to AML changes in the
+new era, established the global, comprehensive and brand-
+new money laundering risk management concept involving
+all personnel, spanning all processes and covering all
+risk exposures, accommodated to "cross-border, cross-
+industrial and cross-sector" development requirements,
+practiced the management principle of "active prevention,
+smart control and comprehensive management", and
+coordinated it efforts to strengthen Group-wide money
+laundering risk management. The Bank continuously
+improved the Group's AML governance system, constantly
+promoted the comprehensive management regarding
+customer identification, implemented new regulations
+on money laundering risk assessment, created a digital
+AML ecosystem, ramped up efforts in overseas AML
+infrastructure, etc. The quality and efficiency of money
+laundering risk management has been further improved.
+Please refer to the section headed "Operational Risk"
+of the 2021 Capital Adequacy Ratio Report of Industrial
+and Commercial Bank of China Limited issued by the
+Bank for further information on operational risk capital
+measurement.
+Annual Report 2021
+77
+Discussion and Analysis
+Based on the objective to ensure legal and compliant
+operation, the Bank always attaches great importance
+to establishing a sound legal risk management system,
+forming a full-process legal risk prevention and control
+mechanism to support and secure business innovation and
+market competition, and to prevent and eliminate various
+potential or practical legal risks. The Board of Directors
+is responsible for reviewing and determining the strategy
+and policy relating to legal risk management, and assumes
+the ultimate responsibility of legal risk management.
+The Senior Management is responsible for executing the
+strategy and policy relating to legal risk management,
+examining and approving relevant important affairs.
+The Legal Affairs Department of the Head Office is in
+charge of legal risk management across the Group, with
+relevant business departments providing related support
+and assistance on legal risk prevention and control. The
+affiliates, domestic and overseas branches undertake the
+responsibility of legal risk management of their respective
+institutions.
+Reputational Risk
+The Board of Directors is responsible for reviewing and
+finalizing bank-wide policies concerning reputational risk
+management that are in line with the strategic objective of
+the Bank, establishing a bank-wide system of reputational
+risk management, monitoring the overall status and
+effectiveness of reputational risk management across
+the Bank and assuming the ultimate responsibility for
+reputational risk management. The Senior Management
+is responsible for leading reputational risk management
+of the Bank, implementing the strategies and policies
+established by the Board of Directors, reviewing and
+finalizing the rules, measures and operating procedures
+for reputational risk management, preparing plans for
+responding to and coping with extraordinarily major
+reputational risk events and ensuring the proper and
+effective operation of the reputational risk management
+system. The Bank has established a special reputational
+risk management team to take charge of the daily
+management of reputational risk.
+In 2021, the Bank kept improving the structure of
+reputational risk management system, to optimize relevant
+working mechanism and enhance reputational risk
+management. The Bank revised and issued the Measures
+for Reputational Risk Management of ICBC (Version 2021)
+and further improved the construction of the whole-
+process reputational risk management system across
+the Group. The Bank raised the efficiency of "dual-line
+management" (speciality and local) and prevented hidden
+reputational risks at the source. In addition, the Bank
+actively responded to social concerns, and organized and
+promoted influential brand communication activities, to
+enhance the Bank's brand image. During the reporting
+period, the reputational risk of the Bank was stable and
+within a controllable range.
+Country Risk
+Country risk is the risk incurred to a bank arising from
+the inability or refusal by the borrower or debtor to repay
+bank debt, losses suffered by the Bank or its commercial
+presence in such country or region and other losses due
+to economic, political and social changes and events
+in a country or a region. Country risk may be triggered
+by deterioration of economic conditions, political and
+social turmoil, asset nationalization or expropriation,
+government's refusal to pay external debt, foreign
+exchange control or currency depreciation in a country or a
+region.
+The Bank strictly observes regulatory requirements on
+country risk management. The Board of Directors assumes
+the ultimate responsibility for the effectiveness of country
+risk management. The Senior Management is responsible
+for executing the country risk management policies
+approved by the Board of Directors. The Risk Management
+Committee of the Head Office is responsible for reviewing
+matters regarding country risk management. The Bank
+manages and controls country risk with a series of tools,
+including country risk assessment and rating, country risk
+limit, country risk exposure calculation and monitoring and
+stress testing. The Bank reviews the country risk rating and
+limits at least once every year.
+In 2021, facing the increasingly complicated, severe and
+uncertain external environment, the Bank strictly abode
+by regulatory requirements and, with consideration of its
+business development needs, continued to strengthen
+country risk management. The Bank closely observed
+changes in country risk exposures, constantly tracked,
+monitored and reported country risk, and timely updated
+and adjusted the country risk rating and limits. It continued
+to strengthen early warning mechanism for country risk,
+proactively conducted stress testing on country risk and
+reasonably and effectively controlled country risk while
+steadily promoting internationalization.
+78
+444,773
+Reputational risk is defined as the risk of negative
+comments on the Bank from stakeholders, the public
+or the media as a result of the behaviors of the Bank or
+practitioners or external events, thereby damaging brand
+value, detrimental to normal operation, and even affecting
+market and social stability. Reputational risk may arise
+in any part of the Bank's operation and management,
+and usually co-exists and correlates with credit risk,
+market risk, operational risk and liquidity risk. Good
+reputation is central to the operation and management of
+a commercial bank. The Bank highly values its reputation
+and has incorporated reputational risk management in the
+corporate governance and enterprise risk management
+system to prevent reputational risk.
+other documents executed by the Bank; legal disputes
+(litigation or arbitration proceedings) between the Bank
+and its clients, counterparties and stakeholders; important
+changes in relevant laws and regulations, administrative
+rules, regulatory provisions and other relevant rules;
+and other relevant legal events that occur internally and
+externally.
+Discussion and Analysis
+ICBC
+(377,347)
+538,067
+335,580
+(209,780)
+981,145
+years
+Undated
+14,692,050 3,190,277 3,275,258
+13,324,640 3,351,427 2,909,515
+Total
+At 31 December 2021
+(14,262,606)
+At 31 December 2020
+(14,309,956)
+Note: Please refer to "Note 49. (b) to the Consolidated Financial Statements: Liquidity Risk".
+Operational Risk
+Operational Risk Management
+Operational risk is defined as the risk of loss resulting from
+insufficient or problematic internal processes, employees
+and IT systems or from external events, including legal
+risk, but excluding strategic and reputational risk. There
+are seven major types of operational risks faced by the
+Bank, including internal fraud, external fraud, employment
+system and workplace safety, customers, products and
+business activities, damage to physical assets, IT system,
+execution and delivery and process management. Among
+these, external fraud, execution, delivery and process
+management constitute major sources of operational risk
+losses of the Bank.
+The Bank strictly complies with regulatory requirements
+on operational risk management. The Board of Directors,
+the Board of Supervisors, the Senior Management and its
+Operational Risk Management Committee are respectively
+responsible for decision-making, supervision and
+execution with respect to operational risk management,
+and relevant departments act as the "three lines of
+defense" for operational risk management pursuant to
+their management functions, thus forming an operational
+risk management system with close connection and
+mutual checks and balances. Institutions and departments
+function as the first line of defense, which assume
+the direct responsibility for respective operational risk
+management. Classified management departments such
+as Internal Control & Compliance, Legal Affairs, Security,
+Financial Technology, Finance & Accounting, Operation
+Management and Human Resources as well as cross-
+risk management departments including Credit and
+Investment Management and Risk Management jointly
+perform the functions as the second line of defense, which
+are respectively responsible for the lead management of
+operational risk, the classified management of certain type
+of operational risk and the management of operational
+risk across credit and market risks. The Internal Audit
+Department performs the functions as the third line of
+defense and assumes the responsibility for supervision,
+which is responsible for supervising the effectiveness of
+operational risk management.
+In 2021, the Bank continued to reinforce operational
+risk management in line with regulatory focuses and
+operational risk trends. It optimized the risk limit
+management mechanism, and effectively transmitted
+the Group's operational risk management appetite. The
+Bank formulated and issued 2021-2023 Development
+Plan for the Internal Control System, and kept perfecting
+internal control mechanism with all-round coverage,
+whole-process control and all-employee participation. The
+operational risk and control self-assessment of special lines
+under "regulatory red line" was carried out. In view of
+serious risks, the Bank promoted optimization of policies,
+processes, systems and mechanisms. The Bank carried out
+risk governance in key business areas, strengthened case
+warning education, and continuously tightened employee
+behavior control. Moreover, the operational risk application
+and management system was optimized, to continuously
+enhance effective risk data aggregation and risk reporting
+capabilities. During the reporting period, the operational
+risk management system of the Bank operated smoothly,
+and the operational risk was controllable on the whole.
+Legal Risk
+Legal risk is the risk of incurring legal sanctions, regulatory
+penalties, financial losses, reputational losses or other
+negative consequences that arises out of or in connection
+with the failure of the Bank to comply with relevant laws,
+regulations, administrative rules, regulatory provisions or
+requirements of other relevant rules during the Bank's
+operation; the unfavorable legal defects that exist in
+products, services or information provided to clients,
+transactions engaged in, and contracts, agreements or
+76
+(89,448)
+Liquidity Risk Analysis
+(563,541)
+ICBC
+In 2021, the Bank implemented the new development
+concept, improved the combined regulation mechanism
+for whole process management, all-factor regulation
+and full-lifecycle coverage of interest rate risk, built an
+intelligent interest rate risk monitoring, early warning and
+business control platform, improved the ability to respond
+quickly and actively to complex market environment,
+and continuously deepened the new pattern of cross-
+cyclical stable interest rate risk management. The Bank
+strengthened the research and anticipation of interest
+rate risk strategy in a forward-looking and active manner,
+made combined use of asset and liability amount, price
+and derivative tools to accurately adjust the allocation
+structure of the Group's asset and liability interest rate
+portfolio, effectively resisted the impact of global economic
+and financial operation and internal and external risk
+challenges, and realized the balanced growth of current
+income and long-term value.
+Analysis on Interest Rate Risk in the
+Banking Book
+Interest Rate Sensitivity Analysis
+Supposing that there is parallel shift of overall market
+interest rates, and taking no account of possible risk
+management actions taken by the management to mitigate
+the interest rate risk, the analysis on interest rate sensitivity
+of the Bank categorized by major currencies at the end of
+2021 is shown in the following table:
+Currency
+RMB
+USD
+HKD
+Other
+Total
+In RMB millions
++100 basis points
+Effect on
+-100 basis points
+Effect on
+net interest
+income
+Effect on
+equity
+net interest
+Effect on
+income
+In line with the principles of comprehensiveness, prudence
+and foresight, the Bank's stress testing on interest rate
+risk in the banking book adopted the interest rate risk
+exposure measurement approach and standardized
+duration approach to measure the effect of interest rate
+changes under different stress scenarios on the overall
+profit and economic value. Based on the domestic and
+overseas regulatory requirements, the bank-wide asset and
+liability business structure, operation and management as
+well as risk appetite, the Bank set stress testing scenarios
+for interest rate risk in the banking book by taking into
+account the current interest rate level, historical changes
+and trends, total assets and liabilities and their term
+characteristics, business development strategies, customer
+behaviors and other factors, and conducted stress testing
+quarterly.
+equity
+Discussion and Analysis
+The objective of management of interest rate risk in the
+banking book: The Bank aims at maximizing the risk-
+adjusted net interest income within the tolerable level
+of interest rate risk under its risk management and risk
+appetite. The Bank formulated strategies and clarified
+objectives and modes for managing interest rate risk
+in the banking book based on risk appetite, risk status,
+macroeconomic and market changes. Based on the pre-
+judging of the interest rate trend and measurement
+results of the changes in overall profit and economic
+value, the Bank formulated and put into practice relevant
+management policies, and adopted a coordinated
+approach to using interest rate risk control tools to
+mitigate and manage risks, so as to ensure the Bank's
+actual interest rate risks conform to its bearing capability
+and willingness. On the basis of management strategies
+and objectives, the Bank developed policies and made clear
+the modes and instruments for managing interest rate risk
+in the banking book. By developing and modifying such
+methods as on-balance sheet adjustment and off-balance
+sheet hedging to manage interest rate risk, adeptly using
+quantity, pricing and derivative instruments regarding
+assets and liabilities, and applying limit management
+system, business plan, performance assessment and capital
+evaluation in all areas for interest rate risk management
+and assessment, the Bank achieved effective control of
+interest rate risk at the business lines, the branches, the
+affiliates and the products and portfolios easily affected by
+interest rate risk.
+RMB
+402,774
+Discussion and Analysis
+equivalent
+61,593
+exchange items, net
+Exposure of off-balance sheet foreign
+(276,298)
+(43,435)
+(198,474)
+(30,351)
+exchange items, net
+Total foreign exchange exposure, net
+168,475
+26,484
+204,300
+31,242
+Please refer to "Note 49. (c)(ii) to the Consolidated
+Financial Statements: Currency Risk" for the exchange rate
+sensitivity analysis.
+Please refer to the section headed "Market Risk" of the
+2021 Capital Adequacy Ratio Report of Industrial and
+Commercial Bank of China Limited issued by the Bank for
+further information on market risk capital measurement.
+Interest Rate Risk in the Banking Book
+Interest rate risk in the banking book is defined as the
+risk of loss in the economic value and overall profit of the
+banking book arising from adverse movements in interest
+rate and maturity structure, etc.
+Management of Interest Rate Risk in the
+Banking Book
+The Bank's management system for interest rate risk in
+the banking book conforms to the system importance, risk
+status and business complexity, and fits the Bank's overall
+development strategy and the enterprise risk management
+system. The system mainly consists of the following
+elements: an effective risk governance structure; sound
+risk management strategies, policies and procedures;
+effective risk identification, measurement, monitoring,
+control and mitigation that cover all areas; a complete
+internal control and review mechanism; a fully-built risk
+management system; and adequate information disclosure
+and reporting. The Bank strictly complied with regulatory
+requirements for interest rate risk in the banking book,
+effectively managed interest rate risk in the banking book
+at the Bank and consolidated level, and developed a sound
+governance structure for interest rate risk management in
+the banking book that is fully built and well-structured,
+with clearly defined rights and responsibilities. The Board
+of Directors and the Senior Management are vested with
+the ultimate and executive responsibilities, respectively,
+for managing interest rate risk in the banking book. The
+Asset & Liability Management Department of the Head
+Office takes the leading role in managing interest rate
+risk in the banking book, and other departments and
+institutions play their roles in implementing policies and
+standards concerning interest rate risk in the banking
+book. The Internal Audit Bureau and the Internal Control &
+Compliance Department of the Head Office are responsible
+for reviewing and evaluating duties in respective of interest
+rate risk in the banking book.
+72
+(27,350)
+ICBC
+27,350
+In RMB millions
+At 31 December 2021
+At 31 December 2020
+Less than
+3 months
+(6,440,087)
+(6,378,856)
+3 months to
+1 year
+8,383,705
+1 to 5 years
+Over 5 years
+7,486,102
+(1,560,515)
+Note: Please refer to "Note 49.(d) to the Consolidated Financial Statements: Interest Rate Risk in the Banking Book".
+Liquidity Risk
+Liquidity risk is the risk that the Bank is unable to raise
+funds on a timely basis at a reasonable cost to settle
+liabilities as they fall due, or perform other payment
+obligations and satisfy other funding demands arising from
+the normal course of business. Liquidity risk may arise from
+the following events or factors: material adverse changes
+in market liquidity, withdrawal of customers' deposits,
+drawing of loans by customers, overdue payment of
+debtors, mismatch between assets and liabilities, difficulties
+in assets realization, operating losses and risk associated
+with its affiliates.
+Liquidity Risk Management
+The Bank's liquidity risk management system conforms
+to the overall development strategy and the overall risk
+management system, and is commensurate with the
+business scale, business nature, complexity and other
+aspects of the Bank. The system includes the following
+fundamental elements: effective governance structure
+for liquidity risk management; sound strategy, policy
+and procedures for liquidity risk management; effective
+identification, measurement, monitoring and control for
+liquidity risk and a complete management information
+system. In respect of liquidity risk management, the Bank's
+governance structure embodies the decision-making
+system comprising the Board of Directors and its special
+committees as well as the Asset and Liability Management
+Committee and the Risk Management Committee of
+the Head Office; the supervision system comprising the
+Board of Supervisors, the Internal Audit Bureau and the
+Internal Control and Compliance Department of the
+Head Office; and the execution system comprising the
+Asset and Liability Management Department, leading
+management departments of on- and off-balance sheet
+businesses, the information technology departments,
+operation management departments of the Head Office
+and relevant departments of branches. Each of these
+systems performs the corresponding functions of decision
+making, supervision and execution according to division of
+responsibilities.
+3,320,310
+2,884,728
+Objective of liquidity risk management: By establishing
+and improving the liquidity risk management system,
+the Bank aims at realizing effective identification,
+measurement, monitoring and control of the liquidity
+risk at the Group level, the Bank, the affiliates, the
+branches and the business lines, and ensuring the liquidity
+demand is satisfied at a reasonable cost in time under
+the normal business scenario and the stress scenario. The
+Bank's liquidity risk management strategy and policy are
+formulated in accordance with the liquidity risk appetite,
+and they cover all businesses on- and off-balance sheet,
+all domestic and overseas business departments, branches
+and affiliates that are likely to have a material impact on
+the liquidity risk, and contain the liquidity risk management
+under normal and stressed scenarios. The liquidity risk
+management strategy specifies the overall objective and
+mode of liquidity risk management and lists major policies
+and procedures. The policies for liquidity risk management
+are formulated in accordance with external and macro
+operating environments and business development of the
+Bank, with a view to striking an effective balance among
+security, liquidity and profitability. The Bank conducts stress
+testing quarterly or by subject by fully considering various
+macro and micro factors that may affect the liquidity of
+the Bank, changes in the external operating environment,
+regulatory requirements, and business characteristics and
+complexity of the Bank.
+(39,969)
+In 2021, the Bank adhered to a steady and prudent
+liquidity management strategy, and the Group's liquidity
+was stable. The Bank intensified the monitoring of funds
+and maintained a proper and sufficient liquidity reserve.
+The Bank optimized and upgraded the liquidity risk
+management mechanism and system, and continuously
+enhanced the automation and intelligence level of liquidity
+risk monitoring, measurement and control. The Bank
+strengthened on- and off-balance sheet liquidity risk
+management in local and foreign currencies in domestic
+and overseas institutions, optimized the multi-level and
+multi-dimensional liquidity monitoring and early warning
+system, and further enhanced the Group's liquidity risk
+prevention and emergency response capabilities.
+74
+INTEREST RATE RISK EXPOSURE
+Discussion and Analysis
+(2,301,496)
+Annual Report 2021
+1,551
+(5,873)
+73
+(1,551)
+6,126
+(958)
+43,662
+(140)
+142
+1,029
+(25,728)
+958
+(1,029)
+1,694
+25,728
+51,624
+Note: Please refer to "Note 49.(d) to the Consolidated Financial Statements: Interest Rate Risk in the Banking Book".
+Interest Rate Exposure Analysis
+(1,661)
+(47,643)
+As at the end of 2021, the Bank had a positive cumulative
+interest rate sensitivity exposure within one year of
+RMB1,943,618 million, representing an increase of
+RMB836,372 million from the end of the previous year,
+mainly caused by the increase in repriced or matured
+loans and advances to customers within one year. It had a
+positive cumulative interest rate sensitivity exposure above
+one year of RMB1,018,814 million, representing a decrease
+of RMB305,399 million, mainly resulted from the increase
+in repriced or matured due to customers above one year.
+Capital adequacy ratio
+40,000
+8.0%
+4.0%
+0.0%
+Core tier 1 capital adequacy ratio
+2021
+Net capital base
+Tier 1 capital adequacy ratio
+12.0%
+2020
+16.0%
+In 2021, ICBC adhered to the "48-character" guideline and
+coordinated COVID-19 prevention and control efforts with
+business development. Through high-quality investment
+and financing, the Bank provided comprehensive services
+against a new development paradigm, implemented the
+new development plan by steadily pushing forward the
+mantra of "bringing out our strengths to make up for
+our weaknesses and laying a solid foundation and base",
+strengthened risk control on every front by improving the
+risk management system and comprehensively deepened
+reform and innovation through well-focused efforts to
+enhance governance capacity. While contributing to high-
+quality economic growth, the Bank further improved its
+sustainability, further cemented the foundation for its
+own high-quality development and delivered remarkable
+performance in main business indicators. In summary, ICBC
+continued to highlight the qualities of "strong, excellent
+Unit: RMB100 millions, %
+Stronger capital base
+First, operational efficiency was further boosted.
+ROE reached 12.15% and ROA was 1.02%, up 20 basis
+points and 2 basis points from last year, respectively, an
+outstanding level among world's largest banks. Second,
+the capital base was increasingly strengthened.
+Capital adequacy ratio stood at 18.02%, an increase
+of 1.14 percentage points from the end of last year,
+maintaining a leading position in the global banking sector.
+Core tier 1 capital adequacy ratio was 13.31%, up 0.13
+percentage points, and tier 1 capital adequacy ratio was
+14.94%, up 0.66 percentage points. Net capital base was
+RMB3,909.7 billion, an increase of 15.1% from the end of
+last year, remaining at a leading position worldwide.
+I. The input and output efficiency of assets
+and capital constantly enhanced
+"I
+and large" and delivered to investors an impressive
+'answer sheet".
+Hot Topic 1: An Impressive "Answer
+Sheet" from ICBC
+Discussion and Analysis
+ICBC
+Higher operating efficiency
+HOT TOPICS IN THE CAPITAL MARKET
+counter-cyclical policy arrangements, and provide targeted
+support for the implementation of major projects during
+the 14th Five-Year Plan period to keep the macro-economy
+on an even keel. The Bank will integrate financial services
+into the processes of production, distribution, circulation
+and consumption to help build a complete demand system
+and smoothen the circulation of the national economy and
+the global economy. Third, it will implement the new
+development plan at a high-quality standard. The
+Bank will give greater prominence to quality, efficiency and
+innovation, make itself stronger and better based on actual
+conditions, and improve qualitative development. It will
+push forward the implementation of key strategies such
+as the No.1 Personal Bank, the Preferred Bank for Foreign
+Exchange Business, Sharpening Competitive Edge in Key
+Regions, and Urban-Rural Collaborative Development. The
+Bank will strive to achieve new results while "bringing
+out our strengths to make up for our weaknesses and
+laying a solid foundation and base" and make mid-term
+breakthroughs in the implementation of new development
+plan. Fourth, it will carry out the high-quality
+enterprise risk management. Adhering to the systematic
+thinking pattern, the Bank will strengthen risk awareness
+and bottom-line thinking, comprehensively sort out and
+identify potential risks, and develop targeted response
+plans and countermeasures. The Bank will improve credit
+risk management, and further stabilize the asset quality.
+It will refine the risk management mechanism for online
+and emerging businesses, and strictly forestall market risks.
+The Bank will comprehensively enhance the effectiveness
+of internal control and case prevention measures to ensure
+that no major risk events and cases occur. Fifth, it will
+press ahead with high-quality financial reform. The
+Bank will further promote the organic integration of the
+Party's leadership and corporate governance, put in place
+the sound system of modern financial enterprise, and
+modernize the governance system and capacity. It will fully
+exploit its advantages in technology and data to boost
+the development of the digital economy and ramp up its
+efforts in building "D-ICBC". The Bank will roll out new
+cutting-edge and controllable financial technology and
+take solid measures to ensure the security in the process
+of digital transformation. Sixth, it will reinforce the
+building of talent teams in a high-quality manner. The
+Bank will strengthen the top-level design for talent-related
+work, devise and implement a new round of bank-wide
+talent development plans. It will improve the evaluation,
+appraisal and monitoring systems, refine the incentive and
+restraint mechanisms, strengthen employee management
+and supervision, and improve employee care. By doing
+so, the Bank aims to build a strong bank with top-notch
+talent teams and forge synergy for ICBC's high-quality
+development.
+20.0%
+Unit: %
+Discussion and Analysis
+38,000
+NIM remained good
+84
+Unit: %
+2.20%
+comparable domestic banks. The Bank demonstrated
+a strong ability to manage assets and liabilities, and
+implemented the policy of fee reduction and profit
+concessions and serving the real economy. Second, the
+profit structure was optimized with an increasing
+proportion of non-interest income. Non-interest income
+accounted for 19.77% of operating income, up 0.61
+percentage points compared with the previous year.
+First, net interest margin ("NIM") remained good.
+NIM stood at 2.11%, still an outstanding level in the
+banking sector. Against the backdrop of persistently low
+interest rates worldwide and narrowing banking spreads,
+the contraction (-4 basis points) in NIM outperformed
+II. Capital profitability and risk control
+capability continuously improved
+85
+Annual Report 2021
+⚫ ROA
+ROE
+2021
+12.15%
+2020
+11.85%
+-30,000
+0.99%
+1.01%
+1.02%
+1.04%
+32,000
+11.92%
+34,000
+12.00%
+36,000
+12.07%
+0.98%
+In 2022, the global economy is expected to continue
+its rebound, but tensions in the global supply chain and
+energy supplies may persist, and the prices of major asset
+categories show a divergent trend. The accelerated shift in
+monetary policy of major economies and the upward shift
+in interest rate centers will pose challenges to the banking
+sector in terms of liquidity management, asset allocation
+and optimization of the debt structure. At present, the
+Chinese economy faces pressures from three fronts,
+namely shrinking demand, supply shock and weakening
+expectations, but the momentum of sustained recovery
+and development has not changed, and its economic
+fundamentals remain strong in the long term. China is
+stepping up efforts to foster a new development paradigm
+featuring dual circulation, in which domestic and overseas
+markets reinforce each other, with the domestic market as
+the mainstay. This will bring new opportunities to the high-
+quality development in the banking sector.
+Adhering to Xi Jinping Thought on Socialism with Chinese
+Characteristics for a New Era, ICBC will continue to
+earnestly implement the decisions and arrangements
+of the Central Committee of the Communist Party of
+China and the State Council, advance full and accurate
+implementation of the new development philosophy in the
+new development stage, and actively serve and integrate
+into the new development paradigm. The Bank will stay
+committed to the general principle of pursuing progress
+while ensuring stability, keep hold of the requirement
+of "stability", fight for achievements in "progress",
+redouble efforts in "reform", stick to the path of financial
+development with Chinese characteristics, follow the
+"48-character" guideline, and pursue its own high-
+quality development while contributing to the country's
+high-quality economic and social development. First, it
+will reinforce the Party's establishment in a high-
+quality manner. The Bank will uphold and strengthen
+the Party's leadership, further integrate it with corporate
+governance, better align the procedural rules of the
+Party Committee and the decision-making mechanism in
+corporate governance, and improve the modern financial
+enterprise system. The Bank will give full play to its
+role in full and strict Party self-governance in providing
+political guidance and guarantees and strengthen strict
+management and atmosphere. Second, it will serve
+the new development paradigm in a high-quality
+manner. The Bank will continue to focus on its main
+responsibilities and businesses, scale up support for
+manufacturing enterprises and small and micro enterprises,
+and improve the service quality and efficiency for scientific
+and technological innovation and green development.
+The Bank will bring into full play to its dual functions as
+monetary policy tools in the total amount and structure of
+investment and financing, implement the cross-cyclical and
+Cross-jurisdictional liabilities
+Discussion and Analysis
+Securities and other financing instruments issued
+Intra-financial system liabilities
+Intra-financial system assets
+Balance of adjusted on- and off-balance sheet assets
+Indicator
+In accordance with the Measures for Assessment of Systemically Important Banks issued by PBC and CBIRC and the Notice
+on Launching the Assessment Data Completion of Systemically Important Banks issued by CBIRC, the Bank calculated and
+disclosed the 2020 assessment indicators of domestic systemically important banks.
+Assessment Indicators of Domestic Systemically Important Banks
+Discussion and Analysis
+ICBC
+82
+2,069,735
+2,092,121
+Payments settled via payment systems or correspondent banks
+153,164
+7,966,381
+Cross-jurisdictional claims
+Level 3 assets
+Trading and available-for-sale securities
+Notional amount of over-the-counter ("OTC") derivatives
+1,259,003
+Trading volume of listed equities and other securities
+6,582,443
+Trading volume of fixed-income securities
+2.16%
+2,272,838
+Underwritten transactions in debt and equity markets
+784,582
+OUTLOOK
+Assets under custody
+Number of corporate customers (in 10,000)
+83
+Annual Report 2021
+1,070,072
+4,222,848
+Balance of wealth management products issued by the wealth management subsidiary
+Cross-jurisdictional claims and liabilities
+1,637,344
+Wealth management business
+872,495
+790,093
+Assets of non-banking affiliates
+Securities measured at fair value
+8,085,879
+16,065
+Agency and commission-based business
+68,030
+7,448,878
+18,157,690
+480,825,563
+2,591,743
+3,121,151
+2,988,192
+35,300,338
+2020
+In RMB millions, unless otherwise specified
+Derivatives
+Number of domestic operating institutions
+Number of personal customers (in 10,000)
+864
+2.15
+2021
+2.09%
+Unit: RMB100 millions
+Total assets
+Discussion and Analysis
+87
+88
+Annual Report 2021
+Growth rate of profit before provision
+Growth rate of operating income
+Growth rate of net profit
+2021
+-0.0%
+4.0%
+8.0%
+12.0%
+16.0%
+Profit before provision
+Operating income
+Net profit
+2020
+0
+2,000
+4,000
+6,000
+8,000
+10,000
+Unit: RMB100 millions, %
+Income and profit ranked first worldwide
+390,000
+325,000
+260,000
+195,000
+ICBC
+19,980,932
+88
+ii. Making up for our weaknesses: focusing on
+personal banking, foreign exchange business, key
+areas and urban-rural collaborative development. In
+terms of No.1 Personal Bank Strategy, personal assets
+under management ("AUM", close to RMB17 trillion)
+still led the market. The number of individual customers
+exceeded 700 million and the number of mobile banking
+customers reached 469 million. The Bank was the first
+bank to have more than 100 million monthly active users
+("MAU") of mobile banking. The balance of personal
+loans reached nearly RMB8 trillion, and payroll service
+reached over RMB5 trillion of distributions to more than
+100 million customers. In terms of the Strategy of the
+Preferred Bank for Foreign Exchange Business, the
+Bank launched the "YES ICBC" financial service brand.
+The average daily balance of domestic foreign exchange
+deposits increased by 35% over the previous year. The
+Group's cross-border RMB business volume exceeded
+RMB8.5 trillion. The Bank became one of the first eligible
+pilot banks for the "Southbound Bond Connect" scheme
+and the "Cross-boundary Wealth Management Connect"
+scheme in the Guangdong-Hong Kong-Macao Greater
+Bay Area. It played a leading role as a big bank to serve
+two-way opening-up of the financial market. In terms
+of Strategy for Sharpening Competitive Edge in Key
+Regions, the Bank enjoyed a dominance in total balance
+of deposits and loans in five key areas, namely the Beijing-
+In terms of transaction banking, the financial market
+business generated more than RMB100 billion of net
+profit, investment banking continued to rank first among
+domestic peers by income from advisory and consulting
+services, and mega asset management totaled RMB27
+trillion, representing a growth of 11.24%.
+i. Bringing out our strengths: focusing on cementing
+strengths in institutional banking, corporate banking,
+settlement and transaction banking. In terms of
+settlement service, RMB corporate settlement generated
+RMB11.3 billion of fee income, ranking first among peers.
+In terms of institutional banking, the customer base
+hit a five-year high in growth, and deposits from banks
+and other financial institutions remained in the first
+place among comparable peers, manifesting a notable
+competitive edge. In terms of corporate banking,
+the Bank still took the first spot in both the number of
+corporate customers and the amount of corporate loans
+and deposits among comparable peers. The Bank was the
+first commercial bank to break the RMB10 trillion mark of
+RMB corporate loans. The asset quality improved steadily.
+IV. Major breakthroughs made in "bringing
+out our strengths to make up for our
+weaknesses and laying a solid foundation
+and base"
+Fifth, the Bank remained in the first place in
+international rankings. The Bank was ranked the 1st
+place among the Top 1000 World Banks by The Banker,
+the 1st place in the Global 2000 by Forbes, and the 1st
+place in the list of commercial banks of the Global 500
+in Fortune for the ninth consecutive year, demonstrating
+strong overall capacity and market influence. Sixth, brand
+value kept increasing. According to the "2022 Top 500
+Banking Brand" by Brand Finance, a research institute of
+global brand value, the Bank took the 1st place among the
+world's top banking brands with a brand value of USD75.1
+billion for the sixth consecutive year.
+Total liabilities
+2021
+Customer deposits
+2020
+First, the Bank ranked No. 1 by total income among
+global banks. The Bank recorded RMB860.9 billion in
+operating income, up 7.6% from the previous year, with
+net fee and commission income maintaining its leading
+position among domestic banks. Second, the Bank
+ranked No. 1 by total profits among global banks.
+Net profit reached RMB350.2 billion, representing an
+increase of 10.2% over the previous year. Profit before
+provision was RMB627.5 billion, up 5.5% from last year.
+Third, the Bank ranked No. 1 by total assets among
+global banks. Total assets reached RMB35,171.4 billion,
+representing an increase of 5.5% over the end of the
+previous year. Loans and advances to customers totaled
+RMB20,667.2 billion, up 11.0% from the end of the
+previous year. Investment in bonds was RMB8,817.3
+billion, up 9.5% from the end of the previous year.
+Fourth, the Bank ranked No. 1 by total deposits
+among global banks. Due to customers amounted to
+RMB26,441.8 billion, an increase of 5.2% from the end of
+the previous year.
+0
+140,000
+210,000
+280,000
+350,000
+Unit: RMB100 millions
+Total deposits
+Loans and advances to customers
+Total assets
+Investment in bonds
+2020
+0
+65,000
+130,000
+70,000
+III. Scale merits and brand value leading the
+world
+◆ Allowance to total loans ratio
+Allowance to NPLs
+450
+Unit: RMB100 millions, %
+Asset quality continued to improve
+ICBC
+86
+percentage points over the end of last year. Allowance to
+total loans ratio was 2.92%, representing an increase of
+7 basis points. Credit cost ratio was 0.86%, down 0.11
+percentage points. Fifth, capital discipline worked
+effectively. RWA grew by 7.8%, 3.2 percentage points
+slower than growth of credit assets. Sixth, the input/
+output efficiency was high. Cost-to-income ratio was
+26.36%, still relatively low among global peers despite a
+rise of 1.60 percentage points over last year.
+Third, asset quality further improved. NPL ratio was
+1.42%, down 16 basis points from the end of last year,
+and basically returned to the pre-pandemic level. The
+overdue loan rate was 1.23%, down 21 basis points.
+The price scissors between overdue loans and NPLs
+was RMB-38.5 billion, maintaining negative for seven
+consecutive quarters, representing a record low. Fourth,
+risk resilience was further boosted and the base
+of risk allowances further fortified. Allowance to
+NPLs was 205.84%, representing an increase of 25.16
+NIM
+Decline rate
+2020
+2.06%
+-0.15
+300
+2021
+2021
+-0.25%
+-0.04
+19.77
+19.16
+Unit: %
+Higher proportion of non-interest income
+-0.05%
+2.11
+0.15%
+0.35%
+0.55%
+2020
+2.13%
+150
+-150
+2021
+-2.75%
+2.84%
+2.92%
+2020
+◆ NPL ratio
+2021
+150.00%
+0.00%
+0.20%
+0.40%
+0.60%
+0
+200.00%
+1.00%
+1.20%
+1.40%
+250.00%
+1.60%
+Unit: %
+Risk resilience was further boosted
+Discussion and Analysis
+Price scissors
+Overdue rate
+2020
+-450
+-300
+0.80%
+Assets under custody
+Issuance of Undated Additional Tier 1
+Capital Bonds
+Payments settled via payment systems or correspondent banks
+16,053
+17,138
+(10,178)
+(18,658)
+3,552
+3,539
+1,508,562
+1,618,142
+339,486
+438,640
+322,692
+356,849
+148,534
+148,597
+356,407
+356,407
+2,669,055
+2020
+At 31 December
+2,903,516
+At 31 December
+2021
+In RMB millions, except for percentages
+Other intangible assets other than land use rights
+Goodwill
+Core tier 1 capital deductions
+7,691
+8,107
+5,669
+4,582
+Valid portion of tier 2 capital instruments and related premiums
+523,394
+668,305
+Tier 2 capital
+2,872,792
+3,241,364
+Net tier 1 capital
+647
+655
+Valid portion of minority interests
+219,143
+354,331
+Other
+Additional tier 1 capital instruments and related premiums
+354,986
+Additional tier 1 capital
+2,653,002
+2,886,378
+Net core tier 1 capital
+institutions that are under control but not subject to consolidation
+7,980
+7,980
+Investments in core tier 1 capital instruments issued by financial
+Cash flow hedge reserve that relates to the hedging of items
+that are not fair-valued on the balance sheet
+(4,616)
+(4,202)
+219,790
+418,415
+Valid portion of minority interests
+General reserve
+2,872,792
+2,944,636
+3,241,364
+Net tier 1 capital
+2,404,030
+2,653,002
+2,614,392
+2,886,378
+Net core tier 1 capital
+Parent
+Company
+Group
+Parent
+Company
+Group
+Item
+At 31 December 2021
+In RMB millions, except for percentages
+At 31 December 2020
+RESULTS OF CAPITAL ADEQUACY RATIO CALCULATION OF THE GROUP AND PARENT COMPANY
+The Bank calculated its capital adequacy ratios at
+all levels in accordance with the Capital Regulation.
+According to the scope of implementing the advanced
+capital management approaches as approved by the
+regulatory authorities, the Bank adopted the foundation
+internal ratings-based ("IRB") approach for corporate
+credit risk, the IRB approach for retail credit risk, the
+internal model approach ("IMA") for market risk, and
+the standardized approach for operational risk meeting
+regulatory requirements. The weighted approach was
+adopted for credit risk uncovered by the IRB approach and
+the standardized approach was adopted for market risk
+uncovered by the IMA.
+Capital Adequacy Ratio and Leverage
+Ratio
+capital management on risk-weighted assets and continued
+to elevate the capital use efficiency. It holistically balanced
+the endogenous and exogenous capital replenishment, and
+further consolidated the capital base to further reinforce
+its capacity in supporting the real economy. In 2021,
+all capital indicators performed well, of which capital
+adequacy ratio was kept at a sound and appropriate level.
+In 2021, the Bank further deepened the capital
+management reform, strengthened capital saving and
+optimization, carried forward the disposal of low-efficiency
+capital occupation, intensified the constraint of economic
+The Bank implements a group-based capital management
+mechanism, and takes capital as the object and an
+instrument for its management activities, including
+planning, measurement, allocation, application and
+operation. The Bank's capital management aims at
+maintaining appropriate capital adequacy ratio and
+continuously meeting capital supervisory regulations
+and policies; ceaselessly strengthening and enhancing
+the capital base and supporting business growth and
+implementation of strategic planning; establishing a
+value management system focusing on economic capital,
+reinforcing capital constraint and incentive mechanism
+and improving capital allocation efficiency; innovating
+and expanding capital replenishment channels, raising
+capital quality and optimizing capital structure. The Bank's
+capital management covers various operating entities in
+the Group, and its contents include capital adequacy ratio
+management, economic capital management, capital
+investment and financing management.
+Discussion and Analysis
+CAPITAL MANAGEMENT
+493,730,289
+2,605,594
+Net capital base
+3,909,669
+3,600,883
+Surplus reserve
+Valid portion of capital reserve
+Paid-in capital
+Core tier 1 capital
+Item
+CAPITAL ADEQUACY RATIO
+Discussion and Analysis
+79
+Annual Report 2021
+As at the end of 2021, the core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio
+calculated by the Bank in accordance with the Capital Regulation stood at 13.31%, 14.94% and 18.02%, respectively,
+complying with regulatory requirements.
+17.02
+16.88
+Retained profits
+18.30
+Capital adequacy ratio (%)
+14.24
+14.28
+14.97
+14.94
+Tier 1 capital adequacy ratio (%)
+13.18
+13.29
+13.31
+Core tier 1 capital adequacy ratio (%)
+3,114,878
+3,396,186
+18.02
+351,568
+13.14
+248,774
+Note: Please refer to "Unaudited Supplementary Information to the Consolidated Financial Statements" for details on disclosed leverage
+ratio information.
+8.14
+8.12
+8.05
+8.31
+8.69
+Leverage ratio (%)
+off-balance sheet assets
+35,300,338
+2,872,792
+2,956,971
+36,423,221
+37,370,525
+3,009,641
+3,132,095
+37,682,357
+3,241,364
+37,292,522
+Balance of adjusted on- and
+Net tier 1 capital
+2020
+31 December
+31 March
+2021
+30 June
+2021
+2021
+2021
+Item
+30 September
+Capital Financing Management
+On the basis of capital replenishment by retained profits,
+the Bank proactively expanded the channels for external
+capital replenishment and continuously promoted the
+innovation of capital instruments, to reinforce the capital
+strength, optimize capital structure and control the cost of
+capital rationally.
+The Bank issued undated additional tier 1 capital bonds of
+USD6.16 billion in the offshore market in September 2021.
+All proceeds from this issuance, after deduction of issuance
+expenses, were used to replenish the Bank's additional tier
+1 capital in accordance with applicable laws and approvals
+by the regulatory authorities.
+The Bank publicly issued two tranches of undated
+additional tier 1 capital bonds of RMB70.0 billion and
+RMB30.0 billion in China's national inter-bank bond
+market in June and November 2021 respectively. All
+proceeds from these issuances, after deduction of issuance
+expenses, were used to replenish the Bank's additional tier
+1 capital in accordance with applicable laws and approvals
+by the regulatory authorities.
+5,080,700
+Surplus provision for loan impairment
+Securities and other financing instruments issued
+2,947,997
+Intra-financial system liabilities
+2,088,082
+37,560,752
+Intra-financial system assets
+Balance of adjusted on- and off-balance sheet assets
+Indicator
+2021
+In RMB millions
+31 December
+In accordance with the Guidelines on the Disclosure of
+Global Systemically Importance Assessment Indicators for
+Commercial Banks issued by CBIRC and the Instructions for
+G-SIB Assessment Exercise issued by the Basel Committee
+on Banking Supervision, the Bank calculated and disclosed
+the global systemically importance assessment indicators.
+Assessment Indicators of Systemically
+Important Banks
+Economic capital management of the Bank includes three
+major aspects: measurement, allocation and application.
+Economic capital indicators include Economic Capital (EC),
+Risk-Adjusted Return on Capital (RAROC) and Economic
+Value-added (EVA). All of the above are applied in credit
+resource allocation, quota management, performance
+assessment, expenditure allocation, product pricing and
+customer management, etc.
+Allocation and Management of
+Economic Capital
+The Bank further improved the Group's economic capital
+management system in terms of measurement, allocation
+and assessment, strengthened the Group's economic
+capital constraint and incentive mechanism, and promoted
+the Group's intensive capital development. It further
+improved its economic capital measurement policy and
+optimized its economic capital measurement standards
+and system. The Bank strictly implemented the quota
+management of economic capital, continuously boosted
+the refined management of economic capital, and
+reinforced the capital constraint on domestic branches,
+profitability units, overseas institutions and subsidiaries.
+Moreover, the Bank upgraded the economic capital
+measurement and appraisal policy of credit business and
+proactively facilitated the adjustment of its credit structure.
+It strengthened trainings on economic capital management
+for institutions at all levels, and vigorously pushed
+forward the application of economic capital in operational
+management and business front-line.
+For details on the issuance of capital instruments of the
+Bank, please refer to the announcements published by the
+Bank on the website of SSE, the "HKEXnews" website of
+HKEX and the website of the Bank.
+2 capital bonds of RMB60.0 billion and RMB40.0 billion
+in the national inter-bank bond market, respectively. All
+proceeds were used to replenish the Bank's tier 2 capital
+in accordance with the applicable laws as approved by
+relevant regulatory authorities.
+Discussion and Analysis
+81
+Annual Report 2021
+In 2021, the Bank received the approvals from CBIRC
+and PBC respectively, for the Bank to publicly issue tier 2
+capital bonds of no more than RMB190.0 billion in China's
+national inter-bank bond market. In December 2021
+and January 2022, the Bank issued two tranches of tier
+The Bank issued a tier 2 capital bond of RMB30.0 billion
+in China's national inter-bank bond market in January
+2021. All proceeds were used to replenish the Bank's tier 2
+capital in accordance with the applicable laws as approved
+by relevant regulatory authorities.
+Issuance Progress of Tier 2 Capital Bonds
+Global Systemically Importance Assessment
+Indicators of Commercial Banks
+At
+The Second Extraordinary General Meeting of 2021 of the
+Bank reviewed and approved the Proposal on the Issuance
+of Eligible Tier 2 Capital Instruments, which approved the
+Bank's issuance of eligible tier 2 capital instruments in
+domestic and offshore markets to replenish the Bank's tier
+2 capital. The issuance plan of the eligible tier 2 capital
+instruments is still subject to the approval of relevant
+regulatory authorities.
+At
+Market risk-weighted assets
+Parts covered by internal ratings-based approach
+Parts uncovered by internal ratings-based approach
+Credit risk-weighted assets
+Item
+RISK-WEIGHTED ASSETS
+ICBC
+80
+Note: (1) Refers to risk-weighted assets after capital floor and adjustments.
+16.88
+18.02
+Capital adequacy ratio (%)
+14.28
+Parts covered by internal model approach
+14.94
+13.31
+Core tier 1 capital adequacy ratio (%)
+20,124,139
+21,690,349
+1,114
+3,396,186
+3,909,669
+Risk-weighted assets (1)
+Net capital base
+1,116
+At
+Valid portion of minority interests
+170,712
+Tier 1 capital adequacy ratio (%)
+Parts uncovered by internal model approach
+13.18
+1,493,708
+21,690,349
+At
+At
+LEVERAGE RATIO
+Please refer to the 2021 Capital Adequacy Ratio Report of Industrial and Commercial Bank of China Limited issued by the
+Bank for further information on capital measurement.
+20,124,139
+1,414,031
+In RMB millions, except for percentages
+80,546
+102,672
+94,238
+51,014
+Operational risk-weighted assets
+153,686
+174,784
+6,570,240
+Total
+Discussion and Analysis
+At 31 December
+2021
+In RMB millions
+6,255,661
+2020
+At 31 December
+18,535,324
+13,472,715
+12,279,663
+20,042,955
+1st
+st
+Major Ranking and Rewards in 2023
+Ranking
+the
+Annual Report 2023
+4
+Industrial and Commercial Bank of China Limited; or Industrial and Commercial Bank
+of China Limited and its subsidiaries
+China Council for
+Brand Development
+Standard Bank Group Limited
+National Council for Social Security Fund
+Shanghai Stock Exchange
+The Stock Exchange of Hong Kong Limited
+place
+Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)
+Accounting Standards for Business Enterprises promulgated by MOF
+The People's Bank of China
+The State Council of the People's Republic of China
+Ranking
+the
+Among the Top 500
+Banking Brands for the
+eighth consecutive year
+st
+Best Bank in China
+Best Corporate Bank in China
+Best Bank for Belt and Road in
+China
+In the "Corporate Brand
+Value List" for the
+eighth time
+National Financial Regulatory Administration
+place
+1st
+Ranking
+the
+Brand Finance
+Brand FinanceⓇ
+place
+1st
+Fortune
+Among commercial banks
+in the Global 500 for the
+eleventh consecutive year
+The Banker
+The Banker
+Among the Top 1000 World
+Banks for the eleventh
+consecutive year
+Ranking
+the
+place
+1ST
+Ministry of Finance of the People's Republic of China
+ICBC Standard Bank
+The International Financial Reporting Standards promulgated by the International
+ICBC-AXA
+ICBC Wealth Management
+ICBC Leasing
+ICBC Investments Argentina
+ICBC Investment
+ICBC International
+ICBC Credit Suisse Asset Management ICBC Credit Suisse Asset Management Co., Ltd.
+Industrial and Commercial Bank of China (USA) NA
+Industrial and Commercial Bank of China (Thai) Public Company Limited
+ICBC Turkey Bank Anonim Şirketi
+ICBC PERU BANK
+Industrial and Commercial Bank of China (New Zealand) Limited
+Industrial and Commercial Bank of China Mexico S.A.
+Industrial and Commercial Bank of China (Malaysia) Berhad
+Industrial and Commercial Bank of China (Macau) Limited
+GLOBAL
+FINANCE
+Industrial and Commercial Bank of China (Brasil) S.A.
+Industrial and Commercial Bank of China (Canada)
+Industrial and Commercial Bank of China (Europe) S.A.
+PT. Bank ICBC Indonesia
+ICBC (London) PLC
+ICBC Austria Bank GmbH
+ICBCFS
+IFRSS
+Inversora Diagonal
+MOF
+Industrial and Commercial Bank of China Financial Services LLC
+ICBC-AXA Assurance Co., Ltd.
+ICBC Wealth Management Co., Ltd.
+ICBC Standard Bank PLC
+ICBC Investments Argentina S.A. Sociedad Gerente de Fondos Comunes de Inversión
+ICBC Financial Leasing Co., Ltd.
+ICBC Financial Asset Investment Co., Ltd.
+ICBC International Holdings Limited
+The Bank/The Group
+Accounting Standards Board, which comprise the International Accounting Standards
+Inversora Diagonal S.A.
+State Council
+SSF
+SSE
+SEHK
+Hong Kong
+Securities and Futures Ordinance of
+PRC GAAP
+PBC
+NFRA
+Standard Bank
+Global Finance
+Legal name in Chinese
+Ranking
+the
+Liao Lin
+Legal Representative
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED ("ICBC")
+Legal name in English
+中國工商銀行股份有限公司(“中國工商銀行")
+Corporate Information
+Annual Report 2023
+6
+(This report is prepared in both Chinese and English. In the case of discrepancy between the two versions, the Chinese
+version shall prevail.)
+The Bank is primarily exposed to credit risk, market risk, interest rate risk in the banking book, liquidity risk, operational
+risk, reputational risk and country risk. The Bank has actively adopted measures to effectively manage various types of
+risks. Please refer to the section headed "Discussion and Analysis Risk Management" for detailed information.
+The report contains forward-looking statements on the Bank's financial position, business performance and development.
+The statements are based on existing plans, estimates and forecasts, and bear upon future external events or the
+Group's future finance, business or performance in other aspects, and may involve future plans which do not constitute
+substantive commitment to investors. Hence, investors and persons concerned shall be fully aware of the risks and
+understand the difference between plans, estimates and commitments.
+Mr. Liao Lin, Legal Representative and Person in charge of finance of the Bank, and Mr. Xu Zhisheng, Person in charge of
+Finance and Accounting Department of the Bank, hereby warrant that the financial statements contained in the Annual
+Report are authentic, accurate and complete.
+27 March 2024
+The Board of Directors of Industrial and Commercial Bank of China Limited
+The Board of Directors of the Bank proposed distributing cash dividends for ordinary shares of RMB3.064 (pre-tax) for each
+ten shares for 2023. The distribution plan will be submitted for approval to the Annual General Meeting for the Year 2023.
+The Bank did not convert capital reserve to share capital.
+The 2023 financial statements prepared by the Bank in accordance with PRC GAAP and IFRSS have been audited by
+Deloitte Touche Tohmatsu Certified Public Accountants LLP and Deloitte Touche Tohmatsu in accordance with Chinese and
+International Standards on Auditing respectively, with unqualified auditors' reports being issued.
+The 2023 Annual Report of the Bank and its abstract have been considered and approved at the meeting of the Board of
+Directors of the Bank held on 27 March 2024. All directors of the Bank attended the meeting.
+Registered address and office address
+The Board of Directors, the Board of Supervisors, Directors, Supervisors and Senior Management members of Industrial
+and Commercial Bank of China Limited undertake that the information in this report contains no false record, misleading
+statement or material omission, and assume individual and joint and several liability for the authenticity, accuracy and
+completeness of the information in this report.
+55 Fuxingmennei Avenue, Xicheng District, Beijing, China
+Telephone: 86-10-66106114
+Industrial and Commercial Bank of China (Asia) Limited
+The "HKEXnews" website of HKEX for disclosure of
+the annual report in respect of H shares
+www.hkexnews.hk
+www.sse.com.cn
+the annual report in respect of A shares
+Website of SSE for disclosure of
+China Securities Journal, Shanghai Securities News,
+Securities Times, Economic Information Daily
+Selected newspaper for information disclosure
+E-mail: ir@icbc.com.cn
+Facsimile: 86-10-66107571
+Address: 55 Fuxingmennei Avenue, Xicheng District, Beijing, China
+Telephone: 86-10-66108608
+Guan Xueqing
+Board Secretary and Company Secretary
+Liao Lin and Guan Xueqing
+Authorized representatives
+33/F, ICBC Tower, 3 Garden Road, Central, Hong Kong SAR, China
+Principal place of business in Hong Kong SAR, China
+Business enquiry and complaint hotline: 86-95588
+Website: www.icbc.com.cn, www.icbc-ltd.com
+Postal code: 100140
+st
+Important Notice
+Annual Report 2023
+Best Wealth Management Bank in
+Asia Pacific
+MSCI
+MSCI ESG Ratings
+AA
+資
+財
+The Asset
+HE Asset #
+Best Custodian Bank,
+China
+Best Private Bank, China
+Digital Bank of the Year,
+China
+China Banking
+Association
+CHINA BANKING ASSOCIATION
+● 中国银行业协会
+In the GYROSCOPE assessment
+system among national
+commercial banks for the
+third consecutive year
+place
+1st
+Green and Sustainable Bank of the
+Year in China
+5
+Best International Cash
+亚洲银行家
+The Chinese Banker
+The Chinese Banker
+银行家
+CHINESE
+EBA
+Financial Innovation
+Institution of Excellence in
+Financial News
+FINANCIAL NEWS
+金融时报
+Best Green Finance Service
+Bank of the Year
+Service Bank of the Year
+Best Inclusive Financial
+Asiamoney
+Best Domestic Bank in China
+Best Corporate Bank in China
+Best Bank for Digital Solutions
+in China
+The Asian Banker
+THE ASIAN BANKER®
+Management Bank in China
+Industrial and Commercial Bank of China (Argentina) S.A.
+Chairman's Statement
+Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited
+Central Huijin Investment Ltd.
+Hot Topics in the Capital Market
+83
+Outlook
+78
+Capital Management
+62
+Risk Management
+4567821
+Discussion and Analysis
+Financial Highlights
+Corporate Information
+Important Notice
+Major Ranking and Rewards in 2023
+Definitions
+Contents
+Excellence
+Innovation
+84
+Prudence
+Highlights of High-quality
+84
+87
+Asset Quality
+32
+Enterprise Risk Management and
+17
+85
+Real Economy
+15
+57223
+Personal Banking
+Corporate Banking
+Business Overview
+Financial Statements Analysis
+Regulatory Environments
+and Efficiency of Serving the
+Economic, Financial and
+Constantly Improving the Quality
+Development
+Solidifying the Ecological
+Humanity
+Integrity Leads to Prosperity
+Adhere to the guidance of
+the Party building theory and
+exercising rigorous corporate
+governance
+Strategic Significance
+Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, ICBC will adhere to
+the general working principle of pursuing progress while ensuring stability, fully and faithfully apply
+the new development philosophy on all fronts, modernize its governance system and capacity,
+and turn ICBC into a world-class and modern financial enterprise with Chinese characteristics.
+Strategic Objective
+The Bank was ranked the 1st place among the Top 1000
+World Banks by The Banker and the 1st place in the list
+of commercial banks of the Global 500 in Fortune for
+the eleventh consecutive year, and took the 1st place
+among the Top 500 Banking Brands of Brand Finance
+for the eighth consecutive year.
+The Bank always keeps in mind its underlying mission
+of serving the real economy with its principal business,
+and along with the real economy it prospers, suffers
+and grows. Taking a risk-based approach and never
+overstepping the bottom line, it constantly enhances its
+capability of controlling and mitigating risks. Besides,
+the Bank remains steadfast in understanding and
+following the business rules of commercial banks to
+strive to be a long-lasting and ever-prosperous bank.
+It also stays committed to seeking progress with
+innovation while maintaining stability, continuously
+enhances the key development strategies, actively
+develops the FinTech and accelerates the digital
+transformation. The Bank unswervingly delivers
+specialized services, and pioneers a specialized business
+model, thus making it "a craftsman in large banking".
+ICBC E
+The Bank has devoted itself to building a world-
+class and modern financial enterprise with Chinese
+characteristics. The Bank has a high-quality customer
+base, a diversified business structure, strong innovation
+capabilities and market competitiveness. The Bank
+regards service as the very foundation to seek further
+development and adheres to creating value through
+services while providing abundant financial products
+and superior financial services to over 12.05 million
+corporate customers and 740 million personal
+customers around the world. It has served the high-
+quality development of the economy and society
+with its own high-quality development. The Bank has
+been consciously integrating social responsibilities
+into its development strategy and operation and
+management activities, and gaining wide recognition
+in the aspects of serving the manufacturing industry,
+promoting inclusive finance, backing rural revitalization,
+developing green finance and participating in public
+welfare undertakings.
+Industrial and Commercial Bank of China was
+established on 1 January 1984. On 28 October 2005,
+the Bank was wholly restructured into a joint-stock
+limited company. On 27 October 2006, the Bank was
+successfully listed on both Shanghai Stock Exchange
+and The Stock Exchange of Hong Kong Limited.
+Company Profile
+Annual Report
+2023
+(A joint stock limited company incorporated in the People's Republic of China with limited liability)
+Stock Code: 1398
+INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED
+L
+ΠΠ
+Legal Advisors
+ICBC upholds the Party's leadership over the
+financial work, and strives to improve the scientific
+decision-making as well as the effectiveness of
+corporate governance through enhanced governance
+system and capacity building.
+Integrity
+Adhere to technology-driven
+development and value creation
+empowers its business operations and
+management with FinTech, and creates superior
+value for the real economy, shareholders, customers,
+employees and the society as a whole.
+VALUES
+To build a world-class modern
+financial institution with Chinese
+characteristics in all aspects, and
+become a long-lasting and ever-
+prosperous bank
+VISION
+Great contribution to society
+Real success for employees
+Maximum returns to shareholders
+Excellent services for clients
+Excellence for You
+MISSION
+ICBC safeguards the lifeline of asset quality by
+reinforcing bottom-line thinking with a combination
+of prevention and control measures. Meanwhile,
+corporate culture formation and caring for staff are
+strengthened to increase group cohesion.
+Adhere to laying a solid
+foundation for risk control and
+achieving development through
+talent cultivation
+ICBC proactively taps resources from both domestic
+and overseas markets, and undertakes to constantly
+promote international development, which well-
+integrates with China's high-level opening-up.
+Adhere to a broad international
+vision and globalized operations
+ICBC remains steadfast in serving the real economy
+and commits to satisfying people's new expectations
+and demands for financial services, making every
+effort to build the No.1 Personal Bank.
+Adhere to putting
+the customer first and
+serving the real economy
+Keeping pace with changing times, ICBC endeavors
+to advance reforms in key areas and critical
+steps, seeking room for development through
+transformation and vitality for growth through
+reform.
+Adhere to pushing for pragmatic
+business transformation and
+progressing through reform
+ICBC
+Industrial and Commercial Bank of China (Almaty) Joint Stock Company
+Special Column: New
+Personal Wealth Management
+Hong Kong Listing Rules
+Huijin
+HKEX
+Former CBIRC
+CSRC
+Regulation
+Capital Regulation/New Capital
+Capital Regulation (Provisional)
+Bank ICBC (JSC)
+Articles of Association
+In this report, unless the context otherwise requires, the following terms shall have the meanings set out below:
+Definitions
+60
+319
+Branches and Offices
+57
+List of Domestic and Overseas
+144
+ICBC (Almaty)
+Statements
+ICBC (Argentina)
+ICBC (Austria)
+Hong Kong Exchanges and Clearing Limited
+Former China Banking and Insurance Regulatory Commission
+China Securities Regulatory Commission
+Regulation Governing Capital of Commercial Banks (Provisional) promulgated in June 2012
+Regulation Governing Capital of Commercial Banks
+The Articles of Association of Industrial and Commercial Bank of China Limited
+Bank ICBC (joint stock company)
+ICBC (USA)
+ICBC (Turkey)
+ICBC (Thai)
+ICBC (Peru)
+ICBC (New Zealand)
+ICBC (Mexico)
+ICBC (Malaysia)
+ICBC (Macau)
+ICBC (London)
+ICBC (Europe)
+ICBC (Indonesia)
+ICBC (Canada)
+ICBC (Brasil)
+ICBC (Asia)
+Breakthroughs Made in
+54
+143
+Internet Finance
+FinTech
+43
+Financial Market Business
+Pension Finance Service
+101
+Management
+Achievements Made in
+Directors, Supervisors and Senior
+Special Column: Great
+93
+90
+88
+Foundation by GBC+ Projects
+Continuous Deepening of D-ICBC
+Details of Changes in Share Capital
+and Shareholding of Substantial
+Shareholders
+41
+Asset Management Services
+39
+Outlet Building and Service
+Auditor's Report and Financial
+International Operation
+Human Resources Management,
+Employees and Institutions
+Organizational Chart
+141
+Significant Events
+135
+Responsibilities
+Environmental and Social
+133
+Report of the Board of Supervisors
+45
+129
+Report of the Board of Directors
+110
+Corporate Governance Report
+2447 258
+51
+Major Controlled Subsidiaries and
+Equity Participating Company
+Comprehensive Operation and
+Subsidiary Management
+Improvement
+Chinese mainland
+49
+17-18/F, East Tower, World Financial Center, 1 East 3rd Ring
+Middle Road, Chaoyang District, Beijing, China
+0
+4%
+1%
+8%
+12%
+1.36%
+1.38%
+1.42%
+2%
+16%
+20%
+3%
+18.02%
+19.10%
+0
+19.26%
+Unit: %
+Capital adequacy ratio
+Non-performing loans ("NPLs") ratio
+2023
+2022
+2021
+26,441,774
+29,870,491
+33,521,174
+2023
+2022
+2021
+20,667,245
+23,210,376
+Unit: %
+26,086,482
+2021
+2021
+King & Wood Mallesons
+Annual Report 2023
+2023
+2022
+2021
+2023
+2022
+2021
+0
+0
+50%
+10%
+100%
+20%
+2023
+150%
+200%
+28.28%
+27.22%
+213.97%
+205.84% 209.47%
+250%
+40%
+Unit: %
+Allowance to NPLs
+Unit: %
+Cost-to-income ratio
+80
+2023
+2022
+30% 26.36%
+33,521,174 RMB million
+2022
+Due to customers
+Stock code: 360011
+Stock name: 1
+Shanghai Stock Exchange
+Domestic Preference Share
+Stock code: 1398
+Stock name: ICBC
+The Stock Exchange of Hong Kong Limited
+H Share
+Stock code: 601398
+Stock name: 工商銀行
+Shanghai Stock Exchange
+Place where shares are listed, and their names and codes
+A Share
+Board of Directors' Office of the Bank
+Facsimile: 852-28650990
+Stock name: 12
+17M Floor, Hopewell Center, 183 Queen's Road East, Wanchai,
+Hong Kong SAR, China
+Telephone: 852-28628555
+H Share
+188 Yanggao South Road, Pudong New Area, Shanghai, China
+Telephone: 86-4008058058
+China Securities Depository and Clearing Corporation Limited,
+Shanghai Branch
+A Share
+Share Registrars
+Hong Kong SAR, China
+11th Floor, Alexandra House, Chater Road, Central,
+Linklaters LLP
+25th Floor, Three Exchange Square, 8 Connaught Place,
+Central, Hong Kong SAR, China
+DLA Piper
+Hong Kong SAR, China
+20/F, Fortune Financial Center, 5 East 3rd Ring Middle Road,
+Chaoyang District, Beijing, China
+Unit: RMB millions
+Haiwen & Partners
+Computershare Hong Kong Investor Services Limited
+Stock code: 360036
+Location where copies of this annual report are kept
+44,697,079 RMB million
+26,086,482 RMB million
+2022
+2023
+Total assets
+Unit: RMB millions
+44,697,079
+III
+39,610,146
+2021
+2022
+2023
+Total loans and advances to customers
+Offshore Preference Share
+Unit: RMB millions
+35,171,383
+362,110 365,116
+2021
+350,216
+The Stock Exchange of Hong Kong Limited
+Stock name: ICBC 20USDPREF
+Stock code: 4620
+Name and office address of Auditors
+Domestic Auditor
+Deloitte Touche Tohmatsu Certified Public Accountants LLP
+30/F, 222 East Yan'an Road, Huangpu District, Shanghai, China
+CPAs (Practicing): Wu Weijun and Zeng Hao
+Deloitte Touche Tohmatsu
+35/F, One Pacific Place, 88 Queensway, Hong Kong SAR, China
+International Auditor
+7
+Financial Highlights
+Net profit
+Unit: RMB millions
+365,116 RMB million
+Annual Report 2023
+BANK
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 OFFSHORE PREFERENCE SHAREHOLDERS (OR PROXIES) OF THE
+Unit: Share
+Name of shareholder
+Nature of
+shareholder
+Increase/
+decrease
+during the
+reporting
+6,938,013,180
+Class of shares
+period
+The Bank of New York Depository
+(Nominees) Limited
+Foreign legal person
+USD offshore
+preference shares
+As at the end of the reporting period, the Bank had one offshore preference shareholder (or proxy), 27 domestic
+preference shareholders of "1" and 37 domestic preference shareholders of "I". As at the end of the month
+immediately before the annual results announcement date (29 February 2024), the Bank had one offshore preference
+shareholder (or proxy), 29 domestic preference shareholders of "1" and 37 domestic preference shareholders of "I
+行優2”.
+of the
+period
+145,000,000
+Shares held
+at the end
+Number of Preference Shareholders and Particulars of Shareholding
+7.99
+Issuance and Listing of Preference Shares in the Past Three Years
+Shareholding
+percentage
+Long position
+1.95
+6,065,074,305
+Long position
+6.99
+The Bank did not issue any preference shares in the past three years.
+1.70
+Notes: (1)
+(2)
+(3)
+As confirmed by Ping An Asset Management Co., Ltd., such shares were held by Ping An Asset Management Co., Ltd. on
+behalf of certain customers (including but not limited to Ping An Life Insurance Company of China, Ltd.) in its capacity as
+investment manager and the interests in such shares were disclosed based on the latest disclosure of interests form filed by
+Ping An Asset Management Co., Ltd. for the period ended 31 December 2023 (the date of relevant event being 31 January
+2023). Both Ping An Life Insurance Company of China, Ltd. and Ping An Asset Management Co., Ltd. are subsidiaries of
+Ping An Insurance (Group) Company of China, Ltd. As Ping An Asset Management Co., Ltd. is in a position to fully exercise
+the voting rights in respect of such shares on behalf of customers and independently exercise the rights of investment and
+business management in its capacity as investment manager, and is completely independent from Ping An Insurance (Group)
+Company of China, Ltd., Ping An Insurance (Group) Company of China, Ltd. is exempted from aggregating the interests in
+such shares as a holding company under the aggregation exemption and disclosing the holding of the same in accordance
+with the Securities and Futures Ordinance of Hong Kong.
+According to the information provided by SSF to the Bank, SSF held 6,836,411,180 H shares of the Bank as at the end of the
+reporting period, accounting for 7.88% of the Bank's H shares and 1.92% of the Bank's total ordinary shares.
+Due to rounding, percentages presented herein are for reference only.
+Preference Shares
+corporations
+Number
+of shares
+subject to
+Nature of shareholder
+pledged/
+Shares held
+during the
+reporting
+at the end
+of the
+Shareholding
+percentage
+Number
+of shares
+subject to
+Number of
+Increase/
+decrease
+pledged/
+restrictions
+marked
+Name of shareholder
+Class of shares
+period
+Beneficial owner
+Interest of controlled
+locked-up/
+Unit: Share
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 DOMESTIC PREFERENCE SHAREHOLDERS OF "I1″
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+locked-up/
+restrictions
+marked
+(%)
+on sales
+shares
+100
+Unknown
+Notes:
+(1)
+The above data are based on the Bank's register of offshore preference shareholders as at 31 December 2023.
+(2) As the issuance of the offshore preference shares above was non-public offering, the register of preference shareholders
+presented the information on the registered holder of the offshore preference shares.
+(3) The Bank is not aware of any connected relations or acting-in-concert relations between the aforementioned preference
+shareholder and top 10 ordinary shareholders.
+(4) "Shareholding percentage" refers to the percentage of offshore preference shares held by preference shareholders in total
+number of offshore preference shares.
+Annual Report 2023
+97
+Number of
+Temasek Holdings (Private)
+Limited
+57.14%
+3.41
+14.54%
+Except the above-mentioned controlling or equity participating enterprises, Huijin also has a wholly-owned subsidiary
+Central Huijin Asset Management Co., Ltd. Central Huijin Asset Management Co., Ltd. was incorporated in November 2015
+in Beijing. With a registered capital of RMB5 billion, the company runs an asset management business.
+Annual Report 2023
+95
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+The second single largest shareholder of the Bank is MOF, which held approximately 31.14% shares of the Bank as at 31
+December 2023. MOF is a department under the State Council, and is responsible for overseeing the State's fiscal revenue
+and expenditure, formulating the fiscal and taxation policies, and supervising State finance at a macro level.
+13.30%
+Particulars of Other Substantial Shareholders
+Particulars of the De Facto Controller
+None.
+Interests and Short Positions Held by Substantial Shareholders and Other Persons
+Substantial Shareholders and Persons Having Notifiable Interests or Short Positions Pursuant to
+Divisions 2 and 3 of Part XV of the Securities and Futures Ordinance of Hong Kong
+As at 31 December 2023, the Bank received notices from the following persons about their interests or short positions held
+in the Bank's ordinary shares and underlying shares, which were recorded in the register pursuant to Section 336 of the
+Securities and Futures Ordinance of Hong Kong as follows:
+HOLDERS OF A SHARES
+Name of substantial
+shareholder
+SSF. SSF owned 5.38% of the shares of the Bank as at 31 December 2023. Founded in August 2000, SSF is a public service
+institution administered by MOF, having its address at South Tower, Building 11, Fenghuiyuan Fenghui Times Building,
+Xicheng District, Beijing, China, and its legal representative being Liu Wei. With the approval of the State Council and
+pursuant to regulations of MOF and the Ministry of Human Resources and Social Security, SSF has been entrusted to
+manage the following funds: the National Social Security Fund, the subsidy from central government to individual accounts,
+part of the surplus of the enterprise employee's basic pension insurance, basic pension insurance fund and the partial state-
+owned capital transferred.
+30.76%
+20.00%
+53.95%
+Huijin's shareholding
+percentage
+34.68%
+34.79%
+40.14%
+64.13%
+period
+63.16%
+73.63%
+71.56%
+100.00%
+69.07%
+20.05%
+31.34%
+40.11%
+80.00%
+Huijin(¹)
+SSF(2)
+MOF
+Beneficial owner
+Annual Report 2023
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+HOLDERS OF H SHARES
+Name of substantial
+shareholder
+Ping An Asset Management
+Co., Ltd. (1)
+96
+Capacity
+Investment manager
+12,137,786,000
+Nature of
+interests
+Long position
+Percentage of
+H shares (%)
+Percentage of
+total ordinary
+13.98
+shares (%)
+Number of
+H shares held
+(share)
+Due to rounding, percentages presented herein are for reference only.
+(2)
+According to the register of shareholders of the Bank, as at 31 December 2023, Huijin held 124,004,660,940 shares in the
+Bank, while Central Huijin Asset Management Co., Ltd., a subsidiary of Huijin, held 1,013,921,700 shares in the Bank.
+Number of
+A shares held
+(share)
+123,717,852,951
+Nature of
+interests
+Long position
+Percentage of
+A shares (%)
+1,013,921,700 Long position
+45.89
+0.38
+Percentage of
+total ordinary
+shares (%)
+34.71
+0.28
+124,731,774,651
+110,984,806,678
+46.26
+35.00
+Long position
+41.16
+31.14
+Notes: (1)
+Capacity
+Beneficial owner
+Interest of controlled
+corporations
+Total
+(%)
+Domestic preference shares
+shares
+marked
+(%)
+on sales
+shares
+17.1
+None
+locked-up/
+Limited
+State-owned legal person
+Domestic preference shares
+112,750,000
+16.1
+None
+China Mobile Communications
+Hwabao Trust Co., Ltd.
+State-owned legal person
+pledged/
+Number
+of shares
+subject to
+restrictions
+Notes: (1)
+(2)
+(3)
+The above data are based on the Bank's register of domestic preference shareholders of "If1" as at 31 December 2023.
+China National Tobacco Corporation Shandong Branch and China National Tobacco Corporation Heilongjiang Branch are
+both wholly-owned subsidiaries of China National Tobacco Corporation. Ping An Life Insurance Company of China, Ltd. and
+Ping An Property & Casualty Insurance Company of China, Ltd. have connected relations. Save as disclosed above, the Bank
+is not aware of any connected relations or acting-in-concert relations among the aforementioned preference shareholders
+and among the aforementioned preference shareholders and top 10 ordinary shareholders.
+"Shareholding percentage" refers to the percentage of domestic preference shares of "I1" held by preference
+shareholders in total number (450 million shares) of domestic preference shares of "Iíƒ1″.
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 DOMESTIC PREFERENCE SHAREHOLDERS OF "I"
+Unit: Share
+Number of
+Name of shareholder
+China Life Insurance Company
+State-owned legal person
+Class of shares
+Domestic preference shares
+Increase/
+decrease
+during the
+reporting
+period
+Shares held
+at the end
+of the
+period
+120,000,000
+Shareholding
+percentage
+Nature of shareholder
+Domestic preference shares
+100,000,000
+14.3
+5.3
+None
+27,600,000
+30,700,000
+4.4
+None
+37,250,000
+Other entities
+Domestic non-state-owned
+legal person
+30,000,000
+4.3
+None
+15,000,000
+2.1
+None
+Domestic preference shares
+Domestic preference shares
+None
+7.1
+50,000,000
+None
+Group Co., Ltd.
+CCB Trust Co., Ltd.
+BOC International (China) Co., Ltd.
+China National Tobacco Corporation
+Jiangsu International Trust Co., Ltd.
+Everbright Securities Asset
+Management Co., Ltd.
+Shanghai Tobacco Group Co., Ltd.
+Ping An Property & Casualty
+Insurance Company of China, Ltd.
+State-owned legal person
+State-owned legal person
+Other entities
+State-owned legal person
+State-owned legal person
+Domestic preference shares
+Domestic preference shares
+Domestic preference shares
+Domestic preference shares
+Domestic preference shares
+64,000,000
+9.1
+None
+-17,500,000
+52,500,000
+7.5
+None
+legal person
+None
+2.2
+10,000,000
+CCB Trust Co., Ltd.
+Domestic non-state-owned
+legal person
+State-owned legal person
+Domestic preference shares
+30,000,000
+6.7
+None
+Ping An Life Insurance Company
+of China, Ltd.
+Domestic preference shares
+3.3
+None
+BOC International (China) Co., Ltd.
+State-owned legal person
+Domestic preference shares
+15,000,000
+15,000,000
+None
+7.8
+35,000,000
+China Mobile Communications
+Group Co., Ltd.
+State-owned legal person
+Domestic preference shares
+200,000,000
+44.4
+None
+China National Tobacco Corporation
+China Life Insurance Company Limited
+Other entities
+Domestic preference shares
+50,000,000
+11.1
+None
+State-owned legal person
+Domestic preference shares
+3.3
+on sales
+None
+State-owned legal person
+legal person
+Other entities
+Domestic preference shares
+10,000,000
+2.2
+None
+None
+Other entities
+10,000,000
+2.2
+None
+Ping An Property & Casualty Insurance
+Company of China, Ltd.
+Domestic non-state-owned
+Domestic preference shares
+(2)
+2.5
+11,200,000
+-6,800,000
+Management Co., Ltd.
+Sun Life Everbright Asset
+BOCOM Schroders Asset
+Management Co., Ltd.
+China National Tobacco Corporation
+Shandong Branch
+China National Tobacco Corporation
+Heilongjiang Branch
+State-owned legal person
+Domestic preference shares
+Domestic preference shares
+13,110,000
+None
+11,715,000
+11,715,000
+2.6
+None
+Domestic non-state-owned
+Domestic preference shares
+Hwabao Trust Co., Ltd.
+represents H share listed company.
+261,775,057
+(1)
+Increase/decrease
+Unit: Share
+At 31 December 2023
+Percentage
+(%)
+Percentage
+(%)
+during the
+reporting period
+Number of shares
+Number of shares
+II. Shares not subject to
+356,406,257,089
+100.00
+restrictions on sales
+1. RMB-denominated ordinary
+shares
+269,612,212,539
+on sales
+75.65
+At 31 December 2022
+DETAILS OF CHANGES IN SHARE CAPITAL
+integration of marketing tasks, business performance,
+portrait views, and entrance of contact points. The smart
+office platform launched a brand-new version of ICBC
+e Office 5.0 centered on users, and promoted a series
+of user experience services such as "My To-do List" and
+"Satisfaction Assessment". It accelerated the integration
+and satisfactory operation of platforms and systems,
+greatly simplified office procedures, and improved
+employees' work efficiency.
+Third, continuously consolidating business support
+system and enhancing enterprise-level digital
+capacity. The digital product system has been increasingly
+rich. The Bank leveraged its advantages of a global
+clearing network to upgrade global cash management
+services such as "ICBC Global Pay", providing strong
+support for the global operation and digital transformation
+of multinational institutions. The Bank enhanced the
+capability of one-stop, comprehensive, and digital
+services for enterprises' financial and asset management,
+continuously improved the treasury service system, and
+assisted in building the treasury system for large and
+medium-sized customers. It has served more than 200
+large group customers, maintaining a leading position
+in the industry. The Bank optimized cloud services such
+as financial and asset management cloud, assisted small
+and medium-sized enterprises in digital transformation,
+and provided financial digital services for more than five
+thousand enterprises cumulatively. The Bank launched the
+enterprise manager cloud for micro, small and medium-
+sized enterprises, and developed four service segments:
+Salary Manager, Account Manager, Bill Manager, and
+Fee Manager, to comprehensively empower the digital
+transformation of medium, small and micro customers.
+As at the end of 2023, 37 branches had completed
+platform registration for 180 thousand customers.
+The Bank strengthened the supply of digital inclusive
+products, launched a new product "Personal e-Enterprise
+Quick Loan" for self-employed businesses, farmers and
+other customers in an innovative way, and upgraded
+and optimized digital inclusive products such as Quick
+Lending for Operation, Online Revolving Loan, and
+Digital Supply Chain, to fully meet the needs of small and
+micro enterprises for credit, collateral, and transaction
+financing. As at the end of 2023, the balance of inclusive
+loans exceeded RMB2.2 trillion, maintaining a leading
+position among peers in terms of growth rate. The Bank
+established a sound digital operation system, continuously
+polished the three digital operation platforms of personal,
+corporate, and online banking, and enhanced the
+capability of enterprise-level customers, products, flows,
+activities, data, and overall collaborative operation. In
+2023, over 70 thousand digital operation strategies were
+deployed, with a focus on intensive operations for mid-
+Annual Report 2023
+91
+Discussion and Analysis
+tier and long-tail customers, driving the sales of funds,
+insurance, and wealth management products to over
+RMB540.0 billion on online platforms. The Bank enhanced
+enterprise risk management capability and advanced
+the intelligent transformation of risk management. The
+Bank upgraded the enterprise-level risk data platform,
+strengthened data penetration within the Group, and
+achieved the "Five-pronged Risk Management Approach"
+view. The Bank improved the joint risk prevention and
+control system, and significantly reduced the accounts
+involved in telecommunications fraud. The Bank offered
+risk prevention and control tools and services to over 400
+peers, improving overall risk prevention and control in the
+industry.
+1. Shares subject to restrictions
+effective
+level data middle office, and introduced more external
+data such as government affairs, operators and internet
+companies in compliance with regulations. The Bank
+established an operation center for the data middle office
+to drive business model transformation with richer data
+elements and new data service models. Focusing on
+digital customer identification, acquisition, activation and
+retention, the Bank promoted high-value data analysis
+products to empower grassroots and reduce their burden.
+The Bank's customer segmentation project was awarded
+the "Best Data Analysis Project" by The Asset. Its data
+security management kept improving. In terms of technical
+support system, the Bank took the lead in the industry
+to complete the largest and most important technical
+architecture transformation of retail banking segment.
+The availability rate of the Bank's information system has
+reached a high level of over 99.99%. A high-availability
+and disaster recovery guarantee system has been refined
+to systematically enhance cyber security capabilities.
+The Bank was the first among domestic peers to build a
+billion-level Al big model technology system and put it
+into operation. It continued to deepen the construction of
+digital employees, undertaking the workload of more than
+30 thousand natural persons in various scenarios, so as to
+empower employees and reduce their burden.
+92
+2
+Annual Report 2023
+Details of Changes in Share Capital and Shareholding of
+Substantial Shareholders
+Changes in Ordinary Shares
+Fourth, continuously consolidating data technology
+support system and promoting the
+empowerment of dual elements. In terms of data
+support, new progress has been made in the cultivation
+of data capabilities. The Bank won the title of "2022
+Top Ten Brand-name Enterprises for Data Management"
+at the China Data Governance Annual Conference. It
+also won the award of the "Best Data Management
+Implementation" conferred by The Asian Banker. The
+Bank strengthened the construction of an enterprise-
+2. Foreign shares listed
+86,794,044,550
+24.35
+During the reporting period, the Bank did not issue any shares, did not have any employee shares, employee stock
+ownership plan, did not issue any convertible bonds, or corporate bonds to be disclosed in accordance with Chapter II,
+Section 9 of the "No. 2 Standards on the Content and Format of Information Disclosure of Companies with Public Offerings
+Content and Format of the Annual Report (Revision 2021)" issued by CSRC.
+For details on the issuance of preference shares of the Bank, please refer to the section headed "Details of Changes in
+Share Capital and Shareholding of Substantial Shareholders - Preference Shares".
+For details on the issuance progress of tier 2 capital bonds and undated additional tier 1 capital bonds of the Bank during
+the reporting period, please refer to the section headed "Discussion and Analysis - Capital Management".
+For information on other securities issued by the Bank and its subsidiaries, please refer to "Note 36. to the Consolidated
+Financial Statements: Debt Securities Issued; Note 39. to the Consolidated Financial Statements: Other Equity Instruments"
+for details.
+Number of Shareholders and Particulars of Shareholding
+As at the end of the reporting period, the Bank had a total number of 646,115 ordinary shareholders and no holders of
+preference shares with voting rights restored or holders of shares with special voting rights, including 108,162 holders of H
+shares and 537,953 holders of A shares. As at the end of the month immediately before the annual results announcement
+date (29 February 2024), the Bank had a total number of 605,300 ordinary shareholders and no holders of preference
+shares with voting rights restored or holders of shares with special voting rights.
+Details of Securities Issuance and Listing
+Annual Report 2023
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+PARTICULARS OF SHAREHOLDING OF THE TOP 10 ORDINARY SHAREHOLDERS OF THE BANK
+Unit: Share
+Increase/
+decrease of
+shares during
+Number of
+Number of
+shares held
+93
+Due to rounding, percentages presented herein are for reference only.
+"Foreign shares listed overseas", namely H shares, are within the same meaning as defined in the "No. 5 Standards on the
+Content and Format of Information Disclosure of Companies with Public Offerings -Content and Format of the Report of
+Change in Corporate Shareholding" (Revision 2022) of CSRC.
+The above data are based on the Equity Structure Chart issued by China Securities Depository and Clearing Corporation
+Limited.
+overseas
+356,406,257,089
+100.00
+356,406,257,089
+100.00
+269,612,212,539
+75.65
+86,794,044,550
+24.35
+356,406,257,089
+100.00
+III. Total number of shares
+Notes: (1)
+(2)
+(3)
+First, continuously improving customer service system
+and strengthening external service platforms to
+better empower market expansion. In terms of open
+banking, the Bank developed comprehensive solutions
+for financial empowerment and value transformation,
+and deepened innovation cooperation, focusing on
+key scenarios such as digital livelihood, digital villages,
+digital industry, digital education, and digital government
+service. The Bank provided "financial + non-financial"
+digital comprehensive services for large enterprise
+groups, and consolidated and deepened comprehensive
+strategic cooperation relationships with them. The Bank
+continuously enhanced the output capacity of financial
+services, diversified services, innovated service models,
+expanded customer base, released special columns of
+SRDI and inclusive services, introduced third-party industry
+clouds, and built a "financial expert + business manager"
+service ecosystem. As at the end of 2023, open banking
+transactions exceeded RMB313 trillion, maintaining a
+leading position among peers. In terms of mobile banking,
+the Bank launched an innovative panoramic financial
+service system (version 9.0), focusing on five areas: mega
+wealth, full financing, consumption promotion, strong
+intelligence, and excellent experience. It refined key high-
+frequency functions such as login and transfer, pioneered
+services such as family wealth and minimalist homepage
+in the industry, and upgraded a new experience of one-
+stop query and use of customer privileges. As at the
+end of 2023, the number of monthly active mobile
+banking customers reached 229 million, ranking first in
+the industry. ICBC e Life built a new ecosystem of 6.0
+platform-based life services, and collaborated with high-
+quality leading platforms to create eight major ecosystems
+and three major life circles, significantly improving
+customers' immersive service experience. As at the end
+of 2023, ICBC e Life had 14.66 million average monthly
+active customers and more than 400 thousand merchant
+customers, maintaining a leading position in the industry.
+Second, shaping an efficient and intensive new
+business management model, and improving internal
+service platforms to better empower employees. The
+Bank completed the construction of the main functions
+of the Counter Express, developed a new digital service
+terminal in an innovative manner, and cultivated remote
+on-site integrated service capabilities for outlets based on
+audiovisual technology. The Bank promoted the scenario-
+based reconstruction of difficult business processes such
+as account opening, cancellation and change, account
+unlocking, and wealth inheritance. It accelerated the
+promotion of online booking services, laying a foundation
+for the transition of outlets towards light operations. The
+Bank upgraded the Marketing Express, and enhanced
+account manager service efficiency through the
+Discussion and Analysis
+Annual Report 2023
+90
+Fourth, channel collaboration momentum went
+up. In terms of strengthening competitiveness of
+outlets, the sharpening of outlets' competitive edge has
+significantly enhanced the "combat capabilities" of outlets.
+The average savings and corporate deposits of outlets
+increased by 15.0% and 14.0%, respectively, compared
+to the beginning of the year, while the average number
+of high-quality personal and enterprise customers rose by
+5.8% and 10.7%, respectively, compared to the beginning
+of the year. In terms of mobile banking APP, the digital
+comprehensive service capabilities continued to improve,
+and digital operations achieved practical results, and
+continued to play a primary role in business operations.
+As at the end of December, the Bank had 552 million
+mobile banking customers and 229 million monthly active
+mobile customers, with an annual cumulative transaction
+amount of RMB99.6 trillion, both ranking first in the
+industry. The online and offline integration has been
+advanced deeply, with a penetration rate of 93.0%
+for mobile banking in-store customers, representing
+a year-on-year increase of 3.3 percentage points. The
+value of online personal fund, insurance and wealth
+management transactions accounted for 97.5% of the
+total. The penetration rate of mobile banking agency
+E
+payment customers was 89.7%, representing an increase
+of 3.4 percentage points year-on-year. The joint combat
+capabilities of various channels have been enhanced,
+providing strong support for the implementation of the
+Bank's key strategies and the development of various work
+through "one-point access, all-channel response".
+Hot Topic 5: Continuous Deepening of
+D-ICBC
+In 2023, the construction of the D-ICBC was quickened,
+and new momentum and vitality were constantly
+unleashed. The Bank continuously upgraded and polished
+key external and internal service platforms, and basically
+formed a "digital financial service window" with ICBC
+characteristics, to better serve customers and empower
+employees. The Bank continued to consolidate the two
+support systems of business and data technology, and
+further improved the efficiency of digital services. The
+Bank's Financial Digital Capability Maturity (FDCM) was the
+first and only one to obtain the highest level of certification,
+and the Bank released the industry's first White Paper on
+Digital Transformation of the Banking Industry (2023), both
+significantly enhancing the brand influence of D-ICBC.
+D
+Discussion and Analysis
+ICBC 数字工行
+Monthly active mobile
+Monthly active ICBC
+banking customers
+174 million
+229 million
+2022
+Continuously improving customer service system and strengthening external service
+platforms to better empower market expansion
+89
+Annual Report 2023
+Third, the Bank accelerated the development of
+key customer groups. The urban-rural collaborative
+development promoted rural revitalization. There
+were 2.01 million farmer customers with outstanding
+loans from the Bank, representing an increase of 51.32%
+over the year beginning. Agriculture-related loans grew
+by RMB960.0 billion, with a balance of nearly RMB4.24
+trillion, continuing to consolidate the leading advantage
+among comparable peers. In terms of payment agency
+service, the total number of corporate and personal
+customers receiving payment agency service from the
+Bank and the amount of funds paid on behalf of these
+customers increased steadily. The number of corporate
+customers of payment agency services reached 898.3
+thousand, representing an increase of 84.8 thousand over
+the year beginning. The number of personal customers
+receiving payment agency service stood at 110 million, up
+960 thousand; the fund paid on behalf of these customers
+amounted to RMB5.72 trillion, representing a year-on-
+year increase of RMB337.9 billion or 6.28%. In terms
+of merchant marketing, the Bank developed 4,593
+thousand new merchant customers, bringing the total
+number of merchant customers to 12.12 million. Acquiring
+transactions amounted to RMB4.49 trillion, representing
+an increase of 18.4%.
+Capital
+flow
+Customer
+chain
+GBC+
+Value
+chain
+Service
+chain
+工银云区
+ICBC IIRU
+F IKBC 智慧政法综合服务平台
+Scenario construction + digital empowerment +
+online & offline support + multi-business
+line collaboration
+In 2023, driven by GBC + projects, the Bank continuously
+solidified the foundation for high-quality development,
+and accelerated the improvement of a balanced and
+coordinated customer ecosystem.
+First, the construction of key scenarios produced the
+desired results. Focusing on the 26 key GBC+ scenarios
+at the Head Office level, including medical insurance
+services, intelligent housing, culture and tourism, and
+e-CNY promotion, the Bank had cumulatively developed
+34 thousand G-end customers (representing a year-on-
+year increase of 89%), 660 thousand B-end customers
+(representing a year-on-year increase of 22%), and 120
+million C-end active customers (representing a year-on-year
+increase of 33%), accelerating the improvement of the
+customer ecosystem. G- and B-end deposits increased by
+RMB182.2 billion and RMB430.9 billion, respectively, and
+realized the diversion of C-end payment agency service of
+RMB2.8 trillion, indicating a remarkable achievement in
+increase of deposits and diversion.
+Second,
+customer expansion and quality
+improvement were advanced simultaneously. During
+the reporting period, the number of personal customers
+increased by nearly 20 million. The number of enterprise
+customers rose by more than 1.3 million over the year
+beginning. The number of institutional customers climbed
+by 50 thousand compared to the year beginning. The
+number of corporate, institutional and personal customers
+with average daily financial assets of RMB10 thousand or
+more increased by 370 thousand, 18 thousand and 5.23
+million over the year beginning.
+e Life customers
+14.66 million
+pledged/
+Open banking
+More than RMB310 trillion API
+Digital operation system
+Online fund, insurance
+and wealth management
+transactions amounted
+to RMB540.0 billion
+Enterprise risk management
+Risk view of "Five-pronged
+Risk Management Approach"
+Significantly reducing
+the accounts involved in
+telecommunication frauds
+Continuously consolidating data technology support system and promoting the effective
+empowerment of dual elements
+Cloud &
+Distributed
+Computing
+Information on over 700
+million personal customers
+Reinforcing the building
+Ranking high among
+peers in terms of
+growth rate
+of an enterprise-level data
+middle office
+Technical
+Providing services for
+over 30 thousand employees
+Over 1 billion personal
+accounts
+Reinforcing a data middle
+office operation
+Billion-level big model
+technology system
+Data
+central enterprises and
+SOEs cumulatively
+Serving more than 200
+Digital inclusive products
+A year-on-year increase of nearly 8%
+➤Shaping an efficient and intensive new business management model, and improving
+internal service platforms to better empower employees
+Counter Express
+construction progress
+Marketing Express
+construction progress
+100% 301 decoding tasks
+100% increased by 40%
+The proportion of active corporate customers
+Covering 55 thousand personal account managers
+E Office
+construction progress
+100%
+Launching a brand-new
+version 5.0
+Continuously consolidating business support system and enhancing enterprise-level digital
+capacity
+Global cash
+management
+Serving 11 thousand
+enterprise customers
+cumulatively
+Treasury service
+system
+transaction value
+Shareholding
+locked-up/
+Class of
+"ICBC SSE 50 Exchange Traded Securities Investment Funds" are securities investment funds raised as approved by CSRC
+Zheng Jian Ji Jin Zi [2004] No. 196 Document dated 22 November 2004, with China Asset Management Co., Ltd. as the fund
+manager and ICBC as fund custodian.
+(10) The "Industrial and Commercial Bank of China Limited - Huatai-PB CSI 300 ETF" is a securities investment fund approved
+by CSRC in CSRC Document [2012] No. 392 dated 23 March 2012. Huatai-PineBridge Fund Management Co., Ltd. acts as
+the fund manager and ICBC acts as the fund custodian.
+94
+Annual Report 2023
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+Particulars of Substantial Shareholders
+According to the Notice on Comprehensively Transferring Part of State-Owned Capital to Fortify Social Security Funds
+(Cai Zi [2019] No. 49), MOF transferred 12,331,645,186 A shares to the state-owned capital transfer account of SSF in a
+lump sum in December 2019. According to the relevant requirements under the Notice of the State Council on Issuing the
+Implementation Plan for Transferring Part of State-Owned Capital to Fortify Social Security Funds (Guo Fa [2017] No. 49), SSF
+shall perform the obligation of more than 3-year lock-up period as of the date of the receipt of transferred shares. At the
+end of the reporting period, according to the information provided by SSF to the Bank, SSF also held 6,836,411,180 H shares
+of the Bank and 19,168,056,366 A and H shares in aggregate, accounting for 5.38% of the Bank's total ordinary shares.
+The number of shares held by Hong Kong Securities Clearing Company Limited at the end of the period refers to the total A
+shares (Northbound shares of the Shanghai-Hong Kong Stock Connect) held by it as a nominal holder designated by and on
+behalf of Hong Kong and foreign investors as at 31 December 2023.
+During the reporting period, the Bank's controlling shareholders and de facto controller remained unchanged.
+The largest single shareholder of the Bank is Huijin, whose full name is Central Huijin Investment Ltd. Huijin is a state-owned
+company founded by the State according to the Company Law on 16 December 2003. Its registered capital is equal to its
+paid-in capital at RMB828,209 million. Its registered address is New Poly Plaza, 1 Chaoyangmen North Street, Dongcheng
+District, Beijing. Its unified social credit code is 911000007109329615, and its legal representative is Peng Chun. Huijin is
+a wholly-owned subsidiary of China Investment Corporation. In accordance with authorization by the State Council, Huijin
+makes equity investments in major state-owned financial enterprises, and shall, to the extent of its capital contribution,
+exercise the rights and perform the obligations as an investor on behalf of the State in accordance with applicable laws, to
+achieve the goal of preserving and enhancing the value of state-owned financial assets. Huijin does not engage in any other
+business activities, and does not intervene in the day-to-day business operations of the key state-owned financial institutions
+it controls.
+As at 31 December 2023, Huijin held approximately 34.79% shares of the Bank. It held shares directly in the institutions
+listed below:
+No.
+1
+2
+3
+Controlling Shareholders
+The number of shares held by HKSCC Nominees Limited at the end of the period refers to the total number of H shares
+held by it as a nominee on behalf of all institutional and individual investors registered with accounts opened with HKSCC
+Nominees Limited as at 31 December 2023, which included H shares of the Bank held by Ping An Asset Management Co.,
+Ltd., SSF and Temasek Holdings (Private) Limited.
+According to Industrial and Commercial Bank of China Limited's Announcement in Relation to Increase in Shareholding
+of the Bank by Its Controlling Shareholders published by the Bank dated 11 October 2023, Huijin intended to continue to
+increase, in its own capacity, its shareholding in the Bank by acquiring shares of the Bank in the secondary market within the
+next six months commencing from the date of the increase in shareholding. As at the end of the month immediately before
+the annual results announcement date (29 February 2024), Huijin cumulatively increased its holding of 286,807,989 A shares
+of the Bank from the date of the increase in shareholding, accounting for approximately 0.08% of the Bank's total share
+capital.
+Except to the extent unknown to HKSCC Nominees Limited, the top 10 shareholders of the Bank did not participate in any
+margin trading, short selling or refinancing business.
+0.10
+None
+Other entities
+A Share
+118,415,100
+98
+0.07
+None
+(4)
+(5)
+(6)
+(7)
+(8)
+(9)
+HKSCC Nominees Limited is a wholly-owned subsidiary of Hong Kong Securities Clearing Company Limited. Central Huijin
+Asset Management Co., Ltd. is a wholly-owned subsidiary of Huijin. Save as disclosed above, the Bank is not aware of any
+connected relations or acting-in-concert relations among the aforementioned shareholders.
+4
+372,432,300
+Company name
+Industrial and Commercial Bank of China ✩✩
+China International Capital Corporation Limited ★☆
+14
+Zhong Hui Life Insurance Co., Ltd.
+15
+Hengfeng Bank Co., Ltd.
+16
+13
+Bank of Hunan Corporation Limited
+Jiantou CITIC Asset Management Co., Ltd. ★☆
+18
+China Galaxy Asset Management Co., Ltd.
+19
+Guotai Junan Investment Management Co., Ltd.
+Notes:
+17
+New China Life Insurance Company Limited ✰✰
+12
+Shenwan Hongyuan Group Co., Ltd. ★☆
+Agricultural Bank of China Limited ★☆
+Bank of China Limited ★☆
+5
+China Construction Bank Corporation ✰✰
+6
+China Everbright Group Ltd.
+7
+China Export & Credit Insurance Corporation
+8
+China Reinsurance (Group) Corporation
+9
+China Jianyin Investment Limited
+10
+China Galaxy Financial Holdings Company Limited
+11
+China Development Bank Corporation
+represents A share listed company, while
+321,384,187
+Other entities
+State-owned
+A Share
+110,984,806,678
+31.14
+None
+Foreign legal person
+None
+H Share
+86,144,120,606
+24.17
+Unknown
+SSF(7)
+China Securities Finance Co., Ltd.
+State-owned
+-1,215,755
+34.79
+124,004,660,940
+286,807,989
+the reporting
+at the end of
+percentage
+marked
+Name of shareholder
+Huijin(5)
+MOF
+HKSCC Nominees Limited (6)
+Nature of shareholder
+shares
+period
+reporting period
+(%)
+shares
+State-owned
+A Share
+A Share
+A Share
+12,331,645,186
+None
+Other entities
+A Share
+127,033,942
+427,259,195
+0.12
+None
+None
+Hexie Health Insurance Co., Ltd.
+Industrial and Commercial Bank of China
+-Huatai-PB CSI 300 ETF (10)
+Notes: (1)
+(2)
+The above data are based on the Bank's register of shareholders as at 31 December 2023.
+The Bank had no shares subject to restrictions on sales.
+(3)
+-Universal insurance products
+0.28
+1,013,921,700
+A Share
+State-owned legal person
+A Share
+2,416,131,540
+0.68
+None
+Hong Kong Securities Clearing Company Limited (8)
+Foreign legal person
+A Share
+353,764,334
+2,253,843,255
+0.63
+None
+Central Huijin Asset Management Co., Ltd.
+ICBC-SSE 50 Exchange Traded
+Securities Investment Funds (9)
+State-owned legal person
+3.46
+Annual Report 2023
+2.9
+Discussion and Analysis
+Third, the Bank improved the value chain relying on the service chain. While actively meeting customers' financial
+needs, the Bank tapped the commercial value such as an increase in deposits and income, in an effort to improve
+comprehensive contributions.
+Directors, Supervisors and Senior Management Leaving Office
+Chen Siqing
+Chairman, Executive Director
+Male
+1960
+May 2019-February 2024
+Zheng Guoyu
+Executive Director, Senior Executive Vice President Male
+1967
+Anthony Francis Neoh
+Independent Non-executive Director
+Male
+1946
+April 2015-March 2024
+Wu Xiangjiang
+Employee Supervisor
+Male
+1962
+Zhang Wenwu
+Senior Executive Vice President
+Male
+1973
+Xie Taifeng
+Chief Business Officer
+Male
+1972
+December 2021-April 2023
+September 2020-January 2023
+Since December 2023
+Male 1967
+Chief Business Officer
+Tian Fenglin
+External Supervisor
+Male 1966
+Since June 2022
+Zhang Weiwu
+Senior Executive Vice President
+Male
+1975
+Since June 2021
+Duan Hongtao
+Senior Executive Vice President
+Male
+1969
+Since March 2023
+July 2020-March 2024
+Yao Mingde
+Senior Executive Vice President
+Board Secretary
+Male
+1970
+Since March 2024
+Male 1963
+Xiong Yan
+Chief Business Officer
+Female 1964
+Since July 2016
+Since April 2020
+Song Jianhua
+Chief Business Officer
+Male 1965
+Since April 2020
+Guan Xueqing
+September 2023-September 2023
+Notes:
+(1)
+Mr. Yang has served as Independent Non-executive Director of the Bank since April 2016. He previously served as
+Chairman and Principal Partner of PricewaterhouseCoopers Hong Kong, Executive Chairman and Principal Partner of
+PricewaterhouseCoopers Chinese Mainland and Hong Kong, member of five-people leading group of global leadership
+committee of PricewaterhouseCoopers, Chairman of PricewaterhouseCoopers Asia-Pacific region, Director and Chairman of
+Audit Committee of Hang Seng Management College, Vice Chairman of the Council of the Open University of Hong Kong
+and a member of the Exchange Fund Advisory Committee of Hong Kong Monetary Authority. Mr. Yang currently serves
+as a member of the 14th National Committee of the Chinese People's Political Consultative Conference, a member of the
+board of directors of the Hong Kong Jockey Club and an Independent Non-executive Director of Tencent Holdings Limited,
+Man Wah Holdings Limited and Xinyi Glass Holdings Limited. Mr. Yang graduated from the London School of Economics
+and Political Science. He was awarded the degree of Honorary Doctor of Social Sciences by The Open University of Hong
+Kong. He is a Justice of the Peace in Hong Kong. Mr. Yang holds the qualification of Chartered Accountants, and is a
+senior member of the Institute of Chartered Accountants in England and Wales, the Hong Kong Institute of Certified Public
+Accountants and the Chartered Institute of Management Accountants.
+Shen Si, Independent Non-executive Director
+Mr. Shen has served as Independent Non-executive Director of the Bank since March 2017. Previously, he served as Deputy
+Division Chief and Division Chief of Zhejiang Branch of PBC, Deputy General Director of the Investigation and Statistics
+Department of the Head Office of PBC, and Deputy President of the Hangzhou Branch of Shanghai Pudong Development
+Bank, Board Secretary of Shanghai Pudong Development Bank and Executive Director and concurrently Board Secretary of
+Shanghai Pudong Development Bank. He obtained a Master's degree in Economics from Zhejiang University and an EMBA
+degree. He is a senior economist.
+Annual Report 2023
+103
+Directors, Supervisors and Senior Management
+Fred Zuliu Hu, Independent Non-executive Director
+Mr. Hu has served as Independent Non-executive Director of the Bank since April 2019. He previously served as a senior
+economist at the International Monetary Fund, Head of Research at the World Economic Forum, the co-director of the
+National Center for Economic Research and a professor at Tsinghua University, an adjunct professor at the Chinese
+University of Hong Kong and Peking University, the chairman for Greater China and a partner at Goldman Sachs Group, Inc.,
+an independent non-executive director of Great Wall Pan Asia Holdings Limited (formerly known as SCMP Group Limited),
+an independent non-executive director of Hang Seng Bank Limited, the non-executive director of China Asset Management
+Co., Ltd., an independent director of Dalian Wanda Commercial Management Group Co., Ltd., an independent director
+of Shanghai Pudong Development Bank, the independent non-executive director of Hong Kong Exchanges and Clearing
+Limited and the independent non-executive director of Ant Group Co., Ltd., etc. Mr. Hu currently serves in various positions
+such as the chairman of Primavera Capital Group, the non-executive chairman of Yum China Holdings, Inc, the director of
+UBS Group AG, the director of Taikang Insurance Group Co., Ltd., the co-chair of The Nature Conservancy's Asia Pacific
+Council and the director of the China Medical Board. Mr. Hu is also a member of the Global Board of Advisors for the
+Council on Foreign Relations, the Harvard Global Advisory Council, the Harvard Kennedy School Mossavar-Rahmani Center
+for Business and Government, the Jerome A. Chazen Institute of International Business at Columbia University etc. Mr. Hu
+obtained a Master's Degree in Engineering Science from Tsinghua University, and a master's degree and a PhD in Economics
+from Harvard University.
+Norman Chan Tak Lam, Independent Non-executive Director
+Mr. Chan has served as Independent Non-executive Director of the Bank since September 2022. He previously served as
+Chief Executive of the Hong Kong Monetary Authority, Director of the Chief Executive's Office of the Hong Kong Special
+Administrative Region Government, Vice Chairman, Asia of Standard Chartered Bank and other positions. He currently
+serves as Chairman of the Board of Directors of RD Wallet Technologies Limited, Chairman of the Board of Directors of RD
+ezLink Limited, Chairman of Hong Kong Acquisition Corporation, Founding Chairman of Hong Kong Institute of Web 3.0,
+Senior Adviser of the Hong Kong Academy of Finance, Chairman of the Board of Trustees of Chung Chi College of The
+Chinese University of Hong Kong, Vice Chairman of The Chinese University of Hong Kong Council, Chairman of the Board
+of CUHK Innovation Limited. He obtained a Bachelor's degree in Social Sciences from The Chinese University of Hong Kong,
+an Honorary Fellowship from The Chinese University of Hong Kong, an Honorary Doctorate of Business Administration from
+City University of Hong Kong, an Honorary Doctorate of Business Administration from Lingnan University, an Honorary
+Doctorate of Business Administration from Hong Kong Shue Yan University, an Honorary Doctorate of Social Sciences of The
+Chinese University of Hong Kong. Mr. Chan was awarded the Silver Bauhinia Star by the Hong Kong Special Administrative
+Region and the Gold Bauhinia Star by the Hong Kong Special Administrative Region. He is a Fellow of The Hong Kong
+Institute of Bankers, Fellow of Hong Kong Academy of Finance. He was awarded the IFTA FinTech Achievement Award by
+the Institute of Financial Technologists of Asia (IFTA), the Leadership Lifetime Achievement Award by The Asian Banker.
+Herbert Walter, Independent Non-executive Director
+Mr. Walter has served as an Independent Non-executive Director of the Bank since March 2024. He previously served
+as Chairman of the Board of Dresdner Bank AG, a member of the Holding Board of Allianz SE, a member of the Group
+Executive Committee and the Global Head of Retail, Private and Commercial Banking of Deutsche Bank. He previously
+served as Chairman of the German Financial Market Stabilisation Authority (FMSA), and served as Chairman of the
+German National Resolution Authority (NRA) and as a Plenary Member of the European Single Resolution Board (SRB). He
+previously served as an Independent Non-executive member of the Supervisory Boards of financial institutions and other
+companies, including Banco Português de Investimento (BPI), S.A. (Porto), and DEPFA Bank plc (Dublin), ERGO Insurance
+Group AG, Deutsche Börse Group AG, E.ON Ruhrgas AG and Lufthansa Group AG. He was Chairman of the Advisory Board
+of the Institute for Law and Finance at the Goethe University Frankfurt am Main and the Karajan Academy of the Berlin
+Philharmonic Orchestra, and a member of the Advisory Boards of Amundi Asset Management Group (Germany), Consileon
+Consultancy Group and Scope European Ratings Group. He is currently an Independent Non-executive member of the
+Supervisory Board of AKBANK AG. He obtained a Master's degree in Business Administration from the Ludwig Maximilian
+University in Munich and holds a Doctorate in Political Science.
+104
+Yang Siu Shun, Independent Non-executive Director
+Annual Report 2023
+Huang Li, Employee Supervisor
+Mr. Huang has served as Employee Supervisor of the Bank since June 2016. He joined ICBC in 1994 and is currently
+the Regional Chief Officer and the Head of Beijing Branch of ICBC. He served as Deputy General Manager and General
+Manager of the Banking Department as well as Deputy Head and Head of Guizhou Branch of ICBC. Mr. Huang graduated
+from The University of Hong Kong with an MBA degree. He is a senior economist.
+Zhang Jie, External Supervisor
+Mr. Zhang has served as External Supervisor of the Bank since November 2021. He is currently a professor and doctoral
+supervisor of the Renmin University of China, director of the International Monetary Institute, a distinguished professor
+of the Ministry of Education's "Changjiang Scholars Program", a famous teacher of the national "Ten Thousand Talents
+Program", and a national candidate of the "New Century Talents Project". Mr. Zhang is a recipient of the special
+government allowance provided by the State Council to experts, and is engaged in research on the topics of institutional
+finance, China's financial system and financial development. He was the Dean of the School of Finance of Shaanxi Institute
+of Finance and Economics, the Associate Dean of the School of Economics and Finance of Xi'an Jiaotong University, the
+Associate Dean of the School of Finance of Renmin University of China, and the first Secretary General of the College
+Finance Teaching Steering Committee of the Ministry of Education. At present, he is concurrently an executive director of
+the China Society for Finance and Banking. Mr. Zhang graduated from Shaanxi University of Finance and Economics with a
+Doctorate degree in Economics.
+Liu Lanbiao, External Supervisor
+Mr. Liu has served as External Supervisor of the Bank since June 2022. He is currently a Member of the Branch Party
+Committee, professor, doctoral supervisor of the School of Finance of Nankai University, a co-advisor at postdoctoral
+research station of Nankai University, Director of the Northeast Asia Financial Cooperation Research Center of Nankai
+University and Government Debt Management Research Center of the School of Finance of Nankai University. Mr. Liu has
+long been engaged in research in areas such as commercial bank management, monetary economics, systemic financial risk
+management, local government debt management, financial technology and international financial cooperation. Mr. Liu
+was a Vice Dean of the School of Finance and Vice Dean of the Institute of State Economy of Nankai University and External
+Supervisor of Liaoshen Bank Co., Ltd. At present, Mr. Liu is concurrently an Expert at the MOF Financial Risk Research
+Center, Government Debt Expert Consultant at the MOF Debt Research and Assessment Center, Member of the China
+Financial Standardization Technical Committee, Deputy Director of the Asia-Pacific Profession Committee at the Chinese
+Social and Economic Systems Analysis Research Association, and Independent Director of NYOCOR Co., Ltd., etc. He is a
+Chief Expert for the key special program "Research on the Prevention and Management of China's Debt Crisis and Effective
+Mitigation Measures" under the National Social Science Fund of China. Mr. Liu graduated from Nankai University with a
+Doctorate degree in Economics.
+Zhang Weiwu, Senior Executive Vice President
+Mr. Zhang has served as Senior Executive Vice President of the Bank since June 2021. He joined ICBC in July 1999, and was
+appointed as General Manager of ICBC (Europe) Amsterdam Branch in January 2011, General Manager of Singapore Branch
+in February 2013 and General Manager of the International Banking Department of the Head Office of ICBC in January
+2017. Mr. Zhang graduated from the Northwest University in China and obtained Master's degree in Political Economy and
+an MBA degree from Hitotsubashi University in Japan. He is a senior economist.
+Duan Hongtao, Senior Executive Vice President
+Mr. Duan has served as Senior Executive Vice President of the Bank since March 2023. Before joining ICBC, he successively
+served as the General Manager of Yangtze River Sub-branch of China Construction Bank Hubei Branch, the General
+Manager of the Compliance Department and the General Manager of the Human Resources Department of Hubei Branch,
+the Assistant to General Manager and Deputy General Manager of Hubei Branch, General Manager of Qingdao Branch,
+General Manager of Shandong Branch, and Director of the Executive Office of the China Construction Bank Head Office.
+Mr. Duan graduated from Wuhan University of Technology and obtained a Doctor's degree in Management. He is a senior
+economist.
+Annual Report 2023
+105
+Directors, Supervisors and Senior Management
+Directors, Supervisors and Senior Management
+Liu Lanbiao
+Mr. Dong has served as Non-executive Director of the Bank since January 2022. He joined MOF in August 1989. He
+previously served as assistant researcher, researcher and secretary (director level) of the Department of National Defense of
+MOF, a member of the CPC Committee, Deputy Inspector, and Discipline Inspection Team Leader of the Commissioner's
+Office of MOF in Heilongjiang, a member of the CPC Committee, Deputy Inspector and Discipline Inspection Leader of the
+Commissioner's Office of MOF in Beijing, a member of the CPC Committee, Deputy Director, and Discipline Inspection Team
+Leader of the Beijing Regulatory Bureau of MOF. Mr. Dong graduated from the Beijing Normal University and obtained a
+Master's degree in Management from Harbin Engineering University.
+Ms. Chen has served as Non-executive Director of the Bank since August 2021. She joined MOF in August 1985. She
+previously served as Deputy Division Chief of Payment Management Division and Deputy Director of Charge Bill Regulatory
+Center of General Affairs and Reform Department of MOF, Deputy Division Chief of the Charging Fund Policy Management
+Division of the Comprehensive Department of MOF, Division Chief of Charging Fund Division of Policy Planning Department
+of MOF, Division Chief of Housing and Land Division of the Comprehensive Department of MOF, Deputy Director-General
+of the Comprehensive Department of MOF, Member of the Party Group, Inspector and Deputy Secretary of the Party Group
+of Shenzhen Finance Supervision Commissioner Office of MOF, Deputy Secretary of the Party Group, Inspector and Level-
+one Inspector of Shenzhen Regulatory Bureau of MOF, and Level-one Inspector of Fiscal Notes Supervision Center of MOF.
+Ms. Chen obtained a Bachelor's degree in Economics from Jiangxi University of Finance and Economics.
+Please refer to the section headed "Appointment and Removal".
+(2)
+(3)
+(4)
+(5)
+The terms of Mr. Liao Lin, Mr. Zheng Guoyu and Mr. Wang Jingwu as Executive Directors of the Bank are set out in the
+above table. Please refer to the section headed "Biographies of Directors, Supervisors and Senior Management" for the
+starting time of terms of Mr. Liao Lin and Mr. Wang Jingwu as Senior Management members of the Bank. Mr. Liao Lin has
+acted as Chairman of the Bank since February 2024. Mr. Zheng Guoyu acted as Senior Executive Vice President of the Bank
+from September 2021 to April 2023.
+According to the Articles of Association of the Bank, before the newly elected directors take office, the current directors shall
+continue to act as directors.
+According to the regulations of CSRC, the commencement date of a re-elected director or supervisor's tenure as indicated in
+the above table shall be the day of his/her first appointment. According to the Articles of Association of the Bank, the term
+of the Bank's directors and supervisors is three years and they can be re-elected and reappointed upon expiration of their
+term.
+During the reporting period, the Bank did not implement any share incentives. None of the existing directors, supervisors and
+senior management members of the Bank or those who left office during the reporting period held shares or share options
+or were granted restricted shares of the Bank, and there was no change during the reporting period.
+Annual Report 2023
+101
+Directors, Supervisors and Senior Management
+Dong Yang, Non-executive Director
+Biographies of Directors, Supervisors and Senior Management
+Mr. Liao has served as Chairman and Executive Director of the Bank since February 2024, and Executive Director of the
+Bank since July 2020. He served as Senior Executive Vice President, Senior Executive Vice President and concurrently Chief
+Risk Officer, Vice Chairman, Executive Director and President as of November 2019. Mr. Liao joined China Construction
+Bank in 1989, and was appointed as Deputy General Manager of Guangxi Branch of China Construction Bank, General
+Manager of Ningxia Branch, Hubei Branch and Beijing Branch of China Construction Bank, Chief Risk Officer, Executive Vice
+President and concurrently Chief Risk Officer of China Construction Bank. Mr. Liao graduated from Guangxi Agricultural
+University. He obtained a Doctorate degree in Management Science from Southwest Jiaotong University. Mr. Liao is a senior
+economist.
+Wang Jingwu, Executive Director, Senior Executive Vice President, Chief Risk Officer
+Mr. Wang has served as Executive Director, Senior Executive Vice President and concurrently Chief Risk Officer since
+September 2021, and as Senior Executive Vice President of the Bank since April 2020. He joined PBC in August 1985, and
+has successively served as Supervision Commissioner (Deputy Director level) of PBC Shijiazhuang Central Sub-branch, Head
+of PBC Shijiazhuang Central Sub-branch and concurrently Director of State Administration of Foreign Exchange ("SAFE")
+Hebei Branch, Head of PBC Hohhot Central Sub-branch and concurrently Director of SAFE Inner Mongolia Branch, Head
+of PBC Guangzhou Branch and concurrently Director of SAFE Guangdong Branch, and Director-General of PBC Financial
+Stability Bureau since January 2002. Mr. Wang graduated from the Hebei Banking School, and he received a Doctorate
+degree in Economics from Xi'an Jiaotong University. He is a research fellow.
+Lu Yongzhen, Non-executive Director
+Mr. Lu has served as Non-executive Director of the Bank since August 2019. He joined Huijin in 2019. Mr. Lu previously
+served as Deputy Director of the Administrative Office of the Economic Research Consultation Centre of the State Economic
+and Trade Commission, Director of the Specific Research Department of the Economic Research Centre of the State
+Economic and Trade Commission, Director of the Capital Markets Research Department of the Research Centre of the
+State-owned Assets Supervision and Administration Commission of the State Council, and Director Assistant of the Research
+Centre of the State-owned Assets Supervision and Administration Commission of the State Council with the concurrent
+post as the Director of the Capital Markets Research Department, and Deputy Director of the Research Centre of the State-
+owned Assets Supervision and Administration Commission of the State Council. Mr. Lu obtained a Bachelor's degree and a
+Master's degree from Peking University, and a Doctorate degree in Economics from Southwestern University of Finance and
+Economics. He is a researcher.
+Feng Weidong, Non-executive Director
+Mr. Feng has served as Non-executive Director of the Bank since January 2020. He joined MOF in 1986. He previously
+served as Deputy Director of Academic Affairs Division of Chinese Accounting Correspondence School of MOF (deputy
+division chief level), Person in charge of Teaching Material Department of National Accountant Certification Examination
+Leading Group Office, Director of Accounting Personnel Management Division and Director of Institutional System Division
+I of Accounting Department of MOF, Deputy Director (deputy director-general level), Deputy Director (person in charge),
+Director (director-general level), Secretary of the Party Committee and Director of National Accountant Assessment &
+Certification Centre of MOF, and member of the Accounting Conceptual Framework Committee of the International
+Public Sector Accounting Standards Board (IPSASB). He concurrently serves as a Managing Director of the 9th Council of
+the Accounting Society of China, a part-time professor and off-campus practice tutor for postgraduate students of the
+School of Economics and Management of Beijing Jiaotong University, and a visiting tutor for postgraduate students in the
+Accounting School of the Central University of Finance and Economics. Mr. Feng obtained a Bachelor's degree in Economics
+from Dongbei University of Finance & Economics and Doctorate degree from Beijing Jiaotong University. Mr. Feng Weidong
+is a senior accountant, researcher, non-practicing certified public accountant and is a recipient of the Special Government
+Allowance by the State Council of China.
+102
+Annual Report 2023
+Directors, Supervisors and Senior Management
+Cao Liqun, Non-executive Director
+Ms. Cao has served as Non-executive Director of the Bank since January 2020. She joined Huijin in 2020. Ms. Cao previously
+served as Deputy Director of Regulations Division, General Affairs Department, Director of Regulations Division, General
+Affairs Department, Director of Non-Financial Institutions Inspection Division, Supervision and Inspection Department,
+Director of General Affairs Division, Supervision and Inspection Department, Deputy Director-General of Supervision and
+Inspection Department, Inspector of General Affairs Department (Policy and Regulation Department), Level-Two Inspector
+of General Affairs Department (Policy and Regulation Department) of State Administration of Foreign Exchange, and acted
+as Deputy Director of Administrative Committee of Beijing's Zhongguancun Science Park. Ms. Cao obtained a Bachelor's
+degree in Law from China University of Political Science and Law, a Master's degree in Finance from Renmin University of
+China, and a Master's degree in Public Administration from Peking University. Ms. Cao is an economist.
+Chen Yifang, Non-executive Director
+Liao Lin, Chairman, Executive Director
+Since November 2021
+Male 1965
+External Supervisor
+distributed (¹)
+4.58%
+RMB2,061 million
+4.20%
+RMB2,940 million
+6.00%
+EUR40 million
+3.58% About USD115.36 million
+3.58% About USD115.36 million
+3.58% About USD115.36 million
+Offshore USD preference share(3)
+Notes: (1) Dividend distributed is tax included.
+(2) Offshore EUR preference shares refer to EURO.6 billion preference shares issued offshore by the Bank at a dividend rate of
+6.00% in 2014. The Bank redeemed the above offshore EUR preference shares on 10 December 2021.
+rate
+(3)
+Annual Report 2023
+99
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+The above-mentioned preference share dividend distribution plans have been fulfilled. For particulars of the Bank's
+distribution of dividends on preference shares, please refer to the announcements of the Bank on the website of SSE, the
+"HKEXnews" website of HKEX and the website of the Bank.
+Redemption or Conversion of Preference Shares
+During the reporting period, the Bank did not redeem or convert any preference share.
+Restoration of Voting Rights of Preference Shares
+During the reporting period, the Bank did not restore any voting right of preference share.
+Accounting Policy Adopted for Preference Shares and Rationale
+According to the Accounting Standard for Business Enterprises No. 22 Recognition and Measurement of Financial
+Instruments, the Accounting Standard for Business Enterprises No. 37 - Presentation of Financial Instruments promulgated
+by MOF as well as the International Financial Reporting Standard 9 Financial Instruments and the International
+Accounting Standard 32 -
+Financial Instruments: Presentation promulgated by International Accounting Standards Board
+and other accounting standards and the key terms of issuance of the Bank's preference shares, the issued and existing
+preference shares do not contain contractual obligations to deliver cash or other financial assets or contractual obligations
+to deliver variable equity instruments for settlement, and shall be accounted for as other equity instruments.
+100 Annual Report 2023
+Directors, Supervisors and Senior Management
+Basic Information on Directors, Supervisors and Senior Management
+Offshore USD preference share refers to USD2.9 billion preference shares issued offshore by the Bank at a dividend rate of
+3.58% in 2020.
+Name
+Liao Lin
+Dividend
+Dividend
+distributed (1)
+RMB2,061 million
+RMB2,940 million
+N/A
+4.58%
+rate
+Dividend
+Dividend
+distributed (¹)
+RMB2,061 million
+RMB2,940 million
+N/A
+N/A
+Offshore EUR preference shares (2)
+4.20%
+Domestic preference share "2"
+4.58%
+Domestic preference share "1"
+rate
+Type of preference shares
+Dividend
+Dividend
+2021
+2023
+The table below shows the distribution of dividends on preference shares by the Bank in the past three years:
+Dividends on the Bank's offshore USD preference shares are paid annually in cash, and calculated based on the liquidation
+preference of the offshore preference shares. Dividends on the Bank's offshore USD preference shares are non-cumulative.
+Holders of offshore USD preference shares are only entitled to dividends at the prescribed dividend rate, but are not entitled
+to any distribution of residual profits of the Bank together with the holders of ordinary shares. According to the dividend
+distribution plan in the offshore USD preference share issuance proposal, total dividends of about USD115.36 million (pre-
+tax) on the offshore USD preference shares were distributed in USD at a dividend rate of 3.58% (after-tax). According to
+relevant laws, when the Bank distributes dividends for offshore USD preference shares, the enterprise income tax shall be
+withheld by the Bank at a rate of 10%. According to the requirements of the terms and conditions of the offshore USD
+preference shares, the Bank paid the relevant taxes, included in the dividends for offshore USD preference shares.
+Dividends on the Bank's domestic preference shares "1" and "2" are paid annually in cash, and calculated
+based on the aggregate par value of the issued domestic preference shares. Dividends on the Bank's domestic preference
+shares are non-cumulative. Holders of domestic preference shares are only entitled to dividends at the prescribed dividend
+rate, but are not entitled to any distribution of residual profits of the Bank together with the holders of ordinary shares.
+According to the dividend distribution plan in the domestic preference share issuance proposal, the Bank distributed
+dividends of RMB2,061 million (pre-tax) on the domestic preference share "1" at a dividend rate of 4.58% (pre-tax);
+and distributed dividends of RMB2,940 million (pre-tax) on the domestic preference share "2" at a dividend rate of
+4.2% (pre-tax).
+As per the resolution and authorization of the General Meeting, the Bank reviewed and approved the Proposal on
+Distribution of Dividends for "2" and Offshore USD Preference Shares at the meeting of its Board of Directors on 30
+August 2023, permitting the Bank to distribute the dividends on domestic preference shares "12" on 25 September
+2023 and on the offshore USD preference shares on 25 September 2023; the Bank reviewed and approved the Proposal on
+Distribution of Dividends for "1" at the meeting of its Board of Directors on 27 October 2023, permitting the Bank
+to distribute the dividends on domestic preference shares "f1" on 23 November 2023.
+Dividend Distribution of Preference Shares
+"Shareholding percentage" refers to the percentage of domestic preference shares of "If2" held by preference
+shareholders in total number (700 million shares) of domestic preference shares of "I₹2″.
+The above data are based on the Bank's register of domestic preference shareholders of "2" as at 31 December 2023.
+Shanghai Tobacco Group Co., Ltd., China National Tobacco Corporation Shandong Branch and China National Tobacco
+Corporation Heilongjiang Branch are all wholly-owned subsidiaries of China National Tobacco Corporation. Ping An Life
+Insurance Company of China, Ltd. and Ping An Property & Casualty Insurance Company of China, Ltd. have connected
+relations. Sun Life Everbright Asset Management Co., Ltd. and Everbright Securities Asset Management Co., Ltd. have
+connected relations. Save as disclosed above, the Bank is not aware of any connected relations or acting-in-concert relations
+among the aforementioned preference shareholders and among the aforementioned preference shareholders and top 10
+ordinary shareholders.
+(3)
+Notes: (1)
+(2)
+Details of Changes in Share Capital and Shareholding of Substantial Shareholders
+4.20%
+N/A
+2022
+Yao Mingde, Senior Executive Vice President
+Position
+Tenure
+Male
+1955
+Since April 2016
+Shen Si
+Independent Non-executive Director
+Male
+1953
+Since March 2017
+Fred Zuliu Hu
+Independent Non-executive Director
+Male
+1963
+Since April 2019
+Independent Non-executive Director
+Norman Chan Tak Lam Independent Non-executive Director
+1954
+Since September 2022
+Herbert Walter
+Independent Non-executive Director
+Male
+1953
+Since March 2024
+Huang Li
+Employee Supervisor
+Male
+1964
+Since June 2016
+Zhang Jie
+Male
+Gender Birth year
+Yang Siu Shun
+1966
+Chairman, Executive Director
+Male
+1966
+Since July 2020
+Wang Jingwu
+Executive Director, Senior Executive Vice President, Male
+Chief Risk Officer
+1966
+Since September 2021
+Lu Yongzhen
+Non-executive Director
+Male
+1967
+Since August 2019
+Since January 2022
+Feng Weidong
+Male 1964
+Since January 2020
+Cao Liqun
+Non-executive Director
+Female 1971
+Since January 2020
+Chen Yifang
+Non-executive Director
+Female 1964
+Since August 2021
+Dong Yang
+Non-executive Director
+Male
+Non-executive Director
+21.98
+Annual Report 2023
+Mr. Yao has served as Senior Executive Vice President of the Bank since March 2024. He joined Agricultural Bank of China
+in August 1998, he has successively served as Deputy General Manager of the Financial Accounting Department and Deputy
+General Manager of the Financial Accounting Department/County Area Banking Accounting and Assessment Center of
+the Head Office of Agricultural Bank of China since April 2009, General Manager of the Financial Accounting Department/
+Office of Assessment Center/County Area Banking Accounting and Assessment Center (County Area Banking/Inclusive
+Finance Accounting and Assessment Center) of the Head Office since March 2017 and President of Shenzhen Branch since
+May 2022 (he served concurrently as Chairman of Agricultural Bank of China (Moscow) Limited from May 2021 to August
+2022). Mr. Yao Mingde obtained a Bachelor's degree in Central University of Finance and Economics and obtained a
+Doctor's degree in Management from Central University of Finance and Economics. He is a senior accountant.
+Norman Chan Tak Lam
+Fred Zuliu Hu
+Shen Si
+Yang Siu Shun
+Dong Yang
+21.98
+60.53
+Herbert Walter
+22.70
+Chen Yifang
+Cao Liqun
+Feng Weidong
+Lu Yongzhen
+Wang Jingwu
+Liao Lin
+(3)
+67.26
+(2)
+Other monetary
+remuneration
+Yes
+Yes
+Yes
+No
+82.51
+No
+89.96
+Total
+(5)=(1)+(2)+(3)+(4)
+before tax
+income
+or not
+related parties
+from shareholder
+entities or other
+Obtain
+remuneration
+Unit: RMB10,000
+(4)
+(1)
+Fees
+medical insurances
+At the Annual General Meeting for the Year 2022 held on 29 June 2023, Mr. Feng Weidong and Ms. Cao Liqun were re-
+elected as Non-executive Directors of the Bank, and each of their new terms of office started from the date of consideration
+and approval by the Annual General Meeting. At the First Extraordinary General Meeting of 2023 held on 30 November
+2023, Mr. Herbert Walter was elected as Independent Non-executive Director of the Bank, and his qualification was
+approved by NFRA in March 2024. Mr. Herbert Walter has confirmed that he obtained the legal advice required under
+Rule 3.09D of the Hong Kong Listing Rules on 6 March 2024 (prior to the approval of his qualification by NFRA) and
+understood his obligations as a director of the Bank. On 1 February 2024, the Board of Directors of the Bank elected Mr.
+Liao Lin as Chairman of the Board of Directors of the Bank, and his qualification was approved by NFRA in February 2024.
+On 29 February 2024, the First Extraordinary General Meeting of 2024 of the Bank elected Mr. Zhang Wenwu as Executive
+Director of the Bank, and his qualification is subject to the approval by NFRA¹; and elected Mr. Murray Horn as Independent
+Non-executive Director of the Bank, and his qualification is subject to the approval by NFRA.
+Directors
+Appointment and Removal
+Directors, Supervisors and Senior Management
+Annual Report 2023
+106
+None of the Directors, Supervisors and Senior Management members of the Bank, whether they are incumbent or have left
+office during the reporting period, have been punished by the securities regulator in the past three years.
+In April 2023, Mr. Zheng Guoyu ceased to act as Executive Director of the Bank due to change of job assignments. In
+February 2024, Mr. Chen Siqing ceased to act as Chairman of the Board of Directors and Executive Director of the Bank
+due to his age. In March 2024, Mr. Anthony Francis Neoh ceased to act as Independent Non-executive Director of the Bank
+due to expiration of his term.
+Mr. Lu Yongzhen, Mr. Feng Weidong, Ms. Cao Liqun, Ms. Chen Yifang and Mr. Dong Yang were recommended by Huijin
+to serve as Non-executive Directors of the Bank. Huijin holds interests in shares of the Bank. Please refer to the section
+headed "Details of Changes in Share Capital and Shareholding of Substantial Shareholders - Interests and Short Positions
+Held by Substantial Shareholders and Other Persons" for further details.
+Tian Fenglin, Chief Business Officer
+Mr. Song has served as Chief Business Officer of the Bank since April 2020. He joined ICBC in 1987. He was appointed as
+Deputy General Manager of Jiangsu Branch and General Manager of the Personal Banking Department of the Head Office.
+Mr. Song graduated from Peking University and obtained a Doctor's degree in management science and engineering from
+Nanjing University. He is a senior economist.
+Song Jianhua, Chief Business Officer
+Ms. Xiong has served as Chief Business Officer of the Bank since April 2020. She joined ICBC in 1984 and served as Deputy
+Director-General of Kunming Sub-bureau of the Internal Audit Bureau, Deputy General Manager of Yunnan Branch,
+Deputy Director-General of the Sub-bureau directly managed by the Internal Audit Bureau, Deputy General Manager of
+the Corporate Banking Department I (Corporate Banking Department) and General Manager of the Institutional Banking
+Department of the Head Office. Ms. Xiong graduated from Hunan University and obtained a degree of International Master
+of Business Administration (IMBA) from Fudan University and The University of Hong Kong. She is a senior economist.
+Xiong Yan, Chief Business Officer
+Mr. Guan has served as Board Secretary of the Bank since July 2016. He joined ICBC in 1984 and served as General
+Manager of Suining Branch in Sichuan, Representative of Frankfurt Representative Office and Deputy General Manager of
+Frankfurt Branch, Deputy General Manager of Sichuan Branch, Deputy General Manager of Sichuan Branch and General
+Manager of Banking Department of Sichuan Branch, and General Manager of Hubei Branch and Sichuan Branch. Previously
+Mr. Guan was also General Manager of Corporate Strategy and Investor Relations Department of the Bank. He graduated
+from the Southwestern University of Finance and Economics and obtained a Doctor's degree in Economics. He is a senior
+economist.
+Guan Xueqing, Board Secretary
+Mr. Tian has served as Chief Business Officer of the Bank since December 2023. He joined ICBC in 1992, and served as
+Deputy General Manager of Singapore Branch, Executive Director and General Manager of ICBC (Malaysia), Vice Chairman
+of ICBC (Argentina), Deputy General Manager of Jiangsu Branch and General Manager of Suzhou Branch, General Manager
+of Jiangsu Branch, and General Manager of the Corporate Banking Department and the Investment Banking Department
+of the Bank. Mr. Tian graduated from Huazhong Agricultural University. He obtained a Master's degree in Economics from
+Huazhong Agricultural University and an MBA degree from the University of Chicago. He is a senior economist.
+Supervisors
+In January 2023, Mr. Wu Xiangjiang ceased to act as Employee Supervisor of the Bank due to his age.
+Senior Management Members
+(before tax)
+additional
+Remuneration paid
+annuities, and
+housing allowance,
+social insurance,
+the employer to
+Contribution by
+Remuneration from the Bank
+Annual Remuneration
+Directors, Supervisors and Senior Management
+107
+Annual Report 2023
+Mr. Zhang Wenwu has resigned all his posts including Senior Executive Vice President of the Bank. For details, please refer to the
+changes in the Senior Management members.
+1
+In April 2023, Mr. Zheng Guoyu ceased to act as Senior Executive Vice President of the Bank due to change of job
+assignments. In September 2023, Mr. Xie Taifeng ceased to act as Chief Business Officer of the Bank due to change of job
+assignments. In February 2024, Mr. Liao Lin resigned as President of the Bank due to adjustment of job assignments. In
+order to ensure the normal operation and management of the Bank, Mr. Liao Lin performs the functions and powers of the
+President on behalf of the Bank in accordance with regulatory requirements and the Articles of Association of the Bank, and
+the period for performing the duties on behalf of the President will end on the date when the new President formally takes
+office. In March 2024, Mr. Zhang Wenwu ceased to act as Senior Executive Vice President of the Bank due to change of job
+assignments.
+On 17 January 2023, the Board of Directors of the Bank appointed Mr. Duan Hongtao as Senior Executive Vice President of
+the Bank, and his qualification was approved by the former CBIRC in March 2023. On 29 June 2023, the Board of Directors
+of the Bank appointed Mr. Xie Taifeng as Chief Business Officer of the Bank, and his qualification was approved by NFRA in
+September 2023. On 29 June 2023, the Board of Directors of the Bank appointed Mr. Tian Fenglin as Chief Business Officer
+of the Bank, and his qualification was approved by NFRA in December 2023. On 29 February 2024, the Board of Directors
+of the Bank appointed Mr. Yao Mingde as Senior Executive Vice President of the Bank, and his qualification was approved
+by NFRA in March 2024.
+Yes
+Yes
+Name
+47.00
+Anthony Francis Neoh
+Zheng Guoyu
+Chen Siging
+Directors, Supervisors and Senior Management Leaving Office
+Tian Fenglin
+31.37
+102.25
+Wu Xiangjiang
+Song Jianhua
+102.25
+Xiong Yan
+31.29
+107.67
+Guan Xueqing
+Yao Mingde
+21.98
+31.58
+60.53
+Xie Taifeng
+67.26
+47.00
+60.53
+No
+No
+82.51
+No
+No
+108
+52.00
+No
+20.48
+5.35
+No
+89.96
+22.70
+15.13
+52.00
+Duan Hongtao
+Zhang Wenwu
+60.53
+25.00
+No
+25.00
+No
+5.00
+888
+Yes
+42.00
+42.00
+Yes
+44.00
+44.00
+No
+49.00
+49.00
+21.98
+No
+Yes
+82.51
+No
+No
+Zhang Weiwu
+25.00
+Liu Lanbiao
+25.00
+Zhang Jie
+Huang Li
+No
+No
+5.00
+No
+133.83
+No
+138.96
+No
+No
+133.62
+82.51
+Committee Member
+Yang Siu Shun
+Committee Member
+Committee Member
+Committee Member
+Dong Yang
+Committee Member
+Committee Member
+Shen Si
+Committee Member
+Committee Member
+Committee Member
+Committee Member
+Chairman
+Committee Member
+Fred Zuliu Hu
+Committee Member
+Norman Chan Tak Lam
+Committee Member
+Chairman
+Chen Yifang
+Committee Member
+Committee Member
+US Risk
+Committee
+Herbert Walter
+Wang Jingwu
+Committee Member
+Committee Member
+Lu Yongzhen
+Committee Member
+Committee Member
+Committee Member
+Committee Member
+Feng Weidong
+Committee Member
+Committee Member
+Committee Member
+Committee Member
+Cao Liqun
+Committee Member
+Committee Member
+Committee Member
+Committee Member
+Examining the risk management system
+Committee Member
+Committee Member
+Committee Member
+Reviewing periodic reports
+The Audit Committee periodically reviewed the financial reports of the Bank. It had
+reviewed the annual report, interim report and quarterly reports of the Bank and reported
+the review opinion to the Board of Directors. It also organized and conducted an internal
+control assessment of the Group and engaged external auditors to audit the effectiveness
+of the internal control over financial reporting in accordance with the relevant regulatory
+requirements. Additionally, it enhanced communication with external auditors, attached
+importance to the supervision of external auditors and heard several reports of external
+auditors concerning audit results, and management proposals etc.
+During the preparation and audit of the 2023 financial statements, the Audit Committee
+discussed and agreed with the external auditors on matters such as audit schedule and
+progress arrangement, followed the status of external audit and conducted supervision
+over relevant work at the appropriate time by means of hearing reports and holding
+informal discussions, and reviewed the unaudited and preliminarily audited annual
+financial statements respectively. The Audit Committee held a meeting on 27 March
+2024, and considered that the 2023 financial statements truly, accurately and completely
+reflected the financial position of the Bank.
+Examining internal control system
+The Audit Committee is responsible for constantly monitoring and examining the internal
+control system of the Bank, and examining the effectiveness of the system at least on
+an annual basis. The Audit Committee performed its function of examining the Bank's
+internal control system through reviewing the administrative rules and regulations and
+their implementation, and examined and assessed the compliance and effectiveness of
+major operating activities of the Bank.
+The Board of Directors of the Bank is responsible for establishing, improving and effectively
+implementing internal control, assessing its effectiveness and truthfully disclosing internal
+control assessment reports according to the standard system for enterprise internal control.
+The objective of the internal control of the Bank is to reasonably assure the compliance
+of its operation and management with relevant laws, safety of its assets, as well as the
+authenticity and completeness of its financial reports and relevant information, in order
+to enhance operation efficiency and effectiveness, and to facilitate the realization of its
+development strategy. Due to inherent limitation of internal control, only reasonable
+assurance can be provided for the aforementioned objectives. The Board of Directors and
+the Audit Committee have reviewed and approved the 2023 Internal Control Assessment
+Report of the Bank. For details of the Bank's internal control, please refer to the section
+headed "Corporate Governance Report - Internal Control".
+Annual Report 2023 117
+Corporate Governance Report
+Performance of the Audit Committee During the reporting period, the Audit
+Committee held eight meetings on 17 January, 23 February, 29 March, 13 April, 27 April,
+29 August, 27 October and 20 December 2023, respectively. At these meetings, the
+Audit Committee reviewed nine proposals, and heard 16 reports. The Audit Committee
+continued to oversee the Bank's internal control system, reviewed the Bank's annual
+internal control assessment report, heard reports on internal control audit results, and
+supervised the improvement of the Group's compliant operation. It inspected and
+supervised the implementation of internal and external audits, considered proposals on
+the internal audit plan, heard reports on the implementation of internal audits and the
+summary of external audit and so on to advance the continuous improvement of an
+effective communication mechanism between internal and external audits.
+Risk Management
+Committee
+Effectiveness of the internal audit function
+The Bank has established a vertical and independent internal audit management system
+responsible and reporting to the Board of Directors. The Board of Directors regularly
+reviews the internal audit plan and hears internal audit reports on internal audit activities,
+audit supporting measures, internal audit team building, etc., thus performing the function
+of risk management. The Audit Committee examines, monitors and assesses the internal
+audit work of the Bank, supervises the internal audit rules and their implementation, and
+makes assessment of audit procedures and results of the internal audit department. It is
+also responsible for urging the Bank to ensure adequate resources for the internal audit
+department and coordinating the communication between the internal audit department
+and external auditors. The internal audit department is accountable to and reports to the
+Board of Directors, is guided by the Board of Supervisors and is under the examination,
+supervision and assessment of the Audit Committee. For details of the internal audit,
+please refer to the section headed "Corporate Governance Report - Internal Audit".
+Primary Responsibilities of the Risk Management Committee The Risk Management
+Committee is primarily responsible for reviewing and revising the Bank's risk strategy,
+risk management policy, risk appetite, enterprise risk management framework and
+internal control process, and supervising and assessing its implementation progress
+and results. The committee is also responsible for continuously monitoring the Bank's
+risk management system, monitoring and evaluating the setup, mode of organization,
+working procedures and results of risk management departments, supervising and
+assessing the Senior Management members' control of strategy risk, credit risk, market
+risk, operational risk (case prevention), liquidity risk, compliance risk, reputational risk, IT
+risk, interest rate risk in banking book, country risk and other risks, and putting forward
+suggestions on the improvement in risk management and internal control of the Bank;
+clarifying the requirements for risk data and reporting, making sure that risk reporting is
+compatible with the Bank's business pattern, risk status and internal management needs
+etc., and proposing improvement requirements to the Senior Management when risk data
+and reporting cannot meet requirements.
+Performance of the Risk Management Committee During the reporting period, the
+Risk Management Committee held eight meetings on 23 February, 29 March, 27 April,
+28 June, 29 August, 27 October, 30 November and 20 December 2023, respectively. At
+these meetings, the Risk Management Committee reviewed 19 proposals, and heard four
+reports. The Risk Management Committee continuously urged the Bank to strengthen
+enterprise risk management. It considered and approved proposals on the 2022 Risk
+Report and Risk Appetite Assessment, the Management Report on Interest Rate Risk in the
+Banking Book of the Group for 2022 and the 2023 Management Strategy, 2023 Liquidity
+Risk Management Strategy, and the 2022 Compliance Risk and AML Management Report
+of the Group and heard reports on technology risk management in 2022. It has become
+more foresighted in preventing and controlling financial risks and enhancing the risk
+management mechanism, in a bid to assist the Board of Directors in improving its risk
+management, prevention and control capabilities.
+The Risk Management Committee is responsible for constantly monitoring and examining
+the risk management system of the Bank, and examining the effectiveness of the system
+at least on an annual basis. Under the enterprise risk management system structure of
+the Bank, the Risk Management Committee performed its function of examining the
+Bank's risk management system through reviewing and revising the risk strategy, risk
+management policy, risk appetite, the enterprise risk management structure and internal
+control process, monitoring and evaluating the setup, mode of organization, working
+procedures and results of risk management departments, regularly assessing the risk
+policy, risk appetite and enterprise risk management status, supervising and assessing risk
+control activities conducted by the Senior Management members in terms of credit risk,
+market risk, operational risk (case prevention), liquidity risk, compliance risk, reputational
+risk, IT risk, interest rate risk in the banking book, country and climate risk, model risk
+and other new risks. For details of risk management, please refer to the section headed
+"Discussion and Analysis Risk Management".
+Annual Report 2023
+Directors
+Control
+Committee
+118
+Corporate Governance Report
+Annual Report 2023
+Primary Responsibilities of the Audit Committee The Audit Committee is mainly
+responsible for constantly overseeing the Bank's internal control system, and supervising,
+inspecting and evaluating financial information and internal audit of the Bank, proposing
+the engagement or replacement of external auditors, reviewing the reports of external
+auditors, and coordinating the communication between the internal audit departments
+and external auditors, and assessing mechanisms for the Bank's staff to report
+misconducts in financial statements, internal control, etc., and assessing the mechanism
+for the Bank to conduct independent and fair investigations and take appropriate actions
+in relation to the reported matters.
+Chairman
+Chairman
+Committee Member
+Chairman
+Committee Member
+Committee Member
+Committee Member
+Committee Member
+Chairman
+Committee Member
+Committee Member
+Annual Report 2023
+115
+Corporate Governance Report
+During the reporting period, the performance of duties by the special committees of the Board of Directors is set out below:
+Strategy Committee
+Corporate Social
+Responsibility and
+Consumer Protection
+Committee
+Audit Committee
+116
+Primary Responsibilities of the Strategy Committee The Strategy Committee is
+mainly responsible for considering the Bank's strategic development plan, risk events
+that bear material influence on the overall situation, annual financial budget and final
+account, strategic capital allocation and asset and liability management objectives,
+significant institution restructuring and adjustment plan, major investment and financing
+proposal, merger and acquisition proposal, strategic development plan for domestic and
+overseas branches and institutions, strategic development plan for human resources, IT
+development and other special strategic development plans, strategic arrangements for
+social responsibility and annual corporate social responsibility report (ESG report), etc.,
+and making recommendations to the Board of Directors. The Strategy Committee is also
+responsible for planning on the overall development of various financial businesses, and
+examining and assessing the soundness of the corporate governance framework.
+Performance of the Strategy Committee During the reporting period, the Strategy
+Committee held five meetings on 23 February, 30 March, 30 August, 27 October and
+30 November 2023, respectively. At these meetings, the Strategy Committee reviewed
+12 proposals, and heard three reports. The Strategy Committee paid attention to major
+strategic issues, reviewed the proposed issuance limit of capital instruments, annual fixed
+assets investment budget, report on the management of capital adequacy ratio, profit
+distribution plan and other proposals to promote the Bank's high-quality development.
+Primary Responsibilities of the Corporate Social Responsibility and Consumer
+Protection Committee The Corporate Social Responsibility and Consumer Protection
+Committee is mainly responsible for hearing and considering the Bank's policy, target
+and issues related to the performance of corporate social responsibility in respect of
+environmental, social and governance (ESG), rural revitalization services, the Bank's
+corporate culture construction, etc., and understanding the Bank's fulfillment of social
+responsibility. The committee is responsible for studying major issues and important
+policies related to the Bank's consumer protection, guiding and pushing forward the
+establishment and improvement of a management system for consumer protection,
+and reviewing and supervising the implementation of the Bank's consumer protection
+strategies, policies, targets, and work reports. The committee shall also consider the
+Bank's policies and targets, such as green finance strategies, climate risk management and
+green bank construction, as well as the development strategy, basic management system,
+annual business plan and assessment method of inclusive finance.
+Performance of the Corporate Social Responsibility and Consumer Protection
+Committee During the reporting period, the Corporate Social Responsibility and
+Consumer Protection Committee held three meetings on 23 February, 28 April and
+30 August 2023, respectively. At these meetings, the Corporate Social Responsibility
+and Consumer Protection Committee reviewed four proposals and heard one report. It
+actively urged the Bank to perform social responsibilities, considered the proposals on
+the application for temporary authorization limit for external donations, etc., providing
+continuous support for charity and other public-interested activities. The committee
+focused on the business development of green finance and inclusive finance, and
+considered and approved the proposals on the 2023 annual business plan for inclusive
+finance. The committee focused on consumer protection, considered and approved the
+proposal on the consumer protection in 2022 and consumer protection plan for 2023,
+and heard the report on consumer protection work for the first half of 2023.
+Committee Member
+Compensation
+Committee
+Protection
+Chairman
+8/8
+Chen Yifang
+2/2
+11/11
+5/5
+3/3
+Dong Yang
+2/2
+11/11
+5/5
+8/8
+5/5
+5/5
+5/5
+3/3
+5/5
+Independent Non-executive
+Directors
+Yang Siu Shun
+2/2
+10/11
+7/8
+7/8
+Shen Si
+2/2
+10/11
+7/8
+8/8
+7/8
+3/3
+2/2
+Committee Committee
+Committee
+Committee
+Executive Directors
+Liao Lin
+22
+11/1 5/5 3/3 5/5
+Wang Jingwu
+2/2
+11/11
+6/8
+4/4
+4/5
+Non-executive Directors
+Lu Yongzhen
+2/2
+11/11
+5/5
+8/8
+3/3
+Feng Weidong
+2/2
+11/11
+8/8
+8/8
+5/5
+Cao Liqun
+11/11
+US Risk
+ཚེ|ཚེ
+3/4
+2/2
+11/11
+5/5
+8/8
+8/8
+5/5
+3/3
+5/5
+Notes:
+(1)
+(2)
+"Attendances in person" refers to attending meetings in person or on telephone or by video conference.
+Directors who did not attend the meetings of the Board of Directors and its special committees in person appointed other
+directors to attend the meetings and exercise the voting right on their behalf.
+(3)
+For the change of directors, please refer to the section headed "Directors, Supervisors and Senior Management
+Appointment and Removal".
+114
+Annual Report 2023
+Corporate Governance Report
+Special Committees of the Board of Directors
+Special Committees of the Board of Directors
+The Board of Directors of the Bank has established eight special committees, namely, the Strategy Committee, the
+Corporate Social Responsibility and Consumer Protection Committee, the Audit Committee, the Risk Management
+Committee, the Nomination Committee, the Compensation Committee, the Related Party Transactions Control Committee
+and the US Risk Committee. Except for the Strategy Committee and the Corporate Social Responsibility and Consumer
+Protection Committee, chairmen of all the other committees are assumed by Independent Non-executive Directors. More
+than half of the members of the Audit Committee, the Nomination Committee, the Compensation Committee and the
+Related Party Transactions Control Committee are Independent Non-executive Directors.
+As at the disclosure date of the results, the composition of special committees of the Board of Directors of the Bank is as
+follows:
+Corporate Social
+Responsibility
+Special Committees under the Board of Directors
+Related Party
+and Consumer
+Strategy
+Anthony Francis Neoh
+5/5
+1/2
+1/2
+4/5
+2/3
+4/4
+5/5
+Fred Zuliu Hu
+2/2
+10/11
+4/5
+5/8
+5/5
+2/3
+Norman Chan Tak Lam
+2/2
+11/11
+4/5
+7/8
+7/8
+5/5
+Herbert Walter
+Directors Leaving Office
+Chen Siging
+2/2
+Nomination
+Committee
+Committee Member
+4/5
+Zheng Guoyu
+0/0
+2/3
+0/1
+Control
+10/11
+Nomination
+- Secondary reporting line
+Board of
+Directors
+Strategy
+Committee
+Corporate Social
+Responsibility and Consumer
+Protection Committee
+Risk
+Management
+Committee
+Nomination
+Committee
+Compensation
+Committee
+Related Party
+Transactions Control
+Committee
+Committee
+Audit
+Committee
+Senior
+Management
+Asset and Liability
+Management Committee
+("Five Priorities" Committee)
+Personal Banking
+Committee
+Institutional Banking Committee
+(Pension Finance Committee)
+Inclusive Finance and Rural
+Revitalization Committee
+Risk Management
+Committee
+Corporate Banking Committee
+(Technology Finance Committee)
+Financial Market and
+Asset Management
+Committee
+Digital Finance
+Committee
+Consumer Protection
+Committee
+Board of
+Supervisors
+Green Finance (ESG and
+Sustainable Finance) Committee
+Internal Audit
+Bureau
+Internal departments and directly managed
+institutions of the Head Office
+Domestic
+Institutions
+Overseas
+Institutions
+110
+Primary reporting line
+Shareholders'
+General Meeting
+oriented nature of financial work in all respects. With
+the fundamental purpose of serving the real economy,
+the Board of Directors ensured both development and
+security, and urged the Bank to maintain stable growth,
+adjust structure, foster new drivers, prevent risks, and
+boost development, and play a pivotal role in serving
+the real economy and a ballast stone role in maintaining
+financial stability. The Board of Directors took solid
+steps to fulfill its responsibilities of strategic decisions
+and risk prevention and control. It fully, accurately, and
+comprehensively applied the new development philosophy,
+promoted the improvement of governance mechanisms
+such as risk control, remuneration incentives, and social
+responsibility, and strove to create better value for all
+stakeholders. The Board of Supervisors gave full play to
+its supervisory function. It focused on how the Board of
+Directors and the Senior Management implemented the
+important decisions and deployments of the Party Central
+Committee and the State Council, national economic
+and financial policies and regulatory requirements, etc.
+The Board of Supervisors conducted supervision on duty
+performance, financial activities, risk management, internal
+control and compliance and other aspects, giving full
+play to its important role in corporate governance. There
+is no material divergence between the actual corporate
+governance of the Bank, relevant laws and administrative
+regulations, and the corporate governance-related rules
+issued by CSRC.
+Corporate Governance Framework
+Chairman
+Liao Lin
+Transactions
+Risk
+Management
+Committee
+Audit Committee
+Committee
+Notes:
+(1)
+(2)
+(3)
+(4)
+(5)
+(6)
+Annual Report 2023
+(7)
+Since January 2015, the remuneration to the Chairman of the Board of Directors, the President and other executives of the
+Bank has followed the State's policies relating to the remuneration reform on executives of central enterprises.
+During the reporting period, the total remuneration amount paid to Directors, Supervisors and Senior Management members
+was RMB12,258.5 thousand. According to the requirements of relevant government authorities, the total final remuneration
+payable to the Chairman of the Board of Directors, the President, Executive Directors and other Senior Management
+members is still subject to final confirmation by relevant government authorities. Additional details of remuneration will be
+disclosed when they have been determined.
+According to relevant rules of the Bank, Senior Management members of the Head Office and employees in positions that
+have a significant influence on the risks of the Head Office include executives of the Bank such as Chairman, Vice Chairman,
+Executive Director, President and Senior Executive Vice President of the Head Office, Senior Management members such as
+Board Secretary and Chief Business Officer, and tier-1 approver. During the reporting period, the Bank's tier-1 approvers were
+assumed by Mr. Wang Jingwu, Mr. Zhang Wenwu, Mr. Zhang Weiwu, Mr. Duan Hongtao, Ms. Xiong Yan and Mr. Zheng
+Guoyu concurrently. As at the disclosure date, the Senior Management members of the Head Office and the employees in
+positions that have a significant influence on the risks of the Head Office had not been involved in the circumstances that
+require the recourse and rebate of performance-based remuneration in 2023.
+During the reporting period, Mr. Lu Yongzhen, Mr. Feng Weidong, Ms. Cao Liqun, Ms. Chen Yifang and Mr. Dong Yang did
+not obtain remuneration from the Bank during their tenure as Directors of the Bank.
+Fees of Mr. Huang Li are his allowances obtained as Employee Supervisor of the Bank, excluding his remuneration with the
+Bank in accordance with the employee remuneration system.
+As the Bank's Independent Non-executive Directors and External Supervisors served as directors or senior management of
+other legal persons or organizations other than the Bank or the controlled subsidiaries of the Bank, such legal persons or
+organizations became related parties of the Bank. During the reporting period, some Independent Non-executive Directors
+and External Supervisors obtained remuneration from such related parties. Except to the extent of the aforementioned
+circumstances, none of the Bank's Directors, Supervisors and Senior Management was paid by the Bank's related parties
+during the reporting period.
+For the change of the Bank's Directors, Supervisors and Senior Management, please refer to the section headed
+"Appointment and Removal".
+Annual Report 2023
+109
+Corporate Governance Report
+Overview of Corporate Governance
+Compensation
+During the reporting period, the Bank has always
+regarded the improvement of corporate governance
+as a fundamental project for achieving high-quality
+development in the new era, and effectively refined the
+modern corporate governance framework, mechanism
+and culture. The Bank constantly developed the
+corporate governance structure which was led by the
+Bank's Party Committee with the Board of Directors
+acting as the decision-making organ, the Board of
+Supervisors responsible for compliance supervision,
+and the Management in charge of operation. The
+Bank strengthened the top-level design of corporate
+governance, revised and improved the Articles of
+Association, and continuously deepened the organic
+integration between the Party's leadership and corporate
+governance. The Bank translated the political and
+institutional advantages of the Party's leadership into
+financial governance efficiency, and stayed committed
+to financial development with Chinese characteristics.
+Focusing on serving Chinese modernization and promoting
+high-quality development, the Board of Directors acted on
+the general principle of pursuing progress while ensuring
+stability. It thoroughly implemented the country's various
+decisions and deployments and financial regulatory
+requirements, and practiced the political and people-
+Directors, Supervisors and Senior Management
+Internal Audit
+Sub-bureau
+US Risk
+Committee
+The Bank has made constant efforts to improve the
+corporate governance and checks and balances mechanism
+comprising the Shareholders' General Meeting, the Board
+of Directors, the Board of Supervisors and the Senior
+Management featuring clearly-defined responsibilities
+and accountability, coordination and effective checks and
+balances, and to optimize responsibilities of the authority
+organ, decision-making organ, supervisory organ and
+executive organ. As a result, the corporate governance
+operation mechanism with a scientific decision-making
+process, effective supervision and steady operation has
+been in place.
+Management
+Committee
+Committee
+Committee
+Committee
+Directors
+Meeting
+Directors
+Audit
+Protection
+Strategy
+Board of
+General
+Transactions
+Risk
+Shareholders'
+Related Party
+and
+Responsibility
+Corporate
+Social
+Attendances in person/Number of meetings that should be attended
+Special Committees of the Board of Directors
+The attendance of each of the Directors in Shareholders' General Meetings and meetings of the Board of Directors and the
+special committees of the Board of Directors during the reporting period is set out below:
+Corporate Governance Report
+113
+Annual Report 2023
+For major proposals reviewed by the Board of Directors,
+please refer to the announcements of the Bank on the
+website of SSE, the "HKEXnews" website of HKEX and the
+website of the Bank.
+Corporate Governance Report
+The Board of Directors actively practiced the ESG
+development philosophy and endeavored to help the
+Bank maximize the comprehensive value of economy,
+environment and society. It revised the Administrative
+Measures for Consumer Protection, reviewed proposals
+on the Application for Temporary Authorization Limit for
+External Donations, the Corporate Social Responsibility
+(ESG) Report 2022, the 2022 Work Report on and 2023
+Work Plan for Consumer Protection, etc.
+The Board of Directors ensured both development and
+security, attached great importance to risk prevention
+and control, continuously improved the enterprise risk
+management systems and mechanisms, and prevented
+the systemic risk with all strength. It revised the Rules
+for Enterprise Risk Management, the Data Security
+Management Measures and other relevant rules, reviewed
+proposals including the 2022 Risk Report and Risk Appetite
+Assessment, the Liquidity Risk Management Strategy for
+2023, the Management Report on Interest Rate Risk in the
+Banking Book of the Group for 2022 and the Management
+Strategy for 2023, and heard reports such as Report on
+Technology Risk Management in 2022.
+The Board of Directors made scientific decisions in
+accordance with economic and financial policies and major
+objectives, with a focus on providing financial services for
+the real economy, developing inclusive finance, promoting
+high-quality development and so on. Meanwhile, the Bank
+continuously reinforced capital management, and made
+efforts to consolidate the foundation of the Bank's support
+for the development of the real economy. The Board
+of Directors reviewed the proposals including the 2023
+business plan, the plan for inclusive finance business in
+2023, the report on internal capital adequacy assessment
+in 2022, the report on capital adequacy ratio in 2022 and
+the planned issuance limit of capital instruments, and
+heard the reports on the annual, interim and quarterly
+operating results and the priorities of the Board of
+Directors in 2023.
+Consumer
+Meetings of the Board of Directors
+Corporate Governance Code
+Special committees were set up under the Senior
+Management for the overall coordination responsibilities
+of the "Five Priorities" and the promotion of technology
+finance, green finance, inclusive finance, pension
+finance and digital finance correspondingly, establishing
+an integrated decision-making and implementation
+mechanism to serve the "Five Priorities", and forming a
+closed loop of organic synergies of the "first, second and
+third lines of defense" and co-control-and-management.
+During the reporting period, the Board of Directors of the
+Bank held 11 meetings on 17 January, 23 February, 30
+March, 13 April, 28 April, 29 June, 30 August, 27 October,
+9 November, 30 November and 21 December 2023,
+respectively. At these meetings, the Board of Directors
+reviewed 59 proposals, and heard 23 reports.
+During the reporting period, the Bank complied with
+the principles, code provisions and recommended best
+practices stipulated in the Corporate Governance Code
+(Appendix C1 to the Hong Kong Listing Rules).
+Amendment to the Articles of Association
+On 23 June 2022, the Bank's Annual General Meeting
+for the Year 2021 reviewed and adopted the Proposal
+on the Amendment to the Articles of Association.
+The amendments covered the business purpose, the
+responsibilities of the Board of Directors, the Board of
+Supervisors, the Shareholders' General Meeting and the
+Senior Management, risk management, remuneration
+incentive, social responsibilities and ESG, green finance,
+consumer protection and information disclosure, etc. The
+new version of the Articles of Association has been put
+into effect upon the approval of NFRA in November 2023.
+Shareholders' General Meeting
+Responsibilities of the Shareholders' General
+Meeting
+Convening of the Shareholders' General
+Meeting
+During the reporting period, the Bank convened the
+Annual General Meeting for the Year 2022 on 29 June
+2023, and the First Extraordinary General Meeting of 2023
+on 30 November 2023. The aforementioned Shareholders'
+General Meetings were convened and held in compliance
+with relevant laws and regulations and the Articles of
+Association of the Bank. The Bank made announcements
+on the resolutions and disclosed legal opinions in a timely
+manner in accordance with regulatory requirements.
+For details of the above meetings, please refer to the
+announcements of the Bank dated 29 June 2023 and 30
+November 2023 respectively on the website of SSE, the
+"HKEXnews" website of HKEX and the website of the
+Bank.
+Annual Report 2023
+111
+Corporate Governance Report
+As the organ of power of the Bank, the Shareholders'
+General Meeting involves all shareholders. The
+Shareholders' General Meeting is responsible for, among
+others, deciding on business policies and significant
+investment plans of the Bank; examining and approving
+the Bank's annual financial budget, final account
+proposals, plans for profit distribution and loss make-up;
+electing and replacing directors, supervisors appointed
+from the shareholder representatives and external
+supervisors; examining and approving work report of
+the Board of Directors and work report of the Board of
+Supervisors; and adopting resolutions on merger, division,
+dissolution, liquidation, change of corporate form, increase
+or decrease of the Bank's registered capital, issuance of
+corporate bonds or other securities and public listing,
+acquisition of the shares, issuance of preference shares
+and amending the Articles of Association of the Bank.
+The Executive Directors of the Bank have worked in
+the areas of banking and management for a long time,
+possess extensive professional expertise and experience
+in those areas and are familiar with the operation and
+management of the Bank. Non-executive Directors have
+worked in the fiscal, economic, financial and governing
+sectors for many years, and they have rich practical
+experience and a relatively high level of understanding of
+policies and theories. All of the Independent Non-executive
+Directors are prestigious Chinese or foreign experts in
+their respective areas, e.g. economy, financial supervision,
+finance, audit and law, and they are familiar with Chinese
+and foreign regulatory rules and have a good knowledge
+of corporate governance, finance and bank management.
+The number of Independent Non-executive Directors
+of the Bank accounted for more than one-third of the
+total members of the Board of Directors, complying with
+relevant regulatory requirements.
+Chairman and President
+Board of Directors and Special
+Committees
+On 1 February 2024, Mr. Chen Siqing resigned as
+Chairman of the Bank due to his age. The Board of
+Directors elected Mr. Liao Lin as Chairman of the Bank.
+Due to change of job assignments, Mr. Liao Lin resigned as
+President of the Bank on the same day. In order to ensure
+the smooth operation and management of the Bank, Mr.
+Liao Lin, according to the regulation and the Articles, shall
+perform the duties and powers of the President up to the
+date on which the new President of the Bank officially
+takes office. Mr. Liao Lin's qualification as Chairman of the
+Bank was approved by NFRA in February 2024.
+Corporate Governance Report
+The Bank formulated relatively complete procedures
+for selecting, nominating and electing Directors. With
+diversified backgrounds, the Directors of the Bank
+complemented each other with regard to their expertise,
+professional competence, professional experience, region,
+gender and many other aspects, which ensured the
+scientific decision-making of the Board of Directors. As at
+the disclosure date of the results, the Board of Directors of
+the Bank consisted of 12 directors, including two Executive
+Directors: Mr. Liao Lin and Mr. Wang Jingwu; five Non-
+executive Directors: Mr. Lu Yongzhen, Mr. Feng Weidong,
+Ms. Cao Liqun, Ms. Chen Yifang and Mr. Dong Yang; and
+five Independent Non-executive Directors: Mr. Yang Siu
+Shun, Mr. Shen Si, Mr. Fred Zuliu Hu, Mr. Norman Chan
+Tak Lam and Mr. Herbert Walter. The Board of Directors
+has reviewed the implementation and effectiveness of
+its board diversity policy. The members of the Board of
+Directors have included two female directors, both of
+whom have contributed to the scientific and efficient
+decision-making of the Board of Directors by offering a
+unique female perspective. In the future, the Bank will
+take full account of the gender composition of candidates
+in the selection of Directors in accordance with relevant
+policies for the diversified backgrounds of Directors, in
+order to further improve the gender diversity of members
+of the Board of Directors.
+Composition of the Board of Directors
+Pursuant to Code Provision C.2.1 of the Corporate
+Governance Code (Appendix C1 to the Hong Kong Listing
+Rules) and the Articles of Association of the Bank, the roles
+of Chairman and President should be held by two persons,
+and the Chairman shall not concurrently hold the position
+of legal representative or chief responsible officer of the
+controlling shareholder. The President is appointed by and
+accountable to the Board of Directors, and performs his
+responsibilities as stipulated in the Articles of Association
+of the Bank and as authorized by the Board of Directors.
+During the reporting period, Mr. Chen Siqing is the
+legal representative and Chairman of the Bank, and
+is responsible for leading the Board of Directors in
+considering and formulating business development
+strategies, risk management, internal control and other
+significant matters of the Bank. During the reporting
+period, Mr. Liao Lin is the President of the Bank, and is
+responsible for the daily management of the business
+operations of the Bank.
+Implementation of Resolutions of the
+Shareholders' General Meeting by the Board
+of Directors
+Annual Report 2023
+112
+As the decision-making organ of the Bank, the Board of
+Directors of the Bank is accountable to, and shall report
+its work to, the Shareholders' General Meeting. The Board
+of Directors is responsible for, among others, convening
+the Shareholders' General Meeting; implementing the
+resolutions of the Shareholders' General Meeting; deciding
+on the Bank's business plans and investment proposals,
+formulating its development strategies and supervising
+the implementation of such strategies; formulating
+annual financial budget and final accounts of the Bank;
+formulating plans for profit distribution and loss recovery
+of the Bank; formulating plans for the increase or decrease
+of the Bank's registered capital, capital replenishment and
+financial restructuring of the Bank; formulating policies
+and basic management systems of the Bank such as risk
+tolerance, risk management system and internal control
+system, supervising the implementation of such systems,
+and assuming the ultimate responsibility for enterprise
+risk management; appointing or removing President and
+the Board Secretary, and appointing or removing Senior
+Executive Vice Presidents and other senior management
+members (except the Board Secretary) who shall be
+appointed or removed by the Board of Directors under
+relevant laws according to the nomination of the President
+and deciding on their compensation, bonus and penalty
+matters; deliberating the policy objectives and related
+matters of the Bank's fulfillment of social responsibility in
+respect of environmental, social, and governance (ESG);
+deliberating the Bank's development strategies, basic
+management systems, annual business plans, assessment
+measures and other matters related to inclusive finance;
+determining the Bank's consumer protection strategies,
+policies and objectives, and safeguarding the legitimate
+rights and interests of financial consumers and other
+stakeholders; establishing a mechanism for identifying,
+reviewing, and managing conflicts of interest between
+the Bank and shareholders, especially major shareholders;
+undertaking the management responsibility for
+shareholders' affairs; and formulating and implementing a
+Senior Management accountability system, and clarifying
+specific ways to investigate responsibilities for dereliction
+of duty and improper performance of duty.
+Responsibilities of the Board of Directors
+The Board of Directors of the Bank earnestly and fully
+implemented the resolutions reviewed and approved by
+the Shareholders' General Meeting during the reporting
+period.
+The Board of Directors of the Bank is responsible for
+formulating the basic systems for internal control and
+supervising the implementation of such systems; the Audit
+Committee of the Board of Directors is responsible for
+supervising the establishment of internal control system and
+evaluating the compliance and effectiveness of the Bank's
+significant business and management activities. The Bank
+has set up the Internal Audit Bureau and Internal Audit Sub-
+bureaus under vertical management, which are accountable to
+and report to the Board of Directors. The Senior Management
+of the Bank is responsible for formulating systematic policies,
+procedures and methods, as well as taking risk control
+measures. Under the Senior Management, the Operational
+Risk and Internal Control Management Committee
+subordinated to the Risk Management Committee, performs
+the responsibilities related to internal control and evaluates
+the sufficiency and effectiveness of internal control. The Head
+Office and tier-one branches (branches directly managed
+by the Head Office) have internal control and compliance
+departments which are responsible for the organization,
+promotion and coordination of internal control.
+While disclosing the annual report, the Bank also disclosed
+the 2023 Internal Control Assessment Report of Industrial
+and Commercial Bank of China Limited in accordance with
+the requirements of MOF, CSRC and SSE. The report stated
+that the Bank had maintained effective internal control
+over financial reporting in all material aspects in accordance
+with the standard system for enterprise internal control and
+relevant rules as at 31 December 2023 (benchmark date).
+Deloitte Touche Tohmatsu Certified Public Accountants LLP
+has audited the effectiveness of the Bank's internal control
+over financial reporting as at 31 December 2023 and issued
+the unqualified audit report on internal control. For details,
+please refer to the announcements published by the Bank on
+the website of SSE, the "HKEXnews" website of HKEX and
+the website of the Bank.
+During the reporting period, the Bank promoted the building
+of internal control system and put forth efforts on improving
+the adaptability of internal control in a forward-looking
+manner, according to the changes in external risk situation
+and the need for implementation of internal operation and
+management strategies. The Bank continued to implement
+the 2021-2023 Development Plan for Internal Control System
+and carried out the compliance culture activity with the theme
+of "Year for Value Improvement" in depth to continuously
+enhance the Group's employees' awareness of internal control
+compliance; in alignment with the New Capital Regulation, the
+Bank deepened the application of big data and IT, improved
+risk assessment techniques and methods, and strove to
+enhance the ability to identify with foresight and to respond
+to "9+X" risks; the Bank steadily promoted the development
+and optimization of policies, deeply implemented the
+optimization of procedures and system control, placed equal
+1
+emphasis on improving control design and strengthening
+implementation, and continuously developed better capacities
+in the whole-process control; the Bank deeply pushed forward
+the development of D-ICBC, strengthened the collection,
+processing and analysis of information, and facilitated smooth
+and effective exchange on internal and external information;
+the Bank deepened the coordination of supervision and
+inspection, and connection of various forms of supervision,
+strengthened closed-loop remediation of issues and accurate
+and serious accountability, and enhanced the connection
+between "regulations, discipline and laws" for supervision
+cohesion to ensure high-level of security.
+Internal Control Assessment Report and
+Internal Control Audit
+Internal Audit
+126
+The Board of Directors of the Bank conducted an assessment
+of the effectiveness of the Group's internal control during
+the reporting period in accordance with the Basic Standard
+for Enterprise Internal Control and its supporting guidelines
+issued by five ministries and commissions including MOF, the
+Circular on Further Improving the Effectiveness of Internal
+Control over Financial Reports of Listed Companies issued
+by MOF and CSRC, the Self-regulatory Guidelines for Listed
+Companies No. 1 Standardized Operation issued by SSE
+and relevant regulatory requirements of NFRA. No material or
+significant deficiencies were detected in the Bank's internal
+control system during the assessment. Risks that may arise
+from ordinary deficiencies are controllable and corrective
+actions have been or are being taken, which have no material
+impact on the fulfillment of internal control objectives of the
+Bank. The Bank had maintained effective internal control in all
+material aspects in accordance with the standard system for
+enterprise internal control and relevant rules.
+There was no factor that affected the assessment conclusion
+of internal control effectiveness from the benchmark date to
+the issuance date of the internal control assessment report.
+9+X risks include credit risk, market risk, operational risk, liquidity risk, interest rate risk in banking book, reputational risk, strategic risk,
+country risk, information technology and cyber security risk, compliance risk, money laundering risk, product risk, climate risk and other risks.
+Annual Report 2023
+Corporate Governance Report
+Internal Control
+Internal Control Evaluation and Defects
+Postal code: 100140
+Compensation Committee
+Relations
+The Bank established a vertical and independent internal audit management system composed of the Internal Audit Bureau
+and ten Internal Audit Sub-Bureaus, which are accountable to and report to the Board of Directors, and shall accept the
+inspection, supervision and evaluation by the Audit Committee of the Board of Directors and the supervision and guidance
+by the Board of Supervisors. The Internal Audit Sub-bureaus, acting as the subordinate agencies of the Internal Audit
+Bureau, are accountable to, and shall report to, the Internal Audit Bureau. The chart below illustrates the internal audit
+management and reporting framework of the Bank:
+Investor Relations
+Effective Communication with Shareholders
+and Review of Investor Relations Activities
+The Bank carried out the investor relations management
+in accordance with the regulatory requirements in the
+place of listing. With consistent adherence to the investor-
+centered approach, the Bank has established an effective
+communication mechanism with investors based on the
+principle of serving investors in a comprehensive, proactive,
+precise, coordinated and efficient manner. The Bank made
+constant and extensive communication with investors and
+analysts through channels like press conferences in relation
+to periodic results announcements, domestic and overseas
+non-deal roadshows, investor hotline, investor relations
+mailbox, investor relations website and the online platform
+of SSE E-interactive, and made records of these activities
+according to relevant regulatory requirements, striving to
+improve its work accuracy and service quality regarding
+investor relations.
+During the reporting period, the Bank had effective
+communication with the investors. The Bank held the
+briefing conference on annual results in the form of "on-
+site meeting + webcast + global telephone" in Hong
+Kong and Beijing simultaneously. It was awarded the
+"Best Practice of the Annual Report Presentation of Listed
+Companies" again by the China Association for Public
+Companies. The Bank strengthened multi-dimensional
+interaction with investors, carried out proactive and
+targeted investor relation activities at a high frequency
+through "online + offline", "one-to-one and one-to-
+many" forms, held investor relation activities themed
+ESG and green finance and reverse roadshow of "path
+to high-quality development" etc., so as to alleviate
+investors' concerns with market-oriented, international
+and professional expressions. The Bank took solid steps
+to protect the legitimate rights and interests of small and
+medium-sized investors, actively responded to inquiries
+about the platforms and channels such as SSE E-interactive,
+investor hotline, investor relation mailbox, etc., and held a
+series of special ICBC activities of "understanding my listed
+company- accessing to blue chip".
+In 2024, the Bank will further and proactively deepen the
+communication and exchange with investors to enhance
+investors' understanding and recognition of the Bank and
+continue to protect legitimate interests of the investors,
+at the same time, the Bank hopes to receive more support
+and attention from its investors.
+Annual Report 2023
+125
+Corporate Governance Report
+Investor Enquiries
+If an investor wishes to enquire any questions related to
+operation performance of the Bank, please contact:
+Telephone: 86-10-66108608
+Facsimile: 86-10-66107571
+E-mail: ir@icbc.com.cn
+Address: Corporate
+Strategy and Investor
+Department, Industrial and Commercial Bank of
+China Limited, 55 Fuxingmennei Avenue, Xicheng
+District, Beijing, China
+Primary reporting line
+Secondary reporting line
+Whistleblowing Rules
+Senior
+Management
+Annual Report 2023
+127
+Corporate Governance Report
+During the reporting period, Deloitte Touche Tohmatsu
+and its member institutions provided the Group with non-
+audit services including professional services for asset
+securitization and bonds issuance etc., and received RMB8
+million for such professional non-audit services.
+Management on Subsidiaries
+For the information of management and control on
+subsidiaries, please refer to "Discussion and Analysis
+Business Overview Comprehensive Operation and
+Subsidiary Management · Major Controlled Subsidiaries
+and Equity Participating Company".
+self-inspections. After self-inspections, none of the insiders
+of the Bank were found to be involved in dealings in
+shares of the Bank who have taken advantage of inside
+information during the reporting period.
+four-in-one
+The Bank continued to improve the
+whistleblowing and acceptance system of "network,
+telephone, letter, and visit", and adhered to designated
+personnel acceptance, collective investigation and
+judgment, ledger management, tracking and supervision.
+Regarding the whistleblowing matters, the Bank followed
+the principles of "seeking truth from facts, complying with
+laws and regulations, safeguarding legal rights and taking
+responsibility at different levels". In terms of institutional
+and mechanism development, the Bank formulated the
+working system for handling reporting and accusations,
+and clearly defined a territorial jurisdiction and multi-level
+and classified handling mechanism for reporting clues, as
+well as the protection mechanism for whistleblowers, etc.
+In terms of system development and staffing, it developed
+a whistleblowing management system in the Group's
+Internal Control and Compliance Management Platform
+(GICC), and appointed whistleblowing management
+personnel in all domestic branches. In terms of daily
+management, the Bank pushed forward the development
+of risk reminder mechanism, analysis and summary
+mechanism, and communication, investigation and
+negotiation mechanism. It gave full play to the role of
+whistleblowing in supervision, timely discovered cases
+and risk clues, investigated and handled violations, so
+as to maintain business order. The Bank also deepened
+the governance of sources of complaint letters and visits,
+and intensified special remediations against repeated
+whistleblowing, so as to constantly improve the quality
+and efficiency of supervision by the public.
+Anti-corruption Policy
+The Bank adhered to tackling both the manifestations
+and the sources of corruption, and deepened systematic
+governance to ensure all personnel do not dare to, are
+unable to and have no desire to commit corruption. The
+Bank focused on key issues, key areas, key targets, new
+corruption and hidden corruption, and enhanced the
+joint efforts of regulatory supervision, audit supervision,
+compliance supervision and judicial supervision in finding
+and punishing financial corruption. It intensified the
+investigation and handling of cases, formulated the
+guidelines for the release of information on serious
+duty-related illegal and criminal cases, and continuously
+enhanced the deterrent effect of investigation and
+handling of cases. The Bank improved the working
+mechanism of promoting reform through cases and
+promoting governance through cases, established a list of
+rights and responsibilities and a system of responsibilities,
+improved the power operation mechanism that links
+decision-making, review, implementation, supervision
+and accountability, strengthened the prevention and
+control of integrity risks, and spared no efforts to block
+all kinds of risk loopholes. The Bank actively promoted
+the building of a clean and honest ICBC in the new era,
+formulated the system to accelerate the building of a clean
+and honest ICBC, and established a clean and honest
+culture and education base. It also launched the "Clean+"
+campaign, actively cultivated a clean and honest culture,
+publicized the concept of integrity and integrity models,
+promoted the honest family tutoring and family style,
+and regularly carried out integrity education. Moreover,
+the Bank deepened case-based learning, created new
+warning education methods, and strengthened classified
+warning education and exposure to different management
+levels through various methods such as WeChat publicity,
+shooting warning films, making and issuing warning
+documents, and holding warning education conferences,
+to build a solid anti-corruption dam.
+128
+Annual Report 2023
+1 Deloitte Touche Tohmatsu Certified Public Accountants LLP is the Recognized Public Interest Entity Auditor under Hong Kong's Financial
+Reporting Council Ordinance. Deloitte Touche Tohmatsu is the Registered Public Interest Entity Auditor under Hong Kong's Financial
+Reporting Council Ordinance.
+Board of
+Directors
+Deloitte Touche Tohmatsu Certified Public Accountants
+LLP was the domestic auditor of the Bank for the financial
+statements audit in 2023, and Deloitte Touche Tohmatsu¹
+was the international auditor of the Bank for the financial
+statements audit in 2023. Deloitte Touche Tohmatsu
+Certified Public Accountants LLP was also the auditors
+of internal control of the Bank in 2023. Deloitte Touche
+Tohmatsu Certified Public Accountants LLP, Deloitte
+Touche Tohmatsu (collectively, the "Deloitte Touche
+Tohmatsu"), Audit Project Partner and Signatory Certified
+Public Accountant (Wu Weijun), and Signatory Certified
+Public Accountant (Zeng Hao) have rendered audit services
+for the Bank for three consecutive years (2021-2023).
+During the reporting period, the Group paid Deloitte
+Touche Tohmatsu and its member institutions a total fee
+of RMB184 million for the audit of financial statements
+(including the audit of financial statements of subsidiaries
+and overseas branches), of which, RMB104 million
+(including fee for internal control audit of RMB8.80 million)
+was paid by the Bank.
+improved the quality and efficiency of supervision and
+audit coordination, strengthened the interconnection with
+other supervisions, and effectively enhanced the cohesion
+of internal and external supervisions.
+Audit Committee
+Internal Audit
+Bureau
+Board of
+Supervisors
+Beijing
+Office
+Tianjin
+Office
+Shenyang
+Office
+Shanghai
+Office
+Nanjing
+Office
+Wuhan
+Office
+Guangzhou
+Office
+Chengdu
+Office
+Kunming
+Office
+Xi'an
+Office
+During the reporting period, the Bank implemented risk-
+oriented audit activities according to the development
+strategies and central tasks of reform and transformation
+of the Bank. The Bank expanded the audit coverage
+of major areas, various risks, key institutions, and key
+minorities, and comprehensively accomplished the annual
+audit plan. The audit focused on the Bank's performance
+in implementing national policies, meeting regulatory
+requirements, improving the quality and efficiency of
+strategy implementation, strengthening risk prevention and
+control and other aspects, covering such areas as credit
+business, financial benefit, emerging business, FinTech,
+operation management, capital management and internal
+control. The Bank also paid close heed to and made full
+use of audit findings and recommendations, with the
+aim of continuously improving risk management, internal
+control and corporate governance.
+During the reporting period, the Bank actively adapted
+to the changes in the risk management conditions,
+promoted the transformation of operation model of audit
+projects, increased the allocation of audit resources and
+continuously improved audit efficiency and value. The Bank
+sped up the digital transformation of audit, enhanced the
+information system support capabilities, and expanded
+the coverage of audit model system. The Bank deepened
+the transformation of the internal audit mechanism,
+strengthened the cultivation, selection and management
+of audit personnel, and improved the ability to perform
+the duties of the audit team. The Bank well conducted
+"second half of the chapter" of the audit remediation,
+Engagement of Auditors
+The Bank manages inside information and insiders in
+accordance with regulatory requirements of the exchanges
+on which the Bank is listed and the Bank's rules, and
+conducts the collection, delivery, sorting, preparation
+and disclosure of relevant information in compliance
+with applicable laws and regulations. During the
+reporting period, the Bank continued to strengthen inside
+information management, timely organized the completion
+of insider lists and regularly conducted insider transaction
+Proposing the Convening of an Extraordinary
+General Meeting
+Ordinary shareholders of the Bank have the right to
+collect dividends and other forms of benefits distributed
+on the basis of the number of shares held by them;
+preference shareholders shall be entitled to rights to
+dividends in priority to payment of dividends to ordinary
+shareholders. Shareholders have other rights conferred by
+laws, administrative regulations, rules and the Articles of
+Association of the Bank.
+The Listed Companies Association of Beijing:
+Training on the strategic management of listed companies
+Training on the information disclosure of listed companies
+Training on the ESG report of listed companies
+Training on the performance of duties of directors, supervisors and senior management
+Training on strengthening the market capitalization of listed companies
+Training on investor relations management
+Training on the measures for independent director management of SSE-listed companies
+in Beijing
+Anti-money Laundering training
+Trainings on business line
+Training of Board Secretary
+During the reporting period, the Board Secretary of the
+Bank attended the relevant specialized training sessions,
+with the training hours over 15 hours, which met relevant
+regulatory requirements.
+Independence and Performance of Duties of
+Independent Non-executive Directors
+The Bank conducted the appointment of Independent
+Non-executive Directors in strict accordance with the
+relevant regulatory rules, the Articles of Association of
+the Bank and other provisions. The qualifications, number
+and proportion of the Bank's Independent Non-executive
+Directors comply with regulatory requirements.
+Annual Report 2023 121
+Corporate Governance Report
+The Bank's Independent Non-executive Directors do not
+have any business or financial interests in the Bank or its
+subsidiaries, and they have not assumed any managerial
+position in the Bank. The Bank has received the annual
+confirmation on independence from all Independent
+Non-executive Directors and considered that they were
+independent.
+During the reporting period, the Bank's Independent
+Non-executive Directors earnestly attended the meetings
+of the Board of Directors and special committees, gave
+independent opinions on the issues for consideration,
+and put forward suggestions in terms of improving the
+capacity of financial services in serving the real economy,
+reinforcing risk control and compliance management,
+facilitating digital development, strengthening capital
+management, and promoting the high-quality development
+of the Group, etc. In accordance with the Corporate
+Governance Code (Appendix C1 to the Hong Kong
+Listing Rules), Independent Non-executive Directors and
+the Chairman of the Board of Directors held discussions
+without the participation of other Directors, fully
+communicated and exchanged information on the Bank's
+risk compliance, digital transformation, internationalization
+strategy, talent management, etc. Meanwhile, Independent
+Non-executive Directors actively attended various meetings,
+symposia, surveys, trainings and other activities of the
+Bank, to gain a deep understanding of the Bank's ESG and
+green finance, IT, digital transformation of commercial
+banks, enterprise risk management, implementation of the
+Group's international development strategy, and operation
+and management of branches. Independent Non-executive
+Directors put forward a series of valuable suggestions in
+each of the performance activities, which have been highly
+valued by the Bank and implemented according to the
+actual conditions.
+During the reporting period, the Bank's Independent Non-
+executive Directors did not raise any objection to proposals
+of the Board of Directors and special committees of the
+Board of Directors.
+For the details on performance of duties of Independent
+Non-executive Directors of the Bank during the reporting
+period, please refer to the Work Report of Independent
+Directors for 2023 issued by the Bank on 27 March 2024.
+122
+Annual Report 2023
+Corporate Governance Report
+Internal trainings
+Board of Supervisors
+External trainings
+During the reporting period, the Bank advanced overall
+training for Directors, constantly increased training
+resources, and actively expanded the channels and forms
+of training for Directors, with the aim of assisting the
+Directors in continuing to improve their ability to perform
+their duties. Directors of the Bank attended relevant
+trainings according to work needs.
+Primary Responsibilities of the Nomination Committee The Nomination Committee is
+mainly responsible for making recommendations to the Board of Directors on candidates
+for Directors and Senior Management members, nominating candidates for chairmen and
+members of special committees of the Board of Directors, formulating the standards and
+review procedures for selection and appointment of Directors and Senior Management
+members, and hearing the training and development plans for Senior Management
+members and key reserved talents. The Nomination Committee is also responsible for
+assessing the structure, size and composition of the Board of Directors and making
+recommendations to the Board of Directors based on the Bank's development strategy.
+The Articles of Association of the Bank specifies procedures and methods to nominate
+Directors. Please refer to Article 118 of the Articles of Association. During the reporting
+period, the Bank appointed and renewed the appointments of Directors of the Bank
+in strict accordance with the Articles of Association of the Bank. The Nomination
+Committee reviews the qualifications of candidates for Directors based on whether the
+candidate complies with applicable laws, administrative rules, regulations and the Articles
+of Association of the Bank. The Bank attached importance to diversified sources and
+backgrounds of Directors and continued the efforts to enhance the professionalism of the
+Board of Directors, thus laying the foundation for the effective operation and scientific
+decision-making of the Board of Directors. According to the requirement on diversified
+composition of the Board of Directors in the Rules for Recommendation and Nomination
+of Board Candidates of the Bank, the Nomination Committee shall pay attention to the
+complementarity of the candidates in terms of expertise, professional competence and
+experience, cultural and educational background, gender, etc., to ensure the members of
+the Board of Directors are well equipped, experienced and have diversified perspectives
+and views. In order to implement the diversity policy, the Nomination Committee
+discusses and designs measurable goals according to actual conditions and assesses the
+improvement of diversified composition of the Board of Directors during the course of its
+yearly assessment on the framework, number of Directors and composition of the Board
+of Directors. As at the disclosure date of the results, there were five Independent Non-
+executive Directors, accounting for more than one-third of the total members of the
+Board of Directors.
+Performance of the Nomination Committee During the reporting period, the
+Nomination Committee held five meetings on 17 January, 23 February, 29 June, 9
+November and 21 December 2023, respectively. Through these meetings, the Nomination
+Committee reviewed seven proposals including the proposals on the nomination of the
+candidate for Non-executive Director of the Bank and extension of tenure of relevant
+positions in the special committees of the Board of Directors, nomination of the candidate
+for Independent Director, appointment of Senior Executive Vice President and Chief
+Business Officer and suggestions on adjusting some of the chairpersons and members
+of special committees of the Board of Directors. The Nomination Committee promoted
+the change of directors and appointment of Senior Management members in an orderly
+manner and continuously improved and adjusted the composition of special committees
+of the Board of Directors.
+Primary Responsibilities of the Compensation Committee The Compensation
+Committee is mainly responsible for formulating assessment rules of the Board of Directors
+on the performance of duties and compensation plans for Directors, organizing the
+assessment of the Board of Directors on the performance of duties of Directors, putting
+forth the proposal on remuneration distribution for Directors, formulating and reviewing
+the assessment measures and compensation plans for Senior Management members of
+the Bank and evaluating the performance and behaviors of Senior Management members.
+Annual Report 2023
+119
+Corporate Governance Report
+Related Party Transactions
+Control Committee
+US Risk Committee
+Performance of the Compensation Committee During the reporting period, the
+Compensation Committee held three meetings on 23 February, 30 August and 27
+October 2023, respectively. At these meetings, the Compensation Committee reviewed six
+proposals including the proposals on the payment of remuneration to Directors and Senior
+Management members for 2022, the Senior Management performance evaluation plan
+for 2023 and the renewal of directors, supervisors and officers liability insurance for 2023-
+2024, and heard the 2022 assessment report on the performance of duties of Directors
+by the Board of Directors. The Compensation Committee, in accordance with regulatory
+requirements, drafted the remuneration of directors, and improved the performance
+evaluation indicators and the incentive and constraint mechanism.
+Primary Responsibilities of the Related Party Transactions Control Committee The
+Related Party Transactions Control Committee is mainly responsible for developing the
+basic policies governing the management of related party transactions, identifying the
+Bank's related parties; approving related party transactions and other related matters
+within the authority granted by the Board; receiving related party transaction statistics for
+filing purpose; reviewing the related party transactions that are subject to the approval of
+the Board of Directors or the Shareholders' General Meeting; and reporting to the Board
+of Directors on the implementation of the related party transaction management policies
+as well as the conditions on these transactions.
+Performance of the Related Party Transactions Control Committee During the
+reporting period, the Related Party Transactions Control Committee held four meetings on
+29 March, 27 April, 29 August and 30 November 2023, respectively. At these meetings,
+the Related Party Transactions Control Committee reviewed and approved three proposals
+including the proposal on identification of related parties of the Bank, and heard the
+special report on related parties and related party transactions in 2022. The Related Party
+Transactions Control Committee focused on reviewing the fairness and objectivity of
+related party transactions, urged the Bank to strengthen the management of related party
+transactions and inside transactions, and assisted the Board of Directors in ensuring the
+Bank's related party transactions are carried out in compliance with laws and regulations.
+Primary Responsibilities of the US Risk Committee In accordance with the relevant
+requirements in the Enhanced Prudential Standards for Bank Holding Companies and
+Foreign Banking Organizations established by the Federal Reserve Board, the US Risk
+Committee supervised the implementation of the US business-related risk management
+framework and relevant policies.
+Performance of the US Risk Committee During the reporting period, the US Risk
+Committee held five meetings on 29 March, 28 June, 29 August, 30 November and 20
+December 2023, respectively. At these meetings, the US Risk Committee reviewed three
+proposals, and heard 11 reports. It attached importance to and strengthened the risk and
+compliance management of overseas institutions, reviewed and approved the proposals
+including the risk management framework, revision of risk appetite and risk management
+in the US, and the liquidity stress testing, funding contingency plans, key business lines
+and product liquidity risks in the US, heard the reports on the risk management and
+liquidity risk management in the US in 2022, and assisted the Board of Directors in urging
+the Management to continuously strengthen compliance and risk prevention and control
+in international operation.
+120
+Annual Report 2023
+Corporate Governance Report
+Term of Directors
+In accordance with the Articles of Association of the
+Bank, Directors are elected by the Shareholders' General
+Meeting with a term of three years, and the appointment
+shall take effect from the date of approval by NFRA or
+upon completion of relevant procedures according to the
+requirements of NFRA. Directors may be re-appointed
+through re-election at the Shareholders' General Meeting
+after expiration of their term.
+Responsibilities of Directors in Respect of
+Financial Statements
+The Directors of the Bank acknowledged that they are
+responsible for the preparation of the financial statements
+of the Bank. During the reporting period, in strict
+compliance with relevant provisions, the Bank published
+the 2022 Annual Report, the First Quarterly Report of
+2023, the 2023 Interim Report and the Third Quarterly
+Report of 2023 as scheduled.
+Investigation and Training of Directors
+During the reporting period, Directors of the Bank
+proactively conducted surveys on departments, branches
+and subsidiaries of the Bank concerning such topics as
+optimization of asset structure and income structure,
+discussions and issues on the practice of expected
+credit loss approach, risk management and sustainable
+development for inclusive finance, building of risk
+warning mechanism, ESG and green finance development,
+financial services for boosting manufacturing strength and
+technological innovation, overseas institutions assisting in
+building the Belt and Road Initiative and serving the high-
+standard opening up of the country, and the operation
+and management of the Bank's branches and affiliates. In
+the form of survey reports, such investigations provide the
+Bank with constructive suggestions and opinions.
+The topics of the trainings attended by the Directors of the Bank during the reporting period were mainly as follows:
+Responsibilities of the Board of Supervisors
+As the supervisory organ of the Bank, the Board of
+Supervisors is accountable to, and shall report its work
+to, the Shareholders' General Meeting. The Board of
+Supervisors is responsible for, among others, supervising
+the Board of Directors to establish the prudent business
+vision and value criteria, and formulating a development
+strategy in line with the actual situation of the Bank;
+assessing the soundness, rationality and prudence of the
+Bank's development strategy, and forming assessment
+reports; formulating measures for assessing the
+performance of duties of the Board of Directors, Senior
+Management members and Supervisors, and supervising
+and assessing the performance of duties of the Board of
+Directors, Senior Management members and Supervisors;
+conducting leave audits towards Directors and Senior
+Management personnel when necessary; inspecting and
+supervising financial activities of the Bank; examining
+financial information such as financial accounting report,
+business report and profit distribution plan to be submitted
+to the Shareholders' General Meeting by the Board of
+Directors; inspecting and supervising the business decision-
+making, risk management and internal control of the Bank,
+and urging the remedial actions; nominating Shareholder
+Supervisors, Employee Supervisors, External Supervisors,
+and Independent Directors; supervising the selection and
+appointment of Directors; supervising the implementation
+of the Bank's remuneration management policy and the
+soundness and rationality of the remuneration plan for
+Senior Management members; formulating remuneration
+plan for Supervisors and submitting it to the Shareholders'
+General Meeting for review and decision; supervising the
+engagement, dismissal, renewal of the Bank's external
+auditing institution, and its auditing work, and guiding
+and supervising the internal audit work of the Bank;
+raising proposals to the Shareholders' General Meeting;
+proposing to convene an extraordinary general meeting
+of shareholders, and convening and presiding over the
+extraordinary general meeting of shareholders in case the
+Board of Directors fails to perform its duty of convening
+Shareholders' General Meeting; and proposing to convene
+an interim meeting of the Board of Directors, etc.
+Corporate Governance Report
+Securities Transactions of Directors and
+Supervisors
+The Bank has adopted a set of codes of conduct
+concerning the securities transactions by directors and
+supervisors which are no less stringent than the standards
+set out in the Model Code for Securities Transactions by
+Directors of Listed Issuers (Appendix C3 to the Hong Kong
+Listing Rules). After making enquiries to all Directors and
+Supervisors of the Bank, each Director and Supervisor
+confirmed that he/she has complied with the provisions
+of the aforesaid codes of conduct during the reporting
+period.
+Senior Management
+Responsibilities of the Senior Management
+As the executive organ of the Bank, the Senior
+Management is accountable to the Board of Directors.
+The Senior Management is responsible for, among others,
+the operation and management of the Bank; organizing
+the implementation of operation and investment plans
+approved by the Board of Directors; formulating specific
+rules and regulations of the Bank; determining plans for
+compensation distribution and performances evaluation of
+persons in charge of internal departments and branches
+of the Bank (except for the internal audit department);
+truthfully reporting to the Board of Directors or the Board
+of Supervisors on the business performance; drafting
+the annual financial budget plan, final account plan,
+profit distribution plan and loss recovery plan, plans for
+increase or reduction of the registered capital, the issuance
+of bonds or other securities and listing, and making
+suggestions in that respect to the Board of Directors.
+Shareholders' Rights
+An extraordinary general meeting should be convened
+within two (2) months from the date when shareholders
+holding more than ten percent (10%) of the voting
+shares of the Bank, either individually or jointly, request
+to convene in writing. Proposing shareholders shall have
+the right to request the Board of Directors in writing to
+convene an extraordinary general meeting. The Board of
+Directors shall make a written response as to whether
+or not it agrees to convene such a meeting within ten
+(10) days upon receipt of the request in accordance with
+laws, administrative regulations, rules and the Articles of
+Association of the Bank. Reasonable expenses incurred
+from the case where shareholders convene the meeting
+by themselves due to the failure of the Board of Directors
+to convene the meeting shall be borne by the Bank, and
+deducted from the payment to those negligent directors.
+Submitting Interim Proposals for the
+Shareholders' General Meeting
+Shareholders who hold more than three percent (3%)
+of shares of the Bank, either individually or jointly, may
+prepare an interim proposal and submit it in writing to the
+Board of Directors ten (10) days before the Shareholders'
+General Meetings convened. The Board of Directors shall
+issue a supplementary notice for the Shareholders' General
+Meeting within two (2) days upon receipt of the proposal
+and submit such proposal to the Shareholders' General
+Meeting for approval.
+Powers and Functions of the Senior
+Management
+The powers of the Board of Directors and the Senior
+Management are separated in strict compliance with the
+Articles of Association and other corporate governance
+documents of the Bank. During the reporting period, the
+Bank made an inspection on the implementation of the
+plan on authorization of the Board of Directors to the
+President, and no matter was found to be beyond the
+approval authority of the President.
+Putting Forward Suggestions and Reviewing
+Documents
+Shareholders are entitled to supervise business operation
+of the Bank and put forward suggestions or inquiries
+accordingly. Shareholders are entitled to review the
+information of the Bank such as the Articles of Association,
+the register of shareholders, documents on the status
+of share capital and minutes of Shareholders' General
+Meetings, etc.
+124
+Annual Report 2023
+Corporate Governance Report
+Special Provisions on Rights of Preference
+Shareholders
+In the following circumstances, preference shareholders
+of the Bank have the right to attend the Shareholders'
+General Meeting and exercise voting rights: (1)
+amendments to the Articles of Association which relate
+to preference shares; (2) the reduction of the registered
+capital of the Bank by more than 10% (either separately
+or in aggregate); (3) merger, division and dissolution or
+change of corporate form of the Bank; (4) issuance of
+preference shares; and (5) other events specified in the
+Articles of Association that will change or abrogate the
+rights of preference shareholders. If any of the above
+circumstances occurs, the notice of a Shareholders'
+General Meeting shall be given to preference shareholders
+in accordance with the notification procedures applicable
+to ordinary shareholders as specified in the Articles of
+Association.
+In the event that the Bank fails to pay the agreed dividend
+to preference shareholders for three years in aggregate or
+for two consecutive years, from the next day following the
+date of approval of the proposal not paying the agreed
+dividend for the current year by the Shareholders' General
+Meeting, preference shareholders shall be entitled to
+attend and vote (together with ordinary shareholders) at
+the Shareholders' General Meeting. For preference shares
+the dividend of which is non-cumulative, the voting rights
+shall be temporarily restored until the full payment of the
+agreed dividend for the current year by the Bank.
+Other Rights
+123
+Annual Report 2023
+Appointment
+For the change of Supervisors, please refer to the section headed "Directors, Supervisors and Senior Management
+and Removal".
+Composition of the Board of Supervisors
+As at the disclosure date of the results, the Board of
+Supervisors of the Bank consisted of three members,
+including one Employee Supervisor, namely Mr. Huang Li;
+and two External Supervisors, namely Mr. Zhang Jie and
+Mr. Liu Lanbiao.
+During the reporting period, the Board of Supervisors held
+nine meetings, reviewed 17 proposals including the Report
+on the Work of the Board of Supervisors for 2022, the
+Report on Performance Evaluation and the Report on the
+Assessment Opinions about the Development Strategy,
+heard 34 reports including the business operation,
+implementation of strategy planning and risk management
+of the Bank, and reviewed 35 special reports including the
+quarterly supervision, special survey reports of the Board
+of Supervisors and the implementation of supervision
+suggestions of the Board of Supervisors.
+Attendance of Supervisors of the Bank in meetings during the reporting period was as follows:
+Supervisor
+Huang Li
+Zhang Jie
+Attendances in person/Number of meetings that should be attended
+Shareholders'
+General Meeting
+2/2
+Inside Information Management
+2/2
+Board of
+Supervisors
+7/9
+9/9
+9/9
+Liu Lanbiao
+Supervisor Leaving Office
+Wu Xiangjiang
+0/0
+1/1
+Note:
+2/2
+Meetings of the Board of Supervisors
+Corporate Governance Report
+Nomination Committee
+The Bank did not convert any capital reserve to share capital in the last three years. The table below sets out the cash
+dividend distribution of ordinary shares for the last three years:
+Annual Report 2023
+Insurance
+Liability
+of Directors,
+Supervisors and Senior Management
+Members Pursuant to the Articles of Association
+of the Bank, where conditions permit, the Bank may
+establish the professional liability insurance system of
+Directors, Supervisors and Senior Management members
+Please refer to "Note 48. to the Consolidated Financial
+Statements: Related Party Disclosures" for details of
+the related party transactions defined under the laws,
+regulations and accounting standards of China.
+At the end of the reporting period, the Bank's balance of
+credit related party transactions and the balance of non-
+credit related party transactions under the rules of NFRA
+amounted to RMB900,672 million and RMB386,973
+million, respectively. The increase in the scale of related
+party transactions was mainly because the scope of
+related party identification of the Bank was expanded to
+cover all domestic and overseas subsidiaries of the Group
+after the official implementation of the Administrative
+Measures for Related-Party Transactions of Banking and
+Insurance Institutions (CBIRC Decree [2022] No. 1) since 1
+March 2023, and the number of related party transactions
+increased correspondingly.
+Related Party (Connected) Transactions
+Kong (including interests or short positions therein that
+they shall be deemed to have pursuant to such provisions
+of the Securities and Futures Ordinance of Hong Kong), or
+any interests or short positions which have to be recorded
+in the register under Section 352 of the Securities and
+Futures Ordinance of Hong Kong, or any interests or short
+positions which have to be notified to the Bank and SEHK
+pursuant to the Model Code for Securities Transactions by
+Directors of Listed Issuers as set out in Appendix C3 to the
+Hong Kong Listing Rules.
+Interests in Shares, Underlying Shares,
+and Debentures Held by Directors
+and Supervisors As at 31 December 2023,
+none of the Directors or Supervisors of the Bank had
+any interests or short positions in the shares, underlying
+shares or debentures of the Bank or any of its associated
+corporations (as defined in Part XV of the Securities and
+Futures Ordinance of Hong Kong) which have to be
+notified to the Bank and SEHK under Divisions 7 and 8 of
+Part XV of the Securities and Futures Ordinance of Hong
+Directors' and Supervisors' Rights to
+Acquire Shares or Debentures None of
+the Bank, its subsidiaries, its controlling shareholders or
+subsidiaries of its controlling shareholders entered into
+any agreement or arrangement enabling the Directors or
+Supervisors to acquire benefits by means of the acquisition
+of shares in or debentures of the Bank or any other body
+corporate.
+Business None of the Bank's Directors held any
+interests in any business competes or competed or is or
+was likely to compete, either directly or indirectly, with the
+Bank.
+Competing
+Directors' Interests in
+Directors' and Supervisors' Interests
+in Transactions, Arrangements or
+Contracts of Significance During the
+reporting period, none of the Directors or Supervisors
+of the Bank or their connected entities had any material
+interests, whether directly or indirectly, in any transaction,
+arrangement or contract of significance regarding the
+Bank's business to which the Bank, its subsidiaries, its
+controlling shareholders or subsidiaries of its controlling
+shareholders was a party. None of the Directors or
+Supervisors of the Bank have entered into any service
+contract with the Bank, which is not determinable by the
+Bank within one year without payment of compensation
+(other than statutory compensation).
+Management Contracts During the reporting
+period, the Bank did not enter into or have any contract
+regarding the management and administration of the
+whole or any important business.
+Equity-linked Agreement The Bank had no
+equity-linked agreements required to be disclosed by the
+Hong Kong Listing Rules.
+Report of the Board of Directors
+130 Annual Report 2023
+As at the latest practicable date before the disclosure date
+of the results, the Bank has maintained the minimum
+public float of 23.45%, based on the publicly available
+information and to the best knowledge of the Board of
+Directors of the Bank.
+Particulars on the share capital of the Bank for the year
+ended 31 December 2023 are set out in "Note 38. to the
+Consolidated Financial Statements: Share Capital".
+131
+Report of the Board of Directors
+upon approval of the Shareholders' General Meeting.
+The Bank will use its own assets to compensate each
+Director, Supervisor and Senior Management member for
+any liability arising during their performance period to the
+maximum extent permitted by laws and administrative
+regulations or within the scope not prohibited by laws and
+administrative regulations, unless the Directors, Supervisors
+and Senior Management members are otherwise proved
+to have failed to act honestly or in good faith during their
+duty performance. During the reporting period, the Bank
+purchased liability insurance for Directors, Supervisors and
+Senior Management members.
+Relations among Directors, Supervisors
+and Senior Management Directors,
+Supervisors and Senior Management members of the Bank
+are not related to one another with respect to finance,
+business, family, or other material relationships which are
+required to be disclosed.
+133
+Annual Report 2023
+Risk supervision. The Board of Supervisors supervised
+the soundness and effectiveness of the risk management
+system. It paid close attention to a wide array of areas
+such as the risk control mechanism, risk management
+strategies, risk appetite and its transmission mechanism,
+The Board of Supervisors
+risks.
+functioning as the key role in serving the real economy and
+the ballast stone role in maintaining financial stability, the
+Board of Supervisors made coordinated efforts to advance
+various aspects of work such as maintaining stable growth,
+adjusting structure, fostering new drivers, preventing risks
+and breaking new ground, implemented major strategic
+decisions of the state and strategies of the Bank, promoted
+operational transition to attain high-quality development,
+and stepped up financial support in the fields of inclusive
+finance, green finance, sci-tech innovation, manufacturing
+sector, and rural revitalization, in a bid to prevent and
+defuse financial risks and regulate the operation of the
+corporate governance system. The Board of Supervisors
+made special evaluations on the implementation of the
+strategic assessment and information disclosure system,
+and effectively carried out the annual performance
+assessment. The Board of Supervisors conducted in-depth
+research on supporting the rural revitalization strategy
+and enhancing the competitiveness of outlets, and
+played an active role in promoting the implementation
+of the strategies, deepening the structural adjustment,
+and improving the management efficiency and value
+contribution of outlets.
+Financial supervision.
+regularly heard the reports on the operations of the Bank
+and the auditing results of financial reports, earnestly
+reviewed periodic reports, final accounts, and profit
+distribution plan. Meanwhile, it oversaw the work done
+by the external auditor, and assessed the performance
+of duties of the auditor annually. It supervised major
+financial decisions and their implementation, conducted
+spot checks on major financial approval and accounting
+matters, and strengthened the management of expected
+credit losses and the supervision of provisioning and
+retention. It strengthened the supervision over financial
+resource allocation and financial compliance management,
+focusing on performance assessment, formulation and
+implementation of expense allocation policies, and
+implementation of internal and external supervision and
+inspection opinions. The Board of Supervisors conducted
+in-depth special surveys on financial expense management
+and centralized procurement management, promoted the
+efficiency of financial resource allocation, and reinforced
+the prevention and control of centralized procurement
+Supervision on the performance of duties. The Board
+of Supervisors supervised the Board of Directors, Senior
+Management and their members on their compliance with
+the laws, regulations and the Articles of Association, on
+their implementation of decisions and plans made by the
+CPC Central Committee, on their attendance of meetings
+and expression of opinions, and on their execution of the
+resolutions reached at the Shareholders' General Meetings
+and the meetings of the Board of Directors. Focused on
+Performance of the Board of Supervisors. In 2023,
+the Board of Supervisors held nine meetings, reviewed 17
+proposals including proposals on the 2022 work report
+of the Board of Supervisors, assessment report on the
+duty performance, and report regarding the assessment
+opinions on development strategies, heard 34 reports
+on the topics including the operation, strategy planning
+and implementation, and risk management of the Bank,
+and reviewed 35 special reports including reports on the
+quarterly supervision, special surveys conducted by the
+Board of Supervisors, and implementation of supervisory
+recommendations by the Board of Supervisors. The
+members of the Board of Supervisors diligently and
+faithfully fulfilled their duties, issued opinions in an
+objective and fair manner, and appropriately exercised
+voting rights. They attended two Shareholders' General
+Meetings, and attended nine meetings of the Board of
+Directors and 28 meetings of special committees as non-
+voting attendees. They input adequate time and efforts
+in supervisory inspections and surveys. They sent 14
+supervisory proposal letters to relevant departments, giving
+full play to the role in supervising corporate governance.
+They attached great importance to theoretical learning
+and actively participated in training and seminars, with
+an aim to continuously build up their duty performance
+ability. External supervisors worked for more than 15
+working days in the Bank, complying with the relevant
+requirements.
+During the reporting period, the Board of Supervisors,
+pursuant to relevant laws and regulations, regulatory
+requirements and the Articles of Association, performed
+supervision duties earnestly. It carried out supervision of
+duty performance and due diligence, financial activities,
+risk management, internal control and compliance, etc. in
+a down-to-earth way. Focusing on institutional issues and
+major risks of the whole Bank, the Board of Supervisors
+I gave play to its supervisory role in corporate governance,
+and promoted the legal, compliant operation and
+development across the Bank.
+Work of the Board of Supervisors
+Report of the Board of Supervisors
+Annual Report 2023
+132
+Industrial and Commercial Bank of China Limited
+Board of Directors
+Independent Non-executive Directors: Mr. Yang Siu Shun,
+Mr. Shen Si, Mr. Fred Zuliu Hu, Mr. Norman Chan Tak Lam
+and Mr. Herbert Walter.
+As at the disclosure date of the results, the composition of
+the Board of Directors of the Bank is as follows:
+Executive Directors: Mr. Liao Lin and Mr. Wang Jingwu;
+Non-executive Directors: Mr. Lu Yongzhen, Mr. Feng
+Weidong, Ms. Cao Liqun, Ms. Chen Yifang and Mr. Dong
+Yang;
+Members of the Board of Directors
+enterprises, which consists of basic annual remuneration,
+performance-based remuneration and incentive income
+linked to term appraisal. The remuneration to other
+Senior Management members consists of basic annual
+remuneration and performance-based remuneration,
+and part of performance-based remuneration is paid in a
+deferred manner. The Bank has contributed to statutory
+retirement programs organized by Chinese governmental
+organizations at different levels for Directors, Supervisors
+and Senior Management members concurrently as the
+employees of the Bank. Upon obtaining all applicable
+approvals, the Bank will implement a long-term incentive
+program. As at 31 December 2023, the Bank had not
+granted any share appreciation rights to any Director,
+Supervisor, Senior Management member, or other core
+business personnel designated by the Board of Directors.
+Remuneration Policy for Directors,
+Supervisors and Senior Management The
+Bank has clearly documented the remuneration policy for
+Directors, Supervisors and Senior Management members,
+and has continuously improved its performance assessment
+system and incentive restriction mechanism. From the
+perspectives of creating economic benefit, serving the
+real economy and fulfilling social responsibilities, as
+well as preventing and controlling financial risks, the
+Bank adopted a system composed of the Bank's overall
+operation and management based indicators for the
+Management and duties allocation based indicators for
+individuals. The remuneration to the Chairman of the
+Board of Directors, the President and Senior Executive
+Vice Presidents has followed the State's policies relating
+to the remuneration reform on executives of central
+Share Capital and Public Float
+For future planning disclosed in the public disclosure
+documents such as previous offering prospectuses and
+fund raising prospectuses issued by the Bank which has
+continued during the reporting period, its implementation
+progress conformed to the planning as described after
+verification and analysis.
+All the funds raised from the Bank's fundraising
+activities were used for the purposes as disclosed in the
+prospectuses, namely, strengthening the capital base to
+support the ongoing business growth of the Bank.
+Use of Proceeds from Fundraising
+Activities
+Calculated by dividing cash dividends on ordinary shares (pre-tax) by net profit attributable to ordinary shareholders of the
+parent company for the period.
+2.933
+104,534
+30.9
+2021
+2022
+3.035
+108,169
+31.3
+109,203
+31.3
+2023
+3.064
+Note: (1)
+Cash dividends (pre-tax, in RMB millions)
+Percentage of cash dividends (1) (%)
+Dividend per ten shares (pre-tax, in RMB yuan)
+Item
+For dividend-related tax and tax reduction, please refer to
+the announcements on dividend distribution of the Bank.
+Computershare Hong Kong Investor Services Limited
+that is located at Rooms 1712-1716, 17 Floor, Hopewell
+Center, 183 Queen's Road East, Wanchai, Hong Kong no
+later than 4:30 p.m. on 9 July 2024. Pursuant to relevant
+regulatory requirements and operational rules, dividends
+on A shares and H shares will be paid on 16 July 2024 and
+19 August 2024, respectively.
+shares for 2023, totaling about RMB109,203 million.
+The distribution plan will be submitted to the Annual
+General Meeting for the Year 2023 for approval. Once
+approved, the above-mentioned dividends will be paid
+to the holders of A shares and H shares whose names
+appeared on the share register of the Bank after the close
+of market on 15 July 2024. The Bank will suspend the
+registration procedures of H share ownership transfer on
+10 July 2024 (inclusive) through 15 July 2024 (inclusive).
+The holders of H shares of the Bank that desire to receive
+the proposed cash dividends but have not registered the
+ownership transfer documents are requested to hand over
+their ownership transfer documents together with the
+relevant share certificates to the Bank's H share registrar
+The Board of Directors of the Bank proposed distributing
+cash dividends for ordinary shares of RMB3.064 (pre-
+tax) for each ten shares of 356,406,257,089 ordinary
+As approved at the Annual General Meeting for the Year
+2022 held on 29 June 2023, the Bank has distributed cash
+dividends of about RMB108,169 million, or RMB3.035 per
+ten shares (pre-tax) for the period from 1 January 2022
+to 31 December 2022 to the ordinary shareholders whose
+names appeared on the share register after the close of
+market on 14 July 2023.
+The profit and financial status of the Bank during the
+reporting period are presented in the Auditor's Report and
+Financial Statements of this annual report.
+Profits and Dividends Distribution
+Principal Business The principal business of
+the Bank and its subsidiaries is the provision of banking
+and related financial services. Please refer to the section
+headed "Discussion and Analysis" for the business review
+of the Bank.
+Report of the Board of Directors
+For details on the distribution of dividends on preference
+shares, please refer to the section headed "Details of
+Changes in Share Capital and Shareholding of Substantial
+Shareholders Preference Shares".
+Report of the Board of Supervisors
+Formulation and Implementation of Cash
+Dividend Policy
+the long-term interest of the Bank, the overall interests of
+all shareholders and the sustainable development of the
+Bank. It emphasizes the priority to adopt cash dividend
+as the profit distribution method and provides that the
+Bank's adjustment to the profit distribution policy shall be
+discussed by the Board of Directors as a special proposal
+and the grounds for adjustment shall be substantiated and
+proved in detail and presented in a written substantiating
+report for Independent Non-executive Directors to issue
+their opinions, and then the report will be submitted
+to the Shareholders' General Meeting for approval as a
+special resolution.
+interest income and other operating income from top five
+customers of the Bank did not exceed 30% of the interest
+income and other operating income of the Bank for the
+year.
+aggregate
+Major Customers In 2023, the
+Pre-emptive Rights The Articles of Association of
+the Bank does not have any mandatory provision regarding
+pre-emptive rights. Pursuant to the Articles of Association,
+the Bank may increase its registered capital after obtaining
+approval of the Shareholders' General Meeting and of
+relevant authorities, by issuing shares through public or
+non-public offering, issuing bonus shares to the existing
+shareholders, converting capital reserve to share capital
+or using other methods as allowed by applicable laws
+and administrative regulations or approved by relevant
+authorities.
+Shares During the reporting period, neither the Bank
+nor any of its subsidiaries purchased, sold or redeemed any
+listed shares of the Bank.
+Purchase, Sale and Redemption of
+Subsidiaries Particulars of the Bank's major
+subsidiaries as at 31 December 2023 are set out in the
+sections headed "Discussion and Analysis Business
+Overview" and "Note 25. to the Consolidated Financial
+Statements: Investments in Subsidiaries" in this annual
+report.
+period, please refer to the section headed "Details of
+Changes in Share Capital and Shareholding of Substantial
+Shareholders Details of Securities Issuance and Listing"
+for information on the debentures issued by the Bank.
+reporting
+the
+Debentures Issued During
+Donations During the reporting period, the Group
+made external donations of RMB135.35 million equivalent.
+Financial Summary The summary of results,
+assets and liabilities for the five years ended 31 December
+2023 is set out in the section headed "Financial
+Highlights" of this annual report.
+Reserves Details
+distributable reserves of the Bank as at 31 December 2023
+are set out in "Note 40. to the Consolidated Financial
+Statements: Reserves" of this annual report.
+of the
+Distributable
+The formulation and implementation of the Bank's cash
+dividend policy accords with the provisions stipulated in
+the Articles of Association and the requirements provided
+in the resolutions of the Shareholders' General Meeting,
+the dividend distribution standards and proportion are
+clear and explicit, and the decision-making procedure
+and mechanism are complete. Moreover, Independent
+Non-executive Directors had issued their opinions for it.
+Minority shareholders can fully express their opinions and
+appeals, to completely safeguard their legitimate rights.
+Report of the Board of Directors
+Annual Report 2023 129
+The Articles of Association of the Bank explicitly stipulates
+that the Bank's profit distribution policy shall maintain
+its continuity and stability and meanwhile have regard to
+risk
+In 2023, the Bank carried out standardized management
+of the Group's related party (connected) transactions
+in strict accordance with the regulations of NFRA and
+CSRC as well as listing rules in Shanghai and Hong Kong,
+and had no related party (connected) transaction to be
+submitted to the Board of Directors or the Shareholders'
+General Meeting for review. All related party (connected)
+transactions occurred complied with the disclosure
+exemptions under the Listing Rules of the Shanghai Stock
+Exchange and the Hong Kong Listing Rules. The disclosure
+exemptions abided by the provisions of SSE for disclosure
+of related party transactions as well as the provisions
+of SEHK for reporting and announcement of connected
+transactions.
+Independent Opinions of the Board of
+Supervisors on Relevant Issues
+The Bank expanded the influence of its green finance. It
+continued to build the green finance brand "ICBC Green
+Bank+", advocated the "harmony, integration and amity"
+concept, and provided professional, comprehensive, and
+perspective financial support for green development. ICBC
+got actively involved in global exchanges and cooperation.
+It participated in side events of the United Nations
+Biodiversity Conference, the United Nations Climate
+Change Conference, etc., to share ICBC's solutions and
+make its voice heard. The Bank took advantage of the
+Belt and Road Inter-bank Regular Cooperation Mechanism
+(BRBR) to promote the international cooperation in the Belt
+and Road green and sustainable finance, and released the
+Belt and Road Green Finance (Investment) Index.
+Green Operation
+By using the independently developed statistical system
+for carbon footprint management data, the Bank collected
+historical emission data, conducted data attribution
+analysis, continuously carried out research on carbon peak
+and carbon neutrality in its own operation, and analyzed
+its potential for energy conservation and carbon reduction,
+offering data support for the low-carbon operation for the
+next step. Third-party professional companies were hired
+to verify the collected data through on-site inventory,
+document review and other methods, thus laying a solid
+foundation for carrying out the carbon peak and carbon
+neutrality-related work continuously.
+Committed to "promoting green development, advocating
+green and low carbon, and building a green bank", the
+Bank actively advanced green office. During the reporting
+period, by holding paperless meetings, it saved nearly 6
+million sheets of paper.
+Consolidating and Building on
+Achievements in Poverty Alleviation and
+Services for Rural Revitalization
+The Bank implemented the strategic arrangements for
+building up China's strength in agriculture at a faster
+pace, focused on "addressing the country's needs, giving
+full play to finance, and tapping into strengths of ICBC",
+continued to improve the rural financial service system,
+carried out the Urban-Rural Collaborative Development
+Strategy in depth, continuously consolidated the
+"1+6" basic framework of financial services for rural
+revitalization', and continued to carry out the themed
+1
+activity called "Year for In-Depth Improvement of Financial
+Services for Rural Revitalization". As a result, financial
+supply for "agriculture, rural areas and farmers" was
+increased greatly, with the range covered by services
+expanding and the quality and efficiency of services
+improving continuously. The positive development
+momentum of financial services for rural revitalization was
+continuously cemented.
+The Bank increased the supply of credit in support of
+rural revitalization. Committed to "securing bottom
+lines, bolstering vitalization, and reinforcing support", it
+kept increasing credit support for a wide range of areas
+such as food security, consolidation of achievements in
+poverty alleviation, rural industry, rural construction, rural
+governance, and rise of farmers' income, formulated and
+implemented on a pilot basis the investment and financing
+policy for high-standard cropland, and devised a program
+of exclusive services for modern protected agriculture,
+continuously improving the financial supply in key areas of
+rural revitalization. As at the end of 2023, the balance of
+agriculture-related loans of the Bank exceeded RMB4.24
+trillion, representing an increase of more than RMB960.0
+billion from the beginning of the year.
+Environmental and Social Responsibilities
+The Bank continuously shifted the focus of services
+downwards. It rolled out "Planting e Loan", a digital
+inclusive credit loan product focused on planting scenarios,
+and launched "Grain Planting Loan" for grain and oil
+producers to meet the capital needs arising from the
+planting and production processes. The Bank enriched
+financial services for new citizens by providing farmers,
+new citizens, and other groups with accessible, convenient
+and safe financial services. Besides, it developed a rural
+financial service delivery system integrated both online and
+offline, constructed inclusive financial service stations in
+rural areas, introduced the "Xingnongtong" APP of ICBC,
+and launched the "Going into the Countryside" campaign
+to provide financial services there.
+The basic framework of service, with the Urban-Rural Collaborative Development Strategy as the center and the six basic systems for
+rural financial services as the pillars, including organization management, fundamental systems, rural service delivery, entire product
+system, categorized execution, and unified service brands.
+Annual Report 2023
+137
+Environmental and Social Responsibilities
+others to increase income. Such featured service modes as
+"Bank-Guarantee Express" and "Bank-Insurance Express"
+were extensively promoted to provide "point-to-point"
+financial services for new agricultural business entities such
+as family farms and farmers' cooperatives. Meanwhile,
+the Bank facilitated intelligent rural governance relying
+on the "Digital Villages" comprehensive service platform,
+which covered all provinces nationwide and reached
+informatization cooperations with 1,244 agricultural and
+rural departments at the district and county level or above.
+The construction of the "ICBC Prosperous Agriculture"
+digital and intelligent service platform was promoted
+continuously to explore the application scenarios and
+value of new technologies such as big data, artificial
+intelligence, blockchain, and satellite-based remote sensing
+in the agricultural sector. Moreover, FinTech was used to
+optimize and innovate financial services for "agriculture,
+rural areas and farmers".
+New progress was made in the field of targeted assistance.
+Focusing on "addressing local needs, giving full play
+to finance and tapping into ICBC strengths", the Bank
+increased the supply of financial services, innovated
+in financial assistance measures, selected the best and
+allocated more assistance forces, and solidly promoted the
+high-quality completion of annual assistance tasks. The
+characteristic industries of Nanjiang gazelle, Tongjiang
+white fungus, Wanyuan black chicken and Jinyang green
+zanthoxylum maintained healthy development, and the
+key assisted enterprises achieved annual sales growth.
+The Bank carried out brand assistance projects such as
+"Candlelight Program" for the 21st consecutive year and
+"Sailing Project" for the 20th year, and commended and
+trained 400 excellent rural teachers in the four counties
+and cities throughout the year. The Bank provided
+financial support to more than 1,800 students with living
+difficulties; and steadily promoted the "ICBC Agricultural
+Talent Training Program", covering more than 127
+thousand grassroots talents in the four counties and
+cities. The Bank increased the investment in assistance,
+and supported the four counties and cities to continue
+to implement assistance projects in weak areas such as
+education, medical care and bottom-line support, to firmly
+hold the bottom line of no large-scale relapse into poverty.
+In 2023, the Bank won a host of awards in the field of
+rural revitalization, including the "Top 10 Cases in Financial
+Support for Key Counties Designated to Receive Assistance
+for Rural Revitalization" from China Banking and Insurance
+News, the "Outstanding Cases in Financial Innovation for
+Rural Revitalization" from JRJ.com, the "Case of Inclusive
+Finance for Rural Revitalization" from China Banking
+Association, and the "Excellent Practice Cases of Financial
+Services for Rural Revitalization" from China Urban-Rural
+Financial News.
+Consumer Protection
+Guided by the philosophy of "finance for the people" and
+closely combined with the diversified needs of consumers
+for financial services under the new circumstances, the
+Bank was committed to incorporating the concept of
+financial consumer protection into the whole process
+of products and services to put consumer protection
+management on a solid footing and boost the customer
+complaints governance capabilities. The Board of Directors,
+the Board of Supervisors, and the Senior Management of
+the Bank worked harder to coordinate, guide, and oversee
+the consumer protection work, with consumer protection
+better embedded in corporate governance and operation
+and management strategies. The Consumer Protection
+Committee functioned as a deliberative and coordinating
+mechanism to actively perform the consumer protection
+duties of the Bank in terms of researching, planning,
+coordination, etc., ensuring the effective implementation
+of consumer protection management objectives and
+requirements. The committee further strengthened the
+"firewall" of policy, proactively aligned itself with the
+latest regulatory requirements, and improved a series of
+systems for consumer protection management, consumer
+protection review, financial education and literacy, etc.,
+to refine the work requirements and strengthen the
+unified management of the Group in keeping with the
+times. To better play its role in appraisal and supervision,
+the committee optimized the appraisal indicators for
+consumer protection, increased the weight of appraisal,
+and oversaw and provided guidance for the Bank in
+performing efficient and in-depth consumer protection. It
+made concrete efforts to prevent risks in a more forward-
+looking manner, intensified consumer protection reviews
+on products in key segments such as personal banking,
+stepped up efforts to implement basic projects such as
+the competitiveness enhancement of outlets and the
+development of mobile banking APPS and the consumer
+protection under innovative businesses including inclusive
+finance and pension services, and made sure that
+consumer protection requirements could be fully met in
+terms of product design, policies and agreements, system
+development, marketing and publicity, etc. The committee
+established the new product (business) access control and
+post-evaluation mechanism for consumer protection, and
+embedded consumer protection requirements in the entire
+process (product design, product approval and launch,
+change and exit, etc.), so as to better safeguard the rights
+and interests of consumers. To actively get consumer
+protection thoroughly integrated with brand building
+projects and key initiatives such as rural revitalization,
+services for new citizens, and construction of an age-
+friendly society, the committee introduced a number of
+pro-people policies targeted at customers in rural areas
+and new citizens, diversified and optimized elderly-oriented
+Annual Report 2023
+management policies and procedures, capital
+management, consolidated management mechanism,
+group-wide implementation of the Five-pronged Risk
+Management Approach, measures to improve the four-
+pronged risk management approach to people, money,
+defense line and bottom line, and risk management
+requirements for "active prevention, smart control and
+comprehensive management". It regularly monitored the
+compliance of major risk indicators, and paid attention
+to and analyzed changes in regulatory policies and their
+impact on business operations of the Bank, in an effort
+to optimize or upgrade the enterprise risk management
+system. The Board of Supervisors conducted an in-depth
+survey on the risk management of local government debt
+financing and the competitiveness of sub-branches in
+counties. Particular attention was paid to exposing the
+holistic, systematic, rooted, and trend-revealing risks and
+hazards, as well as preventing and defusing material risks.
+Supervision on internal control. The Board of
+Supervisors supervised the improvement of the internal
+control system made by the Board of Directors and
+Senior Management, and performed duties in relation
+to internal control and compliance management. It paid
+close attention to a wide array of areas such as the
+construction of compliance culture across the Group, the
+adequacy and effectiveness of the internal control system,
+the soundness of policies and systems, the operation
+of the internal control mechanism, the operation of
+the supervisory inspection system, and the empowering
+role of smart internal control. The Board of Supervisors
+reviewed the annual internal control assessment report of
+the Group, focused on regulatory concerns, development
+strategies, bank-wide central work and employee behavior
+management, and strengthened guidance on internal
+audit and internal control and compliance. It advanced
+the supervision on the internal control compliance
+management in major areas and for key institutions, and
+conducted in-depth special surveys on the internal control
+and compliance management, inclusive finance business
+development and internal control management of key
+institutions, to enhance the Group's internal control and
+compliance management capacity.
+The Bank unveiled innovative services with ICBC's
+characteristics. It released the "Agricultural Matchmaking"
+Top 10 Model Cases in cooperation with the Ministry of
+Agriculture and Rural Affairs of China, and carried out a
+wide range of matchmaking activities to strongly support
+the integrated development of the agricultural industry.
+The "Agricultural Matchmaking • Rural Industry Leader"
+training program and new farmer
+"Partner
+program
+Bellwether Plan" were carried out to help cultivate
+entrepreneurial villagers in the new era who would lead
+136 Annual Report 2023
+138
+The Bank accelerated the innovation of green finance
+products and services. Utilizing a variety of means such as
+credit, bonds, equity, leasing, and funds, it continued to
+enrich its green finance "toolbox" and built a diversified
+green finance service system. The Bank issued its first
+global multi-currency carbon-neutral overseas green bond
+and the first carbon-neutral green finance bond among
+domestic commercial banks. The Bank issued overseas
+green bonds of USD4.23 billion and domestic green
+bonds of RMB60.0 billion in 2023. In addition, it launched
+innovative ESG-themed financial products and issued a
+number of green funds invested in the fields of ecological
+protection, ESG, carbon neutrality, etc. While continuously
+expanding a comprehensive package of green finance
+services, the Bank rolled out personal carbon accounts
+in mobile banking, which supported the redemption of
+green reward points to encourage green consumption.
+It took the lead in the industry in creating the service
+modes based on OFD cloud receipts and cloud statements,
+helping corporate customers reduce carbon emissions
+through financial digitalization.
+Articles of Association. Members of the Board of Directors
+and the Senior Management diligently and faithfully
+performed their duties, and the Board of Supervisors did
+not find any violation of laws and regulations, or any
+circumstance that contravened the interests of the Bank in
+their performance of duties during the reporting period.
+Preparation of Annual Report Preparation and
+review procedures of the Bank's Annual Report were in
+compliance with laws, regulations and regulatory rules.
+Contents of this report reflected the actual conditions of
+the Bank truly, accurately and completely.
+Compliant Operation During the reporting period, the
+Board of Directors and the Senior Management of the
+Bank continued to operate in compliance with applicable
+laws and regulations, and the decision-making procedures
+complied with applicable laws and regulations and the
+Use of Proceeds from Fundraising Activities During
+the reporting period, the use of proceeds from the Bank's
+fundraising activities was consistent with the purpose
+stated in the prospectuses.
+Purchase and Sale of Assets During the reporting
+period, the Board of Supervisors did not find any insider
+trading or any circumstance that contravened the
+shareholders' interests or caused the loss of the Bank's
+assets in the process of the Bank's purchase or sale of
+assets.
+Related Party Transactions During the reporting
+period, the related party transactions of the Bank were
+conducted on normal commercial terms. The Board of
+Supervisors did not find any circumstance that infringed
+upon the interests of the Bank. The approval, voting,
+disclosure and implementation of related party transactions
+complied with applicable laws and regulations and the
+Articles of Association of the Bank.
+Implementation of Resolutions Passed at the
+Shareholders' General Meeting During the reporting
+period, the Board of Supervisors had no objection to the
+reports or proposals presented by the Board of Directors to
+the Shareholders' General Meetings for consideration. The
+Board of Directors earnestly implemented the resolutions
+approved at the Shareholders' General Meetings.
+Review of the Internal Control Assessment
+Report The Board of Supervisors reviewed the 2023
+Internal Control Assessment Report of the Bank and had
+no objection to the report.
+The Bank improved environmental, social and governance
+risk control. The Bank strengthened the classification
+management for
+green investment and financing
+business, and actively prompted bond, leasing, and non-
+standard wealth management businesses to implement
+the green classification management. To exercise ESG risk
+control in a more systematic way, the Bank applied big
+data technology to the full credit process for automatic
+identification and intelligent control of risks, and supported
+the real-time collection of corporate ESG information in
+the process and the automatic risk alerts in the system.
+It promoted prospective study and risk management of
+biodiversity finance, innovatively implemented the risk
+control map system of ecological red lines, added the
+decision-making function of ecological red lines on the
+site selection of loan projects and gradually incorporated
+it into the whole-process management of credit business.
+The project results were published during the Second G20
+Sustainable Finance Working Group meeting, providing an
+innovative solution to the worldwide common problem of
+biodiversity risk management which financial institutions
+face. With climate risk incorporated into its enterprise
+risk management system, the Bank further improved
+climate risk identification and assessment approaches,
+upgraded localized calibration techniques for Network of
+Central Banks and Supervisors for Greening the Financial
+System (NGFS) stress scenarios, completed annual stress
+testing for climate risk, promoted the inclusion of climate
+factors into the management application of internal
+rating, continuously updated climate risk database, and
+strengthened climate risk management training within the
+Group during the reporting period.
+Save as disclosed above, the Board of Supervisors had no
+objection to any other matters during the reporting period.
+134
+Annual Report 2023
+Environmental and Social Responsibilities
+Implementation of Information Disclosure
+Rules During the reporting period, the Bank performed
+its duty of information disclosure in compliance with the
+regulatory requirements, implemented the information
+disclosure management rules in earnest, and disclosed
+information in a timely and fair manner. Information
+disclosed was authentic, accurate and complete.
+The Board of Directors of the Bank actively performed its
+role in strategic decision-making and supervision, made
+continuous efforts to deepen ESG governance and refined
+the ESG governance framework. The Strategy Committee
+established under the Board of Directors was responsible
+for reviewing the annual social responsibility report and
+proposing suggestions to the Board of Directors. The
+Corporate Social Responsibility and Consumer Protection
+Committee under the Board of Directors was responsible
+for studying and deliberating the Bank's performance of
+social responsibility in environmental, social, governance,
+rural revitalization services and corporate culture,
+the Bank's strategies, policies and goals in consumer
+protection; strategies in green finance, development plans
+on inclusive finance business, basic management systems,
+annual operation plans for inclusive finance business,
+and measures of assessment and evaluation, and putting
+forward suggestions to the Board of Directors. The Board
+of Directors attached great importance to and continued
+to deepen the Bank's ESG governance. It actively promoted
+the Bank to improve its ESG governance framework and
+relevant governance systems and mechanisms by reviewing
+proposals, listening to reports, holding seminars and
+conducting surveys, and promoted the Bank to integrate
+environmental, social and governance requirements into its
+operation and development.
+ESG Governance Framework
+Environmental and Social Responsibilities
+135
+Annual Report 2023
+The Bank continuously promoted the green and low-
+carbon transition of investment and financing structure.
+In terms of policy systems, centering around key areas
+of green development, the Bank, through medium and
+long-term investment and financing planning, adjusted
+its investment and financing layout with foresight.
+In investment and financing policies, it stressed the
+"green" orientation. In terms of industries, it positioned
+green industries like clean energy, clean production
+and energy conservation and environmental protection
+as key industries to extend support to, and developed
+differentiated policies. In terms of customers, it embedded
+enterprises' technology, environmental protection, energy
+consumption and other indicators into the selection
+criteria of key industry customers and projects. In terms
+of supporting mechanism, the Bank focused on key areas
+of green industries and increased weighted support in
+economic capital occupancy, authorization, pricing, scale,
+evaluation, etc. By the end of 2023, the Bank's balance of
+green loans (by the statistical standard of the NFRA) was
+nearly RMB5.4 trillion, representing an increase of nearly
+RMB1.4 trillion from the beginning of the year.
+Green Finance
+The domestic institutions at all levels implemented the ESG
+and sustainable development concepts in their operation
+and management activities in accordance with laws,
+regulations and regulatory requirements, and the overseas
+institutions implemented them in accordance with local
+standards and regulatory requirements.
+ESG and sustainable finance strategies and objectives,
+coordinating and promoting ESG and sustainable finance-
+related work of all business lines of all ICBC institutions,
+and guiding the development, operation and management
+of ESG and sustainable finance across the Bank.
+The Senior Management of the Bank was responsible for
+ESG management. The Senior Management set up the
+ESG and Sustainable Finance Committee and made it a
+supportive decision-making body to support the Senior
+Management to coordinate, lead and advance the green
+finance and ESG work. The ESG and Sustainable Finance
+Committee was responsible for implementing the Group's
+In 2023, the Bank persistently developed green finance
+from a strategic height and constructed a green finance
+system in a profound way. Under the coordinated
+leadership of the Board of Directors, the Senior
+Management, and the Green Finance Committee, the Bank
+systematically built a green finance development model
+with ICBC's characteristics from a number of dimensions
+such as governance structure, policy systems, product
+innovation, risk management, its own performance, brand
+promotion, international cooperation, and prospective
+study. Its all-around efforts to develop green finance met
+scheduled milestones. The Bank won a string of awards
+and honors, including the "Green and Sustainable Bank
+of the Year in China" by The Asian Banker, the "Best
+Green Finance Service Bank of the Year" by the Financial
+News (China), the "Top 1 Bank in China's New Finance
+Competitiveness List (Green Finance)" by Southern Weekly,
+and the "Green Finance Service Provider of the Year 2023"
+by China Times. In 2023, ICBC saw its MSCI ESG rating
+upgraded to AA, becoming the first listed bank in China to
+reach such rating.
+As at 31 December 2023, the Group's loans and
+advances to customers measured at amortised cost was
+RMB24,841,245 million, and the related impairment
+allowance was RMB756,001 million.
+The management exercised significant judgements and
+estimation in its assessment of allowance for impairment
+losses on loans and advances to customers measured at
+amortised cost. They include the determination of staging
+of loans and advances to customers including determining
+whether the credit risk has increased significantly
+and credit impairment events have occurred; the
+determination of key parameters used in the ECL model
+including probability of default (PD), loss given default
+(LGD), exposure at default (EAD), discount rate, and
+forward-looking information for stage 1 and 2 corporate
+loans and advances, discounted bills and all personal loans
+and advances; the determination of key parameters used
+in discounted cash flow assessment in respect of stage 3
+corporate loans and advances including recoverable cash
+flows and discount rates.
+How our audit addressed the key audit matter
+Our audit procedures in respect of allowance for
+impairment losses on loans and advances to customers
+measured at amortised cost included the following:
+(1)
+Design and operating effectiveness of key internal
+controls
+understood, assessed and tested the design
+and operating effectiveness of key internal
+controls relating to approval, recording,
+monitoring and regular evaluation of internal
+credit risk ratings which are relevant inputs to
+the ECL model;
+understood, assessed and tested the design
+and operating effectiveness of key internal
+controls of the ECL model, including the
+selection, approval, and application of ECL
+model methodology, optimization of ECL
+model, underlying parameters updating and
+periodic validation, input of underlying data
+and parameters, and loan staging based on
+quality of loans and advances to customers,
+cash flow projection used in the discounted
+cash flow method, and the review and
+approval of forward-looking information;
+understood, assessed and tested the
+information technology system and design and
+operating effectiveness of the related controls,
+including general information technology
+controls, data transmission between systems,
+mapping of parameters of the ECL model, and
+system calculation of loss allowance.
+Annual Report 2023
+verified, on a sample basis, the accuracy of
+ECL model data input such as loan agreement
+amount, due date, interest rate, guarantee
+method;
+Independent Auditor's Report
+Key audit matters (continued)
+Key audit matter
+How our audit addressed the key audit matter
+Allowance for impairment losses on loans and advances
+to customers measured at amortised cost (continued)
+Due to the significance of allowance for impairment (2)
+losses on loans and advances to customers measured
+at amortised cost and the significant judgements and
+estimation exercised by management in estimating ECL,
+we identified this as a key audit matter.
+Refer to Note 4 (10), Note 5, Note 14, Note 23, and Note
+50(a) to the consolidated financial statements for relevant
+disclosures.
+ECL model
+assessed the reliability and appropriateness
+of the ECL model and the reasonableness of
+key parameters used in the model, including:
+PD, LGD, EAD, discount rate, forward-looking
+information, and evaluated the rationality of
+the key management judgements on those key
+parameters;
+assessed the internal credit risk rating
+benchmark used in the ECL model by reviewing
+its periodic validation and monitoring report to
+evaluate the reasonableness of the validation
+approach, completeness of the validation
+scope and accuracy of the validation, and
+selected samples to verify the accuracy of
+internal rating calculation;
+assessed the reasonableness of the selection of
+economic indicators, the weighting of multiple
+macro-economic scenarios, and other inputs
+and assumptions used by management in the
+forward-looking adjustments; assessed the
+reasonableness of forecasted macro-economic
+and industry indicators by comparing to
+available third party information, and reviewed
+the sensitivity analysis of economic indicators;
+verified, on a sample basis, the calculation of
+ECL model, and tested whether the model
+reasonably reflected management's modelling
+methodology;
+147
+The Group uses the expected credit loss ("ECL") model
+to calculate the loss allowance for loans and advances to
+customers measured at amortised cost in accordance with
+IFRS 9.
+We have audited the consolidated financial statements of Industrial and Commercial Bank of China Limited (the "Bank")
+and its subsidiaries (collectively referred to as the "Group") set out on pages 155 to 283, which comprise the consolidated
+statement of financial position as at 31 December 2023, the consolidated statement of profit or loss, the consolidated
+statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the
+consolidated statement of cash flows for the year then ended, and a summary of material accounting policy information
+and other explanatory information.
+Key audit matter
+211
+performed back-testing, and verified the results
+of the model using actual observable data, and
+evaluated whether there was any indication of
+management bias.
+26.
+Investments in Associates and
+Joint Ventures
+213
+Annual Report 2023
+145
+Independent Auditor's Report
+Deloitte.
+Allowance for impairment losses on loans and advances
+to customers measured at amortised cost
+德勤
+Opinion
+In our opinion, the consolidated financial statements give a true and fair view of the financial position of the Group as at
+31 December 2023, and of its consolidated financial performance and its consolidated cash flows for the year then ended
+in accordance with International Financial Reporting Standards ("IFRSS") issued by the International Accounting Standards
+Board ("IASB") and have been properly prepared in compliance with the disclosure requirements of the Hong Kong
+Companies Ordinance.
+Basis for opinion
+We conducted our audit in accordance with International Standards on Auditing ("ISAS"). Our responsibilities under those
+standards are further described in the Auditor's responsibilities for the audit of the consolidated financial statements section
+of our report. We are independent of the Group in accordance with the Code of Ethics for Professional Accountants issued
+by International Ethics Standards Board for Accountants ("the Code"), and we have fulfilled our other ethical responsibilities
+in accordance with the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to
+provide a basis for our opinion.
+Key audit matters
+Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
+consolidated financial statements of the current period. These matters were addressed in the context of our audit of the
+consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
+opinion on these matters.
+146
+Annual Report 2023
+Independent Auditor's Report
+Key audit matters (continued)
+To the Shareholders of Industrial and Commercial Bank of China Limited
+(Incorporated in the People's Republic of China with limited liability)
+148
+2.
+Repurchase Agreements
+Application of New and
+37.
+Other Liabilities
+225
+Amendments to IFRSS
+164
+38.
+Share Capital
+227
+4.
+3.
+Summary of Material Accounting
+Other Equity Instruments
+227
+Policy Information
+167
+40.
+Reserves
+232
+5.
+Significant Accounting Judgements and
+Investments in Subsidiaries
+39.
+Annual Report 2023
+163
+222
+6.
+234
+Cash and Cash Equivalents
+42.
+188
+Estimates
+233
+Other Comprehensive Income
+221
+34.
+Basis of Preparation
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+221
+35.
+Due to Customers
+222
+1.
+41.
+Corporate Information
+163
+36.
+Debt Securities Issued
+Certificates of Deposit
+25.
+ICBC-AXA
+Financial Investments
+238
+11.
+Operating Expenses
+191
+48.
+Related Party Disclosures
+240
+12.
+Directors' and Supervisors' Remuneration
+192
+Commitments and Contingent Liabilities
+49.
+246
+13.
+161
+Five Highest Paid Individuals
+196
+50.
+Financial Risk Management
+251
+14.
+Impairment Losses on Assets
+Segment Information
+196
+47.
+Other Operating (Expense)/Income, Net
+43.
+Interests in Structured Entities
+235
+7.
+Net Fee and Commission Income
+190
+44.
+Transferred Financial Assets
+236
+8.
+191
+Net Trading Income
+45.
+Assets Pledged as Security
+237
+9.
+Net Gains on Financial Investments
+190
+46.
+Share Appreciation Rights Plan
+237
+10.
+190
+206
+51.
+275
+199
+55.
+Approval of the Consolidated Financial
+20.
+Due From Banks and Other
+Statements
+283
+Financial Institutions
+199
+UNAUDITED SUPPLEMENTARY INFORMATION
+Cash and Balances with Central Banks
+21.
+200
+TO THE CONSOLIDATED FINANCIAL STATEMENTS
+284
+22.
+Reverse Repurchase Agreements
+203
+23.
+Loans and Advances to Customers
+204
+24.
+Derivative Financial Instruments
+Fair Value of Financial Instruments
+19.
+Comparative Figures
+15.
+Income Tax Expense
+197
+52.
+Statement of Financial Position and
+16.
+Profit Attributable to Equity Holders
+Statement of Changes in Equity
+of the Parent Company
+197
+283
+of the Bank
+17.
+Dividends
+198
+53.
+Events after the Reporting Period
+283
+18.
+Earnings Per Share
+198
+54.
+282
+Statement of Cash Flows
+Inclusive Finance
+Department (Rural
+Revitalization Office)
+Settlement & Cash
+Management
+Department
+221
+Board of
+Directors
+Strategy
+Committee
+Board of Directors"
+Office
+143
+Annual Report 2023
+Annual Report 2023
+142
+Disciplinary Actions During the reporting period, the Bank was not subject to any case filing investigation for
+suspected crime, nor was any of its controlling shareholders, Directors, Supervisors and Senior Management members
+subject to coercive measures for suspected crime; neither the Bank nor its controlling shareholders, Directors, Supervisors
+and Senior Management members were subject to any criminal penalty or any case filing investigation by CSRC for
+suspected illegality or irregularity or administrative penalty by CSRC or material administrative penalty by other competent
+authority; none of its controlling shareholders, Directors, Supervisors and Senior Management members was held in
+retention by the disciplinary inspection and supervision organ because of suspected serious illegality or irregularity or
+work-related crime, which affected their duty performance; none of its Directors, Supervisors and Senior Management
+members was subject to coercive measures taken by other competent authority for suspected illegality or irregularity, which
+affected their duty performance; neither the Bank nor any of its controlling shareholders, Directors, Supervisors and Senior
+Management members was subject to any administrative or regulatory measures taken by CSRC or disciplinary sanction
+imposed by stock exchanges.
+As at 31 December
+2023, SSF strictly
+fulfilled the above
+commitment and
+did not do anything
+in violation of the
+commitment.
+in violation of the
+commitment.
+did not do anything
+As at 31 December
+2023, Huijin strictly
+fulfilled the above
+commitment and
+Fulfillment of
+commitment
+According to the Notice of the State Council on
+Issuing the Implementation Plan for Transferring Part
+of State-Owned Capital to Fortify Social Security
+Funds (Guo Fa [2017] No. 49), SSF shall perform the
+obligation of more than 3-year lock-up period as of
+the date of the receipt of transferred shares.
+Provided that Huijin continues to hold any share of
+the Bank or is deemed as the controlling shareholder
+of the Bank or the related party of the controlling
+shareholder of the Bank according to the laws or
+listing rules of China or the listing place of the
+Bank, Huijin will not engage in or participate in any
+competitive commercial banking business including
+but not limited to granting loans, attracting deposits
+and providing settlement, fund custody, bank card
+and money exchange services. However, Huijin
+I can engage in or participate in some competitive
+businesses by investing in other commercial banks. In
+this regard, Huijin has committed that it will: (1) fairly
+treat the investments in commercial banks and will
+not make any decision or judgment that will have
+adverse impact on the Bank or be beneficial to other
+commercial banks by taking advantage of the status
+of being a shareholder of the Bank or information
+obtained by taking advantage of the status of being
+a shareholder of the Bank; and (2) perform the
+shareholders' rights for the maximum interests of the
+Bank.
+Commitment
+Simplified Report of
+Changes in Equity of
+National Council for
+Social Security Fund
+is made
+Prospectus of Industrial
+and Commercial Bank of
+China Limited on Initial
+Public Offering (A Share)
+Prospectus on A Share
+Rights Issue of Industrial
+and Commercial Bank of
+China Limited
+the obligation
+of lock-up
+period for A
+shares
+Taking effect from
+December 2019/
+Above three years
+Commitment
+of performing
+Risk Management
+Committee
+Compensation
+Committee
+Audit Committee
+Corporate Social
+Senior Management
+Finance Committee)
+Finance Committee)
+Institutional Banking
+Committee (Pension
+Corporate Banking
+Personal Banking Committee (Technology
+Committee
+Supervisory Board
+Office
+Board of
+Supervisors
+Management Committee Risk Management
+("Five Priorities"
+Committee)
+SSF
+Committee
+institutions of the Head Office
+Internal departments and directly managed
+Shareholders'
+General Meeting
+Internal Audit Bureau
+Internal Audit
+Sub-bureau
+US Risk Committee
+Related Party
+Transactions Control
+Committee
+Committee
+Nomination
+Responsibility and Consumer
+Protection Committee
+Asset and Liability
+November 2010/
+No specific term
+October 2006/
+No specific term
+Commitment
+of non-
+competition
+140
+QR Code link of the 2023 Corporate Social Responsibility
+(ESG) Report of Industrial and Commercial Bank of China
+Limited
+For details of the Bank's fulfillment of social
+responsibilities, please refer to the 2023 Corporate Social
+Responsibility (ESG) Report of Industrial and Commercial
+Bank of China Limited published by the Bank on the
+website of SSE, the "HKEXnews" website of HKEX, and
+the website of the Bank.
+starting the volunteer service tour with a monthly letter
+from young volunteers of ICBC to accompany the growth
+of rural children. In the 6th China Youth Volunteer
+Service Public Entrepreneurship Competition (National
+Competition), the program won the national gold award.
+During the reporting period, the Bank relied on 15.5
+thousand "ICBC Sharing Stations" to expand the supply
+of convenience services in an orderly manner. The Bank
+carried out more than 95 thousand care-themed activities
+such as "Volunteer Spring, You and Me", "Trio of Summer
+Care" and "ICBC Sharing Station, Golden Autumn Care".
+It benefited more than 12.00 million people, including
+new citizens, outdoor workers, students taking the senior
+high school and college entrance examinations, and the
+elderly. Meanwhile, relying on the services of "ICBC
+Sharing Station", the Bank strengthened collaboration
+with volunteer service organizations to provide volunteer
+services, charity assistance and other public welfare services
+to the society, to build a "warm home" of volunteerism,
+care and aid.
+Volunteer activities. During the reporting period, 125
+thousand young volunteers of the Bank participated in
+volunteer activities, raised nearly RMB1.30 million and
+served more than 1,912 thousand people. In order to
+consolidate the achievements in poverty alleviation, the
+Bank, together with the Blue Letter Rural Child Care
+Center, launched the Blue Letter Companion Program,
+Public welfare brand building. In order to continuously
+deepen the long-term public welfare mechanism and
+polish the Group's public welfare brand, the Bank
+continued to carry out public welfare activities with clear
+themes and diversified forms under the leadership of
+"ICBC Sight Initiative". The Bank built a good situation
+of "sharing public welfare resources and jointly building
+public welfare projects", further demonstrating the
+responsibilities as a large state-owned bank. Through the
+"Lifeline Express" hospital project, the Bank donated a
+total of RMB33.40 million to carry out free eye surgery for
+nearly 14 thousand cataract patients to help them regain
+their sight. In cooperation with the Central Committee
+of the Communist Youth League and its affiliated
+foundations, the Bank supported the construction of the
+left-behind child care stations of the "Childlike Innocence
+Harbor" program in the four counties and cities, i.e.,
+Nanjiang, Tongjiang, Wanyuan and Jinyang in Sichuan. A
+total of 150 "Childlike Innocence Harbor" stations were
+built, and the investment exceeded RMB10 million. Relying
+on the "Childlike Innocence Harbor" program, the Bank
+continued to improve the resource sharing and project co-
+building mechanism, well conducted matching of public
+welfare projects, served more than 10,000 rural left-behind
+children, and carried out more than 1,000 activities.
+Public Welfare and Volunteer Activities
+and savings deposits. By region, the complaints were
+mainly distributed in Guangdong, Hubei, Jiangsu, Hebei,
+Sichuan, etc.
+Environmental and Social Responsibilities
+139
+Annual Report 2023
+Annual Report 2023
+1
+In 2023, the Bank received 204.9 thousand complaints
+from individual customers', averaging at 1,323 complaints
+from individual customers every 100 outlets and 2,758
+every 10 million individual customers. By type of business,
+the complaints were concentrated in credit cards, personal
+banking, etc. Specifically, the complaints in credit cards
+were mainly about automobile installments, repayment
+negotiations, interest and fee disputes, and bank card
+application & change, while those in personal banking
+were mainly about residential mortgages, account control,
+governance.
+The Bank continued to strengthen customer complaints
+management, efficiently resolved the pressing difficulties
+and problems that concerned customers, and made every
+effort to build a bank satisfactory to the people, recording
+a customer satisfaction rate of 90.81% in 2023. The
+"Year for Deepening Complaint Management in Personal
+Finance" campaign was carried out, focusing on the
+businesses prone to customer complaints such as early
+repayment of personal loans, repayment negotiations
+about credit card debt, and automobile installments.
+Targeted solutions were devised to address these problems
+from the source, comprehensively improving the level
+of customer service. Meanwhile, the Bank constantly
+built up its complaints handling capacity, enhanced the
+online processing capacity of its customer service hotline
+(95588), and made the best of diverse dispute settlement
+mechanisms such as third-party mediation to resolve
+customers complaints and disputes quickly, in an effort
+to resolve conflicts and disputes as early as possible. The
+Bank quickened the transformation of and innovation
+in digital finance, promoted the intelligent governance
+mode for customer complaints, applied technologies such
+as robotics, natural language processing, and artificial
+intelligence generated content (AIGC) to the main
+sectors of complaints handling and management, and
+made monitoring and analysis activities more intelligent,
+thus achieving more remarkable results in complaints
+and experience sharing. The Bank prioritized increasing
+the training of frontline staff such as customer service
+managers, wealth management managers, and outlet
+heads, which combined knowledge of consumer protection
+with business scenarios, analyzed typical cases of on-site
+services (business premises), standardized marketing and
+publicity activities, and dealt with customer complaints,
+etc., so as to effectively enhance the awareness of
+consumer protection and business skills among the
+primary-level employees and key position holders, and
+implement the concepts of and requirements for consumer
+protection effectively.
+Bank continuously enhanced the coverage,
+coordination, and relevance of consumer protection
+training. With a series of bank-wide training courses on
+consumer protection, customer complaints management,
+customer service and experience management, and
+management of inclusive finance consumer protection
+organized with coordinated efforts, it focused on key
+business areas such as personal banking, bank cards,
+online banking, and precious metals to continuously instill
+consumer protection standards into employees through
+activities such as policy interpretation, business operations,
+The
+The Bank effectively fulfilled its social responsibilities to
+help consumers improve their financial literacy and skills
+for fraud identification and prevention. It made great
+efforts to carry out a series of activities such as "March
+15th Consumer Protection Publicity Week", "Publicizing
+Financial Knowledge to Walk Ten Thousand Miles", and
+"Financial Education and Literacy Month". Focusing
+on key groups such as "senior citizens, young people,
+and new citizens" and highlighting critical missions of
+"carrying forward the spirit of Lei Feng", "ensuring
+fund security", "supporting consumption recovery", and
+"bringing together financial strength to create a better
+life", the Bank carried out a series of publicity activities of
+"visiting the rural, communities, campuses, enterprises,
+and business districts", which popularized the eight basic
+rights for consumers, risk identification and response
+measures, knowledge about safeguarding rights lawfully
+and rationally, and knowledge of investment and financial
+management, among others. Relying on 15.5 thousand
+ICBC Sharing Stations, the Bank organized the "Volunteer
+to Warm up the Spring, You and Me together" and
+other volunteering programs learning from Lei Feng,
+and a variety of activities themed on growth care, health
+care, and career care, providing a series of public benefit
+services for the public to meet the diversified needs of
+consumers. It made efforts to create a distinctive mode
+for digitalized publicity and innovatively used new media,
+artificial intelligence, and other diversified means, to
+carry out a host of popular activities such as consumer
+protection knowledge quizzes, Al-enabled interactions,
+scene plays, short videos, and microfilms, through which
+financial knowledge and anti-fraud techniques were
+disseminated to consumers plainly and straightforwardly,
+and the consumers are guided to learn, understand, trust
+and use finance.
+products and services, and carried out the "Delivering
+Tangible Results for the People" campaign. In short,
+the consumer protection efforts better empowered the
+improvement and upgrading of financial services.
+Environmental and Social Responsibilities
+To present a more accurate picture of customer complaints, the Report has deleted repeated complaints and complaints about the
+"Card Close Action" against new-type cyber-telecom crimes in reporting the number of individual customer complaints in 2023.
+Financial Market and
+Asset Management
+Committee
+Significant Events
+Material Assets Acquisition, Sale and
+Merger During the reporting period, the Bank had no
+material assets acquisition, sale or merger.
+Legal document under
+which the commitment
+Time and term of
+commitment
+Type of
+commitment
+Huijin
+Shareholder
+As at 31 December 2023, all of the continuing commitments made by the shareholders were properly fulfilled and were
+listed as follows:
+Commitments
+Significant Events
+141
+Annual Report 2023
+Material Lawsuits or Arbitration
+Cases During the reporting period, the Bank incurred
+no material lawsuits or arbitration cases. It was involved in
+several legal lawsuits and arbitration in its ordinary course
+of business. Most of these cases were initiated by the
+Bank to recover non-performing loans, while some were
+related to disputes with clients. As at 31 December 2023,
+the amount of cases pending judgments or arbitrations
+awards in which the Bank and/or its subsidiaries are
+defendants totaled RMB6,659 million, and the Bank does
+not expect any material adverse effect from the above-
+mentioned cases on the Bank's business, financial position
+or operating results.
+Occupation of Fund by Controlling
+Shareholders and Other Related
+Parties During the reporting period, none of the
+controlling shareholders and other related parties of the
+Bank occupied any fund of the Bank. The auditors have
+issued the Special Explanation on the Occupation of Fund
+by Controlling Shareholders and Other Related Parties of
+Industrial and Commercial Bank of China Limited in 2023.
+Other Material Contracts During the reporting
+period, the Bank did not have any other material contracts
+which were subject to disclosure.
+Material Guarantees The provision of guarantees is
+in the ordinary course of business of the Bank. During
+the reporting period, the Bank did not have any material
+guarantee that needs to be disclosed except for the
+financial guarantee services within the business scope as
+approved by regulatory authorities.
+Material Trust, Sub-contract and Lease During
+the reporting period, the Bank had not held on trust
+to a material extent or entered into any material sub-
+contract or lease arrangement in respect of assets of
+other corporations, which were subject to disclosure,
+and no other corporation had held on trust to a material
+extent or entered into any material sub-contract or lease
+arrangement in respect of the Bank's assets, which were
+subject to disclosure.
+Material Contracts and Performance of
+Obligations thereunder
+Please refer to "Note 48. to the Consolidated Financial
+Statements: Related Party Disclosures" for details of
+the related party transactions defined under the laws
+and regulations of China and the relevant accounting
+standards.
+During the reporting period, the Bank did not enter into
+any material related party transactions.
+Material Related Party Transactions
+Key Audit Matters The Audit Committee
+has reviewed the key audit matters in the audit report
+and concluded that it is unnecessary to provide a
+supplementary explanation.
+Implementation of Share Incentive Plan
+and Employee Stock Ownership Plan
+during the Reporting Period During the
+reporting period, the Bank did not implement any share
+incentive plan or any employee stock ownership plan.
+Credit Standing During the reporting period,
+neither the Bank nor its controlling shareholders had
+ever failed to fulfil obligations provided in effective legal
+documents issued by court for material lawsuits, nor had
+there been any outstanding debt of a significant amount.
+External Guarantees During the reporting
+period, the Bank did not enter any guarantee contract
+against the resolution procedures for external guarantees
+that are prescribed by laws, administrative regulations or
+CSRC.
+33.
+Inclusive Finance and
+Rural Revitalization
+Committee
+Consumer Protection
+AUDITED FINANCIAL STATEMENTS
+214
+Property and Equipment
+27.
+146
+INDEPENDENT AUDITOR'S REPORT
+Pages
+Pages
+Contents
+20567.
+4000.90
+16975.95
+Auditor's Report and
+Financial Statements
+Secondary reporting line
+Primary reporting line
+Directly managed institutions of the Head Office
+Internal departments of the Head Office
+Organizational Chart
+Rural Banks
+ICBC Wealth
+Management
+ICBC Investment
+28.
+Deferred Tax Assets and Liabilities
+215
+Consolidated:
+Fair Value through Profit or Loss
+159
+Statement of Changes in Equity
+Financial Liabilities Measured at
+32.
+157
+Statement of Financial Position
+220
+Institutions
+156
+ICBC Credit Suisse
+Asset Management
+Other Comprehensive Income
+31.
+Statement of Profit or Loss and
+219
+Impairment Allowance
+30.
+155
+Statement of Profit or Loss
+217
+Other Assets
+29.
+Due to Banks and Other Financial
+Digital Finance
+Committee
+ICBC Leasing
+Development Center
+(including Directly Managed Branches)
+Tier-one Branches
+Overseas Institutions
+Domestic Institutions
+ICBC Bills Discounting
+Asset Custody
+Department
+Domestic
+Branches
+Business Department
+Asset Management
+Department
+Global Market
+Department
+(36)
+Bank Card Department
+Department (Consumer
+Protection Office)
+Finance & Accounting
+Personal Banking
+Department
+Legal Affairs
+Department
+Department
+Internal Control &
+Compliance
+Risk Management
+Department
+Corporate
+Banking
+Executive Office
+Committee
+Operation
+Management
+Department
+Information
+Management
+Department
+Corporate
+Culture
+Domestic
+Subsidiaries and
+their Branches
+Tier-two Branches
+(459)
+(15,227)
+Business Research &
+Development Center
+Hangzhou Institute
+of Financial Managers
+Changchun Institute
+of Financial Managers
+Investment Banking
+Department
+Special Financing
+Department
+(Banking Department)
+Pension Business
+Department
+Retired Staff Service and
+Management
+Department
+Staff Union Working
+Committee
+Security Department
+Inspection Office of
+the Party Committee
+Modern Finance
+Research Institute
+Department
+Party-related
+Affairs
+Department
+Department
+Asset & Liability
+Management
+Department
+Corporate Strategy and
+Investor Relations
+Department
+International
+Banking
+Department
+Financial Technology
+Department
+Grassroots Branches
+Human Resources
+Department
+Credit Approval
+Department
+Credit and Investment
+Management
+Internet Finance
+Department
+189
+Institutional Banking
+Department
+Overseas Subsidiaries and their
+Institutions (358)
+Institutions (55)
+Overseas Branches and their
+Department
+Net Interest Income
+•
+understood, assessed and tested the design and
+operating effectiveness of key internal controls of
+the IT systems relevant to financial reporting;
+understood, assessed and tested the design and
+operating effectiveness of automated controls
+relevant to significant accounts and assertions or risk
+of material misstatement, and such IT automated
+controls include accuracy of system calculation
+logic and consistency of data transmission, covering
+business in corporate banking, personal banking,
+and financial markets, as well as financial reporting
+process;
+Key audit matters (continued)
+0.98
+0.97
+0.98
+0.97
+Annual Report 2023
+155
+Consolidated Statement of Profit or Loss and Other Comprehensive Income
+For the year ended 31 December 2023
+(In RMB millions, unless otherwise stated)
+Profit for the year
+Other comprehensive income (after tax, net):
+(a) Items that will not be reclassified to profit or loss:
+(i) Changes in fair value of equity instruments designated as at fair
+value through other comprehensive income
+(ii) Other comprehensive income recognised under the equity method
+(iii) Other
+(b) Items that may be reclassified subsequently to profit or loss:
+(i) Changes in fair value of debt instruments measured at fair value
+through other comprehensive income
+(ii) Credit losses of debt instruments measured at fair value through
+other comprehensive income
+Note
+2023
+2022
+(restated)
+362,110
+365,116
+365,116
+1,123
+Income tax expense
+15
+(56,850)
+(62,610)
+PROFIT FOR THE YEAR
+365,116
+362,110
+Profit for the year attributable to:
+Equity holders of the parent company
+Non-controlling interests
+PROFIT FOR THE YEAR
+EARNINGS PER SHARE
+-
+- Basic (RMB yuan)
+- Diluted (RMB yuan)
+00 00
+18
+18
+The accompanying notes form part of these consolidated financial statements.
+363,993
+361,132
+978
+424,720
+362,110
+1,530
+Total comprehensive income for the year
+384,343
+357,560
+Total comprehensive income for the year attributable to:
+Equity holders of the parent company
+383,921
+356,548
+Non-controlling interests
+422
+1,012
+384,343
+357,560
+The accompanying notes form part of these consolidated financial statements.
+156
+Annual Report 2023
+Consolidated Statement of Financial Position
+As at 31 December 2023
+(In RMB millions, unless otherwise stated)
+ASSETS
+Notes
+31 December 2023 31 December 2022
+(restated)
+(4,550)
+41
+19,227
+(3,557)
+(2,927)
+(7)
+(25)
+(28)
+13
+21,104
+(24,220)
+205
+3,830
+117
+1,284
+(iii) Cash flow hedging reserve
+(iv) Other comprehensive income recognised under the equity
+method
+(v) Foreign currency translation reserve
+(372)
+(224)
+1,823
+21,276
+(vi) Other
+(5,145)
+Subtotal of other comprehensive income for the year
+Cash and balances with central banks
+421,966
+4,396
+Conclude on the appropriateness of the Directors' use of the going concern basis of accounting and, based on the
+audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
+doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
+required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements
+or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence
+obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease
+to continue as a going concern.
+Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
+disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a
+manner that achieves fair presentation.
+Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
+within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction,
+supervision and performance of the Group audit. We remain solely responsible for our audit opinion.
+We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the audit
+and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
+We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements regarding
+independence and communicate with them all relationships and other matters that may reasonably be thought to bear on
+our independence and, where applicable, actions taken to eliminate threats or safeguards applied.
+From the matters communicated with the Audit Committee, we determine those matters that were of most significance
+in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We
+describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when,
+in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse
+consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
+The engagement partner on the audit resulting in this independent auditor's report is Wu Wei Jun, David.
+Deloitte Touche Tohmatsu
+Certified Public Accountants
+Hong Kong
+27 March 2024
+154
+Annual Report 2023
+Consolidated Statement of Profit or Loss
+For the year ended 31 December 2023
+(In RMB millions, unless otherwise stated)
+Notes
+2023
+2022
+(restated)
+Interest income
+Interest expense
+NET INTEREST INCOME
+Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
+disclosures made by the Directors.
+Fee and commission income
+Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
+appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
+Group's internal control.
+Independent Auditor's Report
+understood, assessed and tested the design and
+operating effectiveness of controls over cyber
+security management mechanism, the operational
+security of key information infrastructure, data and
+customer information management, and system
+operation monitoring and emergency management.
+152
+Annual Report 2023
+Independent Auditor's Report
+Other information
+The Directors are responsible for the other information. The other information comprises all the information included in the
+annual report, other than the consolidated financial statements and our auditor's report thereon.
+Our opinion on the consolidated financial statements does not cover the other information and we do not express any form
+of assurance conclusion thereon.
+In connection with our audit of the consolidated financial statements, our responsibility is to read the other information
+and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial
+statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
+If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we
+are required to report that fact. We have nothing to report in this regard.
+Responsibilities of the directors for the consolidated financial statements
+The Directors are responsible for the preparation of the consolidated financial statements that give a true and fair view in
+accordance with IFRSS issued by IASB and the disclosure requirements of the Hong Kong Companies Ordinance, and for
+such internal control as the Directors determine is necessary to enable the preparation of consolidated financial statements
+that are free from material misstatement, whether due to fraud or error.
+In preparing the consolidated financial statements, the Directors are responsible for assessing the Group's ability to continue
+as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
+accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative
+but to do so.
+The Directors are assisted by the Audit Committee in discharging their responsibilities for overseeing the Group's financial
+reporting process.
+Auditor's responsibilities for the audit of the consolidated financial statements
+Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are
+free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion
+solely to you, as a body, and for no other purpose. We do not assume responsibility towards or accept liability to any other
+person for the contents of this report.
+Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAS
+will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
+material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
+taken on the basis of these consolidated financial statements.
+As part of an audit in accordance with ISAS, we exercise professional judgement and maintain professional scepticism
+throughout the audit. We also:
+•
+Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud
+or error, design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient
+and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
+fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
+misrepresentations or the override of internal control.
+Annual Report 2023
+Independent Auditor's Report
+Auditor's responsibilities for the audit of the consolidated financial statements (continued)
+PROFIT BEFORE TAXATION
+96
+1,278,674
+Other operating (expense)/income, net
+10
+(4,400)
+4,828
+OPERATING INCOME
+806,458
+842,352
+Operating expenses
+11
+Impairment losses on assets
+==
+(238,698)
+(239,351)
+14
+(150,816)
+(182,677)
+OPERATING PROFIT
+416,944
+420,324
+Share of results of associates and joint ventures
+5,022
+7,906
+1,405,039
+21,560
+Net gains on financial investments
+(750,026)
+(586,689)
+19
+6
+655,013
+691,985
+7
+137,891
+145,818
+Fee and commission expense
+7
+(18,534)
+(16,493)
+NET FEE AND COMMISSION INCOME
+7
+119,357
+129,325
+Net trading income
+8
+14,928
+8,308
+9
+Due from banks and other financial institutions
+153
+21
+1,771,747
+3,756,887
+3,496,109
+19,701
+3,776,588
+19,310
+44,697,079
+3,515,419
+39,610,146
+Liao Lin
+Chairman
+Wang Jingwu
+Executive Director
+Xu Zhisheng
+Person in charge of Finance and
+Accounting Department
+The accompanying notes form part of these consolidated financial statements.
+158
+Annual Report 2023
+Our audit procedures in respect of IT systems and controls
+over financial reporting included the following:
+How our audit addressed the key audit matter
+With the rapid increase in the volume of on-line
+transactions of the Group, as well as the continuous
+development and application of new technologies and
+open banking that increased third party network access,
+the Group faces increasing challenges on cyber security
+and data protection that warrant close monitoring of their
+potential impact on financial reporting related IT systems.
+We identified IT systems and controls over financial
+reporting as a key audit matter because the Group's
+financial accounting and reporting systems are highly
+reliant on complex IT systems and control processes,
+and the IT systems are required to serve the Group's
+global customer base, handle large volumes of frequent
+transactions, and continue their rapid development in
+response to changing business needs and technological
+advancement.
+To ensure the accuracy of financial reports, IT over
+financial reporting and its related general controls and
+automated controls are required to be designed and
+operated effectively. The related general controls include
+IT governance, controls over program development and
+changes, access to programs and data and IT operations.
+Automated controls include system calculations and data
+logic relating to significant accounts, as well as interfaces
+between business management systems and accounting
+systems.
+IT systems and controls over financial reporting
+As a large banking group, the Group's IT systems are
+complex.
+1,912,067
+Key audit matter
+1,013,624
+40
+Equity attributable to equity holders of the parent company
+Share capital
+38
+356,407
+356,407
+Other equity instruments
+39
+354,331
+354,331
+Preference shares
+134,614
+134,614
+Perpetual bonds
+219,717
+219,717
+Reserves
+Retained profits
+Non-controlling interests
+TOTAL EQUITY
+TOTAL EQUITY AND LIABILITIES
+40
+1,134,082
+EQUITY
+Key audit matters (continued)
+151
+Selected samples to perform the following audit
+procedures:
+Understood, assessed and tested the related design and
+operating effectiveness of the internal controls relating to
+the consolidation of structured entities.
+Our audit procedures in respect of consolidation of
+structured entities included the following:
+How our audit addressed the key audit matter
+Refer to Note 4(2), Note 5 and Note 43 to the consolidated
+financial statements for relevant disclosures.
+We identified the consolidation of structured entities as a
+key audit matter because the amount involved is significant
+and the evaluation on whether the Group has control
+over the structured entities requires significant accounting
+judgement.
+In determining whether the Group has control and
+therefore should consolidate a structured entity,
+management is required to consider the power it
+possesses, its exposure to variable returns, and its ability
+to use its power to affect returns. The Group is required
+to collectively consider the relevant facts and substance to
+assess whether it has control over the structured entity.
+Structured entities mainly include wealth management
+products, investment funds, trust plans, asset management
+plans and asset-backed securities in which the Group has
+interests in them through their initiation, management or
+investment.
+Consolidation of structured entities
+Key audit matter
+Independent Auditor's Report
+149
+Annual Report 2023
+performed credit assessments on borrower's
+and guarantor's financial information,
+collateral valuation and other sources of
+repayment for the selected stage 3 corporate
+loans and advances, tested the recalculation
+of impairment allowance based on the
+recoverable cash flows and discount rates,
+and evaluated whether there was any material
+misstatement.
+analysed the borrower's financial and non-
+financial information, and other available
+information, and evaluated the reasonableness
+of management's judgement on staging,
+including whether credit risk has increased
+significantly since initial recognition and
+whether credit impairment events have
+occurred by reviewing the credit files,
+interviewing management, independently
+searching for publicly available information
+and exercising professional judgement;
+Risk based sample selection for credit review
+selected samples for credit review by focusing
+on industries that are significantly affected
+by fluctuations of economic cycle and policy
+regulations, regions with high credit risk
+exposure, and loans with other high-risk
+characteristics such as non-performing loans,
+overdue performing loans, rescheduled loans
+and borrowers with negative publicity;
+(3)
+How our audit addressed the key audit matter
+Allowance for impairment losses on loans and advances
+to customers measured at amortised cost (continued)
+Derivative financial assets
+Key audit matter
+inspected agreements relating to the structured
+entity and understood the purpose of its set
+up; assessed the power the Group has over the
+structured entity according to the Group's rights and
+obligations under different transaction structures and
+its involvement with the structured entity;
+Independent Auditor's Report
+verified the analysis on the Group's variable
+return which includes, but is not limited to, fixed
+management fee and performance fees obtained
+through acting as asset manager, as well as the
+returns obtained from holding an interest in a
+structured entity, and providing liquidity support or
+other support;
+assessed
+Annual Report 2023
+assessed and verified the valuation techniques used
+in the valuation of complex financial instruments
+valuation, selected samples to perform independent
+valuation and compared the results with the Group's
+valuation.
+evaluated the appropriateness of the Group's
+valuation techniques, inputs and assumptions for
+level 2 and 3 financial instruments, and compared
+the observable market data with publicly available
+market data;
+evaluated the fair value of level 1 financial
+instruments by comparing the fair value with publicly
+available market observable data;
+•
+Selected samples to perform the following audit
+procedures:
+Understood, assessed and tested the design and operating
+effectiveness of internal controls relating to the valuation
+of financial instruments, independent valuation validation,
+and valuation model validation and approval.
+Our audit procedures in respect of fair value assessment of
+financial instruments included the following:
+How our audit addressed the key audit matter
+Refer to Note 4(7), Note 5, Note 21, Note 22, Note
+23, Note 24, Note 32, Note 33 and Note 51 to the
+consolidated financial statements for relevant disclosures.
+instruments.
+We identified fair value assessment of financial instruments
+as a key audit matter because the amount involved is
+significant and the valuation requires significant judgement
+and estimation, and particularly for level 3 financial
+December 2023, the Group's financial
+assets that were measured at fair value amounted to
+RMB4,460,361 million, representing 9.98% of total
+assets; financial liabilities that were measured at fair value
+amounted to RMB370,260 million, representing 0.90%
+of total liabilities. Level 3 financial assets and liabilities
+with significant unobservable input data amounted to
+RMB160,052 million and RMB3,017 million respectively.
+The valuation of the Group's financial instruments
+measured at fair value is based on readily available market
+data or valuation models. For financial instruments without
+readily available market data such as debt securities,
+equities, over-the-counter derivative contracts and
+structured deposits, fair values are measured based on
+valuation techniques. The selection of valuation techniques
+and significant unobservable input data requires significant
+accounting judgement and estimation by management.
+As at 31
+Fair value of financial instruments
+Key audit matter
+Key audit matters (continued)
+Independent Auditor's Report
+Annual Report 2023
+150
+the management's decision on the
+consolidation of structured entities through carrying
+out the above procedures.
+analysed the scope of the Group's decision-
+making power over the structured entity, the level
+of remuneration obtained from providing asset
+management services, the risk of variable return
+borne by holding other interests in the structured
+entity and the substantive rights held by other
+participants, checked the Group's analysis on the
+magnitude and variability of variable return, and
+assessed whether the Group acts as principal or
+agent in the structured transaction;
+TOTAL LIABILITIES
+Key audit matters (continued)
+Other liabilities
+Investments in associates and joint ventures
+26
+64,778
+65,790
+Property and equipment
+27
+298,878
+293,887
+Deferred tax assets
+7,563,132
+28
+101,117
+Other assets
+29
+533,547
+452,223
+TOTAL ASSETS
+44,697,079
+39,610,146
+The accompanying notes form part of these consolidated financial statements.
+104,669
+8,806,849
+Financial investments measured at amortised cost
+2,223,096
+Loans and advances to customers
+Financial investments
+222222
+19
+4,042,293
+20
+1,116,717
+75,339
+1,224,257
+1,192,532
+87,205
+864,122
+23
+25,386,933
+24
+11,849,668
+22,591,676
+10,533,702
+Financial investments measured at fair value through
+profit or loss
+811,957
+747,474
+Financial investments measured at fair value through
+other comprehensive income
+2,230,862
+Annual Report 2023
+157
+3,427,892
+As at 31 December 2023
+385,198
+375,452
+Due to customers
+Income tax payable
+Debt securities issued
+35
+33,521,174
+29,870,491
+63,322
+85,581
+36
+1,369,777
+905,953
+28
+37
+3,930
+818,642
+3,950
+784,392
+40,920,491
+36,094,727
+Consolidated Statement of Financial Position
+Deferred tax liabilities
+34
+Certificates of deposit
+Reverse repurchase agreements
+1,018,106
+574,778
+(In RMB millions, unless otherwise stated)
+31 December 2023
+(restated)
+LIABILITIES
+Due to central banks
+Due to banks and other financial institutions
+31
+231,374
+3,369,858
+145,781
+31 December 2022
+Financial liabilities measured at fair value through profit or loss
+33
+3,187,712
+Repurchase agreements
+96,350
+76,251
+21
+Notes
+Derivative financial liabilities
+64,287
+62,859
+32
+Due to customers
+Other liabilities
+3,531,968
+3,194,252
+120,166
+151,385
+4,336,481
+3,882,583
+Income tax paid
+The accompanying notes form part of these consolidated financial statements.
+Annual Report 2023
+Net cash flows from operating activities
+1,504,322
+(87,320)
+1,417,002
+(88,496)
+1,404,657
+62,306
+Net cash flows from operating activities before taxation
+1,493,153
+Due to central banks
+Certificates of deposit
+(2,511,044)
+Other assets
+(104,618)
+73,750
+(3,098,980)
+(2,747,693)
+Net (decrease)/increase in operating liabilities:
+Financial liabilities measured at fair value through profit or loss
+(714)
+(11,808)
+161
+85,524
+105,849
+Due to banks and other financial institutions
+160,197
+193,643
+Repurchase agreements
+437,224
+186,956
+2,116
+Consolidated Statement of Cash Flows
+Proceeds from disposal of property and equipment and other assets
+(In RMB millions, unless otherwise stated)
+2,811
+360,575
+326,066
+(891,852)
+(910,621)
+Proceeds from issuance of debt securities
+1,422,308
+955,862
+2,730
+Interest paid on debt securities
+(25,721)
+Repayment of debt securities
+(956,689)
+(870,573)
+Dividends paid on ordinary shares
+(108,169)
+(2,898,902)
+(104,534)
+(49,151)
+CASH FLOWS FROM FINANCING ACTIVITIES
+Net cash flows from investing activities
+Proceeds from disposal of associates and joint ventures
+CASH FLOWS FROM INVESTING ACTIVITIES
+Purchases of property and equipment and other assets
+Note
+2023
+2022
+(restated)
+(31,201)
+(23,128)
+(other than repossessed assets)
+7,527
+Purchases of financial investments
+(4,683,824)
+10,018
+(4,415,567)
+Proceeds from sale and redemption of financial investments
+3,453,713
+3,192,493
+Investments in associates and joint ventures
+(1,372)
+(3,314)
+For the year ended 31 December 2023
+Investment returns received
+4,429
+(100,110)
+(In RMB millions, unless otherwise stated)
+CASH FLOWS FROM OPERATING ACTIVITIES
+Profit before taxation
+Adjustments for:
+Notes
+2023
+2022
+(restated)
+For the year ended 31 December 2023
+421,966
+Share of results of associates and joint ventures
+Depreciation
+(5,022)
+(4,396)
+30,345
+30,297
+Amortisation
+11
+424,720
+Consolidated Statement of Cash Flows
+Annual Report 2023
+160
+Dividends or interest paid to other equity instrument holders
+(35,318)
+57,767 (57,767)
+84
+(28)
+-- (319) 31
+(319) 319
+Other
+(423)
+1,950
+1,527 (1,478) 49
+36
+85
+Balance as at 31 December 2022
+356,407 354,331 148,280 392,487 496,719 2,343 (17,241) (2,987) (5,977) 1,013,624 1,771,747 3,496,109
+19,310 3,515,419
+(i) Includes the appropriation to surplus reserve made by overseas branches and subsidiaries in the amounts of RMB68 million and
+RMB907 million, respectively.
+(ii) Includes the appropriation to general reserve made by subsidiaries in the amounts of RMB4, 196 million.
+The accompanying notes form part of these consolidated financial statements.
+35,318
+Loans and advances to customers
+3,716
+14
+(1,548)
+9
+(4,020)
+(4,179)
+266,821
+358,263
+Net (increase)/decrease in operating assets:
+Due from central banks
+(1,813)
+(178,368)
+Due from banks and other financial institutions
+85,731
+(17,337)
+Financial assets measured at fair value through profit or loss
+(26,740)
+(45,211)
+Reverse repurchase agreements
+23,917
+(147,741)
+11,583
+(2,711)
+(297,106)
+150,816
+182,677
+Unrealised (gains)/losses on foreign exchange
+(4,444)
+8,870
+Interest expense on debt securities issued
+40,967
+28,067
+Interest income on financial investments
+Accreted interest on impaired loans
+Net gains on financial investments
+Net (gains)/losses on changes in fair value
+Net gains on stocktake and disposal of property and equipment and
+other assets (other than repossessed assets)
+Dividend income
+(1,915)
+(1,695)
+(23,510)
+(22,743)
+(338,267)
+Impairment losses on assets
+(14,964)
+Financial investments measured at fair value through
+Dividends paid to non-controlling shareholders
+(1,104)
+Equity attributable to equity holders of the parent company
+Total equity
+3,495,171
+3,496,109
+938
+3,513,826
+3,515,419
+1,593
+36,094,727
+Amendments to IAS 12 - Deferred Tax related to Assets and Liabilities Arising from a Single
+Transaction
+The adoption of the above amendments to IFRSS has had no material impact on the financial position and financial
+performance of the Group.
+Annual Report 2023
+165
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Amendments to IAS 12 - International Tax Reform - Pillar Two Model Rules
+The amendments introduced a temporary exception to the requirements to recognise and disclose information about
+deferred tax assets and liabilities related to Pillar Two model rules ("Pillar Two legislation") published by the Organisation for
+Economic Co-operation and Development ("OECD"), as an exception to IAS 12. The Group apply the temporary exception
+immediately upon the issue of the amendments. In periods in which Pillar Two legislation is enacted or substantively
+enacted but not yet in effect, the amendments also requires the disclosure of qualitative and quantitative information about
+its exposure to Pillar Two legislation. To the extent information is not known or reasonably estimable, an entity shall instead
+disclose a statement to that effect and disclose information about the entity's progress in assessing its exposure. For impact
+of Pillar Two legislation on the financial statements of the Group, please refer to Note 15 to the consolidated financial
+statements.
+The adoption of the other above-mentioned amendments to IFRSS has had no material impact on the financial position and
+financial performance of the Group.
+The amendments mainly relate to the scope of initial recognition exemptions for deferred income tax in the International
+Accounting Standards (IAS) 12 - Income Taxes, and clarifies that the individual transaction 1) that is not arising from
+business combination; 2) that affects neither the accounting profit nor taxable profits (or deductible losses) at the time of
+transaction; and 3) that the equivalent taxable temporary differences and deductible temporary differences are generated
+due to the initially recognised assets and liabilities is not applicable to the regulations on the exemptions from initially
+recognised deferred tax liabilities and deferred tax assets. With the amendments, the Group has been required to recognise
+one deferred tax asset (to the extent that taxable income is likely to be obtained to offset the deductible temporary
+difference) and one deferred tax liability for all deductible and taxable temporary differences relating to right-of-use assets
+and lease liabilities.
+36,095,831
+Total liabilities
+489
+stated)
+Financial investments
+10,527,292
+(restated)
+10,533,702
+6,410
+profit or loss
+714,879
+747,474
+32,595
+Financial investments measured at fair value through other
+comprehensive income
+2,178,018
+2,223,096
+Financial investments measured at amortised cost
+7,634,395
+7,563,132
+(71,263)
+Total assets
+39,609,657
+39,610,146
+(2) Amendments to IFRS in issue but not yet effective
+(originally
+The Group has not applied the following amendments to IFRS that have been issued but are not yet effective:
+Amendments to IFRS 16: Lease Liability in a Sale and Leaseback²
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(2) Subsidiaries
+Subsidiaries are entities (including structured entities) controlled by the Group. The Group controls an entity if it is exposed,
+or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its
+power over the entity. The Group reassesses whether it has control if there are changes to one or more of the elements of
+control. This includes circumstances in which protective rights held (e.g. those resulting from a lending relationship) become
+substantive and lead to the Group having power over an entity.
+A structured entity is an entity that has been designed so that voting or similar rights are not the dominant factor in
+deciding who controls the entity, and the relevant activities are directed by means of contractual or other arrangements.
+An investment in a subsidiary is consolidated into the consolidated financial statements from the date that control
+commences until the date that control ceases. Intra-group balances, transactions and any unrealised profit or loss arising
+from intra-group transactions are eliminated in full in preparing the consolidated financial statements.
+In the Bank's statement of financial position, investments in subsidiaries are stated at cost less impairment losses.
+(3) Non-controlling interests
+167
+Non-controlling interests represent the equity in a subsidiary not attributable directly or indirectly to a parent.
+Non-controlling interests are presented in the consolidated statement of financial position within equity, separately from
+equity attributable to the equity holders of the Bank. Non-controlling interests in the results of the Group are presented
+on the face of the consolidated statement of profit or loss and the consolidated statement of profit or loss and other
+comprehensive income as an allocation of the total profit or loss and total comprehensive income for the year between
+non-controlling interests and the equity holders of the Bank.
+(4) Associates and joint ventures
+An associate is an entity in which the Group has significant influence. A joint venture is an arrangement whereby the
+Group and other parties contractually agree to share control of the arrangement, and have rights to the net assets of the
+arrangement. Other than those measured at fair value through profit or loss, the Group's investments in associates or joint
+ventures are accounted for using the equity method.
+Under the equity method, an investment in an associate or joint venture is carried in the consolidated statement of financial
+position at cost plus post-acquisition changes in the Group's share of the net assets of the associate or joint venture, less
+any impairment losses. The consolidated statement of profit or loss reflects the share of the results of operations of the
+associate or joint venture. Unrealised profits and losses resulting from transactions between the Group and the associates or
+joint ventures are eliminated to the extent of the Group's interests in the associates or joint ventures.
+If an investment in an associate becomes an investment in a joint venture, the retained interest is not re-measured. Instead,
+the investment continues to be accounted under the equity method, and vice versa.
+In the Bank's statement of financial position, investments in associates and joint ventures are stated at cost less impairment
+losses.
+168
+Annual Report 2023
+57,767
+Changes in the Group's interests in a subsidiary that do not result in a loss of control are accounted for as equity
+transactions, whereby adjustments are made to the amounts of controlling and non-controlling interests within consolidated
+statement of equity to reflect the change in relative interests, but no adjustments are made to goodwill and no gain or loss
+is recognised.
+Annual Report 2023
+As at the end of the reporting period, the assets and liabilities of foreign operations are translated into the presentation
+currency of the Bank at the exchange rates ruling at the end of the reporting period. For overseas business not operating in
+a hyperinflationary economy, all items within equity except for retained profits are translated at the exchange rates ruling
+at the dates of the initial transactions. Income and expenses in the statement of profit or loss are translated using the
+exchange rates at the date of the transactions or deemed exchange rates. The exchange differences arising on the above
+translation are taken to other comprehensive income. On disposal of a foreign operation, the deferred cumulative amount
+recognised in other comprehensive income relating to that particular foreign operation is recognised in profit or loss. The
+effect of exchange rate changes on cash and cash equivalents is presented separately in the statement of cash flows.
+Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rates as
+at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated
+using the exchange rates as at the date when the fair value is determined. Any goodwill arising on the acquisition of a
+foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition
+are treated as foreign assets and liabilities of the foreign operation and translated at the deemed rates at the end of the
+reporting period. The exchange differences are recognised in profit or loss or in other comprehensive income, depending on
+the nature of non-monetary items.
+Amendments to IAS 1: Classification of Liabilities as Current or Non-current²
+Amendments to IAS 1: Non-current Liabilities with Covenants²
+Amendments to IAS 7 and IFRS 7: Supplier Finance Arrangements²
+Amendments to IAS 21: Lack of Exchangeability³
+1
+Effective for annual periods beginning on or after a date to be determined.
+2
+Effective for annual periods beginning on or after 1 January 2024.
+3 Effective for annual periods beginning on or after 1 January 2025.
+Revised IFRSS that have been issued but are not yet effective are expected to have no material impact on the financial
+position and financial performance of the Group in the foreseeable future.
+166
+Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+4. SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION
+(1) Functional currency and foreign currency translation
+Functional currency
+The functional currency of the Group's domestic establishments is Renminbi ("RMB"). The overseas establishments
+determine their own functional currencies which best represent the economic environment they operate in. These financial
+statements are presented in RMB millions except when otherwise indicated.
+Foreign currency translation
+Foreign currency transactions are initially recorded in the functional currency using the exchange rates at the dates of the
+transactions or deemed exchange rates. Monetary assets and liabilities denominated in foreign currencies are retranslated
+into the functional currency at the applicable exchange rates ruling at the end of the reporting period. Exchange differences
+arising on the settlement of monetary items or on translating monetary items at period end rates are recognised in profit
+or loss, with the exception that they are taken directly to other comprehensive income when the monetary items are
+designated as part of the hedge of the Bank's net investment in a foreign entity, and the aggregate exchange differences
+are not recognised in profit or loss until the disposal of such net investment.
+Amendments to IFRS 10 and IAS 28: Sale or Contribution of Assets between an Investor and its Associate or Joint
+Venture¹
+(14,810)
+Adjustments
+31 December
+2022
+1,117,401
+1,040,678
+(617,791)
+(451,918)
+The accompanying notes form part of these consolidated financial statements.
+162
+Annual Report 2023
+Notes to the Consolidated Financial Statements
+Interest paid
+(In RMB millions, unless otherwise stated)
+Industrial and Commercial Bank of China Limited (the "Bank"), which was previously known as Industrial and Commercial
+Bank of China ("ICBC"), used to be a wholly-state-owned commercial bank established on 1 January 1984 based on
+the authorisation of the State Council and the People's Bank of China (the "PBOC") of the People's Republic of China
+(the "PRC"). On 28 October 2005, with the approval of the State Council, ICBC was restructured and incorporated as
+a joint-stock limited company. The joint-stock limited company undertook all the assets and liabilities of ICBC upon the
+restructuring. On 27 October 2006, the Bank was listed on both Shanghai Stock Exchange and The Stock Exchange of Hong
+Kong Limited.
+The Bank obtained authorisation to carry out banking business with an institution code of No. B0001H111000001 from
+the former China Banking and Insurance Regulatory Commission (the former "CBIRC") of the PRC. The Bank obtained its
+business license with unified social credit code 91100000100003962T from the Beijing Municipal Administration for Market
+Regulation. The legal representative is Liao Lin and the registered office is located at No. 55 Fuxingmennei Avenue, Xicheng
+District, Beijing, the PRC.
+The Bank's stock codes of A Shares and H Shares listed on Shanghai Stock Exchange and The Stock Exchange of Hong
+Kong Limited are 601398 and 1398, respectively. The Bank's offshore preference shares are listed on The Stock Exchange
+of Hong Kong Limited and the stock code is 4620. The Bank's domestic preference shares are listed on Shanghai Stock
+Exchange and the stock codes are 360011 and 360036.
+The principal activities of the Bank and its subsidiaries (collectively referred to as the "Group") comprise corporate financial
+services, personal financial services, treasury operations, investment banking, asset management, trust, financial leasing,
+insurance and other financial services. Domestic establishments refer to the Head Office of the Bank, branches and
+subsidiaries established in Chinese mainland. Overseas establishments refer to branches and subsidiaries established in
+jurisdictions outside Chinese mainland.
+2. BASIS OF PREPARATION
+(1) Statement of compliance
+The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards
+("IFRSS") promulgated by the International Accounting Standards Board (the "IASB"), and the disclosure requirements of
+the Hong Kong Companies Ordinance and the Rules Governing the Listing of Securities on The Stock Exchange of Hong
+Kong Limited.
+(2) Basis of preparation of the financial statements
+1. CORPORATE INFORMATION
+NET CASH FLOWS FROM OPERATING ACTIVITIES INCLUDE:
+Interest received
+1,926,851
+2,755,732
+(31)
+(28)
+Cash payment for other financing activities
+(7,860)
+(4,985)
+Net cash flows from financing activities
+285,444
+(64,789)
+NET INCREASE IN CASH AND CASH EQUIVALENTS
+810,594
+429,247
+Cash and cash equivalents at beginning of the year
+1,926,851
+1,436,757
+Effect of exchange rate changes on cash and cash equivalents
+18,287
+60,847
+CASH AND CASH EQUIVALENTS AT END OF THE YEAR
+42
+The consolidated financial statements have been prepared under the historical cost convention, except for certain financial
+instruments, and certain non-financial assets measured at fair value, as further explained in the respective accounting
+policies below.
+31 December
+2022
+The preparation of financial statements in conformity with IFRSS requires management to make judgements, estimates and
+assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses.
+Actual results may differ from these estimates. Judgements made by management in the application of IFRSS that have
+significant effect on the financial statements and major sources of estimation uncertainty are disclosed in Note 5.
+163
+Adjustments
+(restated)
+Operating income
+841,441
+842,352
+911
+Profit before taxation
+422,565
+2022
+424,720
+Net profit
+361,038
+362,110
+1,072
+Net profit attributable to equity holders of the parent company
+360,483
+361,132
+649
+2,155
+2022
+(originally
+stated)
+The major effect of the above changes in accounting policies on the Group's financial items is set out below:
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+3.
+APPLICATION OF NEW AND AMENDMENTS TO IFRSS
+(1) New and amendments to IFRSs that are mandatorily effective for the current year
+In the current year, the Group has applied, for the first time, the following new and amendments to IFRSS issued by the
+IASB which are mandatorily effective for the annual periods beginning on or after 1 January 2023 for the preparation of the
+Group's consolidated financial statements:
+IFRS 17 and its amendments: Insurance Contracts
+Amendments to IAS 1 and IFRS Practice Statement 2: Disclosure of Accounting Policies
+Amendments to IAS 8: Definition of Accounting Estimates
+Amendments to IAS 12: Deferred Tax related to Assets and Liabilities Arising from a Single Transaction
+Amendments to IAS 12: International Tax Reform - Pillar Two Model Rules
+IFRS 17 Insurance Contracts and its amendments
+IFRS 17 Insurance Contracts and its amendments (hereinafter referred to as the "New Insurance Contract Standard")
+establishes the principles of recognition, measurement, presentation and disclosure of insurance contracts and replaces IFRS
+4 Insurance Contracts.
+The definition of insurance contract has been elaborated in the New Insurance Contract Standard which specified the
+combination and separation of insurance contract, introduced the concept of insurance contract group and refined the
+measurement model of insurance contract. It also made an adjustment to the principle of revenue recognition for insurance
+services and refined the measurement methods of contract service margins. The New Insurance Contract Standard outlines
+a general measurement model, which is modified for insurance contracts with direct participation features, described as the
+variable fee approach. The general measurement model is simplified if certain criteria are met by measuring the liability for
+remaining coverage using the premium allocation approach. The general measurement model uses current assumptions to
+estimate the amount, timing and uncertainty of future cash flows and it explicitly measures the cost of that uncertainty. It
+takes into account market interest rates and the impact of policyholders' options and guarantees.
+The Group has implemented the New Insurance Contract Standard on 1 January 2023 and made retrospective adjustments
+to the financial statements figures for comparative periods in accordance with the transition requirements. To facilitate
+smooth transition to the New Insurance Contract Standard, the Group has reassessed the business model for managing its
+relevant financial assets, reclassified and remeasured certain financial assets and restated the financial statement line items
+for comparative periods in accordance with the requirements.
+"
+The associate of the Group, Standard Bank Group Limited (hereinafter referred to as the Standard Bank") has also
+adopted the New Insurance Contract Standard and the Group has restated the relevant comparative figures under the
+equity method accordingly.
+164
+Annual Report 2023
+Annual Report 2023
+35,318
+1,633
+(14,810) (14,810)
+1,123 365,116
+Other comprehensive income
+21,954
+1,633
+86
+(3,745) 19,928
+19,928 (701) 19,227
+Total comprehensive income
+21,954
+98
+86
+(3,745) 19,928 363,993 383,921
+422 384,343
+Dividends ordinary shares 2022 final
+(Note 17)
+Distributions to other equity instrument
+holders (Note 17)
+Appropriation to surplus reserve (i)
+35,872
+Appropriation to general reserve (ii)
+64,918
+Dividends to non-controlling shareholders
+(108,169) (108,169)
+(108,169)
+(14,964)
+(14,964)
+(14,964)
+35,872 (35,872)
+64,918
+363,993 363,993
+Profit for the year
+(1,129) 1,016,896 1,767,537 3,495,171 18,655 3,513,826
+(4,848) (3,272) 4,210 938 655 1,593
+(5,977) 1,013,624 1,771,747 3,496,109 19,310 3,515,419
+(2,987)
+(14,810)
+Consolidated Statement of Changes in Equity
+For the year ended 31 December 2023
+(In RMB millions, unless otherwise stated)
+Attributable to equity holders of the parent company
+Reserves
+Foreign
+Other
+Share equity
+capital instruments
+Balance as at 31 December 2022
+356,407 354,331
+Investment currency Cash flow
+Capital Surplus General revaluation translation hedging
+reserve reserve
+148,280 392,487
+Non-
+(64,918)
+Retained
+reserve
+Other
+reserves Subtotal profits Total interests equity
+controlling
+Total
+767 (17,241)
+(2,987)
+Changes in accounting policies (Note 3.1)
+1,576
+Balance as at 1 January 2023
+356,407
+354,331
+148,280 392,487 496,719
+2,343
+(17,241)
+reserve reserve reserve
+496,719
+(31)
+45,078
+Other comprehensive income
+Balance as at 1 January 2022
+356,407 354,331
+148,703
+357,169
+438,952
+26,087 (39,930)
+(4,243)
+Profit for the year
+1,165 926,375 1,620,642 3,257,755
+(3,988) (2,460) 3,561 1,101
+(2,823) 923,915 1,624,203 3,258,856
+361,132 361,132
+787
+18,290 3,277,146
+978 362,110
+1,888
+(104,534)
+(104,534) (104,534)
+----------
+438,952 24,628 (39,999) (4,243)
+1,459 69
+Other comprehensive income
+transferred to retained earnings
+Distributions to other equity instrument
+holders (Note 17)
+Appropriation to surplus reserve (i)
+Appropriation to general reserve (ii)
+Dividends ordinary shares 2021 final
+(Note 17)
+1,012 357,560
+(4,584) 361,132 356,548
+(3,154)
+1,256
+(23,425) 20,739
+Total comprehensive income
+(4,584) 34 (4,550)
+(3,154) (4,584)
+1,256
+(23,425) 20,739
+Other comprehensive income
+Dividends to non-controlling shareholders
+Changes in accounting policies
+(31)
+356,407 354,331
+transferred to retained earnings
+Other
+148,703 357,169
+(250) 250
+(10)
+(10)
+Balance as at 31 December 2023
+356,407 354,331 148,270 428,359 561,637 24,047 (15,608) (2,901) (9,722) 1,134,082 1,912,067 3,756,887 19,701 3,776,588
+(i)
+Includes the appropriation to surplus reserve made by overseas branches and subsidiaries in the amounts of RMB112 million
+and RMB891 million, respectively.
+(ii) Includes the appropriation to general reserve made by subsidiaries in the amounts of RMB654 million.
+The accompanying notes form part of these consolidated financial statements.
+Annual Report 2023
+159
+Consolidated Statement of Changes in Equity
+(250)
+Other
+For the year ended 31 December 2023
+(In RMB millions, unless otherwise stated)
+Balance as at 31 December 2021
+reserve reserve
+Restated
+Total
+reserves Subtotal profits Total interests equity
+17,503 3,275,258
+controlling
+Non-
+reserve reserve reserve reserve
+Other
+Investment currency Cash flow
+General revaluation translation hedging
+Foreign
+Attributable to equity holders of the parent company
+Reserves
+Retained
+Share equity Capital Surplus
+capital instruments
+Equity instruments measured at FVTOCI
+These assets are subsequently measured at fair value. Interest income calculated using the effective interest method,
+impairment and foreign exchange gains and losses are recognised in profit or loss. Other net gains and losses are
+recognised in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income
+are reclassified to profit or loss.
+Debt instruments measured at FVTOCI
+These assets are subsequently measured at amortised cost using the effective interest method. A gain or loss on a financial
+asset that is measured at amortised cost and is not part of a hedging relationship shall be recognised in profit or loss when
+the financial asset is derecognised, amortised or impaired.
+Financial assets measured at FVTPL
+These financial assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend
+income, are recognised in profit or loss unless the financial assets are part of a hedging relationship.
+Subsequent measurement of financial assets
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+These assets are subsequently measured at fair value. Dividend income is recognised in profit or loss for the period. Other
+net gains and losses are recognised in other comprehensive income. On derecognition, gains and losses accumulated in
+other comprehensive income are reclassified to retained earnings.
+Annual Report 2023 171
+Financial assets measured at amortised cost
+(iii) Classification and subsequent measurement of financial liabilities
+(3) the qualified hybrid contract that contains embedded derivatives.
+Financial liabilities measured at FVTPL
+A financial liability is classified as measured at FVTPL if it is classified as held-for-trading (including derivative financial
+liability) or it is designated as such on initial recognition.
+A financial liability may be designated as at FVTPL upon initial recognition if:
+(1) such designation eliminates or significantly reduces accounting mismatch;
+(2)
+the Group makes management and performance evaluation on a fair value basis for a portfolio of financial liabilities
+or a portfolio of financial assets and financial liabilities, in accordance with the Group's formally documented risk
+management or investment strategy, and reports to key management personnel on that basis;
+172
+Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Financial liabilities measured at FVTPL are subsequently measured at fair value and net gains and losses (including any
+interest expense) are recognised in profit or loss, unless the financial liabilities are part of a hedging relationship.
+For the financial liabilities measured at FVTPL, the gains and losses from changes in fair value of the financial liability arising
+from changes in the Group's own credit risk are included in other comprehensive income; other changes in fair value
+of the financial liabilities are recognised in profit or loss for the period. If the treatment of the impact of changes in the
+financial liabilities' own credit risk will create or enlarge the accounting mismatch in profit or loss, the Group shall recognise
+the entire gains or losses of the financial liabilities (including the amount of the impact of changes in its own credit risk)
+in profit and loss. When these liabilities are derecognised, the cumulative gains or losses previously recognised in other
+comprehensive income are reclassified from reserve to retained earnings.
+In assessing whether the contractual cash flows are solely payments of principal and interest on the principal amount
+outstanding, the Group considers the contractual terms of the instrument. For the purposes of this assessment, principal is
+defined as the fair value of the financial asset on initial recognition. Interest is defined as consideration for the time value
+of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for
+other basic lending risks and costs, as well as a profit margin. The Group also assesses whether the financial asset contains
+a contractual term that could change the timing or amount of contractual cash flows such that it would not meet the above
+contractual cash flows characteristics.
+Financial liabilities are classified as measured at FVTPL and other financial liabilities.
+The business model refers to how the Group manages its financial assets in order to generate cash flows. That is, the
+Group's business model determines whether cash flows will result from collecting contractual cash flows, selling financial
+assets, or both. The Group determines the business model for managing the financial assets according to the facts and
+based on the specific business objective for managing the financial assets determined by the Group's key management
+personnel.
+(vi) the entity is controlled or jointly controlled by a person identified in (a);
+its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on
+the principal amount outstanding.
+one entity is a joint venture of a third entity and the other entity is an associate of the third entity;
+(iv)
+the entity and the Group are joint ventures of the same third party;
+(iii)
+one entity is an associate or joint venture of the other entity (or of a parent, subsidiary or fellow subsidiary of
+the other entity);
+(ii)
+the entity and the Group are members of the same group;
+(i)
+the party is an entity where any of the following conditions applies:
+(b)
+is a member of the key management personnel of the Group or of a parent of the Group;
+(iii)
+or
+99
+has significant influence over the Group; or
+(ii)
+has control or joint control over the Group;
+(i)
+the party is a person or a close member of that person's family and that person:
+(v)
+the entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity
+related to the Group;
+Other financial liabilities
+(vii)
+it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling
+financial assets; and
+A financial asset is measured at FVTOCI if it meets both of the following conditions and is not designated as at FVTPL:
+its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on
+the principal amount outstanding.
+it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
+A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at
+FVTPL:
+Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for
+managing financial assets in which case all affected financial assets are reclassified on the first day of the first reporting
+period following the change in the business model.
+The classification of financial assets is generally based on the business model in which a financial asset is managed and its
+contractual cash flow characteristics. On initial recognition, a financial asset is classified as measured at amortised cost, at
+fair value through other comprehensive income ("FVTOCI"), or at FVTPL.
+Classification of financial assets
+(ii) Classification and subsequent measurement of financial assets
+All financial assets not classified as measured at amortised cost or FVTOCI as described above are measured at FVTPL. On
+initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be
+measured at amortised cost or at FVTOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch
+that would otherwise arise.
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+170
+When measuring fair value, the Group shall take into account the characteristics of the asset or liability if market
+participants would take those characteristics into account when pricing the asset or liability at the measurement date
+(including the condition of the asset; and restrictions, if any, on the sale or use of the asset), and use valuation techniques
+that are appropriate in the circumstances and for which sufficient data and other information are available to measure fair
+value. The adopted valuation techniques mainly include market approach, income approach and cost approach.
+Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
+market participants at the measurement date.
+At initial recognition, financial assets and financial liabilities are measured at fair value. For financial assets and financial
+liabilities measured at fair value through profit or loss ("FVTPL"), any related directly attributable transaction costs are
+charged to profit or loss; for other categories of financial assets and financial liabilities, any related directly attributable
+transaction costs are included in their initial recognised value.
+(i) Initial recognition and measurement of financial instruments
+A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
+instrument of another entity.
+(7) Financial instruments
+(viii) the entity, or any member of a Group of which it is a part, provides key management personnel services to the
+Group or to the Group's parent.
+a person identified in (a)(i) has significant influence over the entity or is a member of the key management
+personnel of the entity (or of a parent of the entity); or
+Annual Report 2023
+Other financial liabilities are subsequently measured at amortised cost using the effective interest method.
+12-month ECL is the portion of ECL that result from default events that are possible within the 12 months after the end of
+the reporting period (or a shorter period if the expected life of the instrument is less than 12 months).
+The Group will reclassify all related financial assets when it changes its business model for managing financial assets, and
+the reclassification applies prospectively from the reclassification date (the first day of the first reporting period following
+the change in business model).
+When the hedged item in a fair value hedge is measured at amortised cost, any hedge adjustment to its carrying amount is
+amortised to profit or loss. The amortisation is based on a recalculated effective interest rate at the date when amortisation
+begins.
+Fair value hedges are hedges of the Group's exposure to changes in fair value of a recognised asset or liability or an
+unrecognised firm commitment, or an identified portion of such an asset, liability or unrecognised firm commitment, that
+is attributable to a particular risk and could affect the profit or loss or other comprehensive income. Among them, the
+circumstances affecting other comprehensive income are limited to the hedging for the risk exposure from fair value change
+of non-trading equity investment designated as at FVTOCI. For fair value hedges, the carrying amount of the hedged item
+not already measured at fair value is adjusted for the gain or loss attributable to the risk being hedged and is taken to profit
+or loss or other comprehensive income. The gains or losses for hedging instrument re-measured at fair value are taken to
+profit or loss or other comprehensive income.
+Fair value hedges
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Annual Report 2023
+176
+Certain derivative transactions, while providing effective economic hedges under the Group's risk management positions,
+do not qualify for hedge accounting and are therefore treated as derivatives held for trading with fair value gains or losses
+recognised in profit or loss.
+At the inception of a hedging relationship, the Group formally designates the hedging instruments and the hedged items,
+and documents the hedging relationship to which the Group wishes to apply hedge accounting and the risk management
+objective and strategy for undertaking the hedge. The documentation includes identification of the hedging instrument, the
+hedged item or transaction, the nature of the risk being hedged and how the entity will assess the hedging instrument's
+effectiveness in offsetting the exposure to changes in the hedged item's fair value or cash flows attributable to the hedged
+risk. Such hedges are expected to meet the hedge effectiveness in achieving offsetting changes in fair value or cash
+flows and are assessed on an on-going basis to analyse the sources of hedge ineffectiveness which are expected to affect
+the hedging relationship in remaining hedging period. If a hedging relationship ceases to meet the hedge effectiveness
+requirement relating to the hedge ratio, but the risk management objective for that designated hedging relationship
+remains the same, the Group would rebalance the hedging relationship.
+Hedge accounting
+For less complex derivative products, the fair values are principally determined by valuation models which are commonly
+used by market participants. Inputs to valuation models are determined from observable market data wherever possible,
+including foreign exchange spot and forward rates and interest rate yield curves. For more complex derivative products, the
+fair values are mainly determined by quoted prices from dealers.
+Any gains or losses arising from changes in fair value on derivatives that do not qualify for hedge accounting are taken
+directly to profit or loss.
+If the host contract included in the hybrid contract is a financial asset, the embedded derivative is no longer split from the
+main contract of the financial asset, and the hybrid financial instrument as a whole is related to the classification of the
+financial asset provision. If the host contract included in the hybrid contract is not a financial asset, when the embedded
+derivative's economic characteristics and risks are not closely related to those of the host contract, those separate
+instruments with the same terms as the embedded derivative would meet the definition of a derivative, and the hybrid
+instrument is not carried at FVTPL, derivatives embedded in other financial instruments should be split from the hybrid
+contract and treated as separate derivatives. These embedded derivatives are measured at fair value with the changes in fair
+value recognised in profit or loss.
+Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered
+into and are subsequently re-measured at fair value. Derivatives are carried as assets when the fair value is positive and as
+liabilities when the fair value is negative.
+Derivatives
+(13) Derivatives and hedge accounting
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+Annual Report 2023 175
+The Group derecognises a financial liability (or part of it) only when its contractual obligation (or part of it) is extinguished.
+When an unrecognised firm commitment is designated as a hedged item, the subsequent cumulative change in fair value of
+the firm commitment attributable to the hedged risk is recognised as an asset or liability with a corresponding gain or loss
+recognised in profit or loss. The changes in fair value of the hedging instrument are also recognised in profit or loss.
+The Group discontinues fair value hedge accounting when the hedging relationship ceases to meet the qualifying criteria
+after taking into account any rebalancing of the hedging relationship, including the hedging instrument has expired or has
+been sold, terminated or exercised. If the hedged items are derecognised, the unamortised adjustment to carrying amount
+is recorded in profit or loss.
+Cash flow hedges
+Cash flow hedges are hedges of the Group's exposure to variability in cash flows that is attributable to a particular risk
+associated with a recognised asset or liability, a highly probable forecast transaction or a component of any such item, and
+could affect profit or loss. For designated and qualifying cash flow hedges, the effective portion of the gain or loss on the
+hedging instrument is initially recognised directly in other comprehensive income. The ineffective portion of the gain or loss
+on the hedging instrument is recognised immediately in profit or loss.
+When the hedged cash flow affects profit or loss, the gain or loss on the hedging instrument recognised directly in other
+comprehensive income is recycled in the corresponding income or expense line of the statement of profit or loss. When
+the hedging relationship ceases to meet the qualifying criteria after taking into account any rebalancing of the hedging
+relationship, including the hedging instrument has expired or has been sold, terminated or exercised, any cumulative gains
+or losses existing in other comprehensive income at that time remains in other comprehensive income until the hedged
+forecast transaction ultimately occurs. When a forecast transaction is no longer expected to occur, the cumulative gain or
+loss that was reported in other comprehensive income is immediately transferred to profit or loss.
+Annual Report 2023
+178
+Except for groups of onerous contracts, the Group reasonably determines the coverage units of contract groups for each
+accounting period of the coverage period based on the modes to provide insurance contract services and allocates the
+carrying amount of contract service margin as the insurance revenue for the current and subsequent periods.
+If a group of insurance contracts is onerous at the date of initial recognition, or if additional loss is caused by contracts
+added to the group of onerous contracts, the Group recognizes a loss as insurance service expenses.
+The Group identifies portfolios of insurance contracts. A portfolio comprises contracts subject to similar risks and managed
+together. The Group further divides portfolios of insurance contracts into groups of insurance contracts, which are taken as
+the unit of measurement. Insurance contracts issued less than one year apart and having similar expected profitability are
+included in the same group.
+Grouping of contracts
+The Group is exposed to insurance risk due to the issuance of insurance contracts. Insurance risk is the risk, other than
+financial risk, transferred from the holder of a contract to the issuer. The Group assesses the significance of insurance risk
+contract by contract. A contract is an insurance contract only if it transfers significant insurance risk. A contract that is
+assessed as meeting the definition of an insurance contract at the contract commencement date will not be re-assessed
+subsequently. An insurance contract shall be derecognized if the obligations under such contract are discharged due to
+fulfilment, cancellation or expiration.
+Identification of insurance contracts
+(15) Insurance contracts
+Derecognition of financial liabilities
+Securities borrowed are not recognised in the statement of financial position, unless they are then sold to third parties, in
+which case the obligation to return the securities is recorded as a financial liability held for trading and measured at fair
+value with any gains or losses included in profit or loss.
+Conversely, assets purchased under agreements to resell at a specified future date ("reverse repos") are not recognised on
+the statement of financial position. The corresponding cash paid, including accrued interest, is recognised on the statement
+of financial position as a "reverse repurchase agreement".
+Assets sold under agreements to repurchase at a specified future date ("repos") are not derecognised from the statement
+of financial position. The corresponding cash received, including accrued interest, is recognised on the statement of
+financial position as a "repurchase agreement". The difference between the sale and repurchase prices is treated as an
+interest expense and is amortised over the life of the agreement using the effective interest method.
+(14) Repurchase and reverse repurchase transactions (including securities borrowing and
+lending)
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+177
+Annual Report 2023
+A net investment hedge is a hedge of the currency risk of a net investment in a foreign institution operation.
+Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the
+hedging instrument relating to the effective portion of the hedge is recognised directly in other comprehensive income; the
+gain or loss relating to the ineffective portion is recognised in profit or loss immediately. Gains and losses accumulated in
+other comprehensive income are included in profit or loss when the foreign operation is disposed of as part of the gains or
+losses on the disposal.
+Net investment hedges
+According to the policy of classification of financial assets, the reverse repurchase agreements held by the Group were
+divided into different classifications according to the entity's business model for managing the financial instruments and the
+contractual cash flow characteristics of the assets: financial assets measured at amortised cost and financial assets measured
+at FVTPL. The difference between the purchase and resale prices of reverse repurchase agreements measured at amortised
+cost is treated as an interest income and is amortised over the life of the agreement using the effective interest method.
+Securities borrowing and lending transactions are usually collateralised by securities or cash. The transfer of the securities
+to counterparties is only reflected on the statement of financial position if the risks and rewards of ownership are also
+transferred. Cash advanced or received as collateral is recorded as an asset or liability.
+(iv) Financial instruments reclassification
+The derecognition of financial assets sold on condition of repurchase is determined by the economic substance of the
+transaction. If a financial asset is sold under an agreement to repurchase the same or substantially the same asset at a
+fixed price or at the sale price plus a reasonable return, the Group will not derecognise the asset. If a financial asset is
+sold together with an option to repurchase the financial asset at its fair value at the time of repurchase, the Group will
+derecognise the financial asset.
+As part of its operational activities, the Group securitises credit assets. When a securitisation of financial assets does not
+qualify for derecognition, the relevant financial assets are not derecognised, and the consideration paid by third parties are
+recorded as a financial liability; when the securitisation of financial assets partially qualifies for derecognition, the Group
+continues to recognise the transferred assets to the extent of its continuing involvement, and derecognises the remaining
+portion. The carrying amount of the transferred assets is apportioned between the derecognised portion and the retained
+portion based on their relative fair values, and the difference between the carrying amount of the derecognised portion and
+the total consideration paid for the derecognised portion is recorded in profit or loss.
+The Group's method of measuring ECL of financial instruments reflects the following elements: (i) unbiased weighted
+average probability determined by the results of evaluating a range of possible outcomes; (ii) time value of money; (iii)
+reasonable and evidence-based information about past events, current conditions, and future economic forecasts that are
+available at no additional cost or effort at the end of the reporting period.
+ECL is a probability-weighted amount of credit losses on financial instruments that is determined with the respective risks
+of default occurring as the weight. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference
+between all cash flows discounted at original interest rates and receivable in accordance with the contract and all cash
+flows that the Group expects to receive).
+Measurement of ECL
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+173
+Annual Report 2023
+Financial assets measured at fair value, including debt or equity instruments measured at FVTPL, equity instruments
+designated as at FVTOCI and derivative financial assets, are not subject to ECL assessment.
+loan commitments and financial guarantee contracts.
+debt instruments measured at FVTOCI; and
+financial assets measured at amortised cost;
+The Group recognises loss allowances for expected credit loss ("ECL") on:
+(10) Impairment of financial assets
+the Group intends either to settle on a net basis, or to realise the financial asset and settle the financial liability
+simultaneously.
+the Group currently has a legally enforceable right to set off the recognised amounts; and
+Financial assets and financial liabilities are generally presented separately in the statement of financial position and shall not
+be offset. However, a financial asset and a financial liability are offset and the net amount is presented in the statement of
+financial position when both of the following conditions are satisfied:
+(9) Presentation of financial instruments
+All regular way purchases and sales of financial assets are recognised at the trade date, which is the date that the Group
+commits to purchase or sell the assets. A regular way purchase or sale is the purchase or sale of financial assets that
+requires delivery of assets within the time frame generally established by regulation or convention in the marketplace.
+(8) Trade date accounting
+The maximum period considered when estimating ECL is the maximum contractual period (including extension options) over
+which the Group is exposed to credit risk.
+Lifetime ECL is the ECL that result from all possible default events over the expected life of a financial instrument.
+(a)
+The Group classifies financial instruments into the following three stages and provides provisions for ECL accordingly,
+depending on whether credit risk on that financial instrument has increased significantly since initial recognition.
+Securitisation
+Where the Group has transferred its rights to receive cash flows from an asset or has retained its rights to receive cash
+flows from the asset but assumed the obligation to pay those cash flows to the eventual recipients and meanwhile meet the
+conditions of the transfer of financial assets, and has neither transferred nor retained substantially all the risks and rewards
+of the asset nor transferred control of the asset, the asset is recognised to the extent of the Group's continuing involvement
+in the asset. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower
+of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required
+to repay.
+the financial asset has been transferred, although the Group neither transfers nor retains substantially all of the risks
+and rewards of ownership of the financial asset, it does not retain control over the transferred asset.
+the financial asset has been transferred and the Group transfers substantially all of the risks and rewards of ownership
+of the financial asset; or
+the Group's contractual rights to the cash flows from the financial asset expire;
+Financial asset is derecognised when one of the following conditions is met:
+Derecognition of financial assets
+(12) Derecognition of financial assets and liabilities
+In some cases (such as renegotiating loans), the Group may renegotiate or otherwise modify the financial assets contracts.
+The Group would assess whether or not the new contractual terms are substantially different to the original terms. If the
+terms are substantially different, the Group derecognises the original financial asset and recognises a new asset under the
+revised terms. If the renegotiation or modification does not result in derecognition, but leads to changes in contractual cash
+flows, when assessing whether a significant increase in credit risk has occurred, the Group compares the risk of a default
+occurring under the revised terms as at the end of the reporting period with that as at the date of initial recognition under
+original terms.
+Sales of assets on condition of repurchase
+(11) Modification of financial assets contracts
+Annual Report 2023
+174
+The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic
+prospect of recovery. A write-off constitutes a derecognition event. This is generally the case when the Group determines
+that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts
+subject to the write-off. However, financial assets that are written off could still be subject to enforcement activities in order
+to comply with the Group's procedures for recovery of amounts due. Subsequent recoveries of an asset that was previously
+written off are recognised as a reversal of impairment in profit or loss in the period in which the recovery occurs.
+Write-off
+ECL is re-measured at the end of each reporting period to reflect changes in the financial instrument's credit risk since
+initial recognition. Any change in the ECL amount is recognised as an impairment gain or loss in profit or loss. The Group
+recognises impairment gains or losses for financial instruments measured at amortised cost with a corresponding adjustment
+to their carrying amount through allowance for impairment loss. For debt instruments that are measured at FVTOCI, the
+loss allowance is recognised in other comprehensive income, which does not decrease the carrying amount of the financial
+assets. The Group recognises loss allowance for loan commitments and financial guarantee contracts through other
+liabilities (provisions for credit commitments).
+Presentation of allowance for ECL
+Stage 3: A financial instrument is considered to be credit-impaired as at the end of the reporting period. The amount that
+equals to lifetime ECL is recognised as loss allowance. Refer to Note 50(a) credit risk for the definition of credit-impaired
+financial assets.
+Stage 2: A financial instrument with a significant increase in credit risk since initial recognition but is not considered to be
+credit-impaired. The amount that equals to lifetime ECL is recognised as loss allowance. Refer to Note 50(a) credit risk for
+the description of how the Group determines when a significant increase in credit risk has occurred.
+Stage 1: A financial instrument of which the credit risk has not significantly increased since initial recognition. The amount
+that equals to 12-month ECL is recognised as loss allowance.
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+A party is considered to be related to the Group if:
+On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present
+subsequent changes in the investment's fair value in other comprehensive income. This election is made on an investment-
+by-investment basis, and the relevant investment should meet the definition of equity instrument from the perspective of
+the issuer.
+(In RMB millions, unless otherwise stated)
+(6) Related parties
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(5) Business combination and goodwill
+When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and
+designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition
+date. This includes the separation of embedded derivatives from host contracts of the acquiree.
+If the business combination is achieved in stages, the acquirer's previously-held equity interest in the acquiree is re-
+measured to the acquisition date fair value through profit or loss.
+Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date.
+Subsequent changes to the fair value of the contingent consideration that is classified as a financial asset or financial
+liability, is recognised in profit or loss. If the contingent consideration is classified as equity, it shall not be re-measured, and
+its subsequent settlement is accounted for within equity.
+Business combinations are accounted for by applying the acquisition method. The Group can elect to apply an optional
+concentration test, on a transaction-by-transaction basis, that permits a simplified assessment of whether the acquired set
+of assets is not a business. If the concentration test is met, the set of assets is determined not to be a business; otherwise,
+the Group shall then perform an assessment in accordance with the requirements of business. The consideration transferred
+is measured at acquisition date fair value which is the sum of the acquisition date fair values of assets transferred by the
+Group, liabilities assumed by the Group to the former owners of the acquiree and the equity interests issued by the Group
+in exchange for control of the acquiree. Any costs directly attributable to the combination are recognised in profit or loss
+when incurred.
+After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is tested for
+impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be
+impaired. The Group performs its annual impairment test of goodwill at year end date. For the purpose of impairment
+testing, goodwill arising in a business combination is, from the acquisition date, allocated to each of the Group's cash-
+generating units ("CGU"), or group of CGUs, that are expected to benefit from the synergies of the combination,
+irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units.
+Impairment is determined by assessing the recoverable amount of the CGU or group of CGUS to which the goodwill relates.
+Where the recoverable amount of the CGU or group of CGUS is less than the carrying amount, an impairment loss is
+recognised. An impairment loss recognised for goodwill is not reversed in subsequent period.
+Where goodwill forms part of a CGU or group of CGUS and part of the operation within that unit is disposed of, the
+goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining
+the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative
+values of the operation disposed of and the portion of the CGU or group of CGUS retained.
+Annual Report 2023
+169
+Notes to the Consolidated Financial Statements
+Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred, the amount
+recognised for non-controlling interests and the fair value of the acquirer's previously-held equity interest in the
+acquiree over the net of the acquisition-date amounts of the identifiable assets and liabilities acquired. If the sum of this
+consideration and other items is lower than the fair value of the net assets of the subsidiary acquired, the difference is,
+after reassessment, recognised in profit or loss as gains on bargain purchase.
+Employee wages or salaries, bonuses, social security contributions such as medical insurance, work injury insurance,
+maternity insurance and housing fund, measured at the amount incurred or at the applicable benchmarks and rates, are
+recognised as a liability as the employee provides services, with a corresponding charge to profit or loss or included in the
+cost of assets where appropriate.
+In other cases, the Group recognises revenue at a point in time at which a customer obtains control of the promised
+services.
+Dividend income
+Dividend income is recognised when the Group's right to receive payment is established, it is probable that the related
+economic benefits will flow to the Group and the related income can be reliably measured.
+(29) Employee benefits
+Employee benefits refer to all forms of consideration and other related expenditure given by the Group in exchange for
+services rendered by employees. The benefits payable are recognised as liabilities during the period in which the employees
+have rendered services to the Group. If the effect of discounting the benefits payable which are payable after one year from
+the end of the reporting period is significant, the Group will present them at their present value.
+Short-term employee benefits
+All eligible employees outside Chinese mainland participate in local defined contribution schemes. The Group contributes to
+these defined contribution schemes based on the requirements of the local regulatory bodies and charge to profit or loss or
+included in the cost of assets where appropriate.
+(In RMB millions, unless otherwise stated)
+Pursuant to the relevant laws and regulations of the PRC, the Group participates in a defined contribution basic pension
+insurance and unemployment insurance in the social insurance system established and managed by government
+organisations. The Group makes contributions to basic pension insurance and unemployment insurance plans based on the
+applicable benchmarks and rates stipulated by the organisations. Basic pension insurance and unemployment insurance
+contributions are recognised as liabilities with a corresponding charge to profit or loss or included in the cost of assets
+where appropriate as the related services are rendered by the employees.
+In addition, employees in Chinese mainland also participate in defined contribution retirement benefit plans established
+by the Group (the "Annuity Plan"). The Group and its employees are required to contribute a certain percentage of the
+employees' previous year basic salaries to the Annuity Plan. The Group pays a fixed contribution into the Annuity Plan
+and has no obligation to pay further contributions if the Annuity Plan does not hold sufficient assets to pay all employee
+benefits. The contribution is charged to profit or loss when it is incurred.
+Annual Report 2023
+185
+Notes to the Consolidated Financial Statements
+the Group does not provide service with an alternative use to the Group, and the Group has an enforceable
+right to payment for performance completed to date.
+Termination benefits
+Termination benefits are payable as a result of either the Group's decision to terminate an employee's employment before
+the due date of labour contract or an employee's decision to accept an offer of benefits in exchange for the termination of
+employment. The Group recognises termination benefits in profit or loss at the earlier of:
+Post-employment benefits-defined contribution plans
+the customer controls the service provided by the Group in the course of performance; or
+184
+(i) The Group recognises income over time by measuring the progress towards the complete satisfaction of a
+performance obligation, if one of the following criteria is met:
+A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by
+the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. It
+can also be a present obligation arising from past events that is not recognised because it is not probable that an outflow
+of economic resources will be required or the amount of obligation cannot be measured reliably. Contingent liabilities are
+disclosed in the notes to the financial statements. When a change in the probability of an outflow occurs so that outflow is
+probable and can be reliably estimated, it will then be recognised as a provision.
+(26) Preference shares and perpetual bonds
+At initial recognition, the Group classifies the preference shares, perpetual bonds issued or their components as financial
+liabilities or equity instruments based on their contractual terms and their economic substance after considering the
+definition of financial liabilities and equity instruments.
+Preference shares and perpetual bonds issued that should be classified as equity instruments are recognised in equity based
+on the actual amount received. Any distribution of dividends or interests during the instrument's duration is treated as
+profit appropriation. When the preference shares and perpetual bonds are redeemed according to the contractual terms,
+the redeemed amount is charged to equity.
+(27) Cash and cash equivalents
+Cash and cash equivalents refer to monetary assets, which are short-term, highly liquid, readily convertible into known
+amounts of cash and subject to an insignificant risk of changes in value. Cash and cash equivalents comprise cash,
+unrestricted balances with central banks, amounts due from banks and other financial institutions and reverse repurchase
+agreements with original maturity of less than three months.
+(28) Revenue recognition
+Interest income
+For all financial instruments measured at amortised cost and interest-generating financial instruments classified as financial
+assets measured at FVTOCI, interest income is recorded at the effective interest rate, which is the rate that exactly discounts
+estimated future cash receipts or payments through the expected life of the financial instrument, where appropriate, to the
+gross carrying amount of the financial asset, or the amortised cost of financial liability. The calculation takes into account all
+contractual terms of the financial instrument (for example, prepayment options) and includes any fees or incremental costs
+that are directly attributable to the instrument and are an integral part of the effective interest rate, but not expected credit
+losses.
+Interest income is calculated by applying the effective interest rate to the gross carrying amount of financial assets and is
+recognised as interest income, except for:
+(i)
+(ii)
+purchased or originated credit-impaired financial assets, whose interest income is calculated, since initial recognition,
+by applying the credit adjusted effective interest rate to their amortised cost; and
+purchased or originated financial assets that are not credit-impaired but have subsequently become credit-impaired,
+whose interest income is calculated by applying the effective interest rate to their amortised cost (i.e. net of the
+expected credit loss provision). If, in a subsequent period, the financial assets quality improve so that they are no
+longer credit-impaired and the improvement in credit quality is related objectively to a certain event occurring after
+the application of the above-mentioned rules, then the interest income is calculated by applying the effective interest
+rate to their gross carrying amount.
+when the Group cannot unilaterally withdraw the offer of termination benefits because of an employee termination
+plan or a curtailment proposal;
+Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Fee and commission income
+The Group earns fee and commission income from a diverse range of services it provides to its customers. The fee and
+commission income recognised by the Group reflects the amount of consideration to which the Group expects to be
+entitled in exchange for transferring promised services to customers, and income is recognised when its performance
+obligation in contracts is satisfied.
+the customer simultaneously receives and consumes the benefits provided by the Group's performance as the
+Group performs;
+when the Group has a specific, formal restructure plan involving payment of termination benefits, and the plan has
+started or informed each affected party about the influence of the plan, therefore each party formed reasonable
+expectations.
+Deferred tax is provided using the balance sheet liability method on temporary differences at the end of the reporting
+period between the tax bases of assets and liabilities and their carrying amounts.
+According to the Bank's policy on early retirement benefits, certain employees are entitled to take leave of absence and
+in return receive a certain level of staff salaries and related benefits from the Bank. The salaries and benefit payments are
+made from the date of early retirement to the normal retirement date. Differences arising from changes in assumptions and
+estimates of the present value of the liabilities are recognised in profit or loss.
+187
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+5.
+SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES
+In the process of applying the Group's accounting policies, management is required to make judgements, estimates and
+assumptions of the effects of uncertain future events on the financial statements. The most significant use of judgements,
+estimates and assumptions concerning the uncertainty of the future at the end of the reporting period that have a
+significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial
+year are described below.
+Measurement of the ECL allowance
+The measurement of the ECL allowance for financial assets measured at amortised cost and FVTOCI, and with exposure
+arising from loan commitments and financial guarantee contracts, is an area that requires the use of complex models and
+significant assumptions about future economic conditions and credit behaviour (the likelihood of customers defaulting and
+the resulting losses). Refer to Note 50(a) credit risk for the explanation of the inputs, assumptions and estimation techniques
+used in measuring ECL.
+Annual Report 2023
+Income tax
+Fair value of financial instruments
+If the market for a financial instrument is not active, the Group determines the fair value by using valuation technique,
+including using recent arm's length market transactions between knowledgeable and willing parties, if available, reference
+to the current fair value of another instrument that is substantially the same, discounted cash flow analysis and option
+pricing models. Valuation technique makes maximum use of observable market input. However, where observable market
+inputs are not available, management makes estimates on such unobservable market inputs.
+Determination of control over investees
+Management applies its judgement to determine whether the control indicators set out in Note 4(2) indicate that the Group
+controls securitisation vehicles, wealth management products, investment funds, trust plans, asset management plans and
+asset-backed securities.
+188
+Recognition and measurement of insurance contracts
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Annual Report 2023
+Determining income tax provisions requires the Group to estimate the future tax treatment of certain transactions. The
+Group evaluates tax implications of transactions in accordance with prevailing tax regulations and makes tax provisions
+accordingly. In addition, deferred tax assets are recognised to the extent that it is probable that future taxable profit will be
+available against which the deductible temporary differences can be utilised. This requires significant judgement on the tax
+treatments of certain transactions and also significant assessment on the probability that adequate future taxable profits will
+be available for the deferred tax assets to be recovered.
+Dividends are recognised as a liability and deducted from equity when they are approved by the Bank's shareholders in
+general meetings and declared. Interim dividends are deducted from equity when they are approved and declared, and
+no longer at the discretion of the Bank. A dividend for the year that is approved after the end of the reporting period is
+disclosed as an event after the reporting period.
+(31) Dividends
+Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets
+against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
+(30) Income tax
+Income tax comprises current and deferred tax. Income tax is recognised in the statement of profit or loss except that it
+relates to items recognised directly in equity, in which case it is recognised in equity.
+Current tax
+Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered
+from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted
+or substantively enacted by the end of each reporting period.
+Deferred tax
+(25) Contingent liabilities
+Deferred tax liabilities are recognised for all taxable temporary differences, except:
+(i)
+where the taxable temporary difference arises from the initial recognition of goodwill;
+(ii)
+where the taxable temporary difference arises from the initial recognition of assets and liabilities in a transaction that
+is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable
+income (or deductible expenses), and such transaction does not give rise to equivalent taxable temporary differences
+and deductible temporary differences.
+In respect of taxable temporary differences associated with investments in subsidiaries, associates and joint ventures,
+deferred tax liabilities are recognised except where the timing of the reversal of the temporary differences can be controlled
+and it is probable that the temporary differences will not be reversed in the foreseeable future.
+186 Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused
+tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary
+differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except that deferred
+tax assets are not recognised if the temporary difference arises from the initial recognition of assets and liabilities in a
+transaction and that:
+transaction is not a business combination;
+(ii) at the time of the transaction, it affects neither the accounting profit nor taxable income (or deductible expenses);
+(iii) such transaction does not give rise to equivalent taxable temporary differences and deductible temporary differences.
+In respect of deductible temporary differences associated with investments in subsidiaries, associates and joint ventures,
+deferred tax assets are recognised only to the extent that it is probable that the temporary differences will be reversed in
+the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.
+Deferred tax assets and deferred tax liabilities are measured at the tax rates that are expected to apply to the period when
+the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
+enacted by the end of the reporting period, and reflect the corresponding tax effect.
+The carrying amount of deferred tax assets is reviewed at the end of the reporting period and reduced to the extent that
+it is no longer probable that sufficient taxable income will be available to allow all or part of the deferred tax asset to be
+utilised. When it is virtually probable that sufficient taxable income will be available, the reduced amount can be reversed
+accordingly.
+Early retirement benefits
+(In RMB millions, unless otherwise stated)
+(i)
+Annual Report 2023 183
+there is a change in the amounts expected to be payable under a residual value guarantee;
+there is a change in future lease payments resulting from a change in an index or a rate used to determine those
+payments;
+there is a change in the assessment of whether the Group will exercise a purchase, extension or termination option,
+or there is a change in the exercise of the extension or termination option.
+When the lease liability is re-measured, a corresponding adjustment is made to the carrying amount of the right-of-use
+asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
+The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term
+of 12 months or less and leases of low-value assets. The Group recognises the lease payments associated with these leases
+in profit or loss or as the cost of the assets where appropriate using the straight-line method over the lease term.
+180
+Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Under the following circumstances after the commencement date, the Group re-measures lease liabilities based on the
+present value of revised lease payments:
+(ii) As a lessor
+When the Group is a sub-lessor, it assesses the lease classification of a sub-lease with reference to the right-of-use asset
+arising from the head lease, not with reference to the underlying asset. If the head lease is a short-term lease to which the
+Group applies practical expedient described above, then it classifies the sub-lease as an operating lease.
+Under a finance lease, at the commencement date, the Group recognises the finance lease receivable and derecognises the
+finance lease asset. The finance lease receivable is initially measured at an amount equal to the net investment in the lease.
+The net investment in the lease is measured at the aggregate of the unguaranteed residual value and the present value
+of the lease receivable that are not received at the commencement date, discounted using the interest rate implicit in the
+lease.
+The Group recognises finance income over the lease term, based on a pattern reflecting a constant periodic rate of return.
+The impairment and derecognition of the finance lease receivable are recognised in accordance with the accounting policy
+in Notes 4(10) and 4(12). Variable lease payments not included in the measurement of net investment in the lease are
+recognised as income as they are earned.
+Lease receipts from operating leases is recognised as income using the straight-line method over the lease term. The initial
+direct costs incurred in respect of the operating lease are initially capitalised and subsequently amortised in profit or loss
+over the lease term on the same basis as the lease income. Variable lease payments not included in lease receipts are
+recognised as income as they are earned.
+(17) Financial guarantee contracts
+The Group issues financial guarantee contracts, including letters of credit, letters of guarantee and acceptance. These
+financial guarantee contracts provide for specified payments to be made to reimburse the holders for the losses they incur
+when a guaranteed party defaults under the original or modified terms of a debt instrument, loan or any other obligation.
+The Group initially measures all financial contracts at fair value, in other liabilities, being the premium received. This
+amount is recognised ratably over the period of the contract as fee and commission income. Subsequently, the liabilities are
+measured at the higher of the amount of the loss allowance determined in accordance with impairment policies of financial
+instruments and the amount initially recognised less the cumulative amount of income. Any increase in the liability relating
+to a financial guarantee is taken to the statement of profit or loss.
+(18) Fiduciary activities
+When the Group acts in a fiduciary capacity such as custodian or agent, assets arising thereon together with related
+undertakings to return such assets to customers are excluded from the statement of financial position.
+The Group determines at lease inception whether each lease is a finance lease or an operating lease. A lease is classified
+as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset
+irrespective of whether the legal title to the asset is eventually transferred. An operating lease is a lease other than a finance
+lease.
+The asset custody services of the Group refer to the business that the Group as trustee approved by regulatory authorities,
+signs custody agreement with clients and takes the responsibility of trustee in accordance with relevant laws and
+regulations. The assets under custody are not recorded on the statement of financial position as the Group merely fulfils the
+responsibility as trustee and charges fees in accordance with these agreements without retaining any risks or rewards of the
+assets under custody.
+A constant periodic rate is used to calculate the interest on the lease liability in each period during the lease term with a
+corresponding charge to profit or loss or included in the cost of assets where appropriate. Variable lease payments not
+included in the measurement of the lease liability are charged to profit or loss or included in the cost of assets where
+appropriate as incurred.
+The right-of-use asset is depreciated using the straight-line method. If the lessee is reasonably certain to exercise a purchase
+option by the end of the lease term, the right-of-use asset is depreciated over the remaining useful lives of the underlying
+asset. Otherwise, the right-of-use asset is depreciated from the commencement date to the earlier of the end of the useful
+life of the right-of-use asset or the end of the lease term. Impairment losses of right-of-use assets are accounted for in
+accordance with the accounting policy described in Note 4(23).
+On initial recognition, the Group measures a group of insurance contracts at the total of the fulfilment cash flows and
+the contractual service margin, and recognises an insurance contract liability. Contractual service margin represents the
+unearned profit the Group will recognise as it provides services under insurance contracts in the future. The fulfilment
+cash flows comprise estimates of future cash flows directly attributable to fulfilling insurance contracts, an adjustment to
+reflect the time value of money and the financial risks and a risk adjustment for non-financial risk. An Group's own non-
+performance risk is not taken into account in estimating the fulfilment cash flows. Risk adjustment for non-financial risk
+represents the compensation the Group requires for bearing the uncertainty about the amount and timing of future cash
+flows that arises from non-financial risk as the entity fulfils insurance contracts.
+Notes to the Consolidated Financial Statements
+The Group measures insurance contracts with the general model, applying the variable fee approach or premium allocation
+approach, and subsequently measures the insurance contract liabilities at the end of the reporting period at the sum of the
+liability for remaining coverage and the liability for incurred claims. The Group recognises the reduction in the liability for
+remaining coverage because of services provided in the period as insurance revenue. The Group recognises the increase
+in the liability for incurred claims because of claims and expenses incurred in the period and any subsequent changes in
+fulfilment cash flows relating to incurred claims and incurred expenses as insurance service expenses. The Group allocates
+insurance acquisition cash flows to each accounting period of the coverage period as insurance revenue and recognises the
+same amount as insurance service expenses.
+The Group recognises the change in the liability for remaining coverage and the liability for incurred claims because of the
+effect of the time value of money and the effect of financial risk as financial changes of insurance contracts. The Group
+elects to disaggregate financial changes of insurance contracts and include such changes in insurance finance income or
+expenses for the period and other comprehensive income.
+(16) Leases
+A lease is when the lessor conveys the right to control the use of an asset for a period of time in exchange for the
+consideration of the lessee.
+At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease
+if the contract conveys the right to control the use of one or more identified assets for a period of time in exchange for
+consideration.
+To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether:
+The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement
+date. In calculating the present value of lease payments, the Group uses the incremental borrowing rate if the interest rate
+implicit in the lease is not readily determinable. Each institution of the Group uses an interest rate that a lessee would have
+to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to
+the right-of-use asset in a similar economic environment as the incremental borrowing rate.
+the contract involves the use of an identified asset. An identified asset may be specified explicitly or implicitly in a
+contract and should be physically distinct, or a capacity portion or other portion of an asset that is not physically
+distinct but represents substantially all of the capacity of the asset and thereby provides the customer with the
+right to obtain substantially all of the economic benefits from the use of the asset. If the supplier has a substantive
+substitution right throughout the period of use, then the asset is not identified;
+the lessee has the right to direct the use of the asset.
+Annual Report 2023
+179
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(i)
+As a lessee
+The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is
+initially measured at cost, which comprises the initial amount of the lease liability, any lease payments made at or before
+the commencement date (less any lease incentives received), any initial direct costs incurred and an estimate of costs to
+dismantle and remove the underlying asset or to restore the site on which it is located or restore the underlying asset to the
+condition required by the terms and conditions of the lease.
+the lessee has the right to obtain substantially all of the economic benefits from use of the asset throughout the
+period of use;
+The Group grants entrusted loans on behalf of trustors, which are recorded off-balance sheet. The Group, as a trustee,
+grants such entrusted loans to borrowers under the direction of those trustors who fund these loans. The Group has been
+contracted by those trustors to manage the administration and collection of these loans on their behalf. Those trustors
+determine both the underwriting criteria for and the terms of all entrusted loans including their purposes, amounts, interest
+rates, and repayment schedules. The Group charges a commission related to its activities in connection with entrusted loans
+which are recognised ratably over the period in which the service is provided. The risk of loss is borne by those trustors.
+For a contract that contains more than one separate lease component, the lessee and the lessor separate lease components
+and account for each lease component as a lease separately. For a contract that contains lease and non-lease components,
+the lessee and the lessor separate lease components from non-lease components. However, for the leases in which the
+Group is a lessee, the Group has elected not to separate lease components from non-lease components and accounts for
+the lease and non-lease components as a single lease component.
+Notes to the Consolidated Financial Statements
+For an impaired fixed asset, the depreciation is calculated based on the carrying value less the cumulative impairment loss.
+Where parts of an item of property and equipment have different useful lives, the cost of that item is allocated on a
+reasonable basis among the parts and each part is depreciated separately.
+Residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at least at each financial
+year end.
+An item of property and equipment is derecognised upon disposal or when no future economic benefits are expected from
+its use or disposal. Any gain or loss arising from derecognition of the asset (calculated as the difference between the net
+disposal proceeds and the carrying amount of the asset) is included in the statement of profit or loss in the year the asset is
+derecognised.
+182
+Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(21) Land use rights
+Land use rights are recognised at cost, being the fair value at the time of injection from the central government of the PRC
+(the "Government") during the Group's restructuring or the consideration paid. The rights are amortised using the straight-
+line method over the periods of the leases. When the prepaid land lease payments cannot be allocated reliably between
+the land and buildings elements, the entire lease payments are included in the costs of properties and buildings as finance
+leases in property and equipment.
+(22) Repossessed assets
+Repossessed assets are initially recognised at fair value of assets not retained plus related costs, and are subsequently
+measured at the lower of the carrying value and net recoverable amount. If the recoverable amount is lower than the
+carrying value of the repossessed assets, the assets are written down to the recoverable amount.
+(23) Non-financial asset impairment
+The Group assesses at the end of each reporting period whether there is any indication that property and equipment,
+land use rights, right-of-use assets, associates and joint ventures and other non-financial assets may be impaired. If any
+such indication exists, or when impairment testing for an asset is required, the Group makes an estimate of the asset's
+recoverable amount. An asset's recoverable amount is the higher of its fair value less costs to sell and its value in use and
+is determined on an individual basis, unless the asset does not generate cash inflows that are largely independent of those
+from other assets or groups of assets, in which case the recoverable amount is determined for the CGU to which the
+asset belongs. Where the gross carrying amount of an asset exceeds its recoverable amount, the asset is considered to be
+impaired and is written down to its recoverable amount. In assessing value in use of an asset, the estimated future cash
+flows are discounted to their present values using a pre-tax discount rate that reflects current market assessments of the
+time value of money and the risks specific to the asset.
+(24) Provisions
+Provisions are recognised when the Group has a present obligation as a result of a past event, and it is probable that an
+outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be
+made on the amount of the obligation.
+A provision is initially measured at the best estimate of the expenditure required to settle the related present obligation.
+When the effect of the time value of money is material, the best estimate is determined by discounting the related future
+cash outflows. When determining the best estimate, the Group considers factors pertaining to a contingency such as
+risks, uncertainties and time value of money. Where there is a range of possible outcome, and each possible outcome in
+that range is as likely as any other, the best estimate is the mid-point of that range. In other cases, the best estimate is
+determined according to the following circumstances:
+where the contingency involves a single item, the best estimate is the most likely outcome;
+The Group reviews the carrying amount of a provision at the end of reporting period. The carrying amount is adjusted to
+the current best estimate.
+Annual Report 2023 181
+where the contingency involves a large population of items, the best estimate is determined by weighting all possible
+outcomes by their associated probabilities.
+Equipment under operating leases where the Group is the lessor contains aircraft, aircraft engines and vessels. The
+estimated useful lives and depreciation methods are determined according to the conditions of individual aircraft and vessel.
+The estimated residual values are assessed by an independent appraiser based on historical data. The estimated useful lives
+range from 15 to 25 years.
+The shorter of the economic
+useful lives and remaining lease terms
+An assessment is made at the end of each reporting period as to whether there is any indication that previously recognised
+impairment losses may no longer exist or may have decreased. If such an indication exists, the recoverable amount is
+estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to
+determine the asset's recoverable amount since the last impairment loss was recognised. If that is the case, the carrying
+amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that
+would have been determined, net of any depreciation or amortisation, had no impairment loss been recognised for the
+asset in prior years. Any such reversal is recognised in profit or loss. After such a reversal, the depreciation or amortisation
+charge is adjusted in future periods to allocate the asset's revised carrying amount, less any residual value, on a systematic
+basis over its remaining useful life.
+2-7 years
+(19) Precious metals
+14.29% -50%
+(In RMB millions, unless otherwise stated)
+Precious metals comprise gold, silver and other precious metals. Precious metals that are not related to the Group's precious
+metals trading activities are initially measured at acquisition cost and subsequently measured at the lower of cost and
+net realisable value. Precious metals acquired by the Group for trading purposes are initially measured at fair value and
+subsequent changes in fair value are recorded in the statement of profit or loss.
+The Group records the precious metals received as an asset. A liability to return the amount of precious metals deposited is
+also recognised. The precious metals deposited with the Group are measured at fair value both on initial recognition and in
+subsequent measurement.
+(20) Property and equipment
+Construction in progress comprises the direct costs of construction during the period of construction and is not depreciated.
+Construction in progress is reclassified to the appropriate category of property and equipment when completed and ready
+for use.
+The carrying values of property and equipment are reviewed for impairment when events or changes in circumstances
+indicate that the carrying values may not be recoverable.
+Depreciation is calculated on the straight-line basis to write off the cost of each item of property and equipment, less any
+estimated residual value, over the estimated useful life. The estimated useful life, estimated residual value rate and the
+annual depreciation rate of each item of property and equipment (excluding aircraft and vessels) are as follows:
+Property and equipment, other than construction in progress are stated at costs less accumulated depreciation and
+any impairment loss. The cost of an item of property and equipment comprises its purchase price, tax and any directly
+attributable costs of bringing the asset to its present working condition and location for its intended use. Expenditure
+incurred after items of property and equipment have been put into operation, such as repairs and maintenance, is normally
+charged to profit or loss in the period in which it is incurred. In situations where the recognition criteria are satisfied, the
+expenditure for a major inspection is capitalised in the carrying amount of the asset as a replacement.
+Leasehold improvements
+Estimated
+useful life
+5 - 50 years
+Estimated residual
+value rate
+0% - 3%
+depreciation rate
+1.94% -20%
+Properties and buildings
+Annual
+Office equipment and motor vehicles
+(excluding aircraft and vessels)
+Q4
+210,445
+Net profit attributable
+90,164
+83,580
+Q3
+194,614
+94,929
+226,431
+90,145
+Q1
+Q2
+217,730
+81,525
+218,461
+Q3
+208,392
+94,896
+189,799
+94,566
+Q4
+182,938
+95,320
+Operating income
+(8) Calculated by dividing allowance for impairment losses on loans by total balance of NPLs.
+Q1
+Calculated by dividing net interest income by the average balance of interest-generating assets.
+(4)
+to equity holders of
+the parent company
+Net cash flows from
+operating activities
+(5)
+Calculated by dividing net profit by the average balance of risk-weighted assets at the beginning and at the end of the
+reporting period.
+(6)
+Q2
+Calculated by dividing operating expenses (less taxes and surcharges) by operating income.
+(9)
+Calculated by dividing allowance for impairment losses on loans by total balance of loans and advances to customers.
+(10) Calculated in accordance with the Capital Regulation (Provisional).
+Quarterly Financial Data
+2023
+2022 (Restated)
+(In RMB millions)
+(7) Calculated by dividing the balance of NPLs by total balance of loans and advances to customers.
+1,105,614
+Mutual promotion of foundation and growth drivers. The highlights of foundation are that we stepped up the
+establishment of the customer system where "large, medium, small and micro enterprises and personal customers" were
+well coordinated and developed, and ecologically cemented the high-quality development. The Bank, with the people's
+aspiration for a better life in mind, innovated its products, built the "ICBC Aixiangban" service brand, set up 15.5 thousand
+"ICBC Sharing Stations", and served Chengdu FISU World University Games and the Asian Games Hangzhou, to polish our
+brand image of "By Your Side and As Your Trust". The Bank dynamically upgraded the "GBC+" projects. The number of
+personal customers increased by nearly 20.00 million, and ICBC was the first one to have its corporate customers exceeding
+12.00 million. The increment of domestic RMB deposits reached a new height, while rate of interest payment remained
+stable with a slight decline. Moreover, funds, assets and capital become more balanced.
+611,850
+TEK
+(3)
+Annual Report 2023
+14
+Spring is a time when we look ahead to all the possibilities. The year 2024 marks the 75th anniversary of the founding
+of the People's Republic of China, is a pivotal year for achieving the goals and tasks in the 14th Five-Year Plan, and also the
+first year for ICBC to hit the road again. Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New
+Era, ICBC will act on the general working principle of pursuing progress while ensuring stability, promoting stability through
+progress, and establishing the new before abolishing the old, and fully and faithfully apply the new development philosophy
+on all fronts. ICBC will uphold the goal of building a financial power, stick to the political and people-oriented nature of
+financial work, deepen the implementation of the "Four Strategies", advance our work centering on "layout modernization,
+smart risk control, digital growth drivers, diversified structure, and ecological foundation", cultivate and carry forward
+financial culture with Chinese characteristics, and play the key role in serving the real economy and the ballast stone role in
+maintaining financial stability, so as to make greater contributions to building China into a great modern socialist country
+and advancing the great rejuvenation of the Chinese nation.
+The glory of the previous journey inaugurates a new journey. 1 January 2024 marks the 40th anniversary of ICBC.
+In the past 40 years, we unswervingly integrated our own development into the great causes of progress of the nation,
+national rejuvenation, and people's well-being, and realized a historic leap from small to large, from local to global, and
+from a domestic bank to a modern state-owned large-scale financial institution. Looking to future from the perspective of
+historical coordinates, we are even more confident that the Chinese economy has great resilience and potential, and its
+strong fundamentals will not change in the long run. This is the biggest foundation and strongest support for the high-
+quality development of the financial industry. Only by firmly following the path of financial development with Chinese
+characteristics can ICBC take root downward, grow upward and make breakthroughs in building a world-class and modern
+financial institute with Chinese characteristics.
+In February 2024, due to his age, Mr. Chen Siqing resigned from his positions as Chairman of the Board of Directors,
+Executive Director, and Chairman and Member of the Strategy Committee of the Board of Directors. During his tenure, Mr.
+Chen Siqing fulfilled his duties diligently and conscientiously and made outstanding contributions to the development of the
+Bank. On behalf of the Board of Directors, I would like to hereby express heartfelt gratitude to Mr. Chen Siqing! Gratitude
+also goes to directors leaving office since last year! We also warmly welcome our new directors!
+In the past year, we adhered to the guidance of the Party building theory and exercising rigorous corporate
+governance. We carried out thematic education and united the whole Bank under the guidance of the Xi Jinping
+Thought on Socialism with Chinese Characteristics for a New Era. We remain committed to "Two Affirmations" and "Two
+Upholds" implemented them to the letter. We earnestly rectified problems discovered during central inspections, audits,
+and supervisions, resolutely fought corruption, and unceasingly conducted full and rigorous Party self-governance to forge
+a clean ICBC. We pushed forward the organic integration between the Party's leadership and corporate governance.
+The newly revised Articles of Association has been approved by the regulatory authority and come into effect, and the
+governance system of a modern financial enterprises with Chinese characteristics continued to be improved.
+The highlights of growth driver are that the new quality productive forces of ICBC rapidly formed, and the digital growth
+driver was running at full throttle. Determined to deepen reforms, ICBC maintained continuous increase in technological
+input and accelerated the construction of D-ICBC. ICBC consolidated its basis of technology, took the lead in building a
+hundreds of billion-level Al model technology system, and was certified as the highest level in the Financial Digital Capability
+Maturity (FDCM). ICBC iteratively upgraded its Mobile Banking, Open Banking and other platforms, to enabling enterprise
+to serve new urban residents and county-based rural customers. The number of monthly active mobile banking customers
+reached 229 million, maintaining the leading position among peers. The services for financial infrastructure such as payment
+settlement and pension custody were improved, driving the steady growth of non-interest income. We profoundly realized
+that, facing the new round of scientific and technological revolution and industrial transformation, we must master more
+key core technologies, and accelerate digital transformation, in a bid to empower the present and win the future.
+Chairman's Statement
+13
+Annual Report 2023
+"Five-pronged Risk Management Approach" refers to the overall risk management system of Head Office and branches, domestic and
+overseas institutions, on- and off-balance sheet businesses, commercial banking and investment banking subordinated institutions.
+1
+An effective coordination between development and safety. Adhering to a holistic approach to national security, the
+Bank proactively adapted to stricter regulations trend, persisted on "active prevention, smart control and comprehensive
+management" and enhanced the prevention, mitigation, and management of various types of risks, so as to maintain
+the robust banking feature. We continued to refine the "Five-pronged Risk Management Approach"¹, optimized the risk
+officer system, added new credit approval rules and promoted internal audit mechanism reform, to strengthen the bonding
+force of the three lines of defense. We continuously advanced asset quality improvement, and maintained negative price
+scissors for 15 consecutive quarters. We also strengthened risk control in key areas, pushed forward "Three Major Projects"
+and supported the real estate industry to explore new development models. We improved the compliance management
+system, enhanced the smart risk control level, strengthened management of product risks, information technology, and
+cyber security. We are more convinced that security is the prerequisite for development and only through development can
+security be ensured. We must distinguish rights and responsibility as well as speed and stability, and stick to the risk and
+safety bottom lines, so as to firmly grasp the initiative of work.
+Integration and interaction of real economy and finance. The Bank actively utilized cross- and counter-cyclical
+adjustment policies, focused on primary responsibilities and core businesses, and optimized financial supply. Throughout the
+year, loans and bond investments increased by RMB2.88 trillion and RMB1.29 trillion, up by 12.4% and 12.9%, respectively,
+which strongly supported the economic recovery while ensuring ICBC's own stable growth of assets and interest income.
+We established and improved the work promotion mechanism and service system regarding "Five Priorities" of technology
+finance, green finance, inclusive finance, pension finance and digital finance, and strengthened high-quality financial
+services concerning major strategies and in key areas and weak aspects. The growth rate of loans to manufacturing, sci-
+tech innovation, green industries, inclusive service, rural revitalization, personal consumption, etc. was higher than the
+average, the number of private enterprises with outstanding loans rose rapidly, and the incremental proportion on retail
+and inclusive loans increased persistently. The number of overseas RMB clearing banks rose to 11, enhancing our abilities in
+serving high-level opening-up and jointly building the Belt and Road Initiative. Thus, we gained a deeper understanding that
+the real economy is the "root" or the foundation while finance is the "vein". Therefore, a bank must adhere to the original
+aspiration and constantly make financial services more adaptable, competitive and inclusive to steadily go further.
+In 2023, ICBC's balance sheet became much cleaner and healthier, and income statement became more balanced and
+sustainable. Its core indicators of being "Strong, Excellent and Large" were expected to maintain the leading position
+among global peers or rank among the forefront, which fully demonstrated a balance in value creation, market position,
+risk control and capital constraint and showcased the Bank's strong development resilience.
+Cost-to-income ratio (6)
+(492,117)
+1,207,219
+203,186
+432,146 (437,894)
+Annual Report 2023
+191,655
+11
+Chairman Liao Lin
+12
+Annual Report 2023
+Chairman's Statement
+2023 marks the opening of fully implementing the guiding principles of the 20th National Congress of the Communist Party
+of China ("CPC" or the "Party"). ICBC adhered to Xi Jinping Thought on Socialism with Chinese Characteristics for a New
+Era, earnestly studied and implemented the guiding principles of the 20th CPC National Congress and the Central Financial
+Work Conference. Taking the 40th anniversary of the establishment of ICBC as the impetus, we coordinated our efforts
+in maintaining stable growth, adjusting the structure, fostering new drivers, preventing risks, and breaking new ground.
+In serving China's modernization, we have achieved to promote ICBC's high-quality development by sticking to seeking
+progress while maintaining stability, enhancing stability through progress, and promoting quality amid stability.
+In 2023, the Bank achieved effective improvement in development quality. The Bank's ROA, ROE, and cost-to-income ratio
+were 0.87%, 10.66% and 28.28%, respectively, all at a relatively good level. The Bank achieved proper growth in quantity.
+Net profit rose to RMB365.1 billion, and assets, deposits and loans all increased by more than 10%, achieving a record
+high. The Bank achieved precise risk prevention and control. NPL ratio decreased by 2BP to 1.36%, allowance to NPLs
+climbed to 213.97%, and capital adequacy ratio reached 19.10%, maintaining a relatively high level.
+Chairman's Statement
+Calculated by the spread between yield on average balance of interest-generating assets and cost on average balance of
+interest-bearing liabilities.
+2.85
+Calculated by dividing net profit by the average balance of total assets at the beginning and at the end of the reporting
+period.
+13.72
+Common equity tier 1 capital adequacy
+Capital adequacy (%)
+2.86
+2.92
+2.90
+2.90
+2.90
+Allowance to total loans ratio (9)
+199.32
+180.68
+205.84
+209.47
+209.47
+213.97
+Allowance to NPLs (8)
+1.43
+Chairman: Liao Lin
+28.28
+27.43
+27.22
+26.36
+24.76
+14.04
+25.79
+Non-performing loans ("NPLs") ratio (7)
+1.36
+1.38
+1.38
+1.42
+1.58
+Asset quality (%)
+14.04
+13.31
+13.18
+8.87
+8.88
+9.31
+8.73
+8.94
+Risk-weighted assets to total assets ratio
+8.45
+55.13
+56.11
+61.67
+60.35
+61.83
+Notes: (1)
+(2)
+56.11
+Calculated in accordance with the Rules for the Compilation and Submission of Information Disclosure by Companies that
+Offer Securities to the Public No. 9 - Calculation and Disclosure of Return on Net Assets and Earnings per Share (Revision
+2010) issued by CSRC.
+Total equity to total assets ratio
+16.88
+13.20
+ratio (10)
+Tier 1 capital adequacy ratio (10)
+15.17
+15.64
+15.64
+16.77
+14.94
+14.27
+Capital adequacy ratio (10)
+19.10
+19.26
+19.26
+18.02
+14.28
+27 March 2024
+Net interest income
+ECONOMIC, FINANCIAL AND REGULATORY ENVIRONMENTS
+Net capital base (3)
+Risk-weighted assets (3)
+Per share data (in RMB yuan)
+356,407 356,407 356,407
+3,381,941 3,121,080 3,121,080
+3,736,919 3,475,995 3,475,995
+4,707,100 4,281,079 4,281,079
+24,641,631 22,225,272 22,225,272
+356,407 356,407 356,407
+2,886,378 2,653,002 2,457,274
+3,241,364 2,872,792 2,657,523
+3,909,669 3,396,186 3,121,479
+21,690,349 20,124,139 18,616,886
+Net asset value per share(4)
+9.55
+8.81
+8.82
+8.15
+7.48
+6.93
+Basic earnings per share
+0.98
+0.97
+0.97
+0.95
+0.86
+0.86
+Diluted earnings per share
+0.98
+0.97
+0.97
+0.95
+0.86
+0.86
+2023
+Net tier 1 capital(3)
+2022
+Net common equity tier 1 capital (3)
+of the parent company
+44,697,079
+26,086,482 23,212,312 23,210,376 20,667,245 18,624,308 16,761,319
+16,145,204 13,826,966 13,826,966 12,194,706 11,102,733 9,955,821
+8,653,621 8,236,561 8,234,625 7,944,781 7,115,279 6,383,624
+1,287,657 1,148,785 1,148,785 527,758
+756,391 672,762 672,762 603,983
+39,609,657 39,610,146 35,171,383 33,345,058 30,109,436
+406,296
+531,161
+421,874
+478,730
+11,849,668 10,527,292 10,533,702
+40,920,491 36,095,831 36,094,727
+33,521,174 29,870,491 29,870,491
+16,209,928 14,671,154 14,671,154
+16,565,568 14,545,306 14,545,306
+26,441,774
+13,331,463
+12,497,968 11,660,536
+9,257,760 8,591,139 7,647,117
+31,896,125 30,435,543 27,417,433
+25,134,726 22,977,655
+12,944,860 12,028,262
+10,477,744
+210,185
+199,465
+Accrued interest
+535,493
+Due to banks and other financial
+3,369,858
+454,566
+3,185,564
+199,465 250,349
+454,566 361,994
+3,187,712 2,921,029
+261,389
+267,941
+2,784,259
+234,852
+236,797
+2,266,573
+institutions
+Equity attributable to equity holders
+3,756,887
+3,495,171
+3,496,109 3,257,755
+2,893,502 2,676,186
+Share capital
+Other deposits
+2021
+2019
+2020
+2019
+Profitability (%)
+Return on average total assets (1)
+0.87
+0.97
+0.97
+1.02
+1.00
+1.08
+Return on weighted average equity(2)
+10.66
+11.43
+11.45
+12.15
+11.95
+13.05
+Net interest spread (3)
+1.41
+1.73
+1.72
+1.92
+1.97
+2.12
+Net interest margin (4)
+1.61
+1.92
+2021
+2020
+Original Restated
+2022
+Credit rating
+S&P(5)
+Moody's(5)
+A
+A
+A1
+A1
+A
+A
+A
+A1
+A1
+A1
+Notes:
+(1)
+(2)
+Since 1 January 2023, the Group has implemented IFRS 17 - Insurance Contracts. In accordance with the IFRS requirements,
+the Group made retroactive adjustments to relevant data and indicators for the comparable periods in 2022. According to
+the accounting requirements of the Interim Measures for the Administration of the Gold Leasing Business issued by PBC, the
+Group has made adjustments to the presentation of the interbank gold leasing business since 2023 and adjusted relevant
+data for the comparable periods in 2022 accordingly.
+Calculated by adding allowance for impairment losses on loans and advances to customers measured at amortised cost with
+allowance for impairment losses on loans and advances to customers measured at fair value through other comprehensive
+income.
+(3)
+Calculated in accordance with the Capital Regulation (Provisional).
+(4)
+(5)
+Calculated by dividing equity attributable to equity holders of the parent company after deduction of other equity
+instruments at the end of the reporting period by the total number of ordinary shares at the end of the reporting period.
+The rating results are in the form of "long-term foreign currency deposits rating".
+10
+Annual Report 2023
+Financial Indicators
+Financial Highlights
+2023
+Personal deposits
+Corporate deposits
+Due to customers
+Net interest income
+655,013
+693,687
+691,985
+690,680
+646,765
+632,217
+Net fee and commission income
+119,357
+129,265
+129,325
+133,024
+131,215
+130,573
+Operating income
+806,458
+841,441
+842,352
+860,880
+800,075
+776,002
+Operating expenses
+238,698
+240,884
+239,351
+236,227
+206,585
+Annual operating results (in RMB millions)
+207,776
+2019
+2021
+Corporate customers
+Personal customers
+Business outlets
+Financial Highlights
+Personal mobile
+banking customers
+12.059 million
+740 million
+Up 1,366 thousand Up 19.80 million
+15,495
+552 million
+Green loans
+Loans to
+manufacturing
+Agriculture-related
+loans
+Loans to strategic
+emerging industries
+¥
+ЛП
+with balance of
+5.4 trillion
+with balance of
+3.8 trillion
+with balance of
+4.24 trillion
+with balance of
+2.7 trillion
+(Financial data and indicators in this annual report are prepared in accordance with IFRSS and, unless otherwise specified,
+are consolidated amounts of the Bank and its subsidiaries and denominated in Renminbi.)
+Financial Data
+2022
+2023
+Original(¹)
+Restated(1)
+2020
+Impairment losses on assets
+150,816
+182,419
+Net cash flows from operating activities
+1,417,002
+1,404,657
+1,404,657
+360,882 1,557,616
+481,240
+Annual Report 2023
+9
+Financial Highlights
+Financial Data (continued)
+2022
+2023
+Original (1)
+Restated (1)
+2021
+2020
+2019
+As at the end of reporting period
+(in RMB millions)
+Total assets
+Total loans and advances to customers
+Corporate loans
+Personal loans
+Discounted bills
+Allowance for impairment losses
+on loans (2)
+Investment
+Total liabilities
+312,224
+315,906
+348,338
+361,132
+182,677
+202,623
+202,668
+178,957
+Operating profit
+416,944
+418,138
+420,324
+422,030
+390,822
+389,269
+Profit before taxation
+421,966
+1.92
+422,565
+424,899
+392,126
+391,789
+Net profit
+365,116
+361,038
+362,110
+350,216
+317,685
+313,361
+Net profit attributable to equity holders
+of the parent company
+363,993
+360,483
+424,720
+2.11
+2.15
+2.30
+0.8
+3,006
+362,110
+365,116
+Net profit
+(9.2)
+(5,760)
+62,610
+56,850
+Less: Income tax expense
+(0.6)
+(2,754)
+424,720
+421,966
+Profit before taxation
+joint ventures
+31 Analysis on Statement of
+Cash Flows
+14.2
+626
+4,396
+5,022
+Share of results of associates and
+(0.8)
+(3,380)
+420,324
+416,944
+Operating profit
+31 Changes of Major Accounting
+(17.4)
+Attributable to: Equity holders
+361,132
+Interest
+Average
+Interest
+2022
+2023
+In RMB millions, except for percentages
+AVERAGE YIELD OF INTEREST-GENERATING ASSETS AND AVERAGE COST OF INTEREST-BEARING LIABILITIES
+In 2023, net interest income was RMB655,013 million, RMB36,972 million or 5.3% lower than that of last year, accounting
+for 81.2% of the Bank's operating income. Interest income grew by RMB126,365 million or 9.9% to RMB1,405,039 million
+and interest expenses increased by RMB163,337 million or 27.8% to RMB750,026 million. Affected by factors such as
+reduction in the LPR and changes in the structure of deposit maturities, net interest spread and net interest margin ("NIM")
+declined to 1.41% and 1.61% respectively, both down 31 basis points from the previous year.
+Net Interest Income
+Discussion and Analysis
+17
+Annual Report 2023
+interests
+under PRC GAAP and Those
+under IFRSS
+Statements Prepared
+between the Financial
+31 Reconciliation of Differences
+14.8
+145
+978
+1,123
+Non-controlling
+company
+Policies
+of the parent
+0.8
+2,861
+363,993
+182,677
+150,816
+Less: Impairment losses on assets
+Summary Geographical
+Segment Information
+•
+• Income Tax Expense
+Operating Expenses
+Impairment Losses on
+Assets
+.
+•
+• Non-interest Income
+• Interest Expense
+• Interest Income
+• Net Interest Income
+17 Income Statement Analysis
+FINANCIAL STATEMENTS ANALYSIS
+Discussion and Analysis
+Annual Report 2023
+16
+In 2023, the Bank focused on the central task of serving
+Chinese modernization, the primary task of pursuing high-
+quality development, and the strategic task of building a
+new development pattern. Coordinated steps were taken
+to "maintain stable growth, adjust structure, foster new
+drivers, prevent risks and break new ground". In addition,
+it introduced targeted and effective measures to serve
+the real economy, keep all kinds of risks under control,
+and enhance the ability of balanced, coordinated and
+sustainable development. The Bank was ranked the 1st
+place among the Top 1000 World Banks by The Banker
+for the eleventh consecutive year, and the 1st place in the
+list of commercial banks of the Global 500 in Fortune
+for the eleventh consecutive year, and took the 1st place
+among the Top 500 Banking Brands of Brand Finance for
+the eighth consecutive year, steadily enhancing ICBC's
+international influence.
+Total assets of commercial banks grew steadily, with stable
+credit asset quality and sufficient risk offsetting capacity
+on the whole. At the end of 2023, the RMB and foreign-
+currency assets of commercial banks totaled RMB354.85
+trillion, up 11.0% year on year. The balance of NPLs of
+commercial banks reached RMB3.23 trillion, with a NPL
+ratio of 1.59% and allowance to NPLs of 205.14%. The
+capital adequacy ratio was 15.06%.
+amounted to RMB284.26 trillion, up 10.0% year on year.
+The total issuance amount of various bonds in the bond
+market reached RMB71.0 trillion, up 14.8% year on year.
+Shanghai Composite Index and the Shenzhen Component
+Index dropped by 3.7% and 13.5% respectively over the
+end of last year. The central parity of RMB against the USD
+was RMB7.0827, a depreciation of 1.7% from the end of
+last year.
+The overall financial system ran smoothly. At the end
+of 2023, the balance of broad money supply (M2) was
+RMB292.27 trillion, up 9.7% year on year. The outstanding
+aggregate financing to the real economy (AFRE) stood at
+RMB378.09 trillion, up 9.5% year on year. The outstanding
+RMB loans reached RMB237.59 trillion, increasing by
+10.6% year on year. The balance of RMB deposits
+Significant progress has been made in the financial
+regulatory system reform, providing robust assurances
+for the high-quality development of finance and the
+prevention and resolution of risks. To deepen reforms,
+steps have been taken to implement the Reform Plan
+for the Party and State Institutions, and accelerate the
+formation of a new financial supervision pattern composed
+of "PBC, NFRA and CSRC". To prevent risks, a package
+of policies has been introduced, including the Regulation
+Governing Capital of Commercial Banks to improve the
+capital regulatory rules for commercial banks and enhance
+the risk management capability of banks; the Rules on Risk
+Classification of Financial Assets of Commercial Banks to
+promote accurate assessment of credit risks by commercial
+banks; and the Rules on Operational Risk Management
+of Banking and Insurance Institutions to further improve
+the regulatory rules for operational risk management
+of banking and insurance institutions, and clarify risk
+governance and management responsibilities. In order
+to promote development, the Implementation Opinions
+on Promoting the High-quality Development of Inclusive
+Finance was issued to promote the development of a high-
+level inclusive financial system; and 25 specific measures
+were put in place for strengthening financial support to
+the private sector and promoting its development and
+growth.
+Discussion and Analysis
+15
+Annual Report 2023
+The prudent monetary policy was both targeted and
+effective. PBC has cut the reserve requirement ratio
+("RRR") twice by 0.5 percentage points to maintain
+reasonably abundant liquidity and ensure a moderate
+volume and a steady pace of monetary credit. As a result
+of the two policy interest rate cuts, the 1-year and 5-year
+loan market quoted rates ("LPR") were lowered by 20 basis
+points and 10 basis points, respectively. PBC has also led
+commercial banks to reduce interest rates on existing first-
+time home loans in an orderly manner. Structural monetary
+policy tools have been applied to provide targeted support
+for key areas such as technology innovation, advanced
+manufacturing, and green development, and to steer more
+funds towards weak links such as private micro and small
+enterprises and rural revitalization, so as to promote the
+stable and healthy development of the real estate market.
+Moreover, efforts have been made in a timely manner,
+including up-regulating the macro-prudential parameters
+for cross-border financing and lowering the RRR for
+foreign exchange deposits, to maintain the stability of RMB
+exchange rate at a reasonable and balanced level.
+coordinated regional development. To improve people's
+livelihood, China issued an additional RMB1 trillion in
+government bonds to support post-disaster recovery and
+reconstruction, as well as to enhance disaster prevention,
+mitigation, and relief capabilities. Efforts have also been
+made to dissolve the risk of local government debts.
+The proactive fiscal policy was pursued with intensified
+efforts to improve efficiency. China has improved its
+tax and fee support policies, reducing the tax burden
+on businesses. It used special bond funds to effectively
+support a full range of key projects in transportation,
+water conservancy, energy, and other sectors that provide
+both present and future benefits. By investing in key areas,
+China has promoted high-quality development of the
+manufacturing industry, supported sci-tech innovation,
+promoted comprehensive rural revitalization, and boosted
+In 2023, the global economy continued to recover, but
+with divergent prospects. It faced challenges such as high
+inflation, interest rates and debt, while financial risks were
+accumulating. China has increased its efforts to regulate
+the macroeconomy by focusing on expanding domestic
+demand, optimizing structure, boosting confidence, and
+forestalling and defusing risks. The Chinese economy
+has rebounded and improved steadily, with both supply
+and demand improving and high-quality development
+advancing solidly. China's gross domestic product (GDP),
+fixed asset investment (excluding rural households),
+and total imports and exports of trade in goods (RMB-
+denominated) rose by 5.2%, 3.0% and 0.2% year on year
+respectively, while retail sales of consumer goods increased
+by 7.2% year on year. The value added of industrial
+enterprises above designated size, value added of services,
+and consumer price index (CPI) rose by 4.6%, 5.8% and
+0.2% year on year respectively.
+Income Statement Analysis
+In 2023, adhering to the general principle of seeking progress while
+maintaining stability, the Bank actively responded to multiple internal
+and external challenges, coordinated development and security,
+continuously improved the quality and efficiency of financial services, and
+simultaneously promoted its own high-quality development. In the year,
+the Bank realized a net profit of RMB365,116 million, representing an
+increase of RMB3,006 million or 0.8% as compared to the previous year.
+Return on average total assets stood at 0.87%, and return on weighted
+average equity was 10.66%. Operating income amounted to RMB806,458
+million, representing a decrease of 4.3%. Specifically, net interest income
+decreased by 5.3% to RMB655,013 million; non-interest income was
+RMB151,445 million, up by 0.7%. Operating expenses amounted to
+RMB238,698 million, representing a decrease of 0.3%, and the cost-to-
+income ratio was 28.28%. Impairment losses on assets were RMB150,816
+million. Income tax expense decreased by 9.2% to RMB56,850 million.
+Item
+Non-interest income
+(0.3)
+(653)
+239,351
+238,698
+Less: Operating expenses
+• Off-balance Sheet Items
+(4.3)
+(35,894)
+842,352
+806,458
+0.7
+1,078
+150,367
+Average
+151,445
+(36,972)
+691,985
+655,013
+(%)
+(decrease)
+2022
+2023
+In RMB millions, except for percentages
+Increase/ Growth rate
+CHANGES OF KEY INCOME STATEMENT ITEMS
+• Shareholders' Equity
+• Assets Deployment
+• Liabilities
+23 Balance Sheet Analysis
+Operating income
+(5.3)
+Discussion and Analysis
+Average
+yield/cost
+Net interest income
+1.82
+586,689
+32,291,926
+2,029,137
+34,321,063
+2,065,143
+38,773,224
+Total liabilities
+Non-interest-bearing liabilities
+2.04
+750,026
+36,708,081
+Total interest-bearing liabilities
+deposit issued
+3.17
+35,874
+1,132,767
+3.77
+56,809
+1,508,148
+Debt securities and certificates of
+financial institutions (3)
+1.86
+70,732
+1.75
+480,083
+27,364,627
+3,794,532
+2.55
+103,529
+655,013
+4,058,487
+691,985
+1.41
+Return on risk-weighted assets(5)
+1.56
+1.64
+1.65
+1.68
+1.64
+1.75
+Ratio of net fee and commission income
+14.80
+15.36
+15.35
+15.45
+16.40
+16.83
+to operating income
+Annual Report 2023
+18
+Due from banks and other financial institutions includes the amount of reverse repurchase agreements, and due to banks
+and other financial institutions includes the amount of repurchase agreements etc.
+(3)
+Due from central banks mainly includes mandatory reserves and surplus reserves with central banks.
+The average balances of interest-generating assets and interest-bearing liabilities represent their daily average balances. The
+average balances of non-interest-generating assets, non-interest-bearing liabilities and the allowance for impairment losses
+on assets represent the average of the balances at the beginning of the year and at the end of the year.
+(1)
+Notes:
+1.92
+1.61
+Net interest margin
+1.72
+Net interest spread
+Due to banks and other
+1.89
+589,688
+53,815
+3,230,841
+Due from central banks(2)
+3.31
+297,106
+8,975,046
+3.30
+338,267
+10,266,019
+4.05
+900,063
+22,246,265
+3.81
+951,845
+25,006,605
+Loans and advances to customers
+Investment
+Assets
+(%)
+expense
+balance
+(%)
+expense
+balance
+Item
+yield/cost
+income/
+Average
+1.67
+2,991,645
+45,425
+1.52
+31,141,446
+Deposits
+Liabilities
+37,946,913
+42,409,884
+Total assets
+assets
+(682,871)
+(776,831)
+Allowance for impairment losses on
+2,549,781
+2,510,696
+Non-interest-generating assets
+income/
+3.54
+36,080,003
+3.45
+1,405,039
+40,676,019
+Total interest-generating assets
+institutions (3)
+1.93
+36,080
+1,867,047
+2.81
+61,112
+2,172,554
+Due from banks and other financial
+1,278,674
+(31,861)
+(2)
+(750,026)
+before
+Total
+Remuneration
+Position
+Name
+additional
+annuities, and
+medical
+housing
+allowance,
+to social
+the employer
+Year ended 31 December 2023
+Contribution by
+Details of the directors' and supervisors' remuneration before tax, as disclosed pursuant to the Rules Governing the Listing
+of Securities on The Stock Exchange of Hong Kong Limited and the Hong Kong Companies Ordinance, are as follows:
+12. DIRECTORS' AND SUPERVISORS' REMUNERATION
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+insurance,
+191
+remuneration
+insurances
+Vice President, Chief Risk Officer
+Executive Director, Senior Executive
+Chairman, Executive Director
+Liao Lin (i)
+Wang Jingwu
+900
+227
+673
+tax paid
+(3) (4)=(1)+(2)+(3)
+(1)
+RMB'000
+RMB'000
+RMB'000
+RMB'000
+before tax
+Fees
+(2)
+Annual Report 2023
+(iii) In 2023, the Group incurred RMB4,593 million (2022: RMB4,304 million) of expensed research and development expenditures
+and RMB1,590 million (2022: RMB1,749 million) of capitalized research and development expenditures.
+(i) The defined contribution plans mainly include pension insurance, unemployment insurance and the annuity plan.
+(ii) The principal auditor's remuneration of RMB192 million for the year (2022: RMB 192 million) is included in other administrative
+expenses.
+Repairs and maintenance charges
+7,847
+7,479
+Depreciation charge for right-of-use assets and other leasing expense
+15,935
+15,995
+Depreciation charge for property and equipment
+2,955
+Property and equipment expenses:
+141,405
+18,095
+18,487
+Post-employment benefits - defined contribution plans (i)
+31,745
+29,422
+Staff benefits
+142,633
+3,047
+Utility expenses
+2,105
+239,351
+238,698
+26,928
+24,226
+10,097
+10,662
+27,155
+29,442
+Other
+Taxes and surcharges
+Other administrative expenses (ii)
+3,716
+4,429
+Amortisation
+28,822
+28,534
+1,993
+59
+605
+220
+825
+363,993
+361,132
+(14,964)
+(14,810)
+Profit for the year attributable to ordinary shareholders of the parent company
+Shares:
+349,029
+346,322
+Profit for the year attributable to equity holders of the parent company
+Less: Profit for the year attributable to other equity instrument holders of the
+parent company
+Weighted average number of ordinary shares in issue (in million shares)
+356,407
+356,407
+0.98
+0.97
+Diluted earnings per share (RMB yuan)
+0.98
+0.97
+Basic earnings per share (RMB yuan)
+2022
+2023
+Earnings:
+104,534
+Dividends or interests declared and paid to other equity instrument holders:
+Dividends on preference shares
+5,842
+5,797
+Interests on perpetual bonds distributed
+9,122
+9,013
+14,964
+14,810
+Dividends on ordinary shares proposed for approval
+(not recognised as at 31 December):
+Dividends on ordinary shares for 2023: RMB0.3064 per share
+(2022: RMB0.3035 per share)
+109,203
+108,169
+18. EARNINGS PER SHARE
+Basic and diluted earnings per share were calculated using the profit for the year attributable to ordinary shareholders of
+the parent company divided by the weighted average number of ordinary shares in issue.
+92,793
+198
+673
+Independent Non-executive Director
+Fred Zuliu Hu
+Independent Non-executive Director
+Independent Non-executive Director
+Yang Siu Shun
+Shen Si
+Non-executive Director
+Dong Yang
+Norman Chan Tak Lam
+Non-executive Director
+Non-executive Director
+Cao Liqun
+Non-executive Director
+Feng Weidong
+Non-executive Director
+Lu Yongzhen
+25
+Chen Yifang
+Independent Non-executive Director
+470
+470
+Former Chairman, Executive Director
+External Supervisor
+250
+External Supervisor
+Chen Siqing (ii)
+Liu Lanbiao
+Zhang Jie
+Employee Supervisor
+Huang Li
+Independent Non-executive Director
+Herbert Walter (ii)
+420
+420
+440
+440
+490
+490
+Annual Report 2023
+108,169
+93,496
+Staff costs:
+Fee and commission income on:
+2022
+2023
+NET FEE AND COMMISSION INCOME
+7.
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+Settlement, clearing business and cash management
+189
+The above interest income and expense are related to financial instruments which are not measured at fair value through
+profit or loss.
+(ii) Includes interest expense on due to central banks and repurchase agreements.
+(i) Includes interest income on reverse repurchase agreements.
+Net interest income
+691,985
+655,013
+(586,689)
+Annual Report 2023
+(35,874)
+45,418
+Personal wealth management and private banking services
+7,296
+Guarantee and commitment business
+8,709
+7,994
+Asset custody business
+14,172
+11,770
+45,439
+Corporate wealth management services
+17,906
+Bank card business
+19,586
+20,060
+Investment banking business
+26,253
+22,582
+17,736
+(56,809)
+Debt securities issued and certificates of deposit
+(70,732)
+353,039
+Personal loans
+507,252
+581,117
+Corporate loans and advances
+900,063
+951,845
+376,864
+Loans and advances to customers
+2022
+2023
+6. NET INTEREST INCOME
+The Group acts as manager or investor in a number of wealth management products, investment funds, trust plans, asset
+management plans and assets-backed securities. When assessing whether the Group controls such a structured entity,
+the Group would determine whether it exercises the decision-making rights as a principal or an agent and usually focuses
+on the assessment of the aggregate economic interests of the Group in the entity (comprising any carried interests and
+expected management fees) and the decision-making authority of the entity. The Group would also determine whether
+another entity with decision-making rights is acting as an agent for it.
+Wealth management products, investment funds, trust plans, asset management plans and
+asset-backed securities
+Certain securitisation vehicles sponsored by the Group under its securitisation programme are run according to
+predetermined criteria at the initial set up of the vehicles. In addition, the Group is exposed to variability of returns from the
+vehicles through holding interests in the vehicles and the day-to-day servicing of the underlying assets in the vehicles which
+is carried out by the Group under a servicing contract. Key decisions are usually required only when underlying assets go
+into default. Therefore, in considering whether it has control, the Group considers whether it can use its power to influence
+these vehicles' returns.
+Securitisation vehicles
+Interest income on:
+Discounted bills
+17,689
+15,947
+(103,529)
+Due to banks and other financial institutions (ii)
+(480,083)
+(589,688)
+Due to customers
+Interest expense on:
+1,278,674
+1,405,039
+36,080
+61,112
+Due from banks and other financial institutions (i)
+45,425
+53,815
+Due from central banks
+297,106
+338,267
+Financial investments
+8,803
+Trust and agency services
+Other
+1,950
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Annual Report 2023
+190
+7,906
+21,560
+(7)
+660
+10. OTHER OPERATING (EXPENSE)/INCOME, NET
+904
+Net gains on disposal of financial instruments measured at amortised cost
+Other
+3,638
+3,136
+Held at the end of current year
+541
+884
+Derecognised during the year
+2,596
+2023
+2022
+Net operating lease business income
+2022
+2023
+11. OPERATING EXPENSES
+4,828
+(4,400)
+697
+(196)
+(3,756)
+1,590
+1,925
+(7,785)
+Net losses from foreign exchange and foreign exchange products
+Other
+Net gains on disposal of property and equipment, repossessed assets
+and other assets
+(5,778)
+(9,028)
+Net insurance business expense
+12,075
+10,684
+4,179
+Salaries and bonuses
+4,020
+3,788
+Equity investments
+Derivatives and other
+Debt securities
+8. NET TRADING INCOME
+Included in personal wealth management and private banking services, corporate wealth management services, asset
+custody business and trust and agency services above is an amount of RMB17,179 million with respect to trust and other
+fiduciary activities for 2023 (2022: RMB22,290 million).
+119,357
+Net fee and commission income
+2023
+129,325
+(18,534)
+Fee and commission expense
+145,818
+137,891
+3,226
+2,915
+1,894
+(16,493)
+2022
+12,063
+5,638
+(4,747)
+(4,163)
+Net losses on financial instruments designated as at FVTPL
+Net gains on disposal of financial instruments measured at FVTOCI
+Dividend income from equity investments designated as at FVTOCI, including:
+(217)
+10,496
+Net gains/(losses) on financial instruments measured at FVTPL, including:
+2022
+2023
+NET GAINS ON FINANCIAL INVESTMENTS
+9.
+The above amounts mainly include gains and losses arising from the buying and selling of, the interest income and expense
+on, and the changes in fair value of financial assets and liabilities held for trading.
+8,308
+14,928
+(2,662)
+(1,556)
+5,332
+4,421
+3,047
+(2021: RMB0.2933 per share)
+Dividends on ordinary shares for 2022: RMB0.3035 per share
+Dividends on ordinary shares declared and paid:
+Lu Yongzhen
+Non-executive Director
+Feng Weidong
+Non-executive Director
+Cao Liqun
+Non-executive Director
+Chen Yifang
+Chief Risk Officer
+Non-executive Director
+Non-executive Director
+Anthony Francis Neoh
+Independent Non-executive Director
+520
+Yang Siu Shun
+Independent Non-executive Director
+470
+Dong Yang (i)
+Shen Si
+Executive Director, Senior Executive Vice President,
+1,031
+533
+212
+1,129
+1,129
+Vice Chairman, Executive Director, President
+384
+533
+Wang Jingwu
+212
+1,129
+Zheng Guoyu
+Executive Director, Senior Executive Vice President
+346
+481
+204
+1,031
+1,129
+Independent Non-executive Director
+485
+Fred Zuliu Hu
+470
+470
+485
+485
+433
+433
+433
+520
+140
+140
+50
+50
+50
+250
+250
+250
+140
+520
+1
+1,031
+Independent Non-executive Director
+Norman Chan Tak Lam (ii)
+Independent Non-executive Director
+Huang Li
+Employee Supervisor
+Zhang Jie
+External Supervisor
+Liu Lanbiao (i)
+External Supervisor
+Huang Liangbo (iv)
+Former Chairman of the Board of Supervisors
+་་་་་ 'ཊྛཛྫི8s ཋཡྻཧི་
+g'
+346
+481
+204
+1,031
+384
+Chairman, Executive Director
+Chen Siging
+Liao Lin
+(7)=(5)-(6)
+5,720
+Note: Since January 2015, the remuneration of the Chairman of the Board of Directors, the President and other executives of the
+Bank has followed the State Government's policies relating to the remuneration reform on executives of central enterprises.
+The total compensation packages for the Chairman of the Board of Directors, President and Executive Directors of the
+Bank have not been finalized in accordance with the regulations of the PRC relevant authorities. The remuneration not
+yet accrued is not expected to have a significant impact on the Group's 2023 consolidated financial statements. The total
+compensation packages will be further disclosed when determined by the relevant authorities.
+192
+Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Fees of Mr. Huang Li are his allowances obtained as Employee Supervisor of the Bank, excluding his remuneration with the
+Bank in accordance with the employee remuneration system.
+As at the approval date of the consolidated financial statements for the year ended 31 December 2023, changes of
+directors and supervisors of the Bank were as follows:
+2,890
+(i)
+In February 2024, Mr. Liao Lin resigned as President of the Bank due to adjustment of job assignments. In order
+to ensure the normal operation and management of the Bank, Mr. Liao Lin performs the functions and powers of
+the President on behalf of the Bank in accordance with regulatory requirements and the Articles of Association of
+the Bank, and the period for performing the duties on behalf of the President will end on the date when the new
+President formally takes office. On 1 February 2024, the Board of Directors of the Bank elected Mr. Liao Lin as
+Chairman of the Board of Directors of the Bank, and his qualification was approved by NFRA in February 2024.
+At the First Extraordinary General Meeting of 2023 held on 30 November 2023, Mr. Herbert Walter was elected as
+Independent Non-executive Director of the Bank, and his qualification was approved by NFRA in March 2024.
+(iii) In February 2024, Mr. Chen Siqing ceased to act as Chairman of the Board of Directors and Executive Director of the
+Bank due to his age.
+(iv) In April 2023, Mr. Zheng Guoyu ceased to act as Executive Director and Senior Executive Vice President of the Bank
+due to change of job assignments.
+(v)
+In March 2024, Mr. Anthony Francis Neoh ceased to act as Independent Non-executive Director of the Bank due to
+expiration of his term of office.
+(vi) In January 2023, Mr. Wu Xiangjiang ceased to act as Employee Supervisor of the Bank due to his age.
+Annual Report 2023
+(ii)
+728
+2,102
+Total
+151
+སྶཛ
+227
+ཨཡྻཡྻ '
+50
+250
+250
+250
+900
+54
+205
+Anthony Francis Neoh (v)
+Former Independent Non-executive Director
+5209
+520
+Wu Xiangjiang (vi)
+Former Employee Supervisor
+193
+130
+Notes to the Consolidated Financial Statements
+Year ended 31 December 2022
+insurances
+before tax
+payment
+before tax paid
+RMB'000
+RMB'000
+RMB'000
+bonuses
+RMB'000
+RMB'000
+RMB'000
+(1)
+(2)
+(3)
+(4) (5)=(1)+(2)+(3)+(4)
+(6)
+RMB'000
+Fees Remuneration
+Position
+Name
+Contribution
+by the
+employer
+to social
+insurance,
+housing
+allowance,
+annuities and
+additional
+Total
+Of which:
+Actual
+amount
+Discretionary
+medical
+emoluments
+deferred
+of remuneration
+(In RMB millions, unless otherwise stated)
+130
+130
+256
+Other overseas jurisdictions
+Deferred income tax expense
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+2023
+2022
+58,651
+76,152
+Hong Kong SAR and Macau SAR
+1,191
+5,211
+3,584
+65,053
+81,634
+(8,203)
+(19,024)
+56,850
+1,898
+Chinese mainland
+Current income tax expense
+(a) Income tax expense
+1
+1
+5
+In 2023, no emolument was paid by the Group to any of these non-director and non-supervisor individuals as an
+inducement to join or upon joining the Group or as a compensation for loss of office (2022: Nil).
+14. IMPAIRMENT LOSSES ON ASSETS
+Loans and advances to customers (Note 23)
+Other
+196
+Annual Report 2023
+2023
+143,422
+2022
+143,173
+7,394
+39,504
+150,816
+182,677
+15. INCOME TAX EXPENSE
+62,610
+5
+The Group has applied the amendments to IAS 12 on Pillar Two legislation. Therefore, the Group shall neither recognise nor
+disclose information about deferred tax assets and liabilities related to Pillar Two legislation.
+(b) Reconciliation between income tax and accounting profit
+(2,219)
+(2,253)
+Income tax expense
+56,850
+62,610
+(i)
+The non-deductible expenses mainly represent non-deductible impairment allowance and write-offs.
+(ii) The non-taxable income mainly represents interest income arising from the PRC government bonds and municipal debts.
+Effects of other
+16. PROFIT ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT COMPANY
+Annual Report 2023
+197
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+17. DIVIDENDS
+2023
+2022
+The consolidated profit attributable to equity holders of the parent company for the year ended 31 December 2023 includes
+a profit of RMB347,516 million (2022: RMB346,056 million) which has been dealt with in the financial statements of the
+Bank (Note 52).
+(439)
+(449)
+Effects of profits attributable to associates and joint ventures
+PRC statutory income tax rate is 25%. Taxes on profits assessable elsewhere have been calculated at the applicable rates
+of tax prevailing in the countries/regions in which the Group operates in. The Group has reconciled income tax expense
+applicable to profit before taxation at the PRC statutory income tax rate to actual income tax expense for the Group as
+follows:
+2023
+Profit before taxation
+421,966
+2022
+424,720
+Tax at the PRC statutory income tax rate
+105,492
+106,180
+Effects of different applicable rates of tax prevailing in other countries/regions
+(288)
+(869)
+Effects of non-deductible expenses (i)
+19,580
+18,679
+Effects of non-taxable income (ii)
+(65,266)
+(58,688)
+As of December 31, 2023, 16 of the jurisdictions where the Group's overseas operating institutions are located, including
+the UK and Luxembourg, had enacted Pillar Two legislation which will be implemented in 2024 or later. Therefore, the
+legislation in the aforementioned jurisdictions has no impact on the financial position and financial performance of the
+Group for the year 2023. According to the rules of Pillar Two legislation, low-tax jurisdictions with effective tax rate
+below 15% may have a Top-up Tax impact. There are differences in the computation of effective tax rate between Pillar
+Two legislation and IFRSS. The Group is continuing to assess the impact of the Pillar Two legislation on future financial
+performance.
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+2
+21
+50
+50
+Shen Bingxi (ix)
+Former External Supervisor
+Total
+2,645
+1,926
+50
+2,844
+8,469
+8,469
+Note:
+194
+Since January 2015, the remuneration of the Chairman of the Board of Directors, the President, the Chairman of the Board
+of Supervisors and other executives of the Bank has followed the State Government's policies relating to the remuneration
+reform on executives of central enterprises.
+The remuneration before tax of Directors and Supervisors for 2022 set out in the table above represents the total amount
+of annual remuneration for each of these individuals, which include the amounts disclosed in the 2022 Annual Report.
+Annual Report 2023
+1,054
+Former Employee Supervisor
+Wu Xiangjiang (viii)
+755
+356
+137
+749
+749
+Zheng Fuqing (v)
+Former Non-executive Director
+Nout Wellink (vi)
+Former Independent Non-executive Director
+117
+117
+117
+Zhang Wei (vii)
+Former Shareholder Supervisor
+210
+460
+85
+755
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+1
+Pursuant to the PRC relevant regulations, a portion of the discretionary bonus payments for the Chairman of the Board
+of Directors, the President, the Chairman of the Board of Supervisors, Executive Directors and other senior management
+members are deferred and will be determined based on the future performance.
+Fees of Mr. Huang Li and Mr. Wu Xiangjiang are their allowances obtained as Employee Supervisors of the Bank, excluding
+their remuneration with the Bank in accordance with the employee remuneration system.
+Salaries and allowances
+Discretionary bonuses
+Other
+2023
+RMB'000
+16,672
+2022
+RMB'000
+14,119
+59,475
+74,004
+430
+76,577
+The five highest paid individuals of the Group are employees of the Bank's subsidiaries. Their emoluments were determined
+based on the prevailing market rates in the respective countries/regions where the subsidiaries are operating. None of them
+are directors, supervisors or key management personnel of the Bank whose emoluments are disclosed in Notes 12 and 48(g)
+to the consolidated financial statements. Details of the emoluments in respect of the five highest paid individuals are as
+follows:
+78
+The number of these individuals whose emoluments fell within the following bands is set out below:
+RMB11,000,001 Yuan to RMB13,000,000 Yuan
+RMB13,000,001 Yuan to RMB15,000,000 Yuan
+RMB15,000,001 Yuan to RMB 17,000,000 Yuan
+RMB17,000,001 Yuan to RMB 19,000,000 Yuan
+RMB19,000,001 Yuan to RMB21,000,000 Yuan
+RMB21,000,001 Yuan to RMB23,000,000 Yuan
+RMB23,000,001 Yuan to RMB25,000,000 Yuan
+RMB25,000,001 Yuan to RMB27,000,000 Yuan
+Number of employees
+2023
+2022
+1
+1
+88,201
+13. FIVE HIGHEST PAID INDIVIDUALS
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+As at the approval date of the consolidated financial statements for the year ended 31 December 2022, changes of
+directors and supervisors of the Bank were as follows:
+(i)
+(ii)
+At the Second Extraordinary General Meeting of 2021 held on 25 November 2021, Mr. Dong Yang was elected as
+Non-executive Director of the Bank, and his qualification was approved by the former CBIRC in January 2022.
+At the Annual General Meeting for the Year 2021 held on 23 June 2022, Mr. Norman Chan Tak Lam was elected
+as Independent Non-executive Director of the Bank, and his qualification was approved by the former CBIRC in
+September 2022.
+(iii) At the Annual General Meeting for the Year 2021 held on 23 June 2022, Mr. Liu Lanbiao was elected as External
+Supervisor of the Bank, and his term of office started from the day of approval at the Annual General Meeting.
+(iv) In September 2022, Mr. Huang Liangbo ceased to act as Shareholder Supervisor and Chairman of the Board of
+Supervisors of the Bank due to change of job assignments.
+(v)
+In January 2022, Mr. Zheng Fuqing ceased to act as Non-executive Director of the Bank due to expiration of his term
+of office.
+(vi) In March 2022, Mr. Nout Wellink ceased to act as Independent Non-executive Director of the Bank due to expiration
+of his term of office.
+(vii) In April 2022, Mr. Zhang Wei ceased to act as Shareholder Supervisor of the Bank due to his age.
+(viii) In January 2023, Mr. Wu Xiangjiang ceased to act as Employee Supervisor of the Bank due to his age.
+(ix) In June 2022, Mr. Shen Bingxi ceased to act as External Supervisor of the Bank due to expiration of his term of office.
+The Non-executive Directors of the Bank who were recommended by Huijin received emoluments from Huijin in respect of
+their services during the year.
+In 2023, there was no arrangement under which a Director or a Supervisor of the Bank waived or agreed to waive any
+remuneration (2022: None).
+In 2023, no emolument was paid by the Group to any of the Directors or Supervisors as an inducement to join or upon
+joining the Group or as a compensation for loss of office (2022: Nil).
+Annual Report 2023
+195
+In accordance with applicable national regulations, the incentive income for 2018-2020 was paid to the Chairman, the
+President and Senior Executive Vice President of the Bank in 2021 based on their specific tenure and performance appraisal
+results. Accordingly, the Bank accrued RMB16 thousand, RMB9 thousand and RMB7 thousand for Mr. Chen Siqing, Mr.
+Liao Lin and Mr. Wang Jingwu respectively, as additional contribution to the Annuity Plan in 2022.
+Former Executive Director, Senior Executive Vice President
+Zheng Guoyu (iv)
+11,872
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+201
+Annual Report 2023
+(31)
+(4,752)
+(1,988)
+(69)
+4,721
+1,919
+2022
+2023
+The hedged items
+Hedging instruments
+Gains/(losses) arising from fair value hedges, net:
+The changes in fair value of the hedging instruments and net gains or losses arising from the hedged risk relating to the
+hedged items are set out below:
+Fair value hedges are used by the Group to protect against changes in fair value of financial assets and financial liabilities
+due to movements in market interest rates. The Group mainly used interest rate swaps as hedging instruments to hedge the
+interest risk of financial assets and financial liabilities.
+(b) Fair value hedges
+There was no ineffectiveness recognised in profit or loss that arises from the cash flow hedges in 2023 and 2022.
+(ii) Other hedged items are included in due from banks and other financial institutions, other assets, due to banks and other
+financial institutions, customer deposits and other liabilities.
+Securities are included in financial investments measured at FVTOCI, financial investments measured at amortised cost and
+debt securities issued.
+(i)
+Included in the above derivative financial instruments, those designated as hedging instruments in fair value hedges are
+interest rate swaps and the details are set out below:
+(2,995)
+31 December 2023
+Notional amounts with remaining maturity of
+Liabilities
+(416)
+Assets
+2,955
+82,401
+17,020
+45,069
+18,042
+2,270
+Total
+five years
+five years
+one year
+months
+Over
+within
+year but
+months
+but within
+three
+Within
+Over one
+Over three
+Fair values
+31 December 2022
+1,268
+(109,851)
+65,604
+74,876
+(3,630)
+(290)
+(41,615)
+30,146
+169
+169
+39,997
+593
+248
+(27,775)
+4,733
+Other (ii)
+Loans and advances to customers
+Securities (i)
+income
+comprehensive
+income during
+the current year
+Liabilities
+Assets
+Accumulated
+effect on other
+(69,390)
+127
+(2,868)
+(i)
+(3,340)
+1,076
+(60,418)
+30,693
+8
+623
+345
+income
+Accumulated
+effect on other
+comprehensive
+Hedging instruments
+Effect on other
+comprehensive
+income during
+the current year
+2,976
+184
+34,288
+Liabilities
+Assets
+Carrying amount of hedged items
+31 December 2022
+Other (ii)
+Loans and advances to customers
+Securities (i)
+(ii) Other hedged items are included in due from banks and other financial institutions, other assets, due to banks and other
+financial institutions, customer deposits and other liabilities.
+Securities are included in financial investments measured at FVTOCI, financial investments measured at amortised cost, debt
+securities issued and certificates of deposit.
+(49,433)
+Hedging instruments
+Effect on other
+comprehensive
+12,383
+30,892
+(e) Counterparty credit risk-weighted assets of derivative financial instruments
+The credit risk-weighted assets in respect of the above derivatives of the Group as at the end of the reporting period are as
+follows:
+34,064
+60,494
+30,970
+Net amounts
+31 December 2022
+Gross amounts
+57,400
+Net amounts
+24,048
+26,884
+71,381
+72,958
+Gross amounts
+31 December 2023
+Derivative financial liabilities
+Derivative financial assets
+In accordance with the principle of offsetting financial instruments, the Group offsets certain derivative financial assets,
+derivative financial liabilities and variation margin and presents the net amounts after offsetting in the financial statements.
+(d) Offsetting of financial instruments
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+202 Annual Report 2023
+As at 31 December 2023, an accumulated net losses from the hedging instrument of RMB1,002 million was recognised in
+other comprehensive income (31 December 2022: accumulated net losses of RMB675 million). There was no ineffectiveness
+in profit or loss that arises from the net investment hedges in 2023 and 2022.
+The Group's consolidated statement of financial position is affected by exchange differences between the functional
+currency of the Bank and functional currencies of its branches and subsidiaries. The Group hedges such exchange exposures
+under certain circumstances. Hedging is undertaken by using customer deposits taken in the same currencies as the
+functional currencies of related branches and subsidiaries which are accounted for as hedges of certain net investments in
+foreign operations.
+(c) Net investment hedges
+(ii) Other hedged items are included in due from banks and other financial institutions and repurchase agreements.
+Securities are included in financial investments measured at FVTOCI, financial investments measured at amortised cost and
+debt securities issued.
+Counterparty credit default risk-weighted assets
+(i)
+Including: Non-netting settled credit default risk-weighted assets
+Credit value adjustment risk-weighted assets
+Reverse repurchase agreements-bills
+Measured at amortised cost:
+22. REVERSE REPURCHASE AGREEMENTS
+The credit risk-weighted assets of derivative financial instruments were calculated with reference to Regulation Governing
+Capital of Commercial Banks (Provisional). The risk-weighted assets for counterparty credit risk of derivatives of the Group
+were calculated in accordance with the Rules on Measuring Derivative Counterparty Default Risk Assets since 1 January
+2019.
+166,224
+127,762
+8,840
+4,678
+40,729
+36,563
+36,121
+37,546
+80,534
+48,975
+116,655
+86,521
+2022
+2023
+31 December
+31 December
+Central counterparties credit risk-weighted assets
+Netting settled credit default risk-weighted assets
+127
+(592)
+(8,327)
+80,505
+(92)
+3,267
+(90)
+3,429
+62
+(703)
+to the fair value of hedged items
+Liabilities
+Assets
+Liabilities
+(1,404)
+73,809
+Carrying amount of hedged items
+Assets
+Accumulated adjustments
+31 December 2023
+Other (ii)
+Loans and advances to customers
+Securities (i)
+Details of the Group's hedged risk exposures in fair value hedges are set out below:
+(94)
+725
+108,003
+(1,404)
+(885)
+62
+(i)
+95,808
+22
+(10)
+(6,528)
+1,267
+(89)
+4,780
+Loans and advances to customers
+Other (ii)
+105
+(493)
+61,752
+(1,799)
+Securities (i)
+Liabilities
+Assets
+Liabilities
+to the fair value of hedged items
+Carrying amount of hedged items
+Assets
+Accumulated adjustments
+31 December 2022
+(ii) Other hedged items are included in due from banks and other financial institutions and repurchase agreements.
+Securities are included in financial investments measured at FVTOCI, financial investments measured at amortised cost and
+debt securities issued.
+89,761
+Reverse repurchase agreements-securities
+Carrying amount of hedged items
+Details of the Group's hedged risk exposures in cash flow hedges and the corresponding effect on equity are as follows:
+31 December 2023
+The notional amounts and fair values of derivative financial instruments held by the Group are set out below:
+A derivative is a financial instrument, the value of which changes in response to the changes in a specified interest rate,
+financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or
+other similar variables. The Group uses derivative financial instruments including forwards, swaps, options and futures.
+The notional amount of a derivative represents the underlying amount of the specific financial instruments mentioned
+above. It indicates the volume of business transacted by the Group but does not reflect the risk.
+21. DERIVATIVE FINANCIAL INSTRUMENTS
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Annual Report 2023 199
+1,192,532
+826,799
+702,459
+1,116,717
+(1,107)
+(3,134)
+Less: Allowance for impairment losses
+827,906
+705,593
+5,761
+7,591
+Accrued interest
+200,951
+222,934
+Banks and other financial institutions operating outside Chinese mainland
+226,604
+31 December 2022
+209,164
+Notional
+Fair values
+Assets
+10,011
+(23,760)
+24,945
+(54,844)
+52,249
+(41,618) 4,310,971
+(16,273) 3,139,900
+(18,360) 937,006
+(76,251) 8,387,877
+15,142
+7,367
+75,339
+11,249,693
+1,003,045
+Commodity derivatives and other
+4,231,434
+Interest rate contracts
+52,830
+6,015,214
+Exchange rate contracts
+Liabilities
+Assets
+amounts
+Liabilities
+Fair values
+Notional
+amounts
+Other financial institutions operating in Chinese mainland
+394,590
+265,904
+(ii) Surplus reserves with the PBOC include funds for the purpose of cash settlement and other kinds of unrestricted deposits.
+The Group is required to place mandatory reserve deposits and other restricted deposits with the PBOC and certain central
+banks of overseas countries or regions where it has operations. They are not available for use in the Group's daily operations.
+As at 31 December 2023, the mandatory reserve deposits ratios of the domestic branches of the Bank in respect of customer
+deposits denominated in RMB and foreign currencies were 9% (31 December 2022: 9.5%) and 4% (31 December 2022: 6%)
+respectively. The mandatory reserve funds placed by domestic subsidiaries of the Group are determined by the PBOC. The
+amounts of mandatory reserve deposits placed with the central banks of those countries or regions outside Chinese mainland
+are determined by local jurisdictions.
+3,427,892
+1,822
+4,042,293
+1,640
+516,558
+195,604
+188,923
+952,050
+2,647,750
+2,832,799
+Fiscal deposits and other
+Accrued interest
+Surplus reserves (ii)
+Mandatory reserves (i)
+Balances with central banks
+Cash on hand
+(i)
+2022
+66,340
+66,699
+2023
+31 December
+31 December
+20. DUE FROM BANKS AND OTHER FINANCIAL INSTITUTIONS
+31 December
+31 December
+2023
+Banks operating in Chinese mainland
+Placements with banks and other financial institutions:
+365,733
+414,258
+(393)
+(426)
+Less: Allowance for impairment losses
+366,126
+414,684
+3,406
+(17,746)
+3,885
+164,954
+Banks and other financial institutions operating outside Chinese mainland
+Accrued interest
+14,556
+24,145
+Other financial institutions operating in Chinese mainland
+232,150
+221,700
+Banks operating in Chinese mainland
+Deposits with banks and other financial institutions:
+2022
+116,014
+31 December 2023
+87,205
+(a) Cash flow hedges
+(38)
+Liabilities
+Assets
+203
+8,108
+4,085
+3,137
+886
+Interest rate swap contracts
+Total
+five years
+five years
+one year
+months
+Over
+within
+year but
+months
+but within
+three
+Within
+Over one
+Over three
+Currency swap contracts
+Fair values
+74,270
+4,999
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+200 Annual Report 2023
+(3,725)
+1,986
+178,527
+4
+9,150
+89,487
+79,886
+(126)
+44
+9,802
+4
+66
+5,002
+4,730
+Equity and other derivatives
+(3,561)
+1,739
+160,617
+-
+81,348
+Notional amounts with remaining maturity of
+31 December 2022
+(1,075)
+Interest rate swap contracts
+Liabilities
+Assets
+Total
+five years
+five years
+one year
+months
+Over
+within
+year but
+months
+but within
+three
+Within
+Over one
+Over three
+Fair values
+Notional amounts with remaining maturity of
+31 December 2023
+Included in the above derivative financial instruments, those designated as hedging instruments in the Group's cash flow
+hedges are set out below:
+The Group's cash flow hedges consist of interest rate swap contracts, currency swap contracts, equity and other derivatives
+that are used to protect against exposures to variability of future cash flows.
+2,417
+1,863
+4,280
+99
+934
+135,550
+2
+6,267
+85,424
+43,857
+(17)
+74
+1,328
+2
+(96,350)
+82
+922
+Equity and other derivatives
+(1,052)
+761
+129,942
+4,322
+82,685
+42,935
+Currency swap contracts
+(6)
+322
+21,338
+Accrued interest
+Measured at FVTPL:
+Listed outside Hong Kong SAR
+339,324
+303,881
+Unlisted
+1,679,980
+1,728,516
+2,142,652
+2,124,706
+Other debt investments:
+Unlisted
+Equity investments:
+Listed in Hong Kong SAR
+Listed outside Hong Kong SAR
+Unlisted
+208 Annual Report 2023
+5,421
+5,264
+5,681
+3,965
+4,363
+4,506
+92,309
+72,745
+123,348
+Debt securities:
+31 December
+2023
+2022
+1,076,400
+982,051
+184,168
+211,905
+293,463
+349,923
+566,522
+560,850
+22,099
+19,977
+2,142,652
+2,124,706
+5,421
+82,789
+5,264
+93,126
+2,230,862
+2,223,096
+Analysed into:
+Listed in Hong Kong SAR
+84,655
+82,789
+93,126
+이 이 회
+206 Annual Report 2023
+Financial investments measured at amortised cost
+Financial investments measured at FVTOCI
+Financial investments measured at FVTPL
+24. FINANCIAL INVESTMENTS
+In 2023, the changes of gross carrying amounts of loans and advances to customers with a significant impact on the
+Group's impairment allowance were mainly resulted from the credit business in Chinese mainland, including: the gross
+carrying amount of domestic branches loans and advances to customers transferred from Stage 1 to Stage 2 was
+RMB436,289 million (2022: RMB497,668 million); the gross carrying amount of domestic branches loans transferred
+from Stage 2 to Stage 3 was RMB101,522 million (2022: RMB122,174 million); the gross carrying amount of domestic
+branches loans transferred from Stage 2 to Stage 1 was RMB223,294 million (2022: RMB147,733 million). The changes of
+impairment allowance resulting from loans transferred from Stage 1 to Stage 3, Stage 3 to Stage 1 and Stage 3 to Stage 2
+were not significant (2022: not significant).
+538
+28
+-2
+317
+510
+2
+317
+Balance at 31 December 2022
+Other movements
+Charge for the year
+- to stage 3
+19. CASH AND BALANCES WITH CENTRAL BANKS
+- to stage 2
+- to stage 1
+31 December
+31 December
+2023
+811,957
+2022
+2,230,862
+2,223,096
+186,993
+2022
+2023
+31 December
+Financial investments designated as at FVTPL
+Equity investments
+Corporate entities
+Banks and other financial institutions
+31 December
+Policy banks
+31 December
+(a) Financial investments measured at FVTPL
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+10,533,702
+11,849,668
+7,563,132
+8,806,849
+2,223,096
+2,230,862
+747,474
+Financial investments held for trading
+Debt securities (analysed by type of issuers):
+Governments and central banks
+Transfer:
+747,474
+156,481
+Policy banks
+Banks and other financial institutions
+Corporate entities
+Equity investments
+Funds and other investments
+Analysed into:
+13,037
+16,418
+166,690
+157,946
+2,517
+3,549
+182,244
+177,913
+90,396
+87,032
+123,874
+107,163
+396,514
+372,108
+811,957
+Debt securities (analysed by type of issuers):
+747,474
+Other financial investments measured at FVTPL
+43,643
+64,517
+73,139
+84,302
+106,907
+357,150
+315,337
+14,650
+10,711
+371,800
+326,048
+Debt securities (analysed by type of issuers):
+Governments and central banks
+Banks and other financial institutions
+372
+181
+Corporate entities
+222
+775
+Funds and other investments
+42,868
+49,318
+49,318
+Debt securities:
+Listed in Hong Kong SAR
+3,204
+Other debt investments
+Equity investments
+31 December
+2023
+31 December
+2022
+2,937
+2,443
+27,188
+25,817
+74,921
+69,483
+105,046
+97,743
+3,353
+2,517
+2,393
+2,982
+160,996
+150,982
+166,742
+123,419
+Corporate entities
+Banks and other financial institutions
+Policy banks
+2,177
+Listed outside Hong Kong SAR
+20,629
+30,276
+Unlisted
+516,336
+460,797
+540,169
+493,250
+Annual Report 2023
+811,957
+207
+(In RMB millions, unless otherwise stated)
+Equity investments:
+Listed in Hong Kong SAR
+Listed outside Hong Kong SAR
+Unlisted
+Funds and other investments:
+Listed in Hong Kong SAR
+Listed outside Hong Kong SAR
+Unlisted
+(b) Financial investments measured at FVTOCI
+Debt securities (analysed by type of issuers):
+Governments and central banks
+Notes to the Consolidated Financial Statements
+Less: Allowance for impairment losses
+219
+191
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+204 Annual Report 2023
+As at 31 December 2023, the Group's allowance for impairment losses on loans and advances to customers measured at
+FVTOCI was RMB390 million (31 December 2022: RMB538 million), refer to Note 23.2(b).
+2,780
+22,591,676
+6,104
+25,386,933
+1,155,879
+1,295,585
+37
+335
+11,161
+1,144,681
+10,348
+1,284,902
+21,433,017
+24,085,244
+(672,224)
+(756,001)
+22,105,241
+24,841,245
+53,487
+56,117
+4,104
+2,755
+23.2 Allowance for impairment losses on loans and advances
+8,234,625
+(a) Movements of the allowance for impairment losses on loans and advances to customers
+measured at amortised cost are as follows:
+Stage 1
+89,529
+27,041
+Charge for the year
+47,526
+(44,930)
+(2,596)
+- to stage 3
+(5,158)
+12,411
+(7,253)
+- to stage 2
+(4,564)
+(42,004)
+46,568
+- to stage 1
+Transfer:
+Total
+672,224
+Stage 3
+251,923
+141,586
+278,715
+Stage 2
+Balance at 1 January 2023
+8,653,621
+198,221
+188,515
+Notes to the Consolidated Financial Statements
+203
+Annual Report 2023
+864,122
+1,224,257
+154,974
+40,514
+709,148
+1,183,743
+(475)
+(97)
+544
+909
+564,670
+144,409
+109,077
+1,073,854
+2022
+2023
+31 December
+31 December
+Reverse repurchase agreements-securities and cash advanced as collateral on
+securities borrowing
+(In RMB millions, unless otherwise stated)
+23. LOANS AND ADVANCES TO CUSTOMERS
+23.1 Loans and advances to customers by type of measurement:
+Measured at amortised cost:
+13,614,804
+13,813,025
+16,128,752
+15,940,237
+2022
+31 December
+2023
+31 December
+- Loans
+Corporate loans and advances
+Measured at FVTPL:
+26,736
+Accrued interest
+- Loans
+Corporate loans and advances
+Measured at FVTOCI:
+Less: Allowance for impairment losses on loans and advances to customers
+measured at amortised cost (Note 23.2(a))
+Accrued interest
+Discounted bills
+Personal loans
+- Finance lease
+- Loans
+Corporate loans and advances
+Discounted bills
+28
+143,306
+(72,721)
+Transfer:
+538
+28
+Total
+Stage 3
+Stage 2
+-
+Stage 1
+510
+Balance at 1 January 2023
+(b) Movements of the allowance for impairment losses on loans and advances to customers
+measured at FVTOCI are as follows:
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+205
+Annual Report 2023
+672,224
+251,923
+141,586
+278,715
+Balance at 31 December 2022
+1,232
+(857)
+811
+- to stage 1
+1,278
+- to stage 2
+(46)
+Balance at 1 January 2022
+Total
+Stage 3
+Stage 2
+Stage 1
+390
+29
+361
+Balance at 31 December 2023
+6
+1
+5
+Other movements
+(270)
+(270)
+Write-offs and transfer out
+116
+224
+(108)
+(Reverse)/charge for the year
+46
+- to stage 3
+Other movements
+9,529
+9,529
+269,376
+Balance at 1 January 2022
+Total
+Stage 3
+Stage 2
+Stage 1
+756,001
+257,031
+156,240
+342,730
+Balance at 31 December 2023
+(1,723)
+(1,626)
+(352)
+255
+Other movements
+14,915
+14,915
+previously written off
+Recoveries of loans and advances
+(72,721)
+110,649
+223,739
+603,764
+Transfer:
+previously written off
+Recoveries of loans and advances
+(85,157)
+(85,157)
+Write-offs and transfer out
+142,856
+57,271
+92,227
+(6,642)
+(Reverse)/charge for the year
+Write-offs and transfer out
+54,270
+(4,594)
+- to stage 3
+(3,979)
+15,684
+(11,705)
+- to stage 2
+(2,893)
+(28,109)
+31,002
+- to stage 1
+(49,676)
+Accrued interest
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Total
+298,878
+149,457
+15,609
+1,860
+24,186
+107,766
+At 31 December 2023
+293,887
+148,099
+17,192
+1,976
+17,072
+109,548
+At 31 December 2022
+Carrying amount:
+At 31 December 2023
+223,556
+6,811
+22,858
+1,297
+1,297
+(1,229)
+(93)
+214
+(6,224)
+(11,692)
+87,937
+34
+13,120
+68,149
+54,316
+(4,146)
+8,182
+Annual Report 2023
+As at 31 December 2023, the process of obtaining the legal titles for the Group's properties and buildings with an
+aggregate carrying amount of RMB6,421 million (31 December 2022: RMB8,372 million) was still in progress. Management
+is of the view that the aforesaid matter would neither affect the rights of the Group to these assets nor have any significant
+impact on the business operation of the Group.
+(1,194)
+(4,560)
+(4,221)
+(16,762)
+measured at FVTPL
+Change in fair value of financial instruments
+99,753
+401,947
+111,767
+450,033
+Allowance for impairment losses
+(liabilities)
+differences
+(liabilities)
+differences
+tax
+assets/
+(taxable)
+temporary
+As at 31 December 2023, the carrying amount of aircraft and vessels leased out by the Group under operating leases was
+RMB149,457 million (31 December 2022: RMB148,099 million).
+As at 31 December 2023, the carrying amount of aircraft and vessels owned by the Group that have been pledged as
+collateral for liabilities due to banks and other financial institutions was RMB72,257 million (31 December 2022: RMB86,163
+million).
+As at 31 December 2023, the carrying amount of aircraft and vessel construction in progress was RMB17,670 million (31
+December 2022: RMB9,225 million).
+28. DEFERRED TAX ASSETS AND LIABILITIES
+(a) Analysed by nature
+Deferred tax assets:
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+31 December 2023
+Deferred
+31 December 2022
+Deductible/
+Deferred
+(taxable)
+temporary
+tax
+assets/
+Deductible/
+854
+211,093
+50,354
+83,758
+14,980
+24,220
+195,703
+At 31 December 2023
+(12,304)
+(3,280)
+(6,350)
+(106)
+(155)
+(2,413)
+Disposals and other movements
+4,645
+136
+(10,685)
+5,904
+CIP transfer in/out)
+At 31 December 2022 and 1 January 2023
+191,703
+17,106
+14,335
+83,383
+198,453
+203,773
+504,980
+509
+17,954
+751
+6,589
+3,955
+29,758
+Additions
+522,434
+Accumulated depreciation and allowance for
+impairment losses:
+41,366
+191,036
+903
+8,039
+6,710
+22,686
+62,340
+3,477
+(37)
+(4,188)
+(1,199)
+(6,106)
+12,359
+66,191
+3,477
+Change in fair value of financial instruments
+11,493
+Disposals and other movements
+At 1 January 2022
+75,803
+34
+Depreciation charge for the year
+7,034
+Impairment charge for the year
+༈ ། । | སྐུ | ।।
+Disposals and other movements
+At 31 December 2022 and 1 January 2023
+82,155
+34
+Depreciation charge for the year
+7,011
+Impairment charge for the year
+(682)
+2,098
+measured at FVTOCI
+(9,222)
+104,669
+(5,277)
+8,829
+101,117
+(5,278)
+1,496
+(942)
+(5,832)
+Other
+11,623
+784
+10,839
+Accrued staff costs
+(9,222)
+(6,773)
+(2,449)
+measured at FVTOCI
+Recognised in
+profit or loss
+comprehensive
+income
+2023
+Allowance for impairment losses
+99,753
+Deferred tax liabilities:
+12,014
+Change in fair value of financial instruments
+measured at FVTPL
+(1,194)
+(3,027)
+(4,221)
+Change in fair value of financial instruments
+111,767
+2023
+Recognised
+in other
+Recognised in
+1 January
+Recognised
+in other
+Deferred tax assets:
+3,930
+(646)
+626
+3,950
+2,203
+612
+1,591
+Other
+64
+(646)
+710
+measured at FVTOCI
+Change in fair value of financial instruments
+1,701
+comprehensive
+31 December
+2023
+profit or loss
+income
+2023
+1 January
+Allowance for impairment losses
+158
+(38)
+Change in fair value of financial instruments
+measured at FVTPL
+1,845
+(144)
+(196)
+1 January
+31 December
+in other
+differences
+temporary
+liabilities/
+temporary
+tax
+(deductible)
+tax
+(deductible)
+Deferred
+Taxable/
+Deferred
+Taxable/
+31 December 2022
+31 December 2023
+Deferred tax liabilities:
+101,117
+409,193
+(8,297)
+(2,449)
+Accrued staff costs
+46,529
+11,623
+43,448
+(assets)
+10,839
+(21,244)
+(5,278)
+(23,345)
+(5,832)
+422,947
+104,669
+Other
+differences
+liabilities/
+(assets)
+Allowance for impairment losses
+2,203
+6,395
+1,591
+16,386
+3,930
+17,156
+8,912
+3,950
+215
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(b) Movements of deferred income tax
+Deferred tax assets:
+Recognised
+Annual Report 2023
+(35,609)
+Other
+2,245
+(109)
+(38)
+(219)
+(196)
+Change in fair value of financial instruments
+measured at FVTPL
+710
+7,729
+8,735
+1,845
+Change in fair value of financial instruments
+measured at FVTOCI
+(146)
+64
+1,701
+Recognised in
+8,422
+(143)
+61,868
+2023
+31 December
+31 December
+Less: Allowance for impairment losses
+Goodwill
+Share of net assets
+Interests in joint ventures
+Interests in associates
+26. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Annual Report 2023
+212
+There is no subsidiary of the Group which has material non-controlling interests during the reporting period.
+The above table lists the principal subsidiaries of the Bank. To give details of other subsidiaries would, in the opinion of the
+management, result in particulars of excessive length.
+As at 31 December 2023 and 31 December 2022, voting rights of the subsidiaries of the Group are in line with the Group's
+equity interests.
+These subsidiaries incorporated in Chinese mainland are all limited liability companies.
+Zhejiang Pinghu ICBC Rural Bank Co., Ltd. *
+60
+60
+Chongqing Bishan ICBC Rural Bank Co., Ltd. *
+100
+100
+2022
+62,573
+RMB200 million
+RMB100 million
+Beijing, the PRC
+Zhejiang, the PRC
+Chongqing, the PRC
+Leasing
+Insurance
+Financial asset
+investment
+Wealth management
+Commercial banking
+Commercial banking
+*
+RMB16,000 million
+RMB120 million
+RMB100 million
+RMB16,000 million
+2,910
+64,778
+31 December 2023 31 December 2022
+As at/year ended As at/year ended
+The accounting policies of Standard Bank are consistent with those of the Group. Its financial information is significant to
+the Group and summarised as follows:
+Standard Bank is a listed commercial bank registered in Johannesburg, the Republic of South Africa with an issued capital
+of ZAR168 million and a strategic partner of the Group. As at 31 December 2023, the Group's equity interest and voting
+rights in Standard Bank were 19.39% (31 December 2022: 19.36%).
+65,790
+64,778
+39,930
+39,384
+25,860
+25,394
+2022
+2023
+31 December
+31 December
+Standard Bank
+Other
+(a) Carrying value of the Group's associates and joint ventures are as follows:
+65,790
+65,790
+31 December
+31 December
+2023
+2022
+50,973
+3,217
+51,261
+14,894
+65,297
+66,155
+(519)
+(365)
+64,778
+14,324
+100
+100
+ICBC Wealth Management Co., Ltd.*
+100
+100
+Industrial and Commercial Bank of China (Argentina) S.A.
+Real202 million
+100
+100
+Industrial and Commercial Bank of China (Brasil) S.A.
+MXN1,597 million
+100
+100
+Industrial and Commercial Bank of China Mexico S.A.
+("ICBC Canada")
+Commercial banking
+Commercial banking
+Broker dealer and
+margin trading
+Commercial banking
+New York, United States
+Delaware and New York,
+United States
+Toronto, Canada
+CAD218.66 million
+CAD208 million
+80
+Commercial banking
+Industrial and Commercial Bank of China (USA) NA
+80
+80
+USD369 million
+Industrial and Commercial Bank of China
+ARS171,933 million
+100
+USD50 million
+USD306 million
+USD50.25 million
+Financial Services LLC
+Industrial and Commercial Bank of China (Canada)
+80
+80
+100
+MXN1,597 million
+Real202 million
+USD904 million
+Mexico City, Mexico
+Sao Paulo, Brazil
+Commercial banking
+RMB18,000 million
+RMB11,000 million
+ICBC-AXA Assurance Co., Ltd. ("ICBC-AXA"). *
+60
+60
+RMB12,505 million
+100
+ICBC Financial Asset Investment Co., Ltd.*
+100
+RMB27,000 million
+RMB7,980 million
+RMB27,000 million
+Beijing, the PRC
+Tianjin, the PRC
+Shanghai, the PRC
+Nanjing, the PRC
+Fund management
+("ICBC Investment")
+100
+The associate
+100
+RMB433 million
+Commercial banking
+Buenos Aires, Argentina
+Commercial banking
+ICBC Peru Bank
+100
+100
+ICBC Financial Leasing Co., Ltd. * ("ICBC Leasing")
+USD120 million
+Lima, Peru
+Commercial banking
+ICBC Credit Suisse Asset Management Co., Ltd. *
+80
+80
+RMB200 million
+USD120 million
+(4,743)
+Assets
+Net assets
+equipment
+Properties
+Office
+27. PROPERTY AND EQUIPMENT
+(519)
+65,297
+(1,543)
+(3,234)
+(379)
+5,022
+(2,096)
+1,372
+66,155
+Total
+(519)
+62,387
+(1,742)
+(1,783)
+1,989
+(24)
+(1,456)
+(183)
+36,645
+Aircraft
+(171)
+62,938
+1,372
+(1,783)
+5,215
+(379)
+(3,234)
+Subtotal
+1,372
+and
+Leasehold
+(206)
+(1,232)
+Disposals and other movements
+6,427
+106
+(11,154)
+4,621
+CIP transfer in/(out)
+21,550
+2,659
+6,388
+888
+10,250
+1,365
+Additions
+481,332
+180,945
+and motor
+and
+buildings
+in progress
+improvements
+vehicles
+Construction
+vessels
+Cost:
+At 1 January 2022
+186,949
+18,216
+13,590
+81,632
+Total
+36,730
+Other
+(348)
+Investment
+Movements during the year
+(b) Movements of associates and joint ventures investments of the Group are as follows:
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+213
+Annual Report 2023
+26,208
+25,742
+Closing balance of the Group's interest in Standard Bank in the
+consolidated statement of financial position
+8,616
+8,085
+Goodwill
+17,592
+17,657
+Group's share of net assets of the associate
+19.36%
+1,174,552
+1,068,458
+1,176,814
+1,071,125
+106,094
+105,689
+17,129
+14,235
+income
+Profit from continuing operations
+Net assets of the associate attributable to the parent company
+91,062
+90,868
+Group's effective interest
+19.39%
+Stage 3
+Equity method of the associate
+recognised
+Balance at
+beginning
+under
+Joint ventures
+3,217
+(313)
+(193)
+199
+2,910
+the year
+Associates
+26,208
+3,226
+(355)
+(1,778)
+(1,559)
+25,742
+Standard Bank
+Liabilities
+the year
+or profits
+Other
+Declared
+distribution of
+Investment
+Investment
+the equity
+comprehensive cash dividends
+Other
+Balance at
+end of
+at end of
+of the year
+increase
+decrease
+method
+income
+Balance of
+allowance for
+impairment
+31 December
+comprehensive
+EUR200 million
+2023
+2022
+2023
+Industrial and Commercial Bank of China
+100
+100
+HKD44,188 million
+Amount
+invested
+by the Bank
+HKD54,738 million
+Place of
+incorporation/
+registration
+and operations
+Hong Kong SAR, the PRC
+Principal
+activities
+Commercial banking
+(Asia) Limited ("ICBC Asia")
+ICBC International Holdings Limited
+100
+100
+HKD5,963 million
+98.61
+PT. Bank ICBC Indonesia
+(Macau) Limited ("ICBC Macau")
+Commercial banking
+Macau SAR, the PRC
+MOP12,064 million
+Name
+MOP589 million
+89.33
+Industrial and Commercial Bank of China
+("ICBC International")
+Investment banking
+Hong Kong SAR, the PRC
+HKD5,963 million
+89.33
+98.61
+31 December
+31 December
+(21)
+47
+28,613
+23
+2,699
+31,335
+This includes a special government bond, which is a non-negotiable bond with a nominal value of RMB85,000 million (31
+December 2022: RMB85,000 million) issued by the Ministry of Finance of the People's Republic of China (the "MOF") to the
+Bank in 1998. The bond will mature in 2028 and bears interest at a fixed rate of 2.25% per annum.
+(ii) This includes Huarong bonds of RMB90,309 million (31 December 2022: RMB90,309 million). Huarong bonds are a series of
+long-term bonds issued by the former China Huarong Asset Management Co., Ltd. ("Huarong") in the year of 2000 and 2001
+to the Bank, with an aggregate amount of RMB312,996 million. The proceeds from the issuance of the bonds were used to
+purchase non-performing loans of the Bank. The bonds are non-negotiable, with a tenure of 10 years and bear interest at a
+fixed rate of 2.25% per annum. The MOF provides funding support for the repayment of principal and interest of the bonds.
+In 2010, the Bank received a notice from the MOF that the maturity dates of the Huarong bonds were extended for ten years.
+In 2020, the Bank received a notice from the MOF to adjust the interest rate of the Huarong bonds, starting from 1 January
+2020. Interest rate would be determined on yearly basis with reference to the average level of five-year government bond yield
+in the previous year. In January 2021, the Bank received notice from the MOF that the maturity dates of Huarong bonds were
+further extended for ten years. As at 31 December 2023, the Bank had received accumulated early repayments amounting to
+RMB222,687 million (31 December 2022: RMB222,687 million).
+(iii) Other investments include debt investment plans, asset management plans and trust plans with fixed or determinable
+payments. They will mature from March 2024 to December 2033 and bear interest rates ranging from 3.50% to 6.33% per
+annum.
+25. INVESTMENTS IN SUBSIDIARIES
+Listed investments, at cost
+Unlisted investments, at cost
+31 December
+31 December
+2023
+2022
+paid-in capital
+Percentage of equity interest %
+Nominal value of
+issued share/
+Particulars of the Group's principal subsidiaries as at the end of the reporting period are as follows:
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+31 December
+211
+163,283
+163,283
+160,571
+160,571
+2,712
+2,712
+Annual Report 2023
+Industrial and Commercial Bank of China
+100
+100
+100
+88
+EUR437 million
+EUR437 million
+Luxembourg
+Commercial banking
+USD200 million
+USD200 million
+London, United Kingdom
+Commercial banking
+ICBC Standard Bank PLC
+60
+60
+USD1,083 million
+USD839 million
+London, United Kingdom
+Banking
+EUR200 million
+100
+100
+ICBC Austria Bank GmbH
+USD425 million
+TRY8,845 million
+100
+92.84
+ICBC Turkey Bank Anonim Şirketi
+RUB10,810 million
+RUB10,810 million
+100
+100
+Bank ICBC (joint stock company)
+92.84
+ICBC (London) PLC
+100
+100
+Commercial banking
+Bangkok, Thailand
+THB23,711 million
+THB20,107 million
+97.98
+97.98
+(Thai) Public Company Limited ("ICBC Thai")
+Industrial and Commercial Bank of China
+Commercial banking
+Kuala Lumpur, Malaysia
+Commercial banking
+Jakarta, Indonesia
+USD361 million
+MYR833 million
+IDR3,706,100 million
+MYR833 million
+(Malaysia) Berhad
+24,827
+Industrial and Commercial Bank of China
+100
+Industrial and Commercial Bank of China (Europe) S.A.
+(New Zealand) Limited ("ICBC New Zealand")
+Commercial banking
+Auckland, New Zealand
+NZD234 million
+NZD234 million
+100
+100
+Industrial and Commercial Bank of China
+(Almaty) Joint Stock Company
+Commercial banking
+Almaty, Kazakhstan
+KZT8,933 million
+KZT8,933 million
+100
+2022
+1,772
+830
+31 December
+2023
+31 December
+2022
+Governments and central banks (i)
+Policy banks
+Banks and other financial institutions (ii)
+Corporate entities
+Accrued interest
+7,529,154
+6,398,119
+593,513
+522,148
+542,365
+510,192
+68,061
+63,855
+Less: Allowance for impairment losses
+7,594,467
+8,845,568
+9,743
+13,885
+9
+Debt securities (analysed by type of issuers):
+9,734
+Accrued interest
+Other investments (iii)
+7,584,724
+8,831,683
+90,410
+98,590
+13,869
+16
+(38,719)
+(c) Financial investments measured at amortised cost
+Notes to the Consolidated Financial Statements
+2,677
+355
+1,341
+4,373
+Transfer:
+-
+- to stage 1
+- to stage 2
+(174)
+174
+- to stage 3
+(19)
+(86)
+105
+Charge for the year
+2,203
+545
+209
+Annual Report 2023
+9,330
+3,527
+1,009
+4,794
+(In RMB millions, unless otherwise stated)
+Balance at 31 December 2022
+9
+21
+107
+Other movements
+4,820
+2,072
+137
+(31,335)
+8,806,849
+7,563,132
+4
+7,389
+Other movements
+(6)
+1
+(5)
+Balance at 31 December 2023
+36,009
+11
+2,699
+38,719
+210
+Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Balance at 1 January 2022
+Stage 1
+5,493
+Stage 2
+850
+(830)
+3
+(3)
+(i)
+Balance at 31 December 2022
+Other movements
+-
+Charge for the year
+- to stage 2
+- to stage 1
+Transfer:
+6,461
+Total
+Stage 3
+118
+- to stage 3
+2
+7,385
+(2)
+7,131
+11,254
+11,254
+8,806,849
+236,482
+7,556,001
+8,795,595
+32,267
+194,467
+7,329,267
+8,555,776
+7,131
+7,563,132
+38,843
+200,976
+Unlisted
+Other investments:
+Listed outside Hong Kong SAR
+Unlisted
+Listed in Hong Kong SAR
+Debt securities:
+Analysed into:
+Market value of listed securities
+23,055
+68
+223,682
+Balance at 1 January 2023
+Charge for the year
+- to stage 3
+- to stage 2
+(19)
+19
+Total
+31,335
+Movements of the allowance for impairment losses on financial investments measured at amortised cost are as follows:
+2,699
+23
+28,613
+Stage 2
+Stage 1
+- to stage 1
+Transfer:
+Stage 3
+Balance at 1 January 2022
+Moscow, Russia
+Istanbul, Turkey
+Vienna, Austria
+Stage 2
+545,438
+110,285
+121,963
+2,941
+3,425
+6,204
+6,502
+(c)
+Other
+Interest receivable
+Repossessed assets
+6,056
+7,034
+9,181
+9,357
+(b)
+Advance payments
+Settlement and clearing balances
+213,951
+155,789
+Precious metals
+140,230
+125,717
+464,761
+Right-of-use assets
+28,538
+33,653
+Land use rights
+14,438
+14,935
+Goodwill
+(a)
+2022
+Less: Allowance for impairment losses
+(12,538)
+37,837
+At 31 December 2022 and 1 January 2023
+1,220
+(30)
+4,309
+(3,059)
+Disposals and other movements
+6,700
+68
+6,632
+Additions
+50,730
+357
+16,109
+34,264
+At 1 January 2022
+Cost:
+533,547
+452,223
+Annual Report 2023
+217
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(a) Right-of-use assets
+(11,891)
+Aircraft
+Properties
+and
+and buildings
+vessels
+equipment and
+motor vehicles
+Total
+Office
+2023
+31 December
+31 December
+216 Annual Report 2023
+101,117
+3,202
+18,656
+79,259
+(5,832)
+16
+(3,851)
+(1,997)
+Other
+10,839
+2,155
+8,684
+Accrued staff costs
+(2,449)
+3,186
+(5,635)
+profit or loss
+income
+2022
+Allowance for impairment losses
+81,662
+18,091
+Deferred tax liabilities:
+99,753
+measured at FVTPL
+(3,455)
+2,261
+(1,194)
+Change in fair value of financial instruments
+measured at FVTOCI
+Change in fair value of financial instruments
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+1 January
+Recognised
+in profit
+1,346
+(636)
+710
+Other
+562
+1,556
+Change in fair value of financial instruments
+measured at FVTOCI
+(527)
+5,481
+(368)
+(1,163)
+3,950
+As at 31 December 2023 and 31 December 2022, the Group did not have significant unrecognised deferred tax assets.
+29. OTHER ASSETS
+1,591
+20,418
+1,845
+3,841
+Recognised
+in other
+comprehensive
+31 December
+2022
+Allowance for impairment losses
+(1,996)
+(268)
+72
+income
+2022
+(196)
+Change in fair value of financial instruments
+measured at FVTPL
+or loss
+Commercial banking
+395
+Additions
+Annual Report 2023
+218
+The recoverable amount of the CGU is determined based on the discounted future cash flows of the CGU. The cash flow
+projections are based on financial forecasts approved by management of the subsidiaries. The average growth rates are projected
+based on the similar rates which do not exceed the long-term average growth rate for the business in which the CGU operates in.
+The discount rate is the before-tax rate and reflects the specific risk associated with the CGU.
+Goodwill arising from business combinations has been reasonably allocated to the CGU, which is not larger than the reportable
+segment of the Group, for impairment testing.
+The goodwill is attributable to the expected synergies arising from acquisition of several subsidiaries such as ICBC Asia and ICBC
+Macau in prior year.
+8,799
+8,967
+(382)
+(390)
+9,181
+9,357
+663
+176
+8,518
+9,181
+2022
+2023
+Carrying amount:
+At 31 December 2022
+At 31 December 2023
+16,646
+15,590
+16,047
+11,330
+70
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+32,763
+27,972
+(b) Goodwill
+At 1 January
+Exchange difference
+Subtotal
+Less: Allowance for impairment losses
+1,052
+566
+As at 31 December 2023, the accumulated unrealized profit of the Group's debt securities and other debt investments
+measured at FVTOCI was RMB19,296 million and RMB66 million (31 December 2022: the accumulated unrealized loss of
+RMB10,144 million and RMB41 million).
+Balance at 1 January 2023
+Stage 1
+9,568
+3,769
+964
+4,835
+Balance at 31 December 2023
+(330)
+(417)
+24
+63
+Other movements
+568
+659
+(78)
+(13)
+(Reverse)/charge for the year
+- to stage 3
+Stage 1
+4,794
+Stage 2
+Stage 3
+Total
+1,009
+3,527
+The Group designates certain non-trading equity investments as financial investments measured at FVTOCI. As at December
+31, 2023, the cumulated fair value floating profit of equity investments was RMB4,267 million (December 31, 2022:
+RMB2,902 million) In 2023, dividend income from such equity investments was RMB4,020 million (2022: RMB4,179 million).
+There was RMB884 million dividend income from equity investments derecognised (2022: RMB541 million). The value of
+equity investments disposed of was RMB20,496 million (2022: RMB12,337 million) and the cumulative gains transferred
+into retained earnings from other comprehensive income after disposal was RMB366 million (2022: RMB429 million).
+Allowance for impairment losses on financial investments measured at FVTOCI is recognised in other comprehensive income
+without decreasing the carrying amount of financial investments presented in the consolidated statement of financial
+position, and any impairment gain or loss is recognised in the profit or loss. Movements of the allowance for impairment
+losses on financial investments measured at FVTOCI are as follows:
+9,330
+_ to stage 1
+40
+(40)
+- to stage 2
+(49)
+49
+Transfer:
+(324)
+890
+639
+At 31 December 2022 and 1 January 2023
+(1,453)
+(10)
+817
+(2,260)
+Disposals and other movements
+7,633
+117
+624
+6,892
+Depreciation charge for the year
+18,817
+218
+2,075
+16,524
+At 1 January 2022
+Accumulated depreciation:
+6,231
+1,106
+162
+7,499
+Disposals and other movements
+(4,877)
+21,156
+(6,873)
+(10,699)
+At 31 December 2023
+39,191
+14,651
+1,608
+55,450
+1,051
+3,516
+325
+24,997
+219
+Other movements
+3
+636
+At 31 December 2022 and 1 January 2023
+35
+32
+855
+1
+(325)
+At 31 December 2023
+36
+530
+251
+Other movements
+58,650
+At 1 January 2022
+26,912
+Depreciation charge for the year
+6,730
+689
+95
+7,514
+Disposals and other movements
+Allowance for impairment losses:
+(4,321)
+136
+(5,599)
+At 31 December 2023
+23,565
+2,791
+556
+(1,414)
+Properties and buildings
+Other
+(c) Repossessed assets
+Subtotal
+2023
+30. IMPAIRMENT ALLOWANCE
+The Bank:
+(i)
+(ii)
+Head Office issued debt securities or interbank certificates of deposit, denominated in RMB at fixed interest rates
+amounting to RMB422,984 million in total with maturities between 2024 and 2026. The coupon rates range from 0%
+to 2.80%.
+Sydney Branch issued debt securities, notes, and interbank certificates of deposit denominated in AUD, RMB, HKD
+and USD at fixed or floating interest rates amounting to an equivalent of RMB6,749 million in total with maturities
+between 2024 and 2027. The coupon rates range from 0% to 7.00%.
+(iii) Singapore Branch issued debt securities and notes denominated in RMB and USD at fixed or floating interest rates
+amounting to an equivalent of RMB32,657 million in total with maturities between 2024 and 2026. The coupon rates
+range from 1.00% to 6.47%.
+(iv)
+(v)
+(vi)
+New York Branch issued debt securities and notes denominated in USD at fixed interest rates amounting to an
+equivalent of RMB10,706 million in total with maturities between 2024 and 2027. The coupon rates range from 0%
+to 3.54%.
+Luxembourg Branch issued notes denominated in USD and EUR at fixed or floating interest rates amounting to an
+equivalent of RMB11,956 million in total with maturities between 2024 and 2026. The coupon rates range from
+0.13% to 6.50%.
+Dubai (DIFC) Branch issued notes denominated in RMB and USD at fixed or floating interest rates amounting to an
+equivalent of RMB16,511 million in total with maturities between 2024 and 2026. The coupon rates range from
+1.48% to 6.40%.
+(vii) Hong Kong Branch issued notes denominated in USD and HKD at fixed or floating interest rates amounting to an
+equivalent of RMB40,151 million in total with maturities between 2024 and 2026. The coupon rates range from
+1.20% to 6.39%.
+(viii) London Branch issued notes denominated in GBP, USD and EUR at fixed or floating interest rates amounting to an
+equivalent of RMB9,676 million in total with maturities between 2025 and 2026. The coupon rates range from 1.63%
+to 6.04%.
+(ix)
+Macau Branch issued debt securities and notes denominated in USD and MOP at fixed or floating interest rates
+amounting to an equivalent of RMB3,541 million in total that will mature in 2024. The coupon rates range from
+4.70% to 6.15%.
+224
+Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Subsidiaries:
+(i) ICBC Asia issued debt securities and interbank certificates of deposit denominated in RMB and USD at fixed interest
+rates amounting to an equivalent of RMB7,722 million in total with maturities between 2024 and 2026. The coupon
+rates range from 3.15% to 5.60%.
+(b) Other debt securities issued
+(ii)
+The above tier 2 capital bonds are separately traded on the Thai Bond Market Association, The Stock Exchange of Hong
+Kong Limited and the National Interbank Bond Market.
+On 12 September 2019, ICBC Macau issued a tier 2 capital bond with an aggregate nominal amount of USD500 million,
+bearing a fixed interest rate of 2.875%. The bond will mature on 12 September 2029.
+Issue date Currency
+currency)
+currency)
+(million)
+(In RMB)
+Coupon
+rate
+Value date
+Maturity date
+Circulation date
+(million)
+21/09/2015
+USD
+99.189
+2,000
+14,200
+4.875%
+21/09/2015
+21/09/2025
+22/09/2015
+The bonds cannot be redeemed before maturity.
+Subsidiaries:
+On 23 March 2018, ICBC Thai issued a tier 2 capital bond with an aggregate nominal amount of THB5,000 million, bearing
+a fixed interest rate of 3.5%. The bond will mature on 23 September 2028.
+On 15 March 2022, ICBC-AXA issued a capital supplementary bond with an aggregate nominal amount of RMB5,000
+million, bearing an initial fixed interest rate of 3.7%. The bond will mature on 17 March 2032. The issuer has an option to
+redeem the capital supplementary bond in whole or in part at par value at the end of the fifth interest-bearing year. If the
+issuer does not exercise the redemption option, the coupon rate would increase to 4.7% from the sixth interest-bearing
+year.
+(iii)
+(iv)
+(v)
+24,185
+27,640
+24,849
+28,629
+15,941
+16,493
+1,716
+756
+12
+19
+133,407
+818,642
+138,128
+784,392
+(a) There were no overdue payment for staff salaries, bonuses, allowances and subsidies payable as at 31 December 2023 (31
+December 2022: Nil).
+(b) Provisions for credit commitments
+Balance at 1 January 2023
+Transfer:
+- to stage 1
+- to stage 2
+Stage 1
+20,783
+Stage 2
+41,282
+44,768
+이 회
+(b)
+ICBC Leasing issued debt securities and notes denominated in RMB and USD at fixed or floating interest rates
+amounting to an equivalent of RMB61,855 million in total with maturities between 2024 and 2031. The coupon rates
+range from 1.25% to 6.68%.
+ICBC Thai issued debt securities denominated in THB at fixed interest rates amounting to an equivalent of RMB7,237
+million in total with maturities between 2024 and 2027. The coupon rates range from 0% to 3.70%.
+ICBC International issued notes denominated in RMB and USD at fixed interest rates amounting to an equivalent of
+RMB9,707 million in total with maturities between 2024 and 2025. The coupon rates range from 1.10% to 3.70%.
+ICBC New Zealand issued notes denominated in NZD at fixed or floating interest rates amounting to an equivalent of
+RMB2,701 million in total with maturities between 2024 and 2026. The coupon rates range from 2.61% to 6.78%.
+(vi) ICBC Investment issued debt securities denominated in RMB at fixed interest rates amounting to RMB14,000 million
+in total with maturities between 2024 and 2025. The coupon rates range from 2.20% to 3.70%.
+(vii) ICBC Canada issued interbank certificates of deposit denominated in CAD at fixed interest rates amounting to
+RMB183 million in total that will mature in 2024. The coupon rate is 0%.
+(viii) ICBC Macau issued debt securities denominated in RMB at fixed interest rates amounting to RMB4,988 million in total
+with maturities between 2024 and 2026. The coupon rates range from 2.58% to 3.09%.
+Settlement and clearing balances
+Insurance business liabilities
+Salaries, bonuses, allowances and subsidies payables
+Provisions for credit commitments
+(In original
+Lease liabilities
+Promissory notes
+Early retirement benefits
+Other
+31 December
+31 December
+2023
+296,443
+2022
+279,634
+277,321
+251,811
+Sundry tax payables
+(In original
+Ending
+balance
+Issued
+amount
+18/08/2022
+100 Yuan
+10,000
+3.32%
+22/08/2022
+22/08/2037
+23/08/2022
+22 ICBC 04A Tier-2 Capital Bonds
+22 ICBC 04B Tier-2 Capital Bonds
+22 ICBC 05A Tier-2 Capital Bonds
+22 ICBC 05B Tier-2 Capital Bonds
+23 ICBC 01A Tier-2 Capital Bonds
+23 ICBC 01B Tier-2 Capital Bonds
+23 ICBC 02A Tier-2 Capital Bonds
+08/11/2022
+100 Yuan
+50,000
+3.00%
+10/11/2022
+10/11/2032
+11/11/2022
+08/11/2022
+100 Yuan
+10,000
+3.34%
+10/11/2022
+10/11/2037
+22 ICBC 03B Tier-2 Capital Bonds
+23/08/2022
+22/08/2032
+22/08/2022
+20/01/2022 20/01/2037
+21/01/2022
+22 ICBC 03 Tier 2 Bond
+12/04/2022
+100 Yuan
+45,000
+3.50% 14/04/2022
+14/04/2032
+15/04/2022
+22 ICBC 04 Tier 2 Bond
+11/11/2022
+12/04/2022
+5,000
+3.74%
+14/04/2022
+14/04/2037
+15/04/2022
+22 ICBC 03A Tier-2 Capital Bonds
+18/08/2022
+100 Yuan
+30,000
+3.02%
+100 Yuan
+6,611
+20/12/2022
+25,000
+3.07%
+30/08/2023
+30/08/2033
+31/08/2023
+23 ICBC 02B Tier-2 Capital Bonds
+28/08/2023
+100 Yuan
+25,000
+3.18%
+30/08/2023 30/08/2038
+31/08/2023
+The Bank has the option to redeem these bonds in whole or in part on specific dates at par value in future upon the
+approval of the relevant regulatory authorities.
+Annual Report 2023
+223
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+In 2015, the Bank issued tier 2 capital bonds denominated in USD. The bonds were approved for listing and dealing by The
+Stock Exchange of Hong Kong Limited. The relevant information is set out below:
+Name
+15 USD
+Tier 2 capital bonds
+Issued
+price
+30,000
+100 Yuan
+28/08/2023
+13/04/2023
+3.70%
+22/12/2022
+22/12/2032
+23/12/2022
+20/12/2022
+100 Yuan
+5,000
+3.85%
+22/12/2022 22/12/2037
+23/12/2022
+100 Yuan
+10/04/2023
+35,000
+3.49%
+12/04/2023
+12/04/2033
+13/04/2023
+10/04/2023
+100 Yuan
+20,000
+3.58% 12/04/2023
+12/04/2038
+100 Yuan
+3.60%
+Stage 3
+246
+27,640
+In RMB
+Conversion
+rate
+Issue price
+shares)
+(million)
+(million)
+Maturity
+condition Conversion
+Offshore Preference
+Shares:
+USD
+23/09/2020
+Equity
+3.58%
+USD20/Share
+145
+45
+2,900
+19,716
+None
+currency
+Mandatory
+(million
+Accounting
+classification
+Nominal
+value
+86,795
+86,795
+86,795
+86,795
+269,612
+269,612
+269,612
+269,612
+356,407
+356,407
+356,407
+356,407
+Except for the dividends of H shares which are payable in Hong Kong dollars, all of the ordinary A shares and H shares rank
+pari passu with each other in respect of dividends on ordinary shares.
+39. OTHER EQUITY INSTRUMENTS
+(1) Preference shares
+(a) Preference shares ("Preference Shares") outstanding:
+Amount
+In original
+Financial instrument
+outstanding
+Issue date
+Dividend
+No
+Domestic Preference
+Shares:
+Offshore and domestic dividends are paid annually.
+Offshore and domestic dividends are set at a fixed rate for 5 years after issuance and are reset every 5 years thereafter
+to the sum of the benchmark rate and the fixed spread. The fixed spread is equal to the spread between the initial
+offshore and domestic dividend rate and the benchmark rate at the time of issuance. The fixed spread remains unchanged
+throughout the term of the Preference Shares.
+(ii) Conditions to distribution of dividends
+The Bank can pay offshore and domestic dividends when it has distributable after-tax profit after making up previous years'
+losses, contributing to the statutory reserve and making general provisions, and the Bank's capital adequacy ratios meet
+regulatory requirements. Preference shareholders of the Bank are senior to the ordinary shareholders in respect of the right
+to dividends. The order of payment of domestic dividends is equal to offshore dividends. The Bank may elect to cancel all
+or part of offshore and domestic dividends and this shall not constitute a default for any purpose, but such cancellation will
+require a shareholder's resolution to be passed.
+Annual Report 2023 227
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(iii) Dividend stopper and setting mechanism
+For Offshore and Domestic Preference Shares, if the Bank cancels all or part of the dividends to the Preference Shares, the
+Bank shall not make any dividend distribution to ordinary shareholders before the Bank pays the dividends to the preference
+shareholders in full for the current dividend period.
+Non-cumulative dividend is a dividend on Offshore and Domestic Preference Shares which does not cumulate upon omission
+of payment and the passed or omitted dividend of one year is not carried to the following year. After receiving a dividend
+at the agreed dividend rate, preference shareholders of the Bank will not participate in the distribution of residual profits
+with ordinary shareholders.
+The Bank shall distribute dividends for Offshore and Domestic Preference Shares in cash, based on the liquidation preference
+amount for the issued and outstanding Offshore Preference Shares or total amount of issued and outstanding Domestic
+Preference Shares during the corresponding period (i.e. the product of the issue price of Preference Shares and the number
+of the issued and outstanding preference shares).
+(iv) Order of distribution and liquidation method
+The offshore preference shareholders and domestic preference shareholders will rank equally for payment. The preference
+shareholders will be subordinated to the depositors, general creditors and holders of convertible bonds, holders of
+subordinated debts, holders of tier 2 capital bonds and holders of other tier 2 capital instruments of the Bank but will be
+senior to the ordinary shareholders of the Bank.
+(v) Mandatory conversion trigger events
+For Offshore Preference Shares, upon the occurrence of any Non-Viability Trigger Event, the Bank shall have the right to
+irrevocably and compulsorily convert all or part of the outstanding Offshore Preference Shares into H shares, under the
+consent of the National Financial Regulatory Administration (hereinafter referred to as the "NFRA") but without the need
+for the consent of the offshore preference shareholders or the ordinary shareholders. If the Offshore Preference Shares were
+converted into H shares, they cannot be converted to Preference Shares again under any circumstances.
+For Domestic Preference Shares, upon the occurrence of an Additional Tier 1 Capital Trigger Event (Common Equity Tier
+1 Capital Adequacy Ratio of the Bank falling to 5.125% or below), the Bank shall have the right without the need for the
+consent of the domestic preference shareholders to convert all or part of the outstanding face value of Domestic Preference
+Shares into A shares, in order to restore the Common Equity Tier 1 Capital Adequacy Ratio of the Bank to above 5.125%. If
+Domestic Preference Shares were converted into A shares, they cannot be converted to Preference Shares again under any
+circumstances. Upon the occurrence of a Tier 2 Capital Trigger Event, the Bank shall have the right without the need for the
+consent of the domestic preference shareholders to convert all the outstanding face value of Domestic Preference Shares
+into A shares. If Domestic Preference Shares were converted into A share, they cannot be converted to Preference Shares
+again under any circumstances.
+The initial mandatory conversion prices are HKD5.73 per H share for Offshore Preference Shares; RMB3.44 for Domestic
+2015 Preference Shares and RMB5.43 for Domestic 2019 Preference Shares. In case of stock dividends distribution of H or
+A shares of the Bank or other circumstances, the Bank will make cumulative adjustment to the compulsory conversion price
+in turn.
+(vi) Redemption conditions
+Subject to obtaining the approval of the NFRA and satisfying the conditions of redemption, the Bank has the right to
+redeem all or part of the Offshore Preference Shares at the first call date and any subsequent dividend payment date.
+Redemption price of Offshore Preference Shares is equal to liquidation preference price plus any declared but unpaid
+dividend in current period. The first redemption date of Offshore Preference Shares is five years after issuance.
+Under the premise of obtaining the approval of the NFRA and compliance with relevant requirements, the Bank has the
+right to redeem all or part of Domestic Preference Shares, after five years having elapsed since the date of issuance/the date
+of closing. The redemption period of Domestic Preference Shares is from the start date of redemption to the date of full
+redemption or conversion. Redemption price of Domestic Preference Shares is equal to book value plus any declared but
+unpaid dividend in current period.
+228
+Annual Report 2023
+(i) Dividend
+(b) Main clauses and basic information
+134,716
+Total
+RMB2015
+18/11/2015
+Equity
+4.58%
+RMB100/Share
+RMB2019
+19/09/2019 Equity
+4.20%
+RMB100/Share
+560
+shares
+(millions)
+450
+45,000
+None
+Mandatory
+No
+700
+70,000
+70,000
+None
+Mandatory
+No
+45,000
+value
+Nominal
+31 December 2022
+Number of
+(In RMB millions, unless otherwise stated)
+Balance at 1 January 2022
+Transfer:
+- to stage 1
+Stage 1
+Stage 2
+Stage 3
+Total
+19,881
+3,581
+987
+24,449
+123
+(123)
+- to stage 2
+(219)
+249
+(30)
+- to stage 3
+(2)
+(12)
+Notes to the Consolidated Financial Statements
+225
+Annual Report 2023
+24,185
+341
+(341)
+(301)
+301
+- to stage 3
+(71)
+(113)
+184
+(Reverse)/charge for the year
+(2,953)
+14
+(855)
+(3,585)
+Other movements
+98
+31
+1
+130
+Balance at 31 December 2023
+17,897
+5,634
+654
+223
+Total
+Charge/(reverse) for the year
+2,860
+4,572
+5,441
+5,704
+More than five years
+3,023
+4,625
+Undiscounted lease liabilities
+27,335
+30,297
+Closing balance of lease liabilities
+24,849
+28,629
+226 Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+38. SHARE CAPITAL
+31 December 2023
+Number
+of shares
+(millions)
+Issued and fully paid:
+H shares of RMB1 Yuan each
+A shares of RMB1 Yuan each
+4,689
+6,473
+6,109
+8,923
+(740)
+2,807
+Other movements
+313
+56
+15
+384
+Balance at 31 December 2022
+20,783
+6,611
+687
+246
+(c) Lease liabilities
+31 December
+31 December
+2023
+2022
+Less than one year
+One to two years
+Two to three years
+Three to five years
+8,073
+27,640
+Less: Allowance for impairment losses
+5,000
+18/01/2022
+365
+Property and equipment
+10,991
+3,477
+(1,121)
+338
+13,685
+Credit commitments
+24,449
+2,807
+384
+27,640
+Other
+37,706
+2,911
+(1,555)
+87
+1,010
+40,159
+Total
+689,582
+365
+182,677
+joint ventures
+40,665
+324
+-- 50
+1,500
+Reverse repurchase agreements
+128
+338
+9
+475
+Loans and advances to customers
+603,983
+143,173
+(85,157)
+9,529
+1,234
+672,762
+Financial investments
+10,834
+29,647
+(23)
+-
+207
+Investments in associates and
+(87,856)
+9,616
+3,232
+220
+Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+32. FINANCIAL LIABILITIES MEASURED AT FAIR VALUE THROUGH PROFIT OR LOSS
+Financial liabilities related to precious metals
+and account-based investment products (i)
+Debt securities issued (i)
+Other
+31 December
+31 December
+2023
+2022
+51,843
+55,549
+5,647
+5,218
+5,369
+3,520
+62,859
+64,287
+(i)
+Financial liabilities related to precious metals and account-based investment products, and certain issued debt securities
+have been matched with precious metals or derivatives of the Group as part of a documented risk management strategy to
+mitigate market risk. An accounting mismatch would arise if these financial liabilities were accounted for at amortised cost,
+whereas the related precious metals or derivatives were measured at fair value with movements in fair value taken through the
+statement of profit or loss. By designating these financial liabilities at FVTPL, the movement in their fair values is recorded in
+the statement of profit or loss. As at 31 December 2023 and 31 December 2022, the difference between the fair values of the
+financial liabilities related to precious metals, account-based investment products and issued debt securities and the amounts
+that the Group would be contractually required to pay to the holders of the financial liabilities related to precious metals,
+account-based investment products and issued debt securities upon maturity was not significant.
+In 2023 and 2022, there were no significant changes in the credit spread of the Group and therefore the amounts of
+changes in fair value of the financial liabilities arising from changes in the credit risk and the accumulated amounts as at the
+end of the respective years were not significant. The changes in fair value of the financial liabilities were mainly attributable
+to changes in other market factors.
+3,187,712
+3,369,858
+522,811
+528,473
+797,251
+31. DUE TO BANKS AND OTHER FINANCIAL INSTITUTIONS
+Deposits:
+31 December
+31 December
+2022
+Banks and other financial institutions operating in Chinese mainland
+Banks and other financial institutions operating outside Chinese mainland
+Accrued interest
+2,698,821
+2,524,293
+138,308
+1,126
+137,552
+2,841,385
+3,056
+2,664,901
+Money market takings:
+Banks and other financial institutions operating in Chinese mainland
+Banks and other financial institutions operating outside Chinese mainland
+Accrued interest
+228,733
+213,002
+288,883
+303,008
+10,857
+6,801
+4,256
+financial institutions
+2022
+Other
+Other
+2023
+Due from banks and other
+financial institutions
+1,500
+2,040
+20
+3,560
+Reverse repurchase agreements
+475
+(387)
+9
+97
+Loans and advances to customers
+672,762
+143,422
+(72,991)
+14,915
+(1,717)
+756,391
+Financial investments
+31 December
+At
+previous
+write-offs
+of
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+2023
+2022
+5,878
+5,817
+624
+387
+6,502
+6,204
+(3,116)
+40,665
+(2,799)
+3,405
+Write-offs
+Recoveries
+At
+Charge or
+1 January
+reverse
+2023
+for the year
+and
+transfer
+out
+3,386
+33. REPURCHASE AGREEMENTS
+7,957
+228
+150,816
+(78,471)
+15,141
+(485)
+884,252
+Annual Report 2023
+219
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Due from banks and other
+At
+1 January
+2022
+Charge for
+the year
+Write-offs
+and
+transfer
+Recoveries
+of
+out
+previous
+write-offs
+At
+31 December
+797,251
+39,691
+686
+226
+48,287
+Investments in associates and
+joint ventures
+Property and equipment
+Credit commitments
+Other
+Total
+365
+154
+519
+(563)
+13,685
+(3,619)
+159
+11,522
+27,640
+(3,585)
+130
+24,185
+40,159
+(82)
+(1,298)
+1,297
+Measured at amortised cost:
+31 December
+2023
+31 December
+25/03/2034
+26/03/2019
+19 ICBC 03 Tier 2 Bond
+24/04/2019
+100 Yuan
+45,000
+4.40%
+26/04/2019
+26/04/2029
+28/04/2019
+19 ICBC 04 Tier 2 Bond
+24/04/2019
+100 Yuan
+10,000
+4.69%
+26/04/2019
+26/04/2034
+28/04/2019
+20 ICBC 01 Tier 2 Bond
+22/09/2020
+100 Yuan
+25/03/2019
+4.51%
+10,000
+100 Yuan
+Value
+date
+Maturity
+date
+Circulation
+date
+11 ICBC 01
+29/06/2011
+100 Yuan
+38,000
+5.56%
+30/06/2011
+60,000
+30/06/2031
+19 ICBC 01 Tier 2 Bond
+21/03/2019
+100 Yuan
+45,000
+4.26%
+25/03/2019
+25/03/2029
+26/03/2019
+19 ICBC 02 Tier 2 Bond
+21/03/2019
+30/08/2011
+rate
+4.20%
+24/09/2030
+50,000
+3.48%
+15/12/2021
+15/12/2031
+16/12/2021
+21 ICBC 03 Tier 2 Bond
+13/12/2021
+100 Yuan
+10,000
+3.74%
+15/12/2021
+15/12/2036
+16/12/2021
+22 ICBC 01 Tier 2 Bond
+18/01/2022
+100 Yuan
+35,000
+3.28%
+20/01/2022 20/01/2032
+21/01/2022
+22 ICBC 02 Tier 2 Bond
+100 Yuan
+13/12/2021
+21 ICBC 02 Tier 2 Bond
+22/01/2021
+25/09/2020
+20 ICBC 02 Tier 2 Bond
+12/11/2020
+100 Yuan
+30,000
+4.15%
+16/11/2020
+16/11/2030
+17/11/2020
+20 ICBC 03 Tier 2 Bond
+24/09/2020
+12/11/2020
+10,000
+4.45%
+16/11/2020 16/11/2035
+17/11/2020
+21 ICBC 01 Tier 2 Bond
+19/01/2021
+100 Yuan
+30,000
+4.15%
+21/01/2021 21/01/2031
+100 Yuan
+100 Yuan
+(In RMB million)
+Issue date
+Demand deposits:
+Corporate customers
+Personal customers
+Time deposits:
+Corporate customers
+Personal customers
+Other
+Accrued interest
+31 December
+2023
+31 December
+2022
+7,366,691
+8,076,256
+6,083,841
+5,991,387
+13,450,532
+14,067,643
+8,843,237
+6,594,898
+10,481,727
+8,553,919
+35. DUE TO CUSTOMERS
+19,324,964
+(In RMB millions, unless otherwise stated)
+221
+2022
+Repurchase agreements-bills
+Repurchase agreements-securities
+Accrued interest
+11,738
+968,339
+6,430
+419,464
+9,855
+6,454
+Subtotal
+989,932
+432,348
+Measured at FVTPL:
+Repurchase agreements-securities and cash received as collateral on securities
+lending
+Total
+28,174
+142,430
+1,018,106
+574,778
+34. CERTIFICATES OF DEPOSIT
+Certificates of deposit issued by certain of the Bank's overseas branches and subsidiaries are measured at amortised cost.
+Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB)
+15,148,817
+199,465
+(b)
+554,931
+203,876
+108,393
+108,698
+2,324
+1,749
+665,648
+314,323
+1,369,777
+Issued by the Bank
+Issued by subsidiaries
+Accrued interest
+905,953
+In 2023, the Group has not had any defaults in respect of payments of principal or interest or other breaches with respect
+to the bonds (2022: Nil).
+222 Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(a) Subordinated bonds and tier 2 capital bonds issued
+The Bank:
+As approved by the PBOC and the former CBIRC, the Bank issued callable subordinated bonds and tier 2 capital bonds in
+the National Interbank Bond Market through open market bidding. These subordinated bonds and tier 2 capital bonds were
+traded on the National Interbank Bond Market. The relevant information is set out below:
+Issue price
+Issued and
+nominal amount
+Coupon
+Name
+As at 31 December 2023, the amount of debt securities issued that were due within one year was RMB476,234 million (31
+December 2022: RMB122,602 million).
+210,185
+Other debt securities
+704,129
+535,493
+454,566
+33,521,174
+29,870,491
+As at 31 December 2023, the Group's pledged deposits included in above amounted to RMB171,113 million (31 December
+2022: RMB201,787 million).
+36. DEBT SECURITIES ISSUED
+31 December
+31 December
+2023
+591,630
+2022
+(a)
+Issued by the Bank
+Issued by subsidiaries
+Accrued interest
+682,184
+571,848
+9,543
+9,417
+12,402
+10,365
+Subordinated bonds and tier 2 capital bonds
+37. OTHER LIABILITIES
+2,755,732
+1,926,851
+229
+70,000
+70,000
+None
+None
+No
+RMB2021 Perpetual bond
+Series 2
+24/11/2021
+Equity
+3.65% RMB100/Unit
+300
+30,000
+30,000
+None
+None
+No
+Total
+219,793
+(i)
+Offshore USD Perpetual Bond was issued in specific denomination of USD200,000 and integral multiplies of USD1,000 in
+excess thereof at an issue price of 100%.
+(b) Main clauses and basic information
+With the approvals of relevant regulatory authorities, the Bank issued RMB80,000 million, RMB70,000 million and
+RMB30,000 million of undated capital bonds on 26 July 2019, 4 June 2021 and 24 November 2021 (hereinafter referred to
+as "2019 Domestic Perpetual Bond", "2021 Domestic Perpetual Bond Series 1" and "2021 Domestic Perpetual Bond Series
+2" respectively, collectively Domestic Perpetual Bonds) in the National Interbank Bond Market.
+The Bank issued USD6,160 million of undated capital bonds (hereinafter referred to as "Offshore Perpetual Bond") on The
+Stock Exchange of Hong Kong Limited on 24 September 2021.
+The funds raised by the Bank from the bonds were used to supplement additional tier 1 capital of the Bank in accordance
+with the relevant laws and approvals by regulatory authorities.
+Annual Report 2023
+measured at
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(i) Interest
+Each Domestic Perpetual Bond has a par value of RMB100, and the interest rate of the bonds for the first five years are
+4.45% for 2019 Domestic Perpetual Bond, 4.04% for 2021 Domestic Perpetual Bond Series 1, and 3.65% for 2021
+Domestic Perpetual Bond Series 2, resetting every 5 years. The rates are determined by a benchmark rate plus a fixed
+spread. The initial fixed spreads are the difference between the interest rate and the benchmark rate as determined at
+the time of issuance. The fixed spread will not be adjusted once determined during the duration period. The interest of
+Domestic Perpetual Bonds shall be paid annually.
+700
+4.04% RMB100/Unit
+Equity
+04/06/2021
+(million)
+(million) Maturity condition Conversion
+Offshore
+USD Perpetual bond
+24/09/2021
+Equity
+3.20%
+Note (i)
+NA
+N/A
+6,160
+39,793
+None
+None
+The interest rate of Offshore Perpetual Bond for the first five years is 3.20%, resetting every 5 years. The rate is determined
+by a benchmark rate plus a fixed spread, and the fixed spread will remain unchanged during the duration period. The
+dividend shall be paid semi-annually.
+No
+RMB2019
+Perpetual bond
+26/07/2019
+Equity
+4.45%
+RMB100/Unit
+800
+80,000
+80,000
+None
+None
+No
+RMB2021 Perpetual bond
+Series 1
+Domestic
+(ii) Interest stopper and setting mechanism
+The interest payment for both the Domestic Perpetual Bonds and Offshore Perpetual Bond is non-cumulative. The Bank
+shall have the right to cancel, in whole or in part, distributions on the interest payment and any such cancellation shall
+not constitute an event of default. The Bank may, at its sole discretion, use the proceeds from the cancelled distributions
+to meet other obligations as they fall due. However, the Bank shall not distribute profits to ordinary shareholders until
+resumption of full interest payment.
+(iii) Order of distribution and liquidation method
+(million
+currency
+In RMB
+(million)
+units)
+(million)
+(million)
+Offshore
+USD Perpetual bond
+N/A
+6,160
+39,793
+N/A
+6,160
+In RMB
+39,793
+RMB2019 Perpetual bond
+800
+00
+80,000
+80,000
+800
+80,000
+80,000
+RMB2021 Perpetual bond
+Series 1
+700
+70,000
+70,000
+700
+Domestic
+units)
+currency
+(million)
+(million)
+The claims in respect of Domestic Perpetual Bonds will be subordinated to claims of depositors, general creditors, and
+subordinated indebtedness that rank senior to Domestic Perpetual Bonds, and will rank in priority to all classes of shares
+held by shareholders of the Bank. The claims in respect of Offshore Perpetual Bond will be subordinated to claims of
+depositors, general creditors, tier 2 capital bond holders and subordinated indebtedness that rank senior to the Offshore
+Perpetual Bond, and will rank in priority to all classes of shares held by shareholders of the Bank. Domestic Perpetual
+Bonds and Offshore Perpetual Bond will rank pari passu with the claims in respect of any other Additional Tier 1 Capital
+instruments of the Bank that rank pari passu with the perpetual bonds.
+(iv) Write down conditions
+For 2019 Domestic Perpetual Bond, upon the occurrence of an Additional Tier 1 Capital Trigger Event (Common Equity Tier
+1 Capital Adequacy Ratio of the Bank falling to 5.125% or below), the Bank has the right to write down all or part of the
+total nominal amount of the outstanding 2019 Domestic Perpetual Bond with the consent of the NFRA but without the
+need for the consent of the bond holders, in order to restore the Common Equity Tier 1 Capital Adequacy Ratio of the Bank
+to above 5.125%. Upon the occurrence of a Tier 2 Capital Trigger Event, without the need for the consent of the bond
+holders, the Bank has the right to write down all the total nominal amount of the outstanding 2019 Domestic Perpetual
+Bond.
+For 2021 Domestic Perpetual Bond Series 1 and 2021 Domestic Perpetual Bond Series 2, upon the occurrence of a Non-
+Viability Trigger Event, the Bank has the right to write down all or part of the nominal amount of the outstanding perpetual
+bonds without the need for the consent of the bond holders.
+For Offshore Perpetual Bond, upon the occurrence of a Non-Viability Trigger Event, the Bank has the right to write down all
+or part of the perpetual bonds issued and outstanding at that time up to the total nominal value without the need for the
+consent of the bond holders.
+230
+Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(v) Redemption conditions
+The duration of the Domestic Perpetual Bonds and Offshore Perpetual Bond is the same as the continuing operation of
+the Bank. Five years after the issuance date of the Domestic Perpetual Bonds and Offshore Perpetual Bond, the Bank shall
+have the right to redeem them in whole or in part on each distribution payment date (including the fifth distribution
+payment date since the issuance). In the event that the perpetual bonds are not classified as additional tier 1 capital due
+to unpredicted changes in regulations, the Bank shall have the right to redeem Domestic Perpetual Bonds and Offshore
+Perpetual Bond fully instead of partly.
+(c) Changes in perpetual bond outstanding
+1 January 2023
+Movement during the year
+In
+units)
+In
+Amount
+original
+Amount
+original
+Amount
+original
+Financial instrument
+(million
+currency
+In RMB
+(million
+outstanding
+units)
+(million)
+31 December 2023
+In
+70,000
+Issue price
+Issue date classification
+The maximum loss exposures in the above investment funds, asset management plans and asset-backed securities, and
+trust plans are the carrying amounts which are measured at amortised cost, or the fair value of the investments held by the
+Group as at the reporting date.
+The following tables set out an analysis of the line items in the consolidated statement of financial position in which assets
+were recognised relating to the Group's interests in structured entities sponsored by third party institutions:
+31 December 2023
+Financial
+investments
+measured at
+Financial
+investments
+measured at
+FVTPL
+FVTOCI
+Financial
+investments
+measured at
+amortised cost
+Investment funds
+38,421
+Asset management plans and asset-backed securities
+30,606
+26,829
+27,842
+Trust plans
+15,511
+19,576
+772
+84,538
+46,405
+28,614
+Investment funds
+Asset management plans and asset-backed securities
+Trust plans
+31 December 2022
+Financial
+investments
+measured at
+Financial
+investments
+Financial
+investments
+(c) Changes in preference shares outstanding
+139,174
+139,174
+159,557
+159,557
+Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+43. INTERESTS IN STRUCTURED ENTITIES
+(a) Structured entities sponsored by third party institutions in which the Group holds an
+interest
+The Group holds an interest in some structured entities sponsored by third party institutions through investments in the
+products issued by these structured entities. Such structured entities include investment funds, asset management plans
+and asset-backed securities, and trust plans and the Group does not consolidate these structured entities. The nature and
+purpose of these structured entities are to generate fees from managing assets on behalf of investors and are financed
+through the issuance of investment products to investors.
+The following table sets out an analysis of the carrying amounts and maximum exposure of interests held by the Group in
+the structured entities sponsored by third party institutions:
+31 December 2023
+Carrying
+Maximum
+31 December 2022
+Carrying
+Maximum
+amount
+exposure
+amount
+exposure
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Investment funds
+38,421
+43,128
+43,128
+Asset management plans and
+asset-backed securities
+85,277
+85,277
+79,065
+79,065
+Trust plans
+35,859
+35,859
+16,981
+16,981
+38,421
+1 January 2023
+Movement during the year
+Amount
+Shares:
+RMB2015
+450
+45,000
+45,000
+RMB2019
+700
+70,000
+70,000
+Total
+134,716
+450
+45,000
+45,000
+Domestic Preference
+700
+70,000
+134,716
+The carrying amount of preference shares issued by the Bank, net of related issuance fees, was RMB134,614 million as at
+31 December 2023 (31 December 2022: RMB134,614 million).
+(2) Perpetual bond
+(a) Perpetual bond outstanding
+Financial instrument
+Accounting
+Initial
+interest
+Amount
+(million
+In original
+currency
+In RMB
+Conversion
+outstanding
+70,000
+rate
+19,716
+145
+Financial instrument
+(million
+In original
+currency
+Amount
+In original
+Amount
+31 December 2023
+In original
+In RMB
+(million
+outstanding
+shares)
+(million)
+(million)
+2,900
+shares)
+In RMB
+(million
+(million)
+shares)
+currency
+(million)
+In RMB
+(million)
+Offshore Preference
+Shares:
+USD
+145
+45
+2,900
+19,716
+45
+currency
+(million)
+234
+70,000
+300
+Pursuant to the resolution of the board of directors' meeting held on 27 March 2024, the total appropriation to surplus
+reserve of the Bank was RMB34,981 million (2022: RMB34,411 million), among which an appropriation of 10% of
+the profit of the Bank for the year determined under the PRC GAAP to the statutory surplus reserve, in the amount of
+RMB34,869 million (2022: RMB34,343 million) was approved and a total surplus reserve appropriated by overseas branches
+was RMB112 million (2022: RMB68 million) pursuant to the requirements of local authorities.
+(ii) Discretionary surplus reserve
+After making the appropriation to the statutory surplus reserve, the Bank may also appropriate its profit for the year
+determined under the PRC GAAP to the discretionary surplus reserve upon approval by the shareholders in general meeting.
+Subject to the approval of the shareholders, the discretionary surplus reserve may be used to offset accumulated losses of
+the Bank, if any, and may be converted into capital.
+(iii) Other surplus reserves
+The Bank's overseas entities appropriate their profits to other surplus reserves or statutory reserve in accordance with the
+relevant laws and regulations promulgated by the local regulatory bodies.
+(c) General reserve
+In accordance with the "Administrative Measures for the Provision of Reserves of Financial Enterprises" (Cai Jin [2012] No.
+20) issued by the MOF, the Bank maintains a general reserve within equity, through the appropriation of profit for the year,
+which should not be less than 1.5% of the year-end balance of its risk assets, to partially cover unidentified possible losses.
+The Bank's subsidiaries appropriate their profits to the general reserve according to the applicable local regulations.
+Pursuant to the resolution of the board of directors' meeting held on 27 March 2024, the total appropriation to general
+reserve of the Bank was RMB64,264 million (2022: RMB53,571 million). The general reserve balance of the Bank as at 31
+December 2023 amounted to RMB544,549 million, which reached 1.5% of the year-end balance of the Bank's risk assets.
+(d) Investment revaluation reserve
+The investment revaluation reserve records the fair value changes and impairment provision of financial investments
+measured at FVTOCI.
+232 Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(e) Foreign currency translation reserve
+The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial
+statements of the subsidiaries and branches incorporated outside Chinese mainland.
+(f) Cash flow hedging reserve
+The cash flow hedging reserve comprises the effective portion of the gains or losses on the hedging instruments.
+(g) Other reserves
+Other reserves represent reserves other than the items listed above, including other comprehensive income recognised
+under the equity method.
+(h) Distributable profits
+The Bank's distributable profit is based on its retained profits as determined under PRC GAAP and IFRSS, whichever is
+lower. The amount that the Bank's subsidiaries can legally distribute is determined by referring to their profits as reflected
+in their financial statements prepared in accordance with the accounting regulations and principles promulgated by the
+local regulatory bodies. These profits may differ from those dealt with in these financial statements, which are prepared in
+accordance with IFRSS.
+41. OTHER COMPREHENSIVE INCOME
+(a) Other comprehensive income attributable to equity holders of the parent company in
+the consolidated statement of financial position
+Investment
+revaluation
+Foreign
+currency
+translation
+reserve
+reserve
+Other
+Total
+1 January 2022
+26,087
+Subject to the approval of the shareholders, the statutory surplus reserve may be used to offset accumulated losses of the
+Bank, if any, and may also be converted into capital of the Bank, provided that the balance of the statutory surplus reserve
+after such capitalisation is not less than 25% of the registered capital immediately before capitalisation.
+The Bank is required to appropriate 10% of its profit for the year, as determined under the Accounting Standards for
+Business Enterprises and other relevant requirements ("PRC GAAP"), pursuant to the Company Law of the PRC and the
+Articles of the Bank to the statutory surplus reserve until the reserve balance reaches 50% of its registered capital.
+(i) Statutory surplus reserve
+(b) Surplus reserves
+31 December
+31 December
+Items
+2023
+2022
+1.
+Total equity attributable to equity holders of the parent company
+3,756,887
+3,496,109
+(1) Equity attributable to ordinary shareholders of the parent company
+3,402,556
+3,141,778
+(2) Equity attributable to other equity instrument holders of the parent company
+354,331
+(39,930)
+354,331
+Total equity attributable to non-controlling interests
+19,701
+19,310
+(1) Equity attributable to ordinary shareholders of non-controlling interests
+19,701
+19,310
+(2) Equity attributable to other equity instrument holders of non-controlling interests
+Annual Report 2023
+231
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+40. RESERVES
+(a) Capital reserve
+Capital reserve mainly includes share premium arising from the issuance of new shares at prices in excess of par value.
+2.
+(6,960)
+(20,803)
+Movement during the year
+(2,927)
+(ii) Other comprehensive income recognised under the equity method
+(iii) Other
+(7)
+(25)
+(28)
+13
+Items that may be reclassified subsequently to profit or loss:
+(i)
+Changes in fair value of debt instruments measured at FVTOCI
+30,515
+(27,483)
+Less: Amount transferred to profit or loss from other comprehensive income
+Less: Income tax effect
+(3,593)
+(2,853)
+1,530
+(5,818)
+21,104
+(24,220)
+(ii) Credit losses of debt instruments measured at FVTOCI
+Less: Income tax effect
+98
+5,790
+107
+(1,960)
+205
+3,830
+(iii) Cash flow hedging reserve:
+Gain during the year
+126
+1,268
+6,116
+(3) Interests attributable to equity instruments' holders
+(821)
+(2,106)
+(23,744)
+22,689
+(1,898)
+(2,953)
+31 December 2022 and 1 January 2023
+2,343
+(17,241)
+(8,858)
+(23,756)
+Movement during the year
+21,704
+1,633
+(3,659)
+19,678
+(218)
+31 December 2023
+(15,608)
+(12,517)
+(4,078)
+Annual Report 2023
+233
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(b) Other comprehensive income in the consolidated statement of profit or loss and other
+comprehensive income
+Items that will not be reclassified to profit or loss:
+2023
+2022
+(i)
+Changes in fair value of equity instruments designated as at FVTOCI
+Less: Income tax effect
+1,748
+24,047
+RMB2021 Perpetual bond
+Series 2
+The carrying amount of perpetual bonds issued by the Bank, net of related issuance fees, was RMB219,717 million as at 31
+December 2023 (31 December 2022: RMB219,717 million).
+30,000
+As at 31 December 2023, the carrying amount of asset-backed securities held by the Group in securitisation transactions
+that were qualified for derecognition was RMB791 million (31 December 2022: RMB721 million), and its maximum exposure
+approximated to the carrying amount.
+With respect to the securitisation of financial assets that do not qualify for derecognition, the relevant financial assets are
+not derecognised, and the consideration received is recorded as a financial liability. As at 31 December 2023, transferred
+credit assets that were not qualified for derecognition of the Group amounted to RMB132 million at the time of transfer (31
+December 2022: RMB132 million).
+45. ASSETS PLEDGED AS SECURITY
+The Group's collaterals for liabilities or contingent liabilities include financial assets such as securities and bills, which mainly
+serve as collaterals for repurchase agreements, securities borrowing, derivatives, or local statutory requirements. As at
+31 December 2023, the par value of the financial assets of the Group pledged as collateral amounted to approximately
+RMB1,474,996 million (31 December 2022: approximately RMB940,239 million).
+46. SHARE APPRECIATION RIGHTS PLAN
+The Bank's share appreciation rights plan was approved in 2006, which allows share appreciation rights to be granted to
+eligible participants including directors, supervisors, senior management and other key personnel designated by the board
+of directors. The share appreciation rights will be granted and exercised based on the price of the Bank's H shares and will
+be valid for 10 years. As at the approval date of these financial statements, no share appreciation rights have been granted.
+Annual Report 2023
+237
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+47. COMMITMENTS AND CONTINGENT LIABILITIES
+(a) Capital commitments
+At the end of the reporting period, the Group had capital commitments as follows:
+Contracted but not provided for
+(b) Credit commitments
+31 December
+31 December
+2023
+2022
+26,804
+19,427
+The Group has outstanding commitments to extend credit including approved loans and undrawn credit card limits.
+The Group provides letters of credit and financial guarantees to guarantee the performance of customers to third parties.
+Bank acceptances comprise undertakings by the Group to pay bills of exchange drawn on customers. The Group expects
+most acceptances to be settled simultaneously with the reimbursement from the customers.
+The contractual amounts of credit commitments by category are set out below. The amounts disclosed in respect of loan
+commitments and undrawn credit card limits are under the assumption that the amounts will be fully advanced. The
+amounts for bank acceptances, letters of credit and guarantees represent the maximum potential losses that would be
+recognised at the end of the reporting period had the counterparties failed to perform as contracted.
+Bank acceptances
+Guarantees issued
+- Financing letters of guarantees
+- Non-financing letters of guarantees
+Sight letters of credit
+Usance letters of credit
+For those in which the Group has neither transferred nor retained substantially all the risks and rewards of the transferred
+credit assets, and retained control of the credit assets, the Group recognises the assets on the consolidated statement
+of financial position to the extent of the Group's continuing involvement and the rest is derecognised. The extent of the
+Group's continuing involvement is the extent of the risks and rewards undertaken by the Group with value changes of the
+transferred financial assets. As at 31 December 2023, loans with an original carrying amount of RMB627,857 million at
+the time of transfer (31 December 2022: RMB627,857 million) have been securitised by the Group under arrangements in
+which the Group retained a continuing involvement in such assets. The carrying amount of assets that the Group continues
+to recognise on the consolidated statement of financial position was RMB73,786 million as at 31 December 2023 (31
+December 2022: RMB75,925 million).
+The Group transfers credit assets to structured entities which issue asset-backed securities to investors. The Group may
+acquire some asset-backed securities at the subordinated tranche level and accordingly, may retain parts of the risks and
+rewards of the transferred credit assets. The Group would determine whether to derecognise the associated credit assets by
+evaluating the extent to which it retains the risks and rewards of the assets.
+Securitisation transactions
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+30,000
+30,000
+measured at
+FVTPL
+FVTOCI
+amortised cost
+43,128
+32,987
+8,769
+15,196
+37,309
+1,785
+91,311
+8,769
+39,094
+Loan commitments
+Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(b) Structured entities sponsored by the Group in which the Group does not consolidate
+but holds an interest
+The types of unconsolidated structured entities sponsored by the Group include non-principal-guaranteed wealth
+management products and investment funds. The nature and purpose of these structured entities are to generate fees from
+managing assets on behalf of investors. These structured entities are financed through the issuance of investment products
+to investors. Interest held by the Group includes investments in the products issued by these unconsolidated structured
+entities and fees charged for providing management services. As at 31 December 2023 and 31 December 2022, the carrying
+amounts of the investments in the products issued by these structured entities and fee receivables being recognised were
+not significant in the consolidated financial statements. Management fee income earned by the Group was included in fee
+and commission income of personal wealth management and private banking services and corporate wealth management
+services set out in Note 7.
+As at 31 December 2023, the balance of the unconsolidated non-principal-guaranteed wealth management products and
+investment funds, which are sponsored by the Group, were RMB1,857,056 million (31 December 2022: RMB2,143,978
+million) and RMB1,756,215 million (31 December 2022: RMB1,713,743 million) respectively.
+In 2023, the amount of the average exposure of financing transactions through placements and reverse repurchase
+agreements from the Group with non-principal-guaranteed wealth management products sponsored by the Group was
+RMB386 million (2022: RMB21,631 million). The transactions were conducted in the ordinary course of business under
+normal terms and conditions and at market rates.
+(c) Consolidated structured entities
+The consolidated structured entities of the Group are primarily the principal-guaranteed wealth management products,
+certain investment funds, asset-backed securities and asset management plans issued or initiated and invested by the Group
+or purchased due to regulatory requirements related to wealth management business. The Group controls these entities
+because the Group has power over, is exposed to, or has rights to variable returns from its involvement with these entities
+and has the ability to use its power over these entities to affect the amount of the Group's variable returns.
+44. TRANSFERRED FINANCIAL ASSETS
+The Group enters into transactions in the ordinary course of business by which it transfers recognised financial assets to
+third parties or special purpose entities. In some cases, these transfers may give rise to full or partial derecognition of the
+financial assets concerned. In other cases where the transferred assets do not qualify for derecognition as the Group has
+retained substantially all the risks and rewards of these assets, the Group continues to recognise the transferred assets in
+the statement of financial position.
+Repurchase transactions and securities lending transactions
+Transferred financial assets that do not qualify for derecognition mainly include debt securities held by counterparties as
+collateral under repurchase agreements and debt securities lent to counterparties under securities lending agreements. The
+counterparties are allowed to sell or repledge those securities in the absence of default by the Group but has an obligation
+to return the securities at the maturity of the contract. For securities lent out, if the securities increase or decrease in
+value, the Group may in certain circumstances require additional cash collateral from counterparties or return part of
+the cash collateral to counterparties. The Group has determined that it retains substantially all the risks and rewards of
+these securities and therefore has not derecognised them. In addition, it recognises a financial liability for cash received as
+collateral.
+236
+Annual Report 2023
+235
+31 December
+2023
+804,061
+31 December
+original maturity of three months or less
+Deposits with banks and other financial institutions with
+516,558
+952,050
+66,340
+66,699
+2022
+2023
+31 December
+31 December
+Balances with central banks other than restricted deposits
+Cash on hand
+42. CASH AND CASH EQUIVALENTS
+(4,550)
+331,464
+19,227
+(5,145)
+21,276
+1,823
+(v) Foreign currency translation reserve
+(vi) Other
+(224)
+(372)
+(iv) Other comprehensive income recognised under the equity method
+1,284
+117
+16
+Total
+219,793
+300
+30,000
+(3,557)
+219,793
+228,987
+original maturity of three months or less
+2022
+680,068
+32,048
+56,365
+540,709
+501,054
+53,099
+53,646
+148,803
+112,606
+- With an original maturity of under one year
+34,841
+108,102
+- With an original maturity of one year or over
+443,749
+Placements with banks and other financial institutions with
+348,202
+1,126,870
+1,111,002
+3,184,180
+2,971,045
+Credit risk-weighted assets of credit commitments
+1,158,895
+1,113,801
+238
+Annual Report 2023
+749,854
+1,133,217
+Reverse repurchase agreements with original maturity of three months or less
+365,112
+272,302
+Undrawn credit card limits
+Less: Income tax effect
+(9)
+191,414
+31 December 2022
+Balance
+Financial investments
+3,239,639
+31 December 2023
+Balance Percentage
+27.34%
+Percentage
+2,640,624
+25.07%
+Due from banks and other financial institutions
+218,284
+19.55%
+227,301
+19.06%
+Reverse repurchase agreements
+The major balances and transactions with subsidiaries have been eliminated in the consolidated financial statements. When
+calculating the proportion of related party transactions, transactions with the subsidiaries are excluded.
+82,951
+50,879
+5.89%
+Loans and advances to customers
+19,776
+0.08%
+24,210
+0.11%
+Derivative financial assets
+10,494
+13.93%
+10,852
+12.44%
+Due to banks and other financial institutions
+6.78%
+341,658
+(j) Proportion of major related party transactions
+The Group operates in an economic environment predominated by enterprises directly or indirectly owned and/or controlled
+by the Government through its authorities, affiliates or other organisations (collectively the "state-owned entities"). During
+the reporting year, the Group entered into extensive banking transactions with these state-owned entities including, but
+not limited to, lending and deposit taking, taking and placing of interbank balances, entrusted lending and the provision of
+intermediary services, the sale, purchase, underwriting and redemption of bonds issued by other state-owned entities, and
+the sale, purchase, and leasing of properties and other assets.
+0
+0
+Transactions between the Group and the aforementioned parties were conducted in the ordinary course of business under
+normal terms and conditions and priced based on market rates.
+Annual Report 2023
+243
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(g) Key management personnel
+The key management personnel are those persons who have the authority and responsibility to plan, direct and control the
+activities of the Group, directly or indirectly, including members of the board of directors and the board of supervisors, and
+executive officers.
+The aggregate compensation of key management personnel is as follows:
+Salaries and benefits
+2023
+2022
+The transactions with state-owned entities are activities conducted in the ordinary course of business under normal terms
+and conditions and priced based on market rates, and the dealings of the Group have not been significantly or unduly
+affected by the fact that the Group and those state-owned entities are ultimately controlled or owned by the Government.
+The Group has also established pricing policies for products and services and such pricing policies do not depend on
+whether or not the customers are state-owned entities.
+In RMB'000
+12,258
+21,212
+The above remuneration before tax payable to key management personnel for 2022 represents the total amount of their
+annual remunerations, which includes the amount disclosed in the 2022 annual report.
+The total compensation packages for the Chairman of the Board of Directors, President, Executive Directors, and other
+Senior Management members have not been finalised in accordance with the regulations of the PRC relevant authorities.
+The total remuneration not yet accrued is not expected to have a significant impact on the Group's 2023 consolidated
+financial statements. The total compensation packages will be further disclosed when determined by the relevant
+authorities.
+Related parties of the Group include key management personnel of the Group and their close relatives, as well as
+companies controlled, jointly controlled or significantly influenced by key management personnel or their close relatives.
+In 2023, there were no material transactions and balances with key management personnel individually or in the aggregate
+(2022: Immaterial). The Group entered into banking transactions with key management personnel in the ordinary course of
+business.
+The aggregate balance of loans and credit card overdrafts to the persons who are considered as related parties according
+to the relevant rules of Shanghai Stock Exchange was RMBO.21 million as at 31 December 2023 (31 December 2022:
+RMB11.32 million).
+The Bank's aggregate balance of loans and credit card overdrafts to the persons who are considered as related parties
+according to the relevant rules of the NFRA was RMB64.24 million as at 31 December 2023 (31 December 2022:
+RMB195.17 million).
+The transactions between the Group and the aforementioned parties were conducted in the ordinary course of business
+under normal terms and conditions and priced based on market rates.
+Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(h) Annuity fund
+Apart from the obligations for defined contributions to the annuity fund established by the Bank, annuity fund held A
+shares of the Bank with market value of RMB38.14 million as at 31 December 2023 (31 December 2022: Nil), and bonds
+issued by the Bank of RMB292.72 million as at 31 December 2023 (31 December 2022: RMB527.91 million).
+(i) Transactions with state-owned entities in the PRC
+In RMB'000
+6
+10.14%
+7.55%
+Annual Report 2023
+245
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+49. SEGMENT INFORMATION
+(a) Operating segments
+The Group is organised into different operating segments, namely corporate banking, personal banking and treasury
+operations, based on internal organisation structure, management requirements and internal reporting system.
+Corporate banking
+The corporate banking segment covers the provision of financial products and services to corporations, government
+agencies and financial institutions. The products and services include corporate loans, trade financing, deposit-taking
+activities, corporate wealth management services, custody activities and various types of corporate intermediary services.
+Personal banking
+The personal banking segment covers the provision of financial products and services to individual customers. The products
+and services include personal loans, deposit-taking activities, card business, personal wealth management services and
+various types of personal intermediary services.
+Treasury operations
+The treasury operations segment covers the Group's treasury operations which include money market transactions,
+investment securities, foreign exchange transactions and the holding of derivative positions for its own accounts or on
+behalf of customers.
+0.85%
+Other
+Management monitors the operating results of the Group's operating segments separately for the purpose of making
+decisions about resources allocation and performance assessment. Segment information is prepared in conformity with the
+accounting policies adopted for preparing and presenting the financial statements of the Group.
+Transactions between segments mainly represent the provision of funding to and from individual segments. The internal
+transfer pricing of these transactions is determined with reference to the market rates and have been reflected in the
+performance of each segment. Net interest income and expense arising on internal fund transfer are referred to as "internal
+net interest income or expense". Net interest income and expense relating to third parties are referred to as "external net
+interest income or expense".
+Segment revenues, expenses, results, assets and liabilities include items directly attributable to a segment as well as those
+that can be allocated on a reasonable basis. The basis for allocation is mainly based on occupation of or contribution to
+resources. Income taxes are managed on a group basis and are not allocated to operating segments.
+246 Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+2023
+Corporate
+Personal
+Treasury
+banking
+banking
+operations
+Other
+This segment covers the Group's assets, liabilities, income and expenses that are not directly attributable or cannot be
+allocated to a segment on a reasonable basis.
+240,742
+Percentage
+5.20%
+Amount
+Repurchase agreements
+3,400
+0.33%
+6,200
+1.08%
+Derivative financial liabilities
+9,853
+12.92%
+10,517
+10.92%
+Due to customers
+94,915
+0.28%
+66,465
+4,998
+62,031
+Credit commitments
+11,319
+0.36%
+13,906
+0.47%
+2023
+2022
+Amount
+Interest income
+85,399
+Interest expense
+5,131
+Percentage
+6.08%
+0.68%
+0.21%
+Total
+4
+2022
+1,666
+Interest income on reverse repurchase agreements
+12
+70
+Interest income on loans and advances to customers
+3,021
+1,359
+Interest expense on amounts due to banks and other financial institutions
+Interest expense on repurchase agreements
+3,737
+3,086
+50
+22
+Fee and commission income
+3,094
+4,611
+The major balances and transactions with subsidiaries have been eliminated in the consolidated financial statements.
+242 Annual Report 2023
+(e) Associates and affiliates
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+31 December
+31 December
+2023
+2022
+Balances at end of the year:
+Debt securities purchased
+Due from banks and other financial institutions
+Reverse repurchase agreements
+11,279
+4,108
+11,265
+Interest income on amounts due from banks and other financial institutions
+2,048
+41,126
+42,242
+330,455
+425,329
+12,002
+15,423
+Loans and advances to customers
+108,761
+79,639
+Derivative financial assets
+4,003
+6,183
+Due to banks and other financial institutions
+1,495
+171,189
+Repurchase agreements
+1,904
+2,581
+Derivative financial liabilities
+6,827
+8,680
+Credit commitments
+42,500
+60,370
+2023
+2022
+Transactions during the year:
+Interest income on financial investments
+187,431
+17
+6,066
+3,264
+80 - 100
+1
+Interest expense on amounts due to banks and
+other financial institutions
+Interest expense on amounts due to customers
+41
+70
+46
+41
+Transactions between the Group and the aforementioned parties were conducted under normal commercial terms and
+conditions and priced based on market rates.
+(f) Joint ventures and affiliates
+Balances at end of the year:
+Loans and advances to customers
+49
+Due to banks and other financial institutions
+Transactions during the year:
+Interest income on loans and advances to customers
+Interest expense on amounts due to banks and other financial institutions
+Interest expense on amounts due to customers
+31 December
+2023
+31 December
+2022
+249
+44
+608
+32
+4
+2023
+Due to customers
+4,652
+174
+50
+1,469
+Loans and advances to customers
+4,278
+3,815
+Derivative financial assets
+2,436
+3,085
+Due to banks and other financial institutions
+4,120
+2,250
+Due to customers
+1,089
+1,568
+1
+Derivative financial liabilities
+3,108
+Credit commitments
+4,293
+5,085
+2023
+2022
+Transactions during the year:
+Interest income on debt securities purchased
+274
+344
+Interest income on amounts due from banks and
+other financial institutions
+Interest income on reverse repurchase agreements
+Interest income on loans and advances to customers
+2,271
+Reverse repurchase agreements
+External net interest income
+62,885
+(16,812)
+(3,738)
+(239,351)
+Impairment losses on assets
+(112,259)
+(38,557)
+(30,822)
+(1,039)
+(182,677)
+Operating profit
+179,219
+187,093
+52,740
+(121,364)
+1,272
+Share of results of associates and joint ventures
+4,396
+4,396
+Profit before taxation
+179,219
+187,093
+52,740
+5,668
+424,720
+Income tax expense
+(62,610)
+Profit for the year
+362,110
+420,324
+Other segment information:
+(97,437)
+842,352
+operations
+Other
+Total
+External net interest income
+291,628
+130,466
+269,891
+691,985
+Internal net interest income/(expense)
+14,267
+167,717
+(181,984)
+Net fee and commission income
+Operating expenses
+74,554
+483
+129,325
+Other income/(expense), net (i)
+8,466
+(5,457)
+11,984
+6,049
+21,042
+Operating income
+388,915
+347,014
+100,374
+6,049
+54,288
+banking
+Depreciation and amortisation
+13,105
+293,887
+Other non-current assets (ii)
+45,386
+20,133
+5,610
+9,649
+80,778
+Unallocated assets
+101,117
+Total assets
+39,610,146
+Segment liabilities
+15,448,837
+18,185
+15,325,115
+36,005,196
+Unallocated liabilities
+89,531
+Total liabilities
+36,094,727
+Other segment information:
+Credit commitments
+1,861,309
+1,109,736
+2,971,045
+(i) Includes net trading income, net gains on financial investments and other net operating income.
+(ii) Includes intangible assets, goodwill, long-term deferred expenses, right-of-use assets and other non-current assets.
+248 Annual Report 2023
+5,039,830
+10,543
+27,976
+106,222
+2,781
+111
+26,540
+Capital expenditure
+13,255
+16,618
+3,501
+139
+33,513
+31 December 2022
+Corporate
+Personal
+Treasury
+141,504
+banking
+operations
+Other
+Total
+Segment assets
+14,683,048
+8,659,449
+15,992,193
+174,339
+39,509,029
+Including: Investments in associates and joint ventures
+65,790
+65,790
+Property and equipment
+banking
+301,507
+banking
+Personal
+(8,374)
+1,014
+(150,816)
+Operating profit
+186,946
+150,474
+77,165
+2,359
+416,944
+Share of results of associates and joint ventures
+5,022
+5,022
+Profit before taxation
+(46,644)
+186,946
+77,165
+7,381
+421,966
+Income tax expense
+(56,850)
+Profit for the year
+365,116
+Other segment information:
+Depreciation and amortisation
+11,031
+13,138
+2,822
+108
+150,474
+27,099
+(96,812)
+(238,698)
+290,621
+655,013
+Internal net interest income/(expense)
+232
+211,174
+(211,406)
+Net fee and commission income
+72,556
+46,060
+741
+119,357
+Other income/(expense), net (i)
+7,619
+Impairment (losses)/gains on assets
+(2,263)
+5,268
+32,088
+Operating income
+381,914
+317,856
+101,420
+5,268
+806,458
+Operating expenses
+(98,156)
+(120,738)
+(15,881)
+(3,923)
+21,464
+Treasury
+Capital expenditure
+21,020
+76,492
+Unallocated assets
+104,669
+Total assets
+44,697,079
+Segment liabilities
+16,989,789
+17,454,497
+6,226,481
+182,472
+40,853,239
+Unallocated liabilities
+67,252
+8,549
+Total liabilities
+Other segment information:
+Credit commitments
+2,058,377
+1,125,803
+3,184,180
+(i) Includes net trading income, net gains on financial investments and other net operating income.
+(ii) Includes intangible assets, goodwill, long-term deferred expenses, right-of-use assets and other non-current assets.
+Annual Report 2023
+247
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+2022
+Corporate
+40,920,491
+17,386
+5,487
+42,654
+4,454
+173
+43,033
+31 December 2023
+Corporate
+Personal
+Treasury
+banking
+banking
+operations
+Other
+Total
+Segment assets
+19,802
+17,203,589
+18,228,557
+177,169
+44,592,410
+Including: Investments in associates and joint ventures
+64,778
+64,778
+Property and equipment
+108,123
+137,558
+27,917
+25,280
+298,878
+Other non-current assets (ii)
+8,983,095
+Due from banks and other financial institutions
+244
+Balances at end of the year:
+46,817
+53,525
+2022
+2023
+1,936,670
+2,365,572
+2022
+2023
+31 December
+31 December
+Interest income on the government bonds
+Transactions during the year:
+The PRC government bonds and the special government bond
+Balances at end of the year:
+The MOF is a ministry under the State Council of the PRC, primarily responsible for, among others, state fiscal revenues,
+expenses and taxation policies. As at 31 December 2023, the MOF directly owned approximately 31.14% (31 December
+2022: approximately 31.14%) of the issued share capital of the Bank. The Group entered into banking transactions with
+the MOF in its ordinary course of business. Details of the major transactions are as follows:
+(a) The MOF
+In addition to the transactions detailed elsewhere in these consolidated financial statements, the Group had the following
+transactions with related parties during the reporting year:
+48. RELATED PARTY DISCLOSURES
+The Group provides custody, trust and asset management services to third parties. Revenue from such activities is included
+in "net fee and commission income" set out in Note 7. Those assets held in a fiduciary capacity are not included in the
+Group's consolidated statement of financial position.
+Other related party transactions between the Group and enterprises under the control or joint control of the MOF are
+disclosed in Note 48(i) "Transactions with state-owned entities in the PRC".
+(g) Fiduciary activities
+(b) Central Huijin Investment Ltd.
+As at 31 December 2023, bonds issued by Huijin ("the Huijin Bonds") held by the Group were of an aggregate face value
+of RMB40,427 million (31 December 2022: RMB50,237 million), with terms ranging from one to thirty years and coupon
+rates ranging from 2.44% to 4.20%. The Huijin Bonds are government-backed bonds, short-term bills and medium-term
+notes. The Group's subscription of the Huijin Bonds was conducted in the ordinary course of business, in compliance with
+relevant regulatory and the corporate governance requirements of the Group.
+19,015
+12,009
+51,083
+41,036
+2022
+2023
+31 December
+31 December
+Interest income on loans and advances to customers
+Interest expense on amounts due to customers
+Interest income on debt securities purchased
+Transactions during the year:
+Due to customers
+Loans and advances to customers
+Debt securities purchased
+Balances at end of the year:
+The Group entered into banking transactions with Huijin in the ordinary course of business under normal commercial terms
+and the transactions were priced based on market rates. Details of the major transactions are as follows:
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Annual Report 2023
+240
+Central Huijin Investment Ltd. ("Huijin") is a wholly-owned subsidiary of China Investment Corporation, and in accordance
+with the authorisation of the State Government, Huijin makes equity investments in major state-owned financial enterprises,
+and shall, to the extent of its capital contribution, exercise the rights and perform the obligations as an investor on behalf
+of the State Government in accordance with applicable laws, to achieve the goal of preserving and enhancing the value of
+state-owned financial assets. Huijin does not conduct any other businesses or commercial activities nor intervene in the day-
+to-day business operations of the financial enterprises in which it invests. Huijin was established on 16 December 2003 with
+a total registered and paid-in capital of RMB828,209 million. As at 31 December 2023, Huijin directly owned approximately
+34.79% (31 December 2022: approximately 34.71%) of the issued share capital of the Bank.
+19,374
+(In RMB millions, unless otherwise stated)
+239
+51,414
+24,864
+23,914
+14,627
+14,878
+16,037
+16,946
+18,228
+2022
+31 December
+31 December
+2023
+Over three years but within five years
+Over five years
+Over two years but within three years
+Over one year but within two years
+Within one year
+The Group acts as a lessor principally through operating leases undertaken by its subsidiary ICBC Leasing. Under irrevocable
+operating lease contracts, the expected undiscounted minimum lease payments receivable by the Group in the future period
+amounted to:
+(c) Operating leases
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Financial investments
+57,258
+Notes to the Consolidated Financial Statements
+124,471
+(d) Legal proceedings and arbitrations
+Annual Report 2023
+The designated loans represent the loans granted to specific borrowers designated by the trustors on their behalf according
+to the entrust agreements signed by the Group and the trustors. The Group does not bear any risk.
+The designated funds represent the funding that the trustors have instructed the Group to use to make loans to third
+parties as designated by them. The credit risk remains with the trustors.
+3,420,106
+3,857,252
+3,857,046
+3,420,373
+2022
+2023
+31 December
+31 December
+Designated loans
+Designated funds
+(f) Designated funds and loans
+As at 31 December 2023, the Group has not had any outstanding securities underwriting commitments (31 December
+2022: Nil).
+As an underwriting agent of the MOF, the Bank underwrites certain PRC government bonds and sells the bonds to the
+general public. The Bank is obliged to redeem these bonds at the discretion of the holders at any time prior to maturity. The
+redemption price for the bonds is based on the nominal value of the bonds plus any interest accrued up to the redemption
+date. The MOF will not provide funding for the early redemption of these PRC government bonds on a back-to-back basis
+but is obliged to repay the principal and the respective interest upon maturity. The redemption obligations, which represent
+the nominal value of government bonds underwritten and sold by the Group, but not yet matured as at 31 December 2023
+were RMB57,256 million (31 December 2022: RMB62,140 million). Management expects that the redemption obligations of
+these PRC government bonds by the Bank prior to maturity will not be material.
+commitments
+(e) Redemption commitments of government bonds and securities underwriting
+In the opinion of management, the Group has made adequate allowance for any probable losses based on the current facts
+and circumstances, and the ultimate outcome of these lawsuits and arbitrations will not have any significant impact on the
+financial position or operations of the Group.
+The Group is involved in lawsuits and arbitrations during its normal course of operations. As at 31 December 2023, there
+were a number of legal proceedings and arbitrations outstanding against the Bank and/or its subsidiaries with a total
+claimed amount of RMB6,659 million (31 December 2022: RMB4,738 million).
+129,075
+11,813
+15,380
+2022
+241
+Annual Report 2023
+8
+123
+Interest expense on amounts due to customers
+2
+0
+Interest expense on repurchase agreements
+2,191
+2,539
+Interest expense on amounts due to banks and other financial institutions
+37
+70
+Interest income on loans and advances to customers
+12
+87
+Interest income on reverse repurchase agreements
+1,055
+1,554
+Notes to the Consolidated Financial Statements
+Interest income on amounts due from banks and other financial institutions
+(In RMB millions, unless otherwise stated)
+National Council for Social Security Fund (the "SSF") is a public institution managed by the MOF. It is the management and
+operating organisation of the national social security fund. As at 31 December 2023, the SSF held approximately 5.38%
+(31 December 2022: approximately 5.72%) of the Bank's issued share capital. The Group entered into banking transactions
+with the SSF in the ordinary course of business under normal commercial terms and the transactions were priced based on
+market rates. Details of the major transactions are as follows:
+2022
+2023
+2023
+31 December
+31 December
+2,028
+2,306
+2022
+2023
+64,000
+2022
+2023
+31 December
+31 December
+(d) Subsidiaries
+Interest expense on amounts due to customers
+Transactions during the year:
+Due to customers
+Balances at end of the year:
+(c) National Council for Social Security Fund of the People's Republic of China
+16,184
+48,000
+Interest income on debt securities purchased
+Loans and advances to customers
+49,410
+79,687
+222,649
+212,218
+641,606
+821,752
+Reverse repurchase agreements
+Due from banks and other financial institutions
+3,240
+Debt securities purchased
+2022
+2023
+31 December
+Huijin holds equity interests in certain other banks and financial institutions under the direction of the State Government.
+The Group entered into transactions with these banks and financial institutions in the ordinary course of business under
+normal commercial terms and the transactions were priced based on market rates. Management considers that these banks
+and financial institutions are competitors of the Group. Details of major transactions conducted with these banks and
+financial institutions are as follows:
+658
+1,833
+49
+1,397
+27,829
+421
+70
+Balances at end of the year:
+1,336
+31 December
+8,058
+Derivative financial assets
+Transactions during the year:
+8,821
+7,026
+2023
+646
+10,420
+Due to customers
+2022
+7,409
+Credit commitments
+Derivative financial liabilities
+6,200
+3,400
+Repurchase agreements
+238,492
+336,930
+7,582
+Due to banks and other financial institutions
+7,767
+the borrower's ability to improve performance when a financial difficulty arises;
+the sustainability of the borrower's business plan;
+The calculation of impairment loss on credit-impaired corporate loans and advance to customers applies the discounted cash
+flow method. If there is objective evidence that an impairment loss on a loan or advance has incurred, the amount of the
+loss is measured as the difference between the asset's gross carrying amount and the present value of estimated future cash
+flows discounted at the asset's original effective interest rate. The allowance for impairment loss is deducted in the carrying
+amount. The impairment loss is recognised in the consolidated statement of profit or loss. In determining allowances, the
+following factors are considered:
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+Annual Report 2023 253
+During the year, based on the requirements of the Administrative Measures for the Implementation of the Expected Credit
+Loss Method of Commercial Banks, the Group conducted internal and external verification and re-verification of the
+measurement of expected credit losses, and continued to optimize the model according to the results of the re-verification,
+including updating the criteria of financial instruments stage, forward-looking information, model parameters, risk grouping,
+and other.
+LGD is the magnitude of the likely loss if there is a default in light of forward-looking information. LGD depends on the
+type of counterparty, the method and priority of the recourse, and the type of collateral, taking the forward-looking
+adjustments into account.
+EAD refers to the total amount of on- and off-balance sheet exposures in the event of default and is determined based on
+the historical repayment records.
+PD is the possibility that a customer will default on its obligation within a certain period of time in light of forward-looking
+information. The Group's PD is adjusted based on the results of the IRB approach under the New Basel Capital Accord,
+taking the forward-looking information into account and deducting the prudential adjustment to reflect the debtor's point-
+in-time PD under the current macro-economic environment.
+Loss allowance for a financial instrument is measured at an amount equal to 12-month ECL or lifetime ECL depending on
+whether a significant increase in credit risk on that financial instrument has occurred since initial recognition and whether
+an asset is considered to be credit-impaired. ECL for loans and advances to customers, other than those corporate loans
+and advance to customers which are credit-impaired, is measured using the risk parametric modelling method. The key
+parameters include Probability of Default ("PD"), Loss Given Default ("LGD"), and Exposure at Default ("EAD"), considering
+the time value of money.
+Parameters, assumptions and estimation techniques
+it is probable that the borrower will be insolvent or carry out other financial restructurings;
+there are other objective evidences that indicate the financial asset is impaired.
+due to serious financial difficulties, the financial asset cannot continue to be traded in an active market; and
+The assumptions underlying the ECL calculation, such as how the PDs and LGDs of different maturity profiles change are
+monitored and reviewed on a quarterly basis by the Group.
+the estimated recoverable cash flows from projects and liquidation;
+Financial assets contract modification
+the timing of the expected cash flows.
+31 December
+Annual Report 2023
+254
+in light of economic, legal or other factors, the Group has made concessions to a borrower in financial difficulties,
+which would otherwise have been impossible under normal circumstances;
+Including: Impaired loans and advances to customers
+Rescheduled loans and advances to customers
+The following table includes carrying amount of rescheduled loans and advance to customers:
+the availability of other financial support and the realisable value of collateral; and
+During the year, based on the requirement of China's National Financial Regulatory Administration Reducing the Interest
+Rate of First Residential Mortgages, the Group adjusted the interest rate of conforming stocking residential mortgages. The
+accounting policy refer to Note 4(11) Modification of financial assets contracts.
+The Group might modify the terms of loan with a customer based on commercial renegotiations, or when the customer is
+in financial difficulty, with a view to maximising the recovery of loan.
+The Group has carried out sensitivity analysis of macro-economic indicators used in forward-looking measurement. As at 31
+December 2023, when the key economic indicators in the neutral scenario moved up or down by 10%, the ECL changed by
+no more than 5% (31 December 2022: no more than 5%).
+As at 31 December 2023, the Group has taken into account different macro-economic scenarios, combined with the impact
+of factors such as effect of prior period base data on economic development trends, and made forward-looking forecasts
+of macro-economic indicators. Of which, the year-on-year GDP growth rate used to estimate ECL under each scenario is as
+follows: 5.0% under neutral scenario, 6.3% under optimistic scenario, and 4.0% under pessimistic scenario.
+When calculating the weighted average ECL provision, the Group determines the optimistic, neutral and pessimistic
+scenarios and their weightings through a combination of macro-statistical analysis and expert judgement. The optimistic and
+pessimistic scenarios are of comparable weightings, of which, the weighting of neutral scenario is slightly higher than that
+of the other two scenarios. The weightings of the scenarios are consistent with those as at 31 December 2022.
+The assessment of significant increase in credit risk and the calculation of ECL incorporate forward-looking information. The
+Group has performed historical data analysis and identified Gross Domestic Product ("GDP"), Consumer Price Index ("CPI"),
+Broad Money Supply ("M2"), Consumer Confidence Index and other macro-economic indicators as impacting the ECL for
+each portfolio. The impact of these economic variables on the PD and LGD has been determined by performing statistical
+regression analysis to understand the correlations among the historical changes of the economic variables, PD and LGD. The
+impact of these economic variables on the PD and LGD varies according to different types of business. Forecasts of these
+economic variables are carried out at least quarterly by the Group to provide the best estimate view of the economy over
+the next year.
+Forward-looking information contained in ECL
+It may not be possible to identify a single, or discrete events that result in the impairment, but it may be possible to
+identify impairment through the combined effect of several events. The impairment losses are evaluated at the end of each
+reporting period unless there are other unforeseen circumstances.
+Such modifications include restructuring the loan to provide extended payment term arrangements, payment holidays
+or payment forgiveness. Restructuring policies and practices are based on indicators or criteria which, in the judgement
+of management, indicate that payment will most likely continue, and these policies and practices are reviewed regularly.
+Such restructures are especially common for medium-term and long-term loans. During the year, based on the rules on
+risk classification of financial assets of commercial banks, the group optimized and adjusted the criteria of assessment of
+financial difficulty and the identification of rescheduled loans.
+it has been overdue for more than 90 days (not inclusive);
+The assessment of significant increase in credit risk since initial recognition is performed at least on a quarterly basis for
+financial instruments held by the Group. The Group takes into consideration all reasonable and supportable information
+(including forward-looking information) that reflects significant change in credit risk for the purposes of staging of financial
+instruments. The main considerations are regulatory and operating environment, internal and external credit risk rating,
+debt-servicing capacity, operating capabilities, contractual terms, and repayment behaviour and willingness. The Group
+compares the risk of default of a single financial instrument or a portfolio of financial instruments with similar credit risk
+characteristics as at the end of the reporting period and its risk of default at the date of initial recognition to determine
+changes in the risk of default over the expected lifetime of a financial instrument or a portfolio of financial instruments.
+In determining whether credit risk of a financial instrument has increased significantly since initial recognition, the Group
+considers factors indicating whether the probability of default has risen above threshold, the background for financing
+have been authenticated, the financial instrument has been past due for more than 30 days, the loan has been modified in
+payment term of principal or interest, any significant negative issue has been arisen and any other indicators of increase in
+risk have been noticed.
+Impairment assessment
+Classification of credit risk exposures
+The Group classifies financial instruments into three stages and makes provisions for expected credit loss accordingly,
+depending on whether credit risk on that financial instrument has increased significantly since initial recognition and
+whether the assets have been credit-impaired. Refer to Note 4(10) Impairment of financial assets for the definition of the
+three stages.
+Staging of financial instruments
+Credit risk assessment method
+The Group is also exposed to credit risk in other areas. The credit risk arising from derivative financial instruments is limited
+to derivative financial assets recorded in the consolidated statement of financial position. In addition, the Group provides
+guarantees for customers and may therefore be required to make payments on their behalf. These payments would be
+recovered from customers in accordance with the terms of the agreement. Therefore, the Group assumes a credit risk
+similar to that arising from loans and applies the same risk control procedures and policies to reduce risks.
+Credit risk is the risk of loss arising from a borrower or counterparty's failure to perform its obligations. Operational failures
+which result in unauthorised or inappropriate guarantees, financial commitments or investments by the Group may also
+give rise to credit risk. The Group's credit risk is mainly attributable to its credit assets, due from banks and other financial
+institutions and financial investments.
+Definition and scope
+The Group classifies credit risk exposures of expected credit losses with sufficient information by considering factors such
+as internal ratings-based ("IRB") segmentation, product types, customer types, industry risk characteristics, and response to
+macro-economic changes.
+(a) Credit risk
+Notes to the Consolidated Financial Statements
+251
+Annual Report 2023
+The Bank maintains a dual-reporting risk management structure at the branch level. Under this structure, the risk
+management department of the branches report to both the Group risk management department and the management of
+the branches.
+2023
+82,723
+The Group has clearly defined the roles of each department in monitoring financial risks within the Group. The Credit
+Management Department monitors credit risk, the Risk Management Department together with the Asset and Liability
+Management Department monitor market and liquidity risks, and the Internal Control and Compliance Department
+monitors operational risk. The Risk Management Department is primarily responsible for establishing and coordinating a
+comprehensive risk management framework, preparing consolidated reports on credit risk, market risk and operational risk
+and reporting directly to the Chief Risk Officer.
+The President supervises risk management and reports directly to the Board. He chairs two management committees
+including the Risk Management Committee and the Asset and Liability Management Committee, which set the risk
+management strategies and appetite, evaluate and formulate risk management policies and procedures, and make
+recommendations through the President to the Risk Management Committee of the Board. The Chief Risk Officer assists
+the President to supervise the Bank's risk management and make decisions.
+(In RMB millions, unless otherwise stated)
+A financial asset is generally considered to be credit-impaired if:
+Significant increase in credit risk
+252
+The retail business borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the
+Group to actions such as liquidation against collateral.
+(iii)
+(ii)
+The principal or interest of loan is past due more than 90 days (not inclusive);
+(i)
+Write-offs of loan; or
+The Group defines a retail business borrower as in default when any single credit asset of a borrower meets one or more of
+the following criteria:
+The Group has further facilitated the deferral in principal repayment and interest payment credit arrangements for the
+inclusive loans to micro and small-sized businesses in accordance with the government's regulations. The Group classifies
+the credit risk based on the actual situation of the borrower and the judgement of the substantive risk of the business
+for those loans with deferred principal repayment and interest payment. However, the temporary deferral in principal
+repayment and interest payment is not considered as an automatic trigger event for a significant increase in credit risk.
+(iii) The corporate borrower has the matters refer to in (i) or (ii) above in other financial institutions.
+(ii)
+The principal or interest of any credit business is past due more than 90 days (not inclusive) to the Group;
+(i)
+The Group defines a corporate borrower as in default when it meets one or more of the following criteria:
+Definition of default
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Annual Report 2023
+The corporate borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to
+actions such as liquidation against collateral; or
+15,607
+128,358
+2022
+26,229
+(1) Loans and advances to customers
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+Annual Report 2023 255
+Credit risk is often greater when counterparties are concentrated in one single industry or geographic location or
+have comparable economic features. In addition, different geographic areas and industrial sectors have their unique
+characteristics in terms of economic development, and could present a different credit risk.
+(ii) Risk concentrations
+41,464,757
+By geographical distribution
+46,604,256
+3,184,180
+Maximum credit risk exposure
+Credit commitments
+38,493,712
+43,420,076
+107,719
+Other
+2,971,045
+7,563,132
+The composition of the Group's gross loans and advances to customers (excluding accrued interest) by geographical
+distribution is as follows:
+31 December 2022
+721,397
+The board of directors (the "Board") has the ultimate responsibility for risk management and oversees the Group's risk
+management system through the Risk Management Committee and the Audit Committee of the Board.
+3,762,208
+6,967,323
+126,088
+359,994
+142,114
+31 December 2023
+11,357,727
+Annual Report 2023
+754,746
+Head Office
+Percentage
+Amount
+Percentage
+Amount
+258
+31 December
+8,806,849
+2,129,970
+Reverse repurchase agreements
+Derivative financial assets
+Due from banks and other financial institutions
+Balances with central banks
+As at the end of the reporting period, the maximum credit risk exposure of the Group without taking into account any
+collateral and other credit enhancements is set out below:
+(i) Maximum exposure to credit risk without taking into account of any collateral and other
+credit enhancements
+The Group monitors the market value of the collateral and when needed, require additional collateral according to
+agreements. The Group disposes of repossessed assets in an orderly manner.
+Loans and advances to customers
+The Group prefers more liquid collateral with relatively stable market value and does not accept collateral that is illiquid,
+with difficulties in registration or high fluctuations in market value. The value of collateral should be appraised and
+confirmed by the Group or valuation agencies engaged by the Group. The value of collateral should adequately cover
+the outstanding balance of loans. The Group takes into consideration the types of collateral, state of condition, liquidity,
+price volatility and realisation cost to determine the loan-to-value ratio of collateral. All collateral has to be registered in
+accordance with the relevant laws and regulations. The credit officers inspect the collateral and assess the changes in the
+value of collateral regularly.
+Corporate loans and discounted bills are mainly collateralised by properties or other assets. As at 31 December 2023, the
+gross carrying amount of corporate loans and discounted bills amounted to RMB17,432,861 million (31 December 2022:
+RMB14,975,751 million), of which credit exposure covered by collateral amounted to RMB5,344,849 million (31 December
+2022: RMB4,680,161 million).
+owners.
+Reverse repurchase business is mainly collateralised by bills and marketable securities. As part of certain reverse repurchase
+agreements, the Group has received collateral that it is allowed to sell or repledge in the absence of default by their
+The amount and type of collateral required depend on the assessment of credit risk of the counterparty. Guidelines are in
+place specifying the types of collateral and valuation parameters which can be accepted.
+Collateral and other credit enhancements
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+6,425
+Personal loans are mainly collateralised by residential properties. As at 31 December 2023, the gross carrying amount of
+personal loans amounted to RMB8,653,621 million (31 December 2022: RMB8,234,625 million), of which credit exposure
+covered by collateral amounted to RMB7,719,465 million (31 December 2022: RMB7,359,369 million).
+Financial investments measured at amortised cost
+Financial investments
+31 December
+2,148,073
+Financial investments measured at FVTOCI
+575,165
+578,595
+Financial investments measured at FVTPL
+22,591,676
+25,386,933
+31 December
+864,122
+75,339
+1,224,257
+1,192,532
+1,116,717
+3,361,552
+3,975,594
+2022
+2023
+87,205
+50. FINANCIAL RISK MANAGEMENT
+2,796
+2,971,045
+4,534
+Depreciation and amortisation
+Other segment information:
+362,110
+Profit for the year
+(62,610)
+Income tax expense
+3,946
+424,720
+11,878
+61,841
+60,079
+95,094
+59,687
+98,133
+257
+37,751
+Profit before taxation
+2,696
+3,511
+Annual Report 2023
+250
+33,513
+12,509
+1,099
+3,547
+3,292
+3,972
+2,933
+3,579
+3,758
+Capital expenditure
+26,540
+2,204
+1,471
+4,206
+43,359
+Notes to the Consolidated Financial Statements
+4,396
+Share of results of associates and joint ventures
+68
+(22,316)
+(13,050)
+(34,096) (38,699)
+(37,485)
+(26,794)
+(36,619)
+(239,351)
+(30,360)
+842,352
+(68)
+67,462
+29,214
+130,802
+114,809
+153,822
+Operating expenses
+4,396
+Impairment losses on assets
+(13,775) (26,978)
+420,324
+33,355
+11,878
+61,841
+60,079
+95,094
+59,687
+(53,708)
+98,133
+Operating profit
+(182,677)
+(11,791)
+(4,286)
+(30,262)
+(20,634)
+(21,243)
+257
+(i) Includes net trading income, net gains on financial investments and other net operating income.
+(ii) Includes intangible assets, goodwill, long-term deferred expenses, right-of-use assets and other non-current assets.
+(In RMB millions, unless otherwise stated)
+Chinese mainland (HO and domestic branches)
+5,335,535
+Liabilities by geographical areas
+39,610,146
+Total assets
+101,117
+Unallocated assets
+80,778
+9,208,450
+23,323
+9,769
+8,359
+6,812
+6,149
+7,274
+16,623
+Other non-current assets (ii)
+2,469
+293,887
+5,833,211 9,263,328
+4,842,967 1,819,550
+(3,866,486)
+796,832
+160,799
+680,902
+624,496
+931,972 1,106,387
+1,378,232
+4,599,017
+1,157,911
+Other segment information:
+36,094,727
+Total liabilities
+89,531
+Unallocated liabilities
+(6,034,973) 36,005,196
+1,138,111
+Credit commitments
+31 December 2022
+166,216
+22,240
+Total
+Eliminations
+Overseas
+and other
+China
+China
+China
+Bohai Rim
+Assets by geographical areas
+River Delta
+Office
+Northeastern
+Western
+Central
+Pearl
+Yangtze
+Head
+River Delta
+8,403
+8,069,477
+6,583,520
+18,542
+19,853
+13,678
+32,205
+12,750
+Property and equipment
+65,790
+9,418,551
+65,790
+Including: Investments in associates and
+39,509,029
+4,366,642 (6,034,973)
+1,469,644
+5,174,047
+4,396,769
+6,065,352
+joint ventures
+121,625
+amortised cost
+391,268
+26,086,482
+23,210,376
+256
+Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+By collateral
+The composition of the Group's gross loans and advances to customers (excluding accrued interest) by collateral is as
+follows:
+Total for loans and advances to customers
+Unsecured loans
+Loans secured by mortgages
+Pledged loans
+Total
+31 December
+31 December
+2023
+2022
+9,947,491
+Guaranteed loans
+8,221,000
+1,148,785
+Discounted bills
+263,109
+Other
+458,345
+383,705
+Subtotal for corporate loans
+16,145,204
+13,826,966
+1,287,657
+Personal mortgage and business loans
+7,362,031
+Other
+1,018,017
+872,594
+Subtotal for personal loans
+8,653,621
+8,234,625
+7,635,604
+340,250
+2,715,345
+10,444,304
+33,514
+29,897
+7,368
+102,766
+Guaranteed loans
+13,790
+19,151
+31,987
+16,805
+61,146
+Loans secured by mortgages
+58,876
+48,272
+37,285
+14,429
+158,862
+11,400
+2,544,651
+Unsecured loans
+3 years
+9,977,153
+2,979,342
+2,467,572
+26,086,482
+23,210,376
+Overdue loans
+The composition of the Group's gross overdue loans (excluding accrued interest) by collateral is as follows:
+Total
+31 December 2023
+Overdue for
+for 1 to
+91 days to
+90 days
+1 year
+Overdue
+for 1 to
+3 years
+Overdue
+for over
+Overdue
+Pledged loans
+Mining
+410,202
+15.58%
+3,561,290
+15.34%
+Western China
+4,766,575
+18.27%
+4,225,369
+4,064,415
+18.20%
+1,082,666
+4.15%
+978,246
+4.21%
+Overseas and other
+1,460,720
+5.60%
+Northeastern China
+Total
+Central China
+3,816,621
+113,459
+747,980
+3.22%
+Yangtze River Delta
+5,616,187
+21.53%
+4,798,204
+16.45%
+20.68%
+4,055,692
+15.54%
+3,621,603
+15.60%
+Bohai Rim
+4,285,481
+16.44%
+Pearl River Delta
+368,149
+26,086,482
+1,461,063
+23,210,376
+Production and supply of electricity, heating, gas and water
+1,690,911
+1,313,234
+Real estate
+1,014,138
+976,460
+Wholesale and retail
+1,531,163
+757,022
+Finance
+635,529
+584,594
+Construction
+462,957
+392,535
+Science, education, culture and sanitation
+608,722
+100.00%
+1,742,614
+1,980,076
+6.30%
+100.00%
+By industry
+The composition of the Group's gross loans and advances to customers (excluding accrued interest) by industry is as follows:
+31 December
+31 December
+2023
+Water, environment and public utility management
+2022
+3,782,387
+3,357,175
+Manufacturing
+2,454,786
+2,068,044
+Leasing and commercial services
+2,396,063
+Transportation, storage and postal services
+5,943
+2,583
+3,131
+FVTOCI
+amortised cost
+Governments and central banks
+123,419
+982,051
+6,373,902
+Total
+7,479,372
+FVTPL
+Policy banks
+211,905
+522,014
+762,209
+Banks and other financial institutions
+Corporate entities
+231,085
+349,923
+506,021
+28,290
+1,087,029
+measured at
+measured at
+293,463
+540,296
+1,065,147
+Corporate entities
+87,041
+566,522
+67,834
+measured at
+721,397
+2,120,553
+8,697,005
+11,357,727
+Financial
+investments
+31 December 2022
+Financial
+investments
+Financial
+investments
+540,169
+231,388
+110,456
+63,654
+Policy banks
+732,015
+55,943
+8,934
+11,754
+3,300
+Banks and other financial institutions
+Total
+8,759,237
+409,850
+47,941
+173,791
+52,865
+811,946
+1,065,147
+Corporate entities
+159,202
+2.89%
+380,700
+560,850
+42,590
+63,270
+734,960
+493,250
+2,104,729
+7,465,591
+10,063,570
+By rating
+The Group adopts a credit rating approach to manage the credit risk of the debt securities portfolio held. The ratings are
+obtained from Bloomberg Composite, or major rating agencies in the countries where the issuers of debt securities are
+located. The carrying amounts of debt securities investments (excluding accrued interest) analysed by rating as at the end of
+the reporting period are as follows:
+52,824
+31 December 2023
+AAA
+AA
+A
+Below A
+Governments and central banks
+2,461,141
+6,139,412
+Unrated
+952
+Banks and other financial institutions
+593,403
+Total
+Unsecured loans
+33,114
+22,052
+30,694
+3,304
+89,164
+3 years
+Guaranteed loans
+16,734
+20,007
+5,674
+53,634
+Loans secured by mortgages
+44,182
+37,795
+11,219
+38,550
+3 years
+90 days
+984
+7,650
+Total
+107,236
+101,889
+87,118
+34,181
+1 year
+330,424
+Overdue
+Overdue for
+for 1 to
+91 days to
+Overdue
+for 1 to
+Overdue
+for over
+31 December 2022
+811,946
+9,999
+Pledged loans
+Financial
+investments
+measured at
+measured at
+measured at
+FVTPL
+FVTOCI
+31 December 2023
+Financial
+investments
+Total
+187,365
+1,076,400
+7,495,472
+8,759,237
+Policy banks
+34,375
+184,168
+Governments and central banks
+130,526
+Financial
+investments
+By issuers
+5,287
+2,928
+1,926
+566
+10,707
+Total
+93,802
+The following tables present an analysis of the Group's debt securities investments (excluding accrued interest) by types of
+issuers and investments:
+79,509
+19,543
+284,031
+Annual Report 2023
+257
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(2) Debt securities investments
+91,177
+148,527
+China
+Operating income
+(22,711)
+58
+(238,698)
+Impairment losses on assets
+(14,547)
+(22,613)
+(27,990)
+(19,273)
+(25,326)
+(22,577)
+(5,980)
+(12,510)
+(150,816)
+Operating profit
+(16,378)
+(13,242)
+95,935
+(39,076)
+(38,395)
+Operating income
+24,896
+155,716
+115,266
+161,992
+117,206
+132,478
+30,429
+68,533
+(58)
+806,458
+Operating expenses
+(26,727)
+(37,168)
+(27,117)
+(34,320)
+60,159
+104,324
+57,560
+(56,850)
+Profit for the year
+365,116
+Other segment information:
+Depreciation and amortisation
+4,719
+4,093
+2,795
+3,927
+3,617
+4,194
+1,538
+2,216
+27,099
+Capital expenditure
+Income tax expense
+421,966
+.
+5,022
+70,825
+11,207
+33,312
+416,944
+Share of results of associates and
+joint ventures
+Profit before taxation
+32,088
+5,022
+95,935
+60,159
+104,324
+57,560
+70,825
+11,207
+38,334
+(16,378)
+1,447
+16,139
+(90)
+Chinese mainland (HO and domestic branches)
+Head
+Yangtze
+Pearl
+Bohai
+Central
+Western Northeastern
+Overseas
+Office
+River Delta
+River Delta
+Rim
+China
+China
+China
+2023
+Branches located outside Chinese mainland, domestic and overseas subsidiaries, and investments in associates and joint
+ventures.
+including Liaoning, Heilongjiang, Jilin and Dalian.
+including Chongqing, Sichuan, Guizhou, Yunnan, Guangxi, Shaanxi, Gansu, Qinghai, Ningxia,
+Xinjiang, Inner Mongolia and Tibet; and
+84,325
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(b) Geographical information
+The Group operates principally in Chinese mainland, and also has branches or subsidiaries operating outside Chinese
+mainland. The distribution of the geographical areas is as follows.
+Chinese mainland (Head Office and domestic branches)
+Head Office ("HO"):
+Yangtze River Delta:
+Pearl River Delta:
+and other
+Bohai Rim:
+Western China:
+Northeastern China:
+Overseas and other
+the HO business divisions (including institutions directly managed by the HO and its offices);
+including Shanghai, Jiangsu, Zhejiang and Ningbo;
+including Guangdong, Shenzhen, Fujian and Xiamen;
+including Beijing, Tianjin, Hebei, Shandong and Qingdao;
+including Shanxi, Henan, Hubei, Hunan, Anhui, Jiangxi and Hainan;
+Central China:
+4,125
+Eliminations
+External net interest income/(expense)
+21,597
+17,021
+10,576
+11,680
+2,739
+12,232
+(1,505)
+119,357
+Other income/(expense), net (i)
+18,762
+(818)
+(707)
+(1,277)
+(602)
+(766)
+30,106
+Net fee and commission income
+(4,928)
+23,176
+325,228
+61,311
+63,780
+(12,379)
+71,307
+96,072
+4,604
+Total
+45,090
+Internal net interest (expense)/income
+(349,200)
+73,626
+37,282
+158,627
+35,925
+25,492
+655,013
+3,120
+14,911
+3,294
+Central
+Western Northeastern
+Overseas
+Office
+River Delta
+River Delta
+Bohai Rim
+China
+China
+China
+and other
+Eliminations
+Total
+External net interest income
+290,613
+Pearl
+Yangtze
+Head
+Chinese mainland (HO and domestic branches)
+Unallocated liabilities
+67,252
+40,920,491
+Total liabilities
+Other segment information:
+Credit commitments
+1,140,709 1,742,306
+77,438
+1,132,348
+735,849
+878,791
+170,587
+788,274 (4,710,177)
+3,184,180
+(i) Includes net trading income, net gains on financial investments and other net operating income.
+(ii) Includes intangible assets, goodwill, long-term deferred expenses, right-of-use assets and other non-current assets.
+2022
+1,305,493
+40,853,239
+80,913
+77,663
+12,890
+(1,670)
+129,325
+Other income/(expense), net (i)
+11,096
+(1,992)
+(1,078)
+(1,057)
+(594)
+(1,297)
+(842)
+15,204
+1,602
+2,545
+21,042
+2,621
+10,437
+9,327
+17,965
+103,557
+8,725
+42,014
+Internal net interest (expense)/income
+(259,518)
+52,414
+18,670
+11,062
+125,852
+18,105
+18,710
+(2,646)
+Net fee and commission income
+42,134
+20,667
+14,954
+28,413
+(4,343,557)
+691,985
+5,207,532
+River Delta
+Bohai Rim
+China
+China
+and other
+Eliminations
+Total
+Assets by geographical areas
+8,502,997
+10,215,437
+6,993,931
+6,680,826
+4,946,259
+5,743,425
+1,597,213
+River Delta
+Office
+Northeastern
+Western
+2,926
+2,936
+1,986,209 1,012,218
+882
+23,205
+43,033
+Annual Report 2023
+4,255,879
+249
+(In RMB millions, unless otherwise stated)
+31 December 2023
+Chinese mainland (HO and domestic branches)
+Head
+Yangtze
+Pearl
+Central
+Notes to the Consolidated Financial Statements
+(4,343,557)
+Overseas
+Including: Investments in associates and
+8,392
+9,998
+2,338
+18,756
+(170)
+Unallocated assets
+104,669
+6,837
+Total assets
+Liabilities by geographical areas
+5,554,090
+9,781,890
+4,965,877
+44,592,410
+6,342,124
+10,346,856
+44,697,079
+6,253
+76,492
+Property and equipment
+64,778
+7,087
+11,663
+31,346
+19,297
+18,074
+21,517
+13,544
+7,996
+175,441
+joint ventures
+298,878
+Other non-current assets (ii)
+17,001
+64,778
+5,432,348
+125,796
+6,209
+375,452
+Due to customers
+14,271,619
+1,913,802
+1,683,372
+175,348
+203,986
+18,028
+29,870,491
+Debt securities issued
+6,899
+29,260
+905,953
+68,099
+579,365
+86,443
+6,551,322
+Certificates of deposit
+57,045
+7,965
+204,501
+421,705
+Other
+542,311
+68,494
+16,109
+3,762,490
+Financial liabilities measured at FVTPL
+61
+96,350
+578
+3,597
+668
+64,287
+Derivative financial liabilities
+1,955
+17,932
+23,702
+30,565
+14,231
+2,338
+255,765
+One to
+164,692
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(ii) Maturity analysis of undiscounted contractual cash flows
+The tables below summarise the maturity profile of the Group's financial instruments based on the undiscounted
+contractual cash flows. The balances of some items in the tables below are different from the balances in the consolidated
+statement of financial position as the tables incorporate all cash flows relating to both principal and interest. The Group's
+actual cash flows on these instruments may vary significantly from the following analysis. For example, demand deposits
+from customers are expected to maintain a stable or increasing balance although they have been classified as repayable on
+demand in the following tables.
+31 December 2023
+Overdue/
+repayable
+One to
+Less than
+three
+Three
+months to
+Annual Report 2023
+on demand
+months
+one year
+five years
+Over
+five years
+Undated
+(iv)
+Non-derivative cash flows:
+2,509,370
+Total
+one month
+129,605
+262
+(ii) Includes repurchase agreements.
+132,461
+191,400
+873,923
+Total liabilities
+16,839,989
+2,810,996
+2,213,696
+6,435,173 6,981,338
+813,535
+(iii) Undated loans and advances to customers and financial investments are impaired or not impaired but overdue for more than
+one month.
+36,094,727
+(15,617,408)
+(107,581)
+(412,689)
+(344,569)
+658,151 15,935,539
+3,403,976
+3,515,419
+(i)
+Includes reverse repurchase agreements.
+Net liquidity gap
+Due to banks and other financial institutions (ii)
+4,446,184
+1,038
+2,564,032
+94,446
+709,859
+998,386
+385,254
+241,424
+134,663
+Financial investments measured at FVTOCI
+817,739
+Financial investments measured at amortised cost
+99,746
+151,910
+218,327
+24,050
+8,495
+93,469
+Financial investments measured at FVTPL
+Financial investments
+35,578,483
+525,600
+221,742
+20,395,144
+136,945
+1,015,478
+3,370,710
+Financial assets:
+25,865,754
+11,655,235
+7,144,022
+2,017,984
+2,820,517
+1,223,892
+394,463
+236,805
+39
+17,734
+35,490
+12,698
+143,086
+92,591
+Other
+9,245,933
+3,129
+3,407,392
+92,825
+145,781
+7,016,225
+1,255,195
+153,780
+26,799
+44,653
+32,770
+89,434
+107,611
+553,340
+1,222,581
+2,703,415
+98,293
+1,801,007
+7,639,489
+16,749,074
+3,403,976
+39,610,146
+Liabilities:
+Due to central banks
+6,127
+16,882
+121,734
+6,090,604
+5,132,696
+Total assets
+293,887
+1,213,028
+40,595
+345,296
+867,843
+561,208
+93,310
+2,223,096
+Financial investments measured at amortised cost
+115,000
+Other
+203,067
+2,771,349
+3,636,452
+620
+7,563,132
+Investments in associates and joint ventures
+65,790
+65,790
+Property and equipment
+293,887
+836,644
+Cash and balances with central banks
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+4,654
+Derivative financial instruments settled on net basis
+207
+1,555
+(11,256)
+2,322
+(67)
+(7,239)
+Derivative financial instruments settled on gross basis
+Including: Cash inflow
+1,229,409
+Derivative cash flows:
+Cash outflow
+583,502 1,758,108
+(589,874) (1,772,475)
+367,431
+(370,714)
+57,583
+3,996,033
+(57,826)
+(4,002,979)
+17,319
+(6,372)
+(14,367)
+(1,212,090)
+(3,283)
+41,302,254
+9,618,428
+18,184
+34,109,197
+Debt securities issued
+Other
+18,200
+107,968
+376,141
+330,196
+780,131
+858,395
+1,612,636
+35,260
+19,738
+59,849
+51,921
+430,416
+16,427,597
+2,639,315
+2,971,226
+8,787,293
+263,648
+9,148,344
+(243)
+(i)
+Total
+Non-derivative cash flows:
+Financial assets:
+Cash and balances with central banks
+766,050
+3,774
+3,478
+2,566
+4,579
+(iv)
+2,647,750
+Due from banks and other financial institutions (i)
+231,187
+1,180,526
+244,334
+354,211
+59,009
+2,069,267
+54,098,114
+Loans and advances to customers (ii)
+3,428,197
+(6,946)
+five years
+one year
+Includes reverse repurchase agreements.
+(ii) The maturity profile of the rescheduled loans' undiscounted contractual cash flows is determined according to the negotiated
+terms.
+(iii) Includes repurchase agreements.
+(iv) Undated loans and advances to customers and financial investments are impaired or not impaired but overdue for more than
+one month.
+Annual Report 2023
+263
+31 December 2022
+Overdue/
+five years
+One to
+Less than
+three
+Three
+months to
+One to
+Over
+Undated
+on demand
+one month
+months
+repayable
+1,192,880
+7,090,386
+1,831,542
+81,529
+9,384
+24,206
+246,219
+185,042
+226,856
+105,763
+878,999
+Financial investments measured at FVTOCI
+Financial investments measured at FVTPL
+137,501
+462,665
+964,058
+802,982
+83,534
+2,551,857
+Financial investments measured at amortised cost
+118,767
+377,001
+1,075,522 4,070,282
+101,117
+5,072,783
+Financial investments
+671,048
+4,028
+2,998
+5,183
+2,832,799
+4,042,542
+Due from banks and other financial institutions (i)
+337,094
+1,462,855
+179,850
+37,768,335
+334,769
+4
+2,357,046
+Loans and advances to customers (ii)
+54,533
+1,353,001
+1,534,912
+5,839,403
+8,646,048
+19,669,390
+42,474
+2,335,694
+3,130
+Other
+953,779
+51,671
+7,802
+4,461,285
+Financial liabilities measured at FVTPL
+56,799
+180
+165
+1,414
+301,577
+5,463
+64,378
+Certificates of deposit
+58,475
+123,722
+186,117
+22,905
+391,219
+Due to customers
+13,685,047
+357
+10,717,485
+460,705
+Due to banks and other financial institutions (iii)
+105,707
+195,642
+20,713
+46,739
+45,605
+51,849
+466,255
+1,771,743
+3,281,804
+2,685,751
+2,241,827 8,008,315
+25,823,864
+3,696,274
+58,782,519
+Financial liabilities:
+Due to central banks
+6,565
+66,840
+159,718
+233,123
+13,958,692
+Financial liabilities:
+Liabilities:
+6,132
+30,533
+Derivative financial assets
+2,340,974
+261,176
+39,665
+427,598
+1,612,535
+Due from banks and other financial institutions (i)
+4,042,293
+25,973
+124,763
+168,210
+3,741,187
+Cash and balances with central banks
+Assets:
+Total
+(in RMB
+equivalent)
+(in RMB
+equivalent)
+Other
+HKD
+(in RMB
+equivalent)
+USD
+(in RMB
+equivalent)
+8,133
+RMB
+7,455
+75,339
+Financial investments measured at amortised cost
+2,230,862
+95,848
+38,971
+359,118
+1,736,925
+Financial investments measured at FVTOCI
+811,957
+8,266
+11,378
+10,832
+761,884
+Financial investments measured at FVTPL
+Financial investments
+25,386,933
+352,637
+346,152
+690,350
+23,997,794
+Loans and advances to customers
+30,975
+8,450,363
+31 December 2023
+(In RMB millions, unless otherwise stated)
+The tables below indicate a sensitivity analysis of exchange rate changes of the main foreign currencies to which the Group
+had significant on- and off-balance sheet exposure on its monetary assets and liabilities and its estimated future cash
+flows. The analysis calculates the effect of a reasonably possible movement in the currency rates against RMB, with all
+other variables held constant, on profit before taxation and equity, The impact on equity only includes the impact on other
+comprehensive income. A negative amount in the table reflects a potential net reduction in profit before taxation or equity,
+while a positive amount reflects a potential net increase. While the table below indicates the effect on profit before taxation
+and equity of a 1% depreciation of USD and HKD against RMB, there will be an opposite effect with the same amount
+if the currencies appreciate by the same percentage. This effect, however, is based on the assumption that the Group's
+foreign exchange exposures as at the end of the reporting period are kept unchanged and, therefore, has not incorporated
+actions that would be taken by the Group to mitigate the adverse impact of this currency risk.
+The Group manages its currency risk exposure through various methods, including limit management and risk hedging to
+hedge currency risk, and performs currency risk sensitivity analysis and stress testing regularly.
+The Group conducts its businesses mainly in RMB, with certain transactions denominated in USD, HKD, and other currencies
+to a lesser extent. The exchange rate of RMB to USD is managed under a floating exchange rate system. The HKD exchange
+rate has been pegged to the USD and therefore the exchange rate of RMB to HKD has fluctuated in line with the changes
+in the exchange rate of RMB to USD. Transactions in foreign currencies mainly arise from the Group's foreign currency
+treasury operations, commissioned foreign exchange dealings for clients and overseas investments.
+(ii) Currency risk
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Annual Report 2023
+266
+VaR relies heavily on historical data to provide information and may not clearly predict the future changes and
+modifications of the risk factors, especially those of an exceptional nature due to significant market moves.
+Even though positions may change throughout the day, VaR only represents the risk of the portfolios at the close of
+each business day, and it does not account for any losses that may occur beyond the 99% confidence level; and
+Currency
+USD
+VaR does not reflect liquidity risk. In the VaR model, a one-day holding period assumes that it is possible to hedge
+or dispose of positions within that period without restriction, the price of the financial instruments will fluctuate in
+the specified range, and the correlation between these market prices will remain basically unchanged. This may not
+fully reflect the market risk arising at times of severe illiquidity, when a one-day holding period may be insufficient to
+hedge or dispose of all positions fully;
+(2)
+(1)
+Although VaR is an important tool for measuring market risk under normal market environment, the assumptions on which
+the model is based do give rise to some limitations, mainly including the following:
+VaR.
+VaR for each risk factor is the derived largest potential loss due to fluctuations solely in that risk factor. As there is a
+diversification effect due to the correlation amongst the risk factors, the individual VaRs do not add up to the total portfolio
+89
+411
+179
+411
+(3)
+A breakdown of the assets and liabilities analysed by currency is as follows:
+HKD
+Effect on equity
+Notes to the Consolidated Financial Statements
+267
+Annual Report 2023
+(1,279)
+(889)
+(629)
+(1,443)
+817
+327
+-1%
+Effect on profit
+before taxation
+522
+-1%
+2022
+2023
+31 December
+31 December
+31 December
+2022
+2023
+31 December
+Change in
+exchange rate
+267
+Total portfolio VaR
+192,730
+126,760
+24,334
+213,141
+569,117
+1,369,777
+29,356
+2,058
+187,762
+1,150,601
+33,521,174
+79,302
+376,941
+871,819
+31,837,835
+385,198
+32,553
+40,857
+208,441
+103,347
+Other
+Debt securities issued
+434,579
+Due to customers
+885,894
+37,512,684
+268 Annual Report 2023
+(ii) Includes repurchase agreements.
+Includes reverse repurchase agreements.
+(i)
+3,184,180
+183,704
+49,055
+426,002
+2,525,419
+Total liabilities
+Credit commitments
+304,823
+(89,236)
+237,884
+3,323,117
+Net long/(short) position
+40,920,491
+828,217
+583,968
+1,995,622
+3,776,588
+36,996
+Certificates of deposit
+9,296
+638,216
+124,395
+5,658
+174,586
+333,577
+Total assets
+Other
+298,878
+2,135
+40,835,801
+674
+134,199
+Property and equipment
+64,778
+25,682
+196
+2,096
+36,804
+Investments in associates and joint ventures
+8,806,849
+161,870
+76,251
+2,233,506
+1,133,040
+8,627
+29,765
+28,563
+Derivative financial liabilities
+62,859
+55,668
+4
+2,250
+4,937
+494,732
+Financial liabilities measured at FVTPL
+1,128
+243,973
+73,509
+482,444
+3,588,038
+Due to banks and other financial institutions (ii)
+230,246
+Due to central banks
+Liabilities:
+44,697,079
+231,374
+4,387,964
+Due to central banks
+7
+12
+849,091
+586,504
+979,392
+85,965
+Derivative financial instruments settled on gross basis
+Including: Cash inflow
+4,452
+100
+1,542
+1,529
+263,153
+464
+Derivative financial instruments settled on net basis
+Derivative cash flows:
+36,303,279
+806,560
+7,357,699
+234,407
+2,114,125 6,381,103
+2,795,937
+16,847,855
+817
+425,302
+37,805
+Cash outflow
+(iv) Undated loans and advances to customers and financial investments are impaired or not impaired but overdue for more than
+one month.
+(iii) Includes repurchase agreements.
+terms.
+(ii) The maturity profile of the rescheduled loans' undiscounted contractual cash flows is determined according to the negotiated
+Includes reverse repurchase agreements.
+(i)
+(9,381)
+(784)
+(2,092)
+2,801,910
+(794)
+3,712
+(2,615)
+(2,811,291)
+(38,589)
+(265,245)
+(849,885)
+(593,312)
+(975,680)
+(88,580)
+(6,808)
+264
+94,479
+13,476
+64,357
+668
+3,598
+2,403
+578
+65
+57,045
+Financial liabilities measured at FVTPL
+3,812,273
+Certificates of deposit
+17,746
+436,973
+206,552
+543,715
+2,509,380
+Due to banks and other financial institutions (iii)
+147,031
+1,038
+122,938
+16,923
+97,907
+34,445
+68,186
+177,563
+34,944
+247,958
+Other
+1,120,786
+673,025
+297,722
+107,640
+32,841
+9,558
+126,364
+Debt securities issued
+20,642
+6,916,340
+5,520,110
+1,695,923
+1,920,323
+14,281,430
+Due to customers
+378,762
+6,649
+30,354,768
+33
+Annual Report 2023
+(iii) Analysis of credit commitments by contractual expiry date
+38
+131
+406
+256
+258
+43
+209
+112
+87
+37
+Minimum
+Average
+End of year
+2023
+Total portfolio VaR
+Commodity risk
+Currency risk
+Interest rate risk
+A summary of VaRs of trading book by risk type is as follows:
+VaR is a measure index which estimates the potential maximum losses that could occur on risk positions taken due to
+movements in interest rates, foreign exchange rates or prices over a specified time horizon and at a specified level of
+confidence. The Bank adopts a historical simulation method to calculate and monitor the VaRs of trading portfolios with
+250 days' historical market data (with a 99% confidence level, and one-day holding period) on a daily basis.
+Maximum
+(i) VaR
+44
+245
+32
+Commodity risk
+83
+297
+160
+297
+Currency risk
+30
+121
+26
+67
+Interest rate risk
+Minimum
+Maximum
+Average
+End of year
+2022
+180
+412
+312
+121
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(In RMB millions, unless otherwise stated)
+265
+3,184,180
+207,576
+510,386
+690,830
+359,067
+145,907
+1,270,414
+Credit commitments
+Total
+31 December 2022
+Over
+five years
+one year
+months
+Three
+months to
+three
+Less than
+one month
+Repayable
+on demand
+One to
+31 December 2023
+Management does not expect all of the commitments to be drawn down before the expiry of the commitments.
+One to
+five years
+Notes to the Consolidated Financial Statements
+One to
+Credit commitments
+Annual Report 2023
+Sensitivity analysis, interest rate repricing gap analysis and foreign exchange risk concentration analysis are the major
+market risk management tools used by the Group. The Bank monitors market risk separately in respect of trading and other
+non-trading portfolios. The Value-at-risk (VaR) analysis is a major tool used by the Bank to measure and monitor the market
+risk of its trading portfolios. The following sections include a Value-at-risk (VaR) analysis by risk type of the Group's trading
+portfolios and a sensitivity analysis based on the Group's currency risk exposure and interest rate risk exposure (both trading
+and non-trading portfolios).
+The Group considers the market risk arising from stock price fluctuations in respect of its investment portfolios to be
+immaterial.
+The Group's currency risk mainly results from the risk arising from exchange rate fluctuations on its foreign exchange
+exposures. Foreign exchange exposures include the foreign exchange exposures arising from currency structural imbalance
+between foreign currency assets and liabilities, and off-balance sheet foreign exchange exposures arising from currency
+derivative transactions.
+The Group is primarily exposed to structural interest rate risk arising from commercial banking and interest rate risk arising
+from treasury business positions. Interest rate risk is inherent in many of its businesses and largely arises from mismatches
+between the repricing dates of interest-generating assets and interest-bearing liabilities. The analysis of the interest rate risk
+in the banking book is disclosed in Note 50(d).
+Market risk is the risk of loss, in respect of the Group's on- and off-balance sheet activities, arising from adverse movements
+in market rates including interest rates, foreign exchange rates, commodity prices and stock prices. Market risk arises from
+both the Group's trading and non-trading businesses.
+(c) Market risk
+2,971,045
+182,555
+Repayable
+on demand
+490,874
+273,992
+Total
+Over
+five years
+One to
+five years
+Three
+months to
+one year
+months
+three
+Less than
+one month
+112,499
+1,228,303
+682,822
+121,032
+101,736
+747,474
+1,194,032
+-- 1,194,032
+(1,500)
+-- (1,500)
+Reverse repurchase agreements
+709,623
+709,623
+(475)
+(475)
+Loans and advances
+to customers
+21,098,741
+685,365
+Financial investments
+7,591,165
+163
+Total
+34,021,453
+685,528
+321,135 22,105,241
+3,139 7,594,467
+324,274 35,031,255
+(278,715)
+(28,613)
+(309,303)
+(141,586) (251,923)
+(672,224)
+other financial institutions
+(23)
+Due from banks and
+3,427,892
+(5,196)
+(964)
+(3,798)
+(9,958)
+Annual Report 2023
+259
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+31 December 2022
+Gross carrying amount
+Provision for ECL
+Stage 1
+Stage 2
+Stage 3
+Total
+Stage 1
+Stage 2
+Stage 3
+Total
+Financial assets measured
+at amortised cost
+Cash and balances with
+central banks
+- 3,427,892
+(2,699)
+(31,335)
+(141,609)
+maintaining the stability of the deposit base;
+projecting cash flows and evaluating the level of current assets; and
+maintaining an efficient internal fund transfer mechanism to ensure sufficient liquidity at branch level.
+260
+Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(i) Maturity analysis of assets and liabilities
+The tables below summarise the maturity profile of the Group's assets and liabilities. The actual remaining maturity of
+the Group's financial instruments may vary significantly from the following analysis. For example, demand deposits from
+customers are expected to maintain a stable or increasing balance although they have been classified as repayable on
+demand in the following tables.
+31 December 2023
+Overdue/
+repayable
+One to
+Less than
+three
+Three
+months to
+One to
+Over
+Undated
+on demand
+one month
+months
+one year
+five years
+five years
+optimising the structure of assets and liabilities;
+The Group manages its liquidity risk through the Asset and Liability Management Department and aims at:
+Liquidity risk is the risk that funds will not be sufficient or raised at a reasonable cost in a timely manner to meet the need
+of asset growth or repayment of debts due, although the Group remains solvent. This may arise from amount or maturity
+mismatches of assets and liabilities.
+(b) Liquidity risk
+(254,622)
+(705,534)
+Financial assets measured
+at FVTOCI
+Loans and advances
+to customers
+1,155,844
+Financial investments
+2,118,550
+Total
+3,274,394
+(9,568)
+10,534
+10,534
+(510)
+(28)
+(538)
+(4,794)
+(5,304)
+(1,009)
+(3,527)
+(9,330)
+(1,009)
+(3,555)
+(9,868)
+As at 31 December 2023 and 2022, credit risk exposures of credit commitments were mainly classified in Stage 1.
+35 1,155,879
+886 2,129,970
+921 3,285,849
+(3,769)
+(964)
+(4,835)
+158,706
+420,935
+4,214
+49,369
+734,960
+3,511,589 6,034,097
+62,126
+289,885
+165,873
+10,063,570
+(iii) Three-stage analysis of financial instruments' risk exposure
+The Group's credit risk stages of financial instruments are as follows:
+31 December 2023
+Stage 1
+Gross carrying amount
+Stage 2 Stage 3
+Provision for ECL
+Total
+Stage 1
+Stage 2
+Stage 3
+Total
+Financial assets measured
+at amortised cost
+Corporate entities
+762,209
+1,087,029
+80,953
+127,208
+Financial investments measured at FVTOCI
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+31 December 2022
+Unrated
+AAA
+AA
+A
+Below A
+Governments and central banks
+2,209,376
+5,156,655
+Cash and balances
+30,519
+35,191
+Total
+7,479,372
+Policy banks
+700,863
+44,454
+3,222
+13,310
+360
+Banks and other financial institutions
+442,644
+412,053
+47,631
+(!!!)
+with central banks
+4,042,293
+(2,699)
+(38,719)
+(382,235)
+(156,251)
+(259,891)
+(798,377)
+Financial assets measured
+at FVTOCI
+Loans and advances
+to customers
+1,295,548
+Financial investments
+2,136,289
+11,509
+275
+Total
+3,431,837
+11,509
+312
+37 1,295,585
+2,148,073
+3,443,658
+(361)
+(29)
+(390)
+(11)
+(36,009)
+(756,001)
+(257,031)
+Due from banks and
+other financial institutions
+1,120,116
+161
+1,120,277
+(3,399)
+(161)
+(3,560)
+Reverse repurchase agreements
+1,183,840
+1,183,840
+4,042,293
+(97)
+Loans and advances
+to customers
+23,773,666
+Financial investments
+8,840,215
+Total
+38,960,130
+714,114
+2,214
+716,328
+353,465 24,841,245
+3,139 8,845,568
+356,765 40,033,223
+(342,730)
+(156,240)
+(97)
+Total
+24,171
+Cash and balances with central banks
+16,426,099
+2,657,447
+3,059,130
+8,759,653 9,139,669
+878,493
+40,920,491
+Net liquidity gap
+(14,661,992)
+517,820 (1,065,013) (1,961,803) 299,076 17,033,573
+3,614,927
+3,776,588
+(i)
+Includes reverse repurchase agreements.
+(ii) Includes repurchase agreements.
+(iii) Undated loans and advances to customers and financial investments are impaired or not impaired but overdue for more than
+one month.
+Annual Report 2023
+261
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+31 December 2022
+Overdue/
+repayable
+One to
+Three
+Less than
+Total liabilities
+three
+885,894
+161,415
+Certificates of deposit
+58,396
+122,826
+182,299
+21,677
+385,198
+Due to customers
+13,683,549
+1,830,012 2,325,939
+6,986,876 8,679,518
+15,280
+33,521,174
+Debt securities issued
+17,813
+106,187
+352,234
+215,269
+678,274
+1,369,777
+Other
+268,158
+132,389
+149,244
+174,688
+months to
+One to
+Over
+20,960
+25,225
+16,705
+8,951
+87,205
+Loans and advances to customers
+32,364
+1,109,740
+1,048,523
+3,772,395
+12,253,435
+95,942
+22,591,676
+Financial investments
+Financial investments measured at FVTPL
+93,469
+7,792
+22,464
+208,484
+116,605
+199,594
+Assets:
+99,066
+14,136
+1,228
+Derivative financial assets
+2,056,654
+Undated
+on demand
+one month
+months
+one year
+five years
+five years
+(iii)
+Total
+Assets:
+Cash and balances with central banks
+76,251
+766,050
+3,471
+2,534
+4,316
+2,647,750
+3,427,892
+Due from banks and other financial institutions (i)
+231,177
+1,178,164
+241,316
+348,491
+57,506
+3,771
+4,427
+4,279,277
+22,859
+12,873,541
+128,071
+25,386,933
+Financial investments
+Financial investments measured at FVTPL
+81,529
+9,082
+22,165
+235,722
+156,408
+201,903
+105,148
+811,957
+Financial investments measured at FVTOCI
+132,916
+94,002
+425,812
+852,277
+643,039
+82,816
+2,230,862
+Financial investments measured at amortised cost
+104,586
+4,967,058
+4,848,837
+1,299,690
+1,233,059
+4,640
+10,909
+1,192,880
+3,980
+2,908
+5,086
+2,832,799
+4,042,293
+Due from banks and other financial institutions (i)
+337,094
+178,151
+338,685
+327,184
+4
+2,340,974
+Derivative financial assets
+9,989
+17,197
+30,865
+11,194
+6,094
+75,339
+Loans and advances to customers
+36,677
+39,718
+875,813
+1,458,823
+4,141,536
+6,549
+66,676
+158,149
+231,374
+Due to banks and other financial institutions (ii)
+2,685,751
+458,379
+284,933
+907,359
+46,034
+5,508
+4,387,964
+Financial liabilities measured at FVTPL
+56,799
+141
+633
+4,847
+316
+62,859
+20,057
+Derivative financial liabilities
+3,345,609
+17,999
+Due to central banks
+44,697,079
+123
+17,912,066
+Investments in associates and joint ventures
+3,614,927
+64,778
+64,778
+Property and equipment
+298,878
+Other
+115,927
+222,172
+40,247
+50,709
+61,395
+298,878
+45,949
+620
+9,438,745
+6,797,850
+1,994,117
+3,175,267
+8,806,849
+101,817
+Total assets
+638,216
+1,764,107
+Financial investments
+166,488
+7,242,116
+Financial investments measured at amortised cost
+2,223,096
+117,091
+8,989
+389,335
+21,137,985
+Financial investments measured at FVTOCI
+747,474
+9,306
+8,122
+352,901
+697,336
+Financial investments measured at FVTPL
+347,995 22,591,676
+752,795
+57,165
+1,707,681
+32,710
+137,342
+7,563,132
+35,564,084
+553,340
+2,405,480
+87,694
+38,442
+Loans and advances to customers
+84,400
+342,804
+Total assets
+Other
+293,887
+2,366
+643
+153,536
+Property and equipment
+65,790
+26,133
+189
+2,728
+36,740
+Investments in associates and joint ventures
+97,363
+87,205
+31 December 2022
+15,269
+275,764
+Valid portion of minority interests
+1,127
+Net capital base
+4,707,100
+1,013
+4,281,079
+Risk-weighted assets (i)
+24,641,631
+22,225,272
+333,382
+Common equity tier 1 capital adequacy ratio
+14.04%
+Tier 1 capital adequacy ratio
+Capital adequacy ratio
+15.17%
+532,232
+15.64%
+19.10%
+(i) Refers to risk-weighted assets after the capital floor and adjustments.
+19.26%
+13.72%
+Surplus provision for loan impairment
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+29,132
+27,006
+Derivative financial assets
+2,056,654
+268,637
+35,575
+644,064
+1,108,378
+Due from banks and other financial institutions (i)
+3,427,892
+135,967
+14,937
+150,292
+3,126,696
+Cash and balances with central banks
+Assets:
+Total
+(in RMB
+equivalent)
+Other
+(in RMB
+equivalent)
+HKD
+(in RMB
+equivalent)
+USD
+(in RMB
+equivalent)
+RMB
+15,798
+1,108,350
+Net long position
+Liabilities:
+despite the similarities in maturity periods, changes in the benchmark interest rate vary among on- and off-balance
+sheet business in the banking book with different pricing benchmark interest rates;
+the repricing period of different financial instruments are different when the interest rate changes;
+Interest rate risk in the banking book is defined as the risk of loss in the overall return and the economic value of the
+banking book arising from adverse movements in interest rate and term structure. This type of risk may occur in the
+following situations:
+(d) Interest rate risk in the banking book
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Annual Report 2023 269
+(ii) Includes repurchase agreements.
+Includes reverse repurchase agreements.
+(i)
+the Bank or the counterparty can elect to change the level or the maturity of future cash flows of financial
+instruments when the Bank holds option derivatives or when there are embedded option terms or implied options in
+the on- and off-balance sheet businesses in the banking book; and
+2,971,045
+8,896
+398,563
+2,379,809
+Credit commitments
+3,515,419
+36,094,727
+755,854
+352,496
+6,997
+298,260
+183,777
+due to changes in expected default levels or market liquidity, the market's assessment of the credit quality of financial
+instruments changes, leading to changes in credit spreads.
+The Group manages the interest rate risk in the banking book through the Asset and Liability Management Department,
+and the following methods have been adopted:
+interest rate prediction: analysing the macro-economic factors that may impact the PBOC benchmark interest rates
+and market interest rates;
+equity
+interest income
+Currency
+51. FAIR VALUE OF FINANCIAL INSTRUMENTS
+Effect on
+Effect on net
+Effect on
+Effect on net
+Decreased by 100 basis points
+Increased by 100 basis points
+31 December 2023
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+270 Annual Report 2023
+The effect on net interest income is the impact of the assumed changes in interest rates on the net interest income, arising
+from the financial assets and financial liabilities held at the end of the reporting period that are subject to repricing within
+the coming year, including the effect of hedging instruments. The effect on equity is the impact of the assumed changes in
+interest rates on other comprehensive income, calculated by revaluing fixed rate financial assets measured at FVTOCI held at
+the end of the reporting period, including the effect of any associated hedging instruments.
+The following tables demonstrate the sensitivity to a reasonably possible change in interest rate, with all other variables held
+constant, on the Group's net interest income and equity.
+The Group measures interest rate risk mainly by analysing the sensitivity of projected net interest income under various
+interest rate movements (scenario analysis). The Group aims to mitigate the impact of prospective interest rate movements
+which might reduce future net interest income, while balancing the cost of hedging on the current revenue.
+hedging: using interest rate derivatives for hedging management in a timely manner.
+limit management: optimising the positions of interest-generating assets and interest-bearing liabilities and controlling
+the impact on profit or loss and equity; and
+pricing management: managing the deviation of the pricing of interest-generating assets and interest-bearing
+liabilities from the benchmark interest rates or market interest rates;
+duration management: optimising the differences in timing between contractual repricing (or maturities) of interest-
+generating assets and interest-bearing liabilities;
+2,857,666
+525,235
+2,107,220
+32,706,418
+96,350
+15,588
+15,856
+33,778
+31,128
+Derivative financial liabilities
+64,287
+55,219
+3,707
+5,361
+Financial liabilities measured at FVTPL
+3,762,490
+257,934
+57,370
+598,689
+2,848,497
+Due to banks and other financial institutions (ii)
+145,781
+2,429
+143,352
+Due to central banks
+Certificates of deposit
+39,610,146
+Due to customers
+Other
+873,923
+8,440
+14,136
+138,878
+712,469
+905,953
+26,693
+2,317
+191,789
+685,154
+29,870,491
+361,873
+418,526
+937,078
+28,153,014
+375,452
+27,678
+17,030
+203,301
+127,443
+Total liabilities
+Debt securities issued
+The Group has established policies and internal controls with respect to the measurement of fair values, specifically the
+framework of fair value measurement of financial instruments, fair value measurement methodologies and operating
+procedures. Fair value measurement methodologies specify valuation techniques, parameter selection and relevant concepts,
+models and parameter-seeking methods. Operating procedures specify measurement procedures, timing of valuation,
+market parameter selection and corresponding allocation of responsibilities. In the process of fair value measurement,
+front office is responsible for daily transaction management. The Finance and Accounting Department plays a lead role in
+formulating accounting policies of fair value measurement, valuation methodologies and system implementation. The Risk
+Management Department is responsible for verifying trade details and validating models.
+Notes to the Consolidated Financial Statements
+275
+at FVTOCI
+1,155,879
+1,155,879
+Financial investments measured at FVTPL
+Debt securities investments
+32,905
+457,187
+3,158
+493,250
+Loans and advances to customers measured
+Equity investments
+12,334
+68,484
+97,743
+Funds and other investments
+34,460
+85,701
+36,320
+156,481
+84,290
+16,925
+2,780
+109
+2,671
+362,648
+3,017
+370,260
+Annual Report 2023
+277
+(In RMB millions, unless otherwise stated)
+31 December 2022
+Level 1
+Level 2
+Level 3
+Total
+Financial assets:
+Derivative financial assets
+3,730
+82,589
+886
+87,205
+Reverse repurchase agreements measured
+at FVTPL
+154,974
+154,974
+Loans and advances to customers measured
+at FVTPL
+555,222
+4,595
+107,962
+Financial investments measured at FVTOCI
+Repurchase agreements
+144,959
+144,959
+Financial liabilities measured at FVTPL
+761
+62,215
+1,311
+64,287
+Derivative financial liabilities
+235,414
+4,203
+2,185
+96,350
+4,964
+532,550
+3,496
+541,010
+interest income
+278
+Annual Report 2023
+89,962
+235,414
+Due to customers
+Financial liabilities:
+Debt securities investments
+333,378
+1,790,966
+362
+2,124,706
+Other debt investments
+5,264
+5,264
+Equity investments
+7,792
+38,310
+47,024
+93,126
+341,170
+1,834,540
+47,386
+2,223,096
+429,190
+3,785,875
+156,343
+4,371,408
+747,474
+76,251
+1,179
+71,939
+Derivative financial assets
+3,333
+71,491
+515
+75,339
+Reverse repurchase agreements measured
+at FVTPL
+40,514
+40,514
+Loans and advances to customers measured
+at FVTPL
+Total
+5,990
+6,104
+Loans and advances to customers measured
+at FVTOCI
+1,295,585
+1,295,585
+Financial investments measured at FVTPL
+Debt securities investments
+21,412
+515,389
+3,368
+114
+Level 3
+31 December 2023
+Level 2
+Level 1
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Fair value estimates are generally subjective in nature, and are made as of a specific point in time based on the
+characteristics of the financial instruments and relevant market information. The Group uses the following hierarchy for
+determining and disclosing the fair value of financial instruments:
+Level 1 inputs: quoted (unadjusted) prices in active markets for identical assets or liabilities;
+Level 2 inputs: valuation techniques are used, for which all inputs that have a significant effect on the recorded fair value
+are observable, either directly or indirectly; and
+Level 3 inputs: valuation techniques are used, for which certain inputs that have a significant effect on the recorded fair
+value are not based on observable market data.
+The following is a description of the fair value of financial instruments measured at fair value which are determined using
+valuation techniques. They incorporate the Group's estimate of assumptions that a market participant would make when
+valuing the instruments.
+Financial investments
+Financial investments that use valuation techniques for their valuation include debt securities, asset-backed securities,
+investment funds, unlisted equity instruments and asset management plans. The Group values such investments by
+incorporating either only observable data or both observable and unobservable data. Observable inputs include assumptions
+regarding current interest rates; unobservable inputs include assumptions regarding expected default rates, prepayment
+rates, discount rates and market liquidity.
+The majority of the debt securities investments classified as level 2 are RMB bonds. The fair values of these bonds are
+determined based on the valuation results provided by China Central Depository & Clearing Co., Ltd., which are determined
+based on a valuation technique for which all significant inputs are observable market data.
+Derivatives
+Derivatives that use valuation techniques with market observable inputs are mainly interest rate swaps, currency forwards,
+swaps and options. The most frequently applied valuation techniques include discounted cash flow model and Black-Scholes
+model. The models incorporate various inputs including foreign exchange spot and forward rates, foreign exchange rate
+volatility, interest rate yield curves.
+Structured derivatives are mainly valued using dealer's quotations.
+Loans and advances to customers
+The loans and advances to customers that use valuation techniques for valuation are mainly the bills and discounted cash
+flow model is used. For bank acceptance bill, based on the different credit risk of the acceptor, interest rate yield curve is
+set up using the actual market data; for commercial bill, based on the interbank offered rate, interest rate yield curve is
+constructed, with spreads adjusted for credit risk and liquidity.
+Other liabilities at fair value through profit or loss
+For unquoted other liabilities at FVTPL, discounted cash flow model is used based on current yield curve appropriate for
+the remaining term to maturity adjusted for market liquidity and credit spreads; and Heston model is applied based on
+parameters including yields, foreign exchange forward rates, foreign exchange rate volatilities, which are calibrated by
+active market quotes of standard European option with the same underlying items.
+276 Annual Report 2023
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(a) Financial instruments measured at fair value
+Financial assets:
+540,169
+Equity investments
+19,885
+10,935
+1,843,078
+40,472
+2,230,862
+429,385
+3,870,924
+160,052
+4,460,361
+Financial liabilities:
+Due to customers
+202,976
+202,976
+Repurchase agreements
+28,174
+28,174
+Financial liabilities measured at FVTPL
+1,462
+59,559
+1,838
+62,859
+Derivative financial liabilities
+3,133
+347,312
+Annual Report 2023
+82,789
+33,556
+74,226
+105,046
+Funds and other investments
+37,443
+87,942
+41,357
+166,742
+78,740
+614,266
+118,951
+811,957
+Financial investments measured at FVTOCI
+Debt securities investments
+338,551
+1,804,101
+2,142,652
+Other debt investments
+5,421
+5,421
+Equity investments
+8,761
+40,472
+equity
+Valid portion of tier 2 capital instruments and related premiums
+(14,922)
+Due to central banks
+Liabilities:
+44,697,079
+1,848,853
+638,216
+563,431
+24,485
+5,174,775
+40,169
+4,735,833
+7,674
+17,208,242
+15,729,376
+Total assets
+2,457
+Other
+298,878
+298,878
+Property and equipment
+64,778
+64,778
+ventures
+Investments in associates and joint
+99,037 8,806,849
+4,079,888
+3,198,040
+73,225
+158,149
+231,374
+Due to banks and other financial
+Total liabilities
+17,501,563
+172,151
+4,292
+Other
+Debt securities issued
+181,578
+76,251
+76,251
+Due to customers
+Certificates of deposit
+Derivative financial liabilities
+62,859
+849,538
+53,416
+4,847
+633
+3,647
+Financial liabilities measured at FVTPL
+4,387,964
+34,011
+10
+13,684
+924,444
+3,415,815
+institutions (ii)
+316
+Interest rate exposure
+580,346
+Financial investments measured
+4,042,293
+328,448
+4,303
+2,498
+3,707,044
+Cash and balances with central banks
+Due from banks and other financial
+institutions (i)
+Assets:
+Total
+interest-
+bearing
+Over
+five years
+One to
+five years
+months to
+one year
+Non-
+Three
+Less than
+three
+months
+31 December 2023
+The tables below summarise the contractual repricing or maturity dates, whichever is earlier, of the Group's assets and
+liabilities:
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+271
+Annual Report 2023
+528,307
+635,672
+1,946,422
+323,422
+35,293
+35,837
+104,914 2,230,862
+629,586
+803,302
+420,740
+272,320
+Financial investments measured
+at FVTOCI
+811,957
+223,376
+194,907
+125,924
+234,428
+at amortised cost
+33,322
+Financial investments
+25,386,933
+54,815
+245,909
+528,802
+9,187,465 15,369,942
+Loans and advances to customers
+75,339
+75,339
+Derivative financial assets
+2,340,974
+Financial investments measured
+at FVTPL
+21,352,271
+180,896
+6,643,611
+311,141
+12,526
+8,231,400
+(5,622,895) 8,976,842
+19,878
+8,618,565
+293,887
+65,790
+65,790
+Total assets
+Other
+Property and equipment
+ventures
+Investments in associates and joint
+90,850 7,563,132
+3,522,497
+2,658,476
+823,892
+467,417
+at amortised cost
+Financial investments measured
+113,289 2,223,096
+526,625
+770,277
+372,109
+440,796
+Financial investments measured
+at FVTOCI
+747,474
+226,785
+933
+31,106
+410,049
+3,267,140
+13,735,852
+2,634
+15,490,860
+18,290
+3,996,217
+55,653
+4,607,349
+476,412
+553,340
+1,779,868
+39,610,146
+Liabilities:
+Due to central banks
+145,781
+188,523
+Due to banks and other financial
+Financial liabilities measured at FVTPL
+Derivative financial liabilities
+Certificates of deposit
+Due to customers
+Debt securities issued
+Other
+Total liabilities
+Interest rate exposure
+23,009
+121,734
+1,038
+institutions (ii)
+87,708
+212,113
+32,345
+Less than
+31 December 2022
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Annual Report 2023
+272
+The data set out in the above table includes trading book data.
+(ii) Includes repurchase agreements.
+Includes reverse repurchase agreements.
+(i)
+N/A
+N/A
+three
+months
+885,894
+40,920,491
+14,726
+784,797
+1,708,620
+678,275
+29,349
+722,812
+4,451,963
+(4,169,555)
+RMB
+54,930
+8,905,388
+193,484
+33,521,174
+742,573
+14,862
+385,198
+2,846
+1,369,777
+351
+Three
+months to
+one year
+One to
+five years
+Financial investments measured
+at FVTPL
+Financial investments
+87,205
+22,591,676
+52,006
+314,051
+405,677
+8,087,371 13,732,571
+Loans and advances to customers
+87,205
+Derivative financial assets
+48,524 2,056,654
+Non-
+51,637
+1,611,486
+3,427,892
+325,120
+4,152
+2,534
+3,096,086
+Cash and balances with central banks
+Due from banks and other financial
+institutions (i)
+Assets:
+Total
+interest-
+bearing
+Over
+five years
+345,007
+53,262
+293,887
+adopt the advanced capital measurement approach, improve the internal capital adequacy assessment process
+(ICAAP), publicly disclose information on capital management, cover all types of material risks, and ensure stable
+operations of the Group;
+Other
+Valid portion of minority interests
+Retained profits
+General reserve
+Surplus reserve
+Valid portion of capital reserve
+Paid-in capital
+Common equity tier 1 capital
+2022
+31 December
+31 December
+2023
+The common equity tier 1 capital adequacy ratio, the tier 1 capital adequacy ratio and the capital adequacy ratio of the
+Group calculated after implementation of the advanced capital measurement approaches approved by the former CBIRC are
+as follows:
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+274 Annual Report 2023
+The capital adequacy ratios and related data of the Group are calculated based on the statutory financial statements of
+the Group prepared under the PRC GAAP. During the reporting year, the Group has complied in full with all its externally
+imposed regulatory capital requirements.
+The Group calculates the following common equity tier 1 capital adequacy ratio, the tier 1 capital adequacy ratio and the
+capital adequacy ratio in accordance with the Regulation Governing Capital of Commercial Banks (Provisional) and relevant
+requirements. The requirements pursuant to these regulations may be different from those applicable in Hong Kong SAR
+and other jurisdictions.
+According to Regulation Governing Capital of Commercial Banks (Provisional), Measures for the Assessment of Systemically
+Important Banks, Additional Regulation of Systemically Important Banks (Provisional), and the capital surcharge applied to
+global systemically important banks as required by the Basel Committee on Banking Supervision, the minimum common
+equity tier 1 capital adequacy ratio, the tier 1 capital adequacy ratio and the capital adequacy ratio of the Group shall
+not be lower than 9%, 10% and 12% respectively. In addition, overseas entities are directly regulated by local banking
+regulators, and the required capital adequacy ratios differ by countries or regions.
+3,404,032
+3,141,891
+356,407
+148,164
+Other intangible assets other than land use rights
+8,320
+8,488
+Goodwill
+20,811
+22,091
+Common equity tier 1 capital deductions
+(20,839)
+Since 1 January 2013, the Group commenced calculating the capital adequacy ratios in accordance with the Regulation
+Governing Capital of Commercial Banks (Provisional) and other relevant regulations. In April 2014, the former CBIRC
+officially approved the Bank to adopt the advanced capital management approach. Within the approved scope of risk
+exposures that meet the regulatory requirements, the Bank can adopt the foundation IRB approach for its corporate credit
+risk exposures, the IRB approach for its retail credit risk exposures, the internal model approach (IMA) for its market risk
+exposures, and the standardised approach for its operational risk exposures.
+560
+3,623
+1,766,288
+1,905,968
+496,406
+561,303
+392,162
+428,007
+148,174
+3,293
+The Group monitors the capital adequacy ratios regularly based on regulations issued by the former CBIRC. The required
+information is quarterly filed with the NFRA by the Group and the Bank.
+The Group manages its capital structure and makes adjustments in light of changes in economic conditions and the risk
+profiles of its business operations. In order to maintain or adjust the capital structure, the Group may adjust its profit
+distribution policies, issue or repurchase its own shares, eligible additional tier 1 capital instruments, eligible tier 2 capital
+instruments, or convertible bonds.
+make effective use of various capital instruments, continuously enhance capital strengths, refine the capital structure,
+improve capital quality, reduce capital costs, and maximise shareholders' returns.
+16,484
+375,452
+1,190
+6,159
+6,347,993
+172,644
+5,273,380
+62,121
+167,260
+8,304
+34,116
+6,049,400 6,589,093
+9,441,460 (2,592,876)
+(7,389,824)
+21,125,676
+17,539,353
+95,251
+2,459
+693,281
+195,459
+96,350
+64,287
+58,666
+27
+1,421
+1,168
+3,005
+3,762,490
+96,350
+8,490
+29,870,491
+12,113
+leverage on the results of quantitative assessments of material risks fully, establish a bank-wide value management
+mechanism with a core of economic capital, improve the aligned policies, processes, and applications in business
+management, strengthen the capital constraints and capital incentives mechanism, enhance the abilities of product
+pricing and decision-making support, and improve the capital allocation efficiency; and
+maintain sound capital adequacy to meet regulatory and policy requirements on capital, keep stable capital base to
+ensure the implementation of the Group's business growth and strategic plans in order to achieve comprehensive,
+balanced, and sustainable development;
+The Group has set the following capital management objectives:
+(e) Capital management
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+273
+Annual Report 2023
+569,208
+The data set out in the above table includes trading book data.
+(i) Includes reverse repurchase agreements.
+N/A
+N/A
+36,094,727
+873,923
+766,801
+1,681,663
+62,243
+648,895
+3,958,454
+905,953
+(ii) Includes repurchase agreements.
+7,473
+356,407
+(2,867)
+91,766
+31 December 2022
+Increased by 100 basis points
+Decreased by 100 basis points
+Effect on net
+Effect on
+Effect on net
+Effect on
+16,673
+Currency
+equity
+interest income
+equity
+RMB
+(29,472)
+(63,594)
+29,472
+71,723
+interest income
+USD
+Cash flow hedging reserve that relates to the hedging of items that are not fair-
+valued on the balance sheet
+Total
+(73,298)
+14,922
+84,941
+USD
+(1,320)
+(6,466)
+1,320
+6,655
+(16,673)
+HKD
+(95)
+1,439
+96
+Other
+1,008
+(20)
+(1,008)
+74
+(1,439)
+HKD
+(79,879)
+Total
+3,736,919
+Net tier 1 capital
+584
+647
+Valid portion of minority interests
+354,331
+354,915
+Additional tier 1 capital instruments and related premiums
+3,475,995
+Additional tier 1 capital
+3,381,941
+Net common equity tier 1 capital
+7,980
+7,980
+institutions that are under control but not subject to consolidation
+Investments in common equity tier 1 capital instruments issued by financial
+(2,962)
+Other
+3,121,080
+Tier 2 capital
+354,978
+354,331
+970,181
+(469)
+(4,663)
+469
+4,945
+(809)
+809
+(1,642)
+458
+(1,290)
+1,563
+(458)
+1,355
+(30,292)
+(67,984)
+30,292
+76,381
+The interest rate sensitivities set out in the tables above are for illustration only and are based on simplified scenarios. The
+figures represent the estimated movements in net interest income and equity based on the projected yield curve scenarios
+and the Group's current interest rate risk profile. This effect, however, does not incorporate actions other than hedging that
+would be taken by management to mitigate the impact of interest rate risk. The projections above also assume that interest
+rates of all maturities move by the same degree and, therefore, do not reflect the potential impact on net interest income
+and equity in the case where some rates change while others remain unchanged.
+805,084
+Financial investments measured at FVTPL
+504,918
+466,374
+Financial investments measured at FVTOCI
+Financial investments measured at amortised cost
+1,928,908
+8,592,769
+9,748,008
+1,913,887
+11,011,574
+1,209,201
+24,618,384
+686,682
+51,163
+1,144,948
+52,312
+1,357,208
+3,347,555
+3,983,898
+7,352,726
+21,761,362
+Investments in subsidiaries
+231,349
+163,283
+Due to banks and other financial institutions
+Financial investments
+145,763
+Due to central banks
+37,751,537
+42,905,245
+371,880
+458,765
+LIABILITIES
+163,283
+TOTAL ASSETS
+100,306
+103,196
+Deferred tax assets
+127,907
+123,642
+Property and equipment
+36,183
+36,042
+Investments in associates
+Other assets
+Loans and advances to customers
+(20,223)
+Net (short)/long position
+(754,849)
+(3,370,003)
+1,732,590
+247,474
+453,110
+2,433,174
+(2,002,155)
+(96,680)
+(691,849)
+(525,235)
+(2,790,684)
+1,468
+(3,292)
+12,318
+(96,126)
+158,427
+82,971
+145,272
+138,963
+3,250,269
+14,142
+(2,089,919)
+Total
+3,860,467
+Other
+1,079,851
+(158,050)
+95,216
+31,956
+(30,878)
+Net structural position
+146,012
+870
+26,781
+173,663
+Spot assets
+Spot liabilities
+Forward purchases
+Forward sales
+Net option position
+Net (short)/long position
+Net structural position
+31 December 2022
+USD
+HKD
+2,249,216
+531,400
+Reverse repurchase agreements
+2,185
+3,106,929
+52,306
+(53,571)
+Balance as at 31 December 2022
+and 1 January 2023
+356,407
+354,331 153,348 384,808
+480,285
+8,513
+(1,528)
+(3,089)
+(189)
+1,022,148
+1,624,995
+3,357,881
+Profit for the year
+Other comprehensive income
+347,516
+347,516
+17,821
+794
+(39)
+(56)
+18,520
+18,520
+Total comprehensive income
+17,821
+794
+99
+(39)
+(56) 18,520 347,516
+53,571
+(34,411)
+34,411
+53,571
+The following tables show the movement of level 3 financial assets and financial liabilities measured at fair value:
+(b) Movement of level 3 financial instruments measured at fair value
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+346,056 346,056
+Other comprehensive income
+(15,593)
+3,245
+907
+(191)
+(11,632)
+(11,632)
+Total comprehensive income
+(15,593)
+366,036
+3,245
+(191)
+(11,632)
+346,056 334,424
+Dividends-ordinary shares 2021 final
+(Note 17)
+(104,534)
+(104,534)
+Distributions to other equity instrument
+holders (Note 17)
+(14,810)
+(14,810)
+Appropriation to surplus reserve (i)
+Appropriation to general reserve
+34,411
+907
+1 January
+Dividends-ordinary shares 2022 final
+Distributions to other equity instrument
+Statement of differences between the financial statements prepared under IFRSS and
+those prepared in accordance with PRC GAAP
+There are no differences between the profit attributable to equity holders of the parent company under IFRSS and PRC
+GAAP for the year ended 31 December 2023 and 2022. There are no differences between the equity attributable to equity
+holders of the parent company under IFRSS and PRC GAAP as at 31 December 2023 and 31 December 2022.
+2.
+Currency concentrations
+31 December 2023
+USD
+HKD
+Spot assets
+2,069,540
+493,862
+(12,736)
+Other
+1,105,223
+Total
+3,668,625
+Spot liabilities
+(1,977,668)
+(583,968)
+(827,181)
+(3,388,817)
+Forward purchases
+2,555,132
+307,986
+524,807
+3,387,925
+Forward sales
+(2,784,831)
+(124,849)
+(758,157)
+(3,667,837)
+Net option position
+1.
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Information to the Consolidated Financial Statements
+283
+holders (Note 17)
+(108,169) (108,169)
+(14,964) (14,964)
+Appropriation to surplus reserve (i)
+Appropriation to general reserve
+34,981
+64,264
+34,981
+(34,981)
+64,264
+(64,264)
+Other comprehensive income carried
+forward to retained earnings
+(2)
+(Note 17)
+(2)
+Balance as at 31 December 2023
+356,407 354,331 153,348 419,789 544,549
+26,332
+(734)
+(3,128)
+(245) 1,139,911 1,750,135 3,600,784
+(i) Includes the appropriation made by overseas branches in the amount of RMB112 million (2022: RMB68 million).
+53. EVENTS AFTER THE REPORTING PERIOD
+A final dividend of RMB0.3064 (pre-tax) per share after the appropriation of statutory surplus reserve and general reserve,
+was approved at the board of directors' meeting held on 27 March 2024, and is subject to the approval of the Bank's
+shareholders at the forthcoming annual general meeting. Based on the number of ordinary shares issued as at 31 December
+2023, the final dividend amounted to approximately RMB109,203 million in total. The dividend payable was not recognised
+as a liability in the consolidated financial statements.
+54. COMPARATIVE FIGURES
+In accordance with the requirements of the New Insurance Contract standards and the Provisional Regulation Governing
+Gold Leasing Business, the Group has implemented the aforesaid requirements from 2023 onwards and adjusted certain
+comparative figures accordingly to conform to the current reporting period's presentation.
+55. APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTS
+The consolidated financial statements were approved by the board of directors on 27 March 2024.
+Annual Report 2023
+2
+Financial liabilities measured at FVTPL
+Total
+gains/(losses)
+recorded in
+profit or loss
+356,407
+356,407
+354,331
+354,331
+134,614
+134,614
+219,717
+219,717
+1,139,911
+1,022,148
+1,750,135
+1,624,995
+3,600,784
+3,357,881
+42,905,245
+37,751,537
+Liao Lin
+Chairman
+282 Annual Report 2023
+Wang Jingwu
+Executive Director
+Xu Zhisheng
+Person in charge of Finance and
+Accounting Department
+Notes to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+The statement of changes in equity of the Bank is set out below.
+Reserves
+Foreign
+Other
+Investment currency
+TOTAL LIABILITIES AND EQUITY
+TOTAL EQUITY
+Retained profits
+Reserves
+55,936
+Repurchase agreements
+Derivative financial liabilities
+Certificates of deposit
+Due to customers
+Income tax payable
+Debt securities issued
+Other liabilities
+TOTAL LIABILITIES
+EQUITY
+Share capital
+Other equity instruments
+Preference shares
+Perpetual bonds
+Cash flow
+51,234
+949,247
+400,490
+370,623
+317,123
+32,621,398
+28,986,751
+61,462
+82,932
+1,250,598
+786,799
+465,975
+451,633
+39,304,461
+34,393,656
+59,300
+2023
+Share
+Capital
+3,368
+87
+(800)
+511
+412
+3,158
+Debt securities investments
+(30,774)
+114
+14
+(9)
+515
+15
+(587)
+24
+14
+109
+measured at FVTPL
+Loans and advances to customers
+177
+886
+Derivative financial assets
+Financial assets:
+2023
+31 December
+Transfer
+in/(out) of
+level 3
+Disposals and
+settlements
+Additions
+Total effects
+in other
+comprehensive
+income
+Equity investments
+68,484
+(99)
+16,612
+Surplus
+General revaluation translation
+hedging
+Other
+Retained
+Total
+reserve
+reserve
+reserve
+reserve
+reserve
+reserve
+reserves Subtotal
+profits
+equity
+capital instruments
+equity
+356,407
+354,331
+153,348
+350,397
+426,714 24,106
+(4,773)
+(3,996)
+2
+945,798
+1,486,265 3,142,801
+Profit for the year
+74,226
+(534)
+(10,237)
+Balance as at 1 January 2022
+Financial investments measured at FVTPL
+Debt securities investments
+36,320
+11
+12
+13
+14
+15
+Cash flow hedging reserve that relates to the hedging of
+items that are not fair-valued on the balance sheet
+Shortfall of provision for loan impairment
+Gain on sales related to asset securitisation
+Unrealised gains and losses due to changes in own credit
+risk on fair-valued liabilities
+Defined-benefit pension fund net assets (net of deferred
+tax liabilities)
+286
+Annual Report 2023
+(2,867)
+those arising from temporary differences (net of
+deferred tax liabilities)
+(2,962)
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Items
+16
+17
+18
+19
+20
+21
+22
+23
+24
+Direct or indirect investments in own ordinary shares
+Reciprocal cross-holdings in common equity tier 1 capital
+between banks, or between banks and other financial
+institutions
+Deductible amount of non-significant minority investments
+in common equity tier 1 capital instruments issued
+by financial institutions that are not subject to
+consolidation
+Deductible amount of significant minority investments
+in common equity tier 1 capital instruments issued
+by financial institutions that are not subject to
+consolidation.
+X20
+Deferred tax assets that rely on future profits excluding
+10
+X16
+X14-X15
+127,335
+public reserve)
+За
+Capital reserve
+148,164
+148,174
+X19
+3b
+Other
+560
+(20,839)
+X24
+4
+Valid portion to common equity tier 1 capital during the
+transition period (only applicable to non-joint stock
+companies. Fill in 0 for joint stock banks)
+Valid portion of minority interests
+56
+3,623
+8,320
+7,473
+8,490
+Other intangible assets other than land use rights (net of
+deferred tax liabilities)
+9
+8,488
+Goodwill (net of deferred tax liabilities)
+Mortgage servicing rights
+8
+7
+Common equity tier 1 capital: Regulatory adjustments
+X25
+3,293
+3,141,891
+3,404,032
+Common equity tier 1 capital before regulatory
+adjustments
+Prudential valuation adjustments
+148,724
+Deferred tax assets arising from temporary differences
+(amount above 10% threshold, net of deferred tax
+liabilities)
+31 December
+Additional tier 1 capital instruments and related premiums
+354,331
+31
+Including: Portion classified as equity
+354,331
+354,331
+354,331
+X28+X32
+32
+Including: Portion classified as liabilities
+Annual Report 2023
+287
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+31 December
+30
+31 December
+2022
+Reference
+Items
+33
+Invalid instruments to additional tier 1 capital after the
+transition period
+34
+Valid portion of minority interests
+647
+584
+X26
+35
+Including: Invalid portion to additional tier 1 capital after
+the transition period
+36 Additional tier 1 capital before regulatory
+adjustments
+354,978
+2023
+Additional tier 1 capital:
+3,121,080
+3,381,941
+31 December
+2023
+2022
+Reference
+N/A
+N/A
+--
+N/A
+N/A
+25
+Including: Deductible amount in deferred tax assets
+arising from temporary differences
+26a
+Investments in common equity tier 1 capital instruments
+issued by financial institutions that are under control but
+not subject to consolidation
+7,980
+7,980
+X11
+26b
+Common equity tier 1 capital
+29
+20,811
+22,091
+Total regulatory adjustments to common equity tier
+1 capital
+28
+Deductible amount exceeding the 15% threshold for
+significant minority capital investments in common
+equity tier 1 capital instruments issued by financial
+institutions that are not subject to consolidation and
+undeducted portion of deferred tax assets arising from
+temporary differences (net of deferred tax liabilities)
+Including: Deductible amount of significant minority
+investments in common equity tier 1 capital
+instruments issued by financial institutions
+Including: Deductible amount of mortgage servicing
+rights
+additional tier 1 capital and tier 2 capital
+27
+capital
+Other that should be deducted from common equity tier 1
+26c
+issued by financial institutions that are under control but
+not subject to consolidation
+Shortfall in common equity tier 1 capital instruments
+Undeducted shortfall that should be deducted from
+354,915
+Accumulated other comprehensive income (and other
+X23
+0.46%
+0.48%
+0.85%
+0.82%
+The definition of overdue loans and advances to customers is as follows:
+Loans and advances to customers with a specific repayment date are classified as overdue when the principal or interest is
+overdue.
+For loans and advances to customers repayable by regular instalments, if part of the instalments is overdue, the whole
+amount of the loans and advances would be classified as overdue.
+(ii) Overdue loans and advances to customers by geographical distribution
+Head Office
+Bohai Rim
+Western China
+Central China
+Pearl River Delta
+Yangtze River Delta
+Northeastern China
+0.21%
+Overseas and other
+31 December 2023
+31 December
+31 December
+2023
+2022
+46,984
+42,383
+48,059
+45,934
+53,866
+41,139
+42,126
+39,140
+54,727
+(iii) Rescheduled loans and advances to customers
+0.24%
+Over 12 months
+Between 6 and 12 months
+167,289
+The net option position is calculated using the delta equivalent approach required by the Hong Kong Monetary Authority.
+The net structural position of the Group includes the structural positions of the Bank's overseas branches, banking
+subsidiaries and other subsidiaries substantially involved in foreign exchange transactions. Structural assets and liabilities
+include:
+property and equipment, net of depreciation charges;
+capital and statutory reserves of overseas branches; and
+investments in overseas subsidiaries, associates and joint ventures.
+284
+Annual Report 2023
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+3.
+Loans and advances to customers (excluding accrued interest)
+(i)
+Overdue loans and advances to customers
+31 December
+31 December
+2023
+2022
+Gross loans and advances to customers of the Group which have been overdue
+with respect to either principal or interest for periods of:
+0.13%
+0.15%
+As a percentage of the total gross loans and advances to customers:
+Between 3 and 6 months
+190,229
+223,188
+110,720
+48,177
+121,299
+62,917
+Over 12 months
+Between 6 and 12 months
+30,627
+38,972
+Between 3 and 6 months
+48,882
+3
+33,009
+25,550
+Items
+Common equity tier 1 capital:
+31 December
+31 December
+2023
+2022
+Reference
+1
+Paid-in capital
+356,407
+356,407
+X18
+2
+Retained earnings
+(i) Capital composition
+2,895,278
+2a
+Surplus reserve
+428,007
+392,162
+X21
+2b
+General reserve
+561,303
+496,406
+X22
+2c
+Retained profits
+1,905,968
+1,766,288
+2,654,856
+The disclosure of correspondence between balance sheet in published financial statements and capital composition is based
+on the Notice on Issuing Regulatory Documents on Capital Regulation for Commercial Banks (Yin Jian Fa, [2013] No. 33)
+Appendix 2 Notice on Enhancing Disclosure Requirements for Composition of Capital.
+Correspondence between balance sheet in published financial statements and capital
+composition
+5.
+32,754
+15,309
+330,424
+284,031
+31 December 2022
+% of total
+loans and
+advances
+to customers
+Rescheduled loans and advances to customers
+82,723
+0.32%
+26,229
+% of total
+loans and
+advances
+to customers
+0.11%
+Less: Rescheduled loans and advances to
+customers overdue for more than
+three months
+(8,575)
+The Bank is a commercial bank incorporated in Chinese mainland with its banking business primarily conducted in Chinese
+mainland. As at 31 December 2023 and 31 December 2022, substantial amounts of the Bank's exposures arose from
+businesses with entities or individuals in Chinese mainland. Analyses of various types of exposures by counterparty have
+been disclosed in the respective notes to the financial statements.
+Exposures to non-bank entities in Chinese mainland
+4.
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Annual Report 2023 285
+0.10%
+18,899
+23,948
+74,148
+overdue for less than three months
+Rescheduled loans and advances to customers
+(0.01%)
+(2,281)
+(0.03%)
+0.29%
+Additional tier 1 capital: Regulatory adjustments
+37
+Direct or indirect investments in own additional tier 1
+instruments
+53,839
+Equity investments
+362
+(63)
+(2,764)
+363
+(2)
+1
+2,827
+Debt securities investments
+Financial investments measured at FVTOCI
+36,320
+(2,163)
+(3,478)
+(1,198)
+9,164
+Funds and other investments
+68,484
+(5,744)
+14,959
+582
+58,687
+Equity investments
+3,158
+574
+74
+(2,149)
+1,111
+(218)
+3,840
+32,799
+2,677
+(6,320)
+(1,974)
+279
+Annual Report 2023
+(3,496)
+(90)
+1,189
+(354)
+(2,248)
+(1,993)
+(2,185)
+407
+1,022
+(14)
+(2,174)
+(1,426)
+Derivative financial liabilities
+(1,311)
+(497)
+47,024
+153,164
+1,223
+(1,200)
+28,464
+(21,646)
+Financial investments measured at FVTPL
+(3,662)
+Financial liabilities:
+Financial liabilities measured at FVTPL
+(567)
+(74)
+(340)
+167
+156,343
+Notes to the Consolidated Financial Statements
+60
+(111)
+519
+(3,496)
+675
+(2,185)
+Derivative financial liabilities
+(156)
+(1,311)
+Financial liabilities measured at FVTPL
+Financial liabilities:
+160,052
+(432)
+(27,565)
+29,119
+1,495
+Financial assets:
+1,092
+40,472
+(9,535)
+1,488
+1,495
+47,024
+Equity investments
+(362)
+362
+Debt securities investments
+Financial investments measured at FVTOCI
+41,357
+(6,035)
+10,484
+588
+156,343
+(595)
+224
+(1,838)
+102
+12
+106
+measured at FVTPL
+Loans and advances to customers
+886
+(36)
+(1,080)
+88
+848
+1,066
+Derivative financial assets
+2022
+31 December
+Transfer
+(out)/in of
+level 3
+Disposals and
+settlements
+Additions
+(77)
+396
+12
+(1,179)
+(672)
+620
+109
+12
+Total
+gains/(losses)
+Total effects
+1 January
+2022
+recorded in
+profit or loss
+in other
+comprehensive
+income
+(3,017)
+(In RMB millions, unless otherwise stated)
+Net gains or losses on level 3 financial instruments of the Group are set out below:
+Realised
+635,672
+528,307
+X17
+48
+Valid portion of minority interests
+1,127
+1,013
+X27
+49
+Including: Invalid portion to tier 2 capital after the
+transition period
+50
+Valid portion of surplus provision for loan impairment
+333,382
+51
+Tier 2 capital instruments and related premiums
+Invalid instruments to tier 2 capital after the transition
+period
+Tier 2 capital before regulatory adjustments
+275,764
+805,084
+X02+X04
+288
+Annual Report 2023
+Derivative financial assets
+Due from banks and other financial institutions
+Cash and balances with central banks
+ASSETS
+2022
+(restated)
+31 December
+31 December
+2023
+The statement of financial position of the Bank is set out below.
+52. STATEMENT OF FINANCIAL POSITION AND STATEMENT OF CHANGES IN EQUITY OF
+THE BANK
+(In RMB millions, unless otherwise stated)
+970,181
+47
+46
+Tier 2 capital:
+38
+Reciprocal cross-holdings in additional tier 1 capital
+between banks, or between banks and other financial
+institutions
+39
+40
+40
+Deductible amount of non-significant minority investments
+in additional tier 1 capital instruments issued by financial
+institutions that are not subject to consolidation
+Significant minority investments in additional tier 1 capital
+instruments issued by financial institutions that are not
+subject to consolidation
+--
+--
+41a
+Investments in additional tier 1 capital instruments issued
+by financial institutions that are under control but not
+subject to consolidation
+41b
+Shortfall in additional tier 1 capital instruments issued
+--
+by financial institutions that are under control but not
+subject to consolidation
+41c
+Other that should be deducted from additional tier 1
+capital
+--
+3,475,995
+3,736,919
+Tier 1 capital (common equity tier 1 capital +
+additional tier 1 capital)
+45
+354,915
+354,978
+Notes to the Consolidated Financial Statements
+Additional tier 1 capital
+capital
+Total regulatory adjustments to additional tier 1
+43
+capital
+Undeducted shortfall that should be deducted from tier 2
+42
+44
+Annual Report 2023 281
+All of the aforementioned assumptions and methods provide a consistent basis for the calculation of the fair values of the
+Group's financial assets and financial liabilities. However, other institutions may use different assumptions and methods.
+Therefore, the fair values disclosed by different financial institutions may not be entirely comparable.
+The fair values of subordinated bonds and tier 2 capital bonds issued are determined with reference to the available
+market values. If quoted market prices are not available, fair values are estimated on the basis of pricing models or
+discounted cash flows.
+Level 2
+Level 1
+Fair value
+Carrying
+amount
+31 December 2023
+There are no significant differences between the carrying amount and the fair value of financial assets and financial
+liabilities not measured at fair value, except for the following items:
+(e) Fair value of financial assets and financial liabilities not carried at fair value
+(In RMB millions, unless otherwise stated)
+Notes to the Consolidated Financial Statements
+Annual Report 2023
+280
+As at 31 December 2023, the effects of changing the significant unobservable assumptions to reasonably possible
+alternative assumptions were not significant (31 December 2022: not significant).
+Financial instruments valued with significant unobservable inputs primarily include certain structured financial derivatives,
+asset-backed securities, investment funds, unlisted equity instruments and asset management plans. These financial
+instruments are valued using discounted cash flow model, net asset value method and market comparison approach. The
+models incorporate various unobservable assumptions such as expected default rates, prepayment rates, discount rates and
+market liquidity.
+(d) Valuation of financial instruments with significant unobservable inputs
+At the end of the reporting period, certain financial instruments were transferred out from level 3 of the fair value hierarchy
+for financial assets and liabilities, when significant inputs used in their fair value measurements, which were previously
+unobservable became observable, or when there was a change in valuation technique.
+At the end of the reporting period, certain financial instruments were transferred out from level 2 to level 3 of the fair
+value hierarchy for financial assets and liabilities when significant inputs used in their fair value measurements, which were
+previously observable became unobservable.
+(ii) Transfers between level 2 and level 3
+Unrealised
+(c) Transfers between levels
+(i) Transfers between level 1 and level 2
+2023
+2022
+391
+Level 3
+(298)
+(727)
+1,611
+(1,025)
+Due to changes in market conditions for certain securities, quoted prices in active markets were available for these
+securities. Therefore, these securities were transferred from level 2 to level 1 of the fair value hierarchy as at the end of the
+reporting period.
+Due to changes in market conditions for certain securities, quoted prices in active markets were no longer available for
+these securities. However, there was sufficient information available to measure the fair values of these securities based on
+observable market inputs. Therefore, these securities were transferred from level 1 to level 2 of the fair value hierarchy as at
+the end of the reporting period.
+In 2023 and 2022, the transfers between level 1 and level 2 of the fair value hierarchy for financial assets and liabilities
+measured at fair value of the Group were not significant.
+1,220
+Funds and other investments
+Financial assets
+8,806,849
+The fair values of financial investments measured at amortised cost relating to the restructuring of the Bank are
+estimated on the basis of the stated interest rates and the consideration of the relevant special clauses of the
+instruments evaluated in the absence of any other relevant observable market data, and the fair values approximate
+to their carrying amounts. The fair values of financial investments measured at amortised cost irrelevant to the
+restructuring of the Bank are determined based on the available market values. If quoted market prices are not
+available, fair values are estimated on the basis of pricing models or discounted cash flows.
+(ii)
+(i)
+Subject to the existence of an active market, such as an authorised stock exchange, the market value is the best reflection
+of the fair value of a financial instrument. As there is no available market value for certain financial assets held and financial
+liabilities issued by the Group, discounted cash flow or other valuation methods described below are adopted to determine
+the fair values of these financial assets and financial liabilities:
+594,718
+594,718
+591,630
+Subordinated bonds and tier 2 capital bonds issued
+Financial liabilities
+181,769
+7,503,935
+42,594
+7,728,298
+7,563,132
+Financial investments measured at amortised cost
+Financial assets
+Level 3
+9,083,501
+75,260
+8,830,559
+177,682
+Financial liabilities
+Subordinated bonds and tier 2 capital bonds issued
+Financial investments measured at amortised cost
+704,129
+705,809
+31 December 2022
+Carrying
+amount
+Fair value
+Level 1
+Level 2
+705,809
+26,399
+27,494
+832
+2.5%
+At 31 December 2022
+Percentage
+Percentage
+Item
+Amount
+(%)
+Amount
+(%)
+Financial investments measured at fair value
+through profit or loss
+811,957
+6.9
+747,474
+7.1
+Financial investments measured at fair value
+through other comprehensive income
+Financial investments measured at amortised
+cost
+At 31 December 2023
+In RMB millions, except for percentages
+DISTRIBUTION OF INVESTMENT BY MEASURING METHOD
+In terms of currency structure, RMB-denominated bonds rose by RMB1,279,851 million or 13.9% over the end of last year;
+USD-denominated bonds decreased by an equivalent of RMB5,016 million or 0.9%; other foreign currency bonds increased
+by an equivalent of RMB19,322 million or 6.7%. During the reporting period, the Bank reasonably arranged the currency
+structure based on foreign-currency fund positions, in consideration of bond liquidity, security and profitability.
+USD-denominated bonds
+554,737
+4.9
+559,753
+5.6
+Other foreign currency bonds
+2,230,862
+Total
+2.7
+286,515
+2.8
+100.0
+10,063,570
+100.0
+305,837
+11,357,727
+91.6
+18.8
+21.1
+Policy bank bonds 2015
+22,495
+4.21
+Policy bank bonds 2020
+19,460
+3.23
+interest rate (%)
+In RMB millions, except for percentages
+Allowance for
+13 April 2025
+23 March 2030
+impairment
+losses(1)
+Policy bank bonds 2022
+19,408
+Maturity date
+value
+Bond name
+Annual
+8,806,849
+74.3
+7,563,132
+71.8
+Total
+11,849,668
+100.0
+10,533,702
+100.0
+Annual Report 2023
+27
+Discussion and Analysis
+As at the end of 2023, the Group held RMB1,786,784 million of financial bonds', including RMB811,946 million of policy
+bank bonds and RMB974,838 million of bonds issued by banks and non-bank financial institutions, accounting for 45.4%
+and 54.6% of financial bonds, respectively.
+TOP 10 FINANCIAL BONDS HELD BY THE BANK
+Nominal
+2,223,096
+2.77
+(%)
+92.4
+Annual Report 2023
+DISTRIBUTION OF INVESTMENT IN BONDS BY REMAINING MATURITY
+Remaining maturity
+Undated (1)
+Less than 3 months
+3 to 12 months
+26
+1 to 5 years
+Total
+Note: (1) Refers to overdue bonds.
+Discussion and Analysis
+In RMB millions, except for percentages
+At 31 December 2022
+At 31 December 2023
+Percentage
+Over 5 years
+In terms of distribution by issuers, government bonds increased by RMB1,298,422 million or 17.5% over the end of last
+year, mainly due to the increase in local government bonds and Chinese government bonds; central bank bonds decreased
+by RMB18,557 million or 32.7%; policy bank bonds went up by RMB49,737 million or 6.5%; and other bonds decreased by
+RMB35,445 million or 1.9%.
+100.0
+10,063,570
+7,422,555
+73.8
+38,260
+0.3
+56,817
+0.5
+811,946
+7.1
+762,209
+7.6
+1,786,544
+11,357,727
+15.8
+1,821,989
+18.1
+100.0
+Percentage
+Amount
+9,217,302
+Amount
+Amount
+11,357,727
+100.0
+4,347,196
+10,063,570
+43.2
+100.0
+DISTRIBUTION OF INVESTMENT IN BONDS BY CURRENCY
+At 31 December 2023
+43.6
+In RMB millions, except for percentages
+At 31 December 2022
+Percentage
+Item
+RMB-denominated bonds
+Amount
+(%)
+10,497,153
+Percentage
+4,952,134
+36.3
+3,649,538
+(%)
+117
+0.0
+284
+0.0
+690,280
+6.0
+694,517
+6.9
+1,495,238
+13.2
+1,372,035
+13.6
+4,219,958
+37.2
+(%)
+24 October 2032
+Policy bank bonds 2020
+18,041
+(191.1)
+(9,228)
+4,828
+(4,400)
+172.7
+13,654
+32,088
+7,906
+79.7
+6,620
+8,308
+14,928
+(%)
+(decrease)
+21,560
+2022
+21,042
+52.5
+Property and equipment expenses
+(0.9)
+(1,228)
+142,633
+141,405
+Staff costs
+11,046
+(%)
+In RMB millions, except for percentages
+Increase/
+(decrease)
+2022
+2023
+Item
+Operating Expenses
+Other non-interest related gains amounted to RMB32,088 million, RMB11,046 million or 52.5% higher than that of the
+previous year. Among these, the increase in net trading income was mainly due to the increase in bond investment income,
+the increase in net gains on financial investments was primarily due to the increase in net gains on financial assets measured
+at fair value through profit or loss, while other net operating expense was mainly because of the increase in net losses on
+exchange and exchange rate products.
+Growth rate
+2023
+Growth rate
+Increase/
+18,534
+Less: Fee and commission expense
+(5.4)
+(7,927)
+145,818
+137,891
+16,493
+Fee and commission income
+(311)
+3,226
+2,915
+Other
+3.0
+56
+(9.6)
+2,041
+12.4
+Net fee and commission income
+In RMB millions, except for percentages
+Total
+Other operating (expense)/income, net
+Net gains on financial investments
+Net trading income
+Item
+OTHER NON-INTEREST RELATED GAINS
+Discussion and Analysis
+21
+Annual Report 2023
+In 2023, the Bank's net fee and commission income was RMB119,357 million, representing a decrease of RMB9,968 million
+or 7.7% over last year. Affected by the volatile capital markets, changes in the investors' risk appetite, reform of public fund
+fee rate and other factors, income from personal wealth management and private banking, corporate wealth management,
+asset custody and other businesses dropped. The decreased fee rates of guarantee and commitment business resulted in a
+decline in relevant income.
+(7.7)
+(9,968)
+129,325
+119,357
+28,534
+28,822
+(288)
+(1.0)
+15,082
+3.48
+8 January 2029
+Policy bank bonds 2023
+14,615
+2.52
+Policy bank bonds 2019
+25 May 2028
+Reverse Repurchase Agreements
+Reverse repurchase agreements amounted to RMB1,224,257 million, RMB360,135 million or 41.7% higher than that at
+the end of the previous year, principally because the Bank reasonably arranged fund operation strategies based on fund
+changes and moderately increased the lending size.
+Liabilities
+The Bank fully implemented regulatory requirements, established a liability quality management system commensurate with
+the size and complexity of liabilities, and defined the management strategy and policy for liability quality that are consistent
+with the business strategy, risk appetite and overall business characteristics. As a result, the liability business maintained
+steady development. The Bank solidly carried forward the "GBC+" projects, continued to improve the coordinated ecology
+of "large, medium, small and micro enterprises and personal customers" and promoted the continued high-quality
+development of deposits in recent years. The Bank also built a multi-channel funding source mechanism including financial
+bonds and NCDs. As at the end of 2023, total liabilities reached RMB40,920,491 million, representing an increase of
+RMB4,825,764 million or 13.4% compared with the end of last year.
+1
+Financial bonds refer to the debt securities issued by financial institutions on the bond market, including bonds issued by policy banks,
+banks and non-bank financial institutions but excluding debt securities related to restructuring and central bank bonds.
+Note: (1) Excludes stage 1 allowance for impairment losses set aside in accordance with the expected credit loss model.
+26 October 2030
+3.79
+15,136
+2.96
+Policy bank bonds 2022
+17,850
+2.90
+17 April 2030
+19 August 2032
+Policy bank bonds 2019
+17,480
+3.45
+20 September 2029
+Policy bank bonds 2015
+16,493
+4.29
+7 April 2025
+Policy bank bonds 2020
+28
+76.8
+Annual Report 2023
+Amount
+54,083
+53,668
+238,698
+Total
+Other
+19.2
+713
+(415)
+3,716
+Amortisation
+5.6
+565
+10,097
+10,662
+Taxes and surcharges
+4,429
+(0.8)
+239,351
+(653)
+Item
+Percentage
+Percentage
+2022
+In RMB millions, except for percentages
+2023
+Discussion and Analysis
+Summary Geographical Segment Information
+Annual Report 2023
+22
+Income tax expense decreased by RMB5,760 million or 9.2% to RMB56,850 million as compared to the previous year. The
+effective tax rate stood at 13.47%, lower than the statutory tax rate of 25%, primarily because the interest income on
+Chinese government bonds and local government bonds were exempted from tax under the relevant tax law.
+Income Tax Expense
+In 2023, the Bank set aside the impairment losses on assets of RMB150,816 million, with a decrease of RMB31,861 million
+or 17.4% as compared to that of last year. Specifically, the impairment losses on loans were RMB143,422 million, indicating
+an increase of RMB249 million or 0.2%. Please refer to "Note 14. to the Consolidated Financial Statements: Impairment
+Losses on Assets; Note 30. to the Consolidated Financial Statements: Impairment Allowance" for details.
+Impairment Losses on Assets
+(0.3)
+(%)
+8,720,977
+(%)
+Amount
+Annual Report 2023
+23
+Discussion and Analysis
+Structure of assets
+Item
+Total loans and advances to customers
+Add: Accrued interest
+As at the end of 2023, total assets amounted to RMB44,697,079 million, RMB5,086,933 million or 12.8% higher than that
+at the end of the previous year. Specifically, total loans and advances to customers (collectively referred to as "total loans")
+increased by RMB2,876,106 million or 12.4% to RMB26,086,482 million, investment increased by RMB1,315,966 million or
+12.5% to RMB11,849,668 million, and cash and balances with central banks increased by RMB614,401 million or 17.9% to
+RMB4,042,293 million.
+Less: Allowance for impairment losses on
+loans and advances to customers
+measured at amortised cost
+2022
+56.8%
+Net loans and advances to customers
+57.0%
+26.5%
+Investment
+2023
+Assets Deployment
+In 2023, in response to the changes in external development trends, the Bank earnestly implemented macro-economic and
+financial policies and regulatory requirements, and continued to strengthen its emergency response capacity to market
+fluctuations and various risk events. The Bank dynamically optimized the aggregate amount of assets and liabilities and
+structural distribution strategy to ensure that the aggregate amount of assets and liabilities matches its market position,
+aligns to its capital level and accommodates to the demand of the real economy, and maintained a reasonable level of
+profit contribution and return on capital. The Bank adhered to the integrated development strategy of investment and
+financing, and continued to improve high-quality financial supply. The Bank insisted on the principle of taking customer
+deposits as the main funding source, built a multi-channel funding source mechanism, and steadily enhanced the support
+of liability business to asset business.
+Balance Sheet Analysis
+70,825
+16.8
+61,841
+14.6
+Northeastern China
+11,207
+2.7
+11,878
+2.8
+Overseas and other
+38,334
+9.1
+37,751
+8.8
+Note: Please see "Note 49. to the Consolidated Financial Statements: Segment Information" for details.
+26.6%
+Western China
+9.0%
+8.7%
+Net loans and advances to customers (1)
+Investment
+25,386,933
+56.8
+22,591,676
+57.0
+11,849,668
+672,224
+26.5
+26.6
+Cash and balances with central banks
+4,042,293
+9.0
+3,427,892
+8.7
+10,533,702
+53,524
+Amount
+23,210,376
+756,001
+with central banks
+(%)
+Due from banks and
+3.0%
+2.7%
+2.5%
+other financial institutions
+Reverse repurchase agreements
+Other
+2.2%
+2.5%
+At 31 December 2023
+In RMB millions, except for percentages
+At 31 December 2022
+Percentage
+(%)
+Percentage
+(%)
+Amount
+26,086,482
+56,452
+Cash and balances
+Due from banks and other financial institutions
+14.1
+13.6
+161,992
+20.1
+153,822
+18.3
+Central China
+117,206
+Bohai Rim
+14.5
+13.6
+Western China
+132,478
+16.4
+130,802
+15.5
+114,809
+13.5
+113,459
+14.3
+100.0
+842,352
+100.0
+Head Office
+24,838
+3.1
+84,257
+10.0
+Yangtze River Delta
+155,716
+19.3
+148,527
+17.6
+Pearl River Delta
+115,266
+Northeastern China
+60,079
+30,429
+29,214
+98,133
+23.1
+Pearl River Delta
+60,159
+14.3
+59,687
+22.7
+14.1
+104,324
+24.7
+95,094
+22.4
+Central China
+57,560
+Bohai Rim
+95,935
+Yangtze River Delta
+0.1
+3.5
+Overseas and other
+68,533
+8.5
+67,462
+8.0
+Profit before taxation
+421,966
+100.0
+424,720
+100.0
+Head Office
+(16,378)
+(3.9)
+257
+3.8
+1,894
+1,116,717
+1,192,532
+Please see the section headed "Discussion and Analysis Risk Management" for a detailed analysis of the Bank's loans
+and their quality.
+Annual Report 2023
+25
+Discussion and Analysis
+Investment
+In 2023, the Bank supported the implementation of the national development strategies, stepped up efforts to serve the
+real economy, actively conducted bond investments, and reasonably arranged the bond variety and term structure. As at
+the end of 2023, investment amounted to RMB11,849,668 million, representing an increase of RMB1,315,966 million or
+12.5% from the end of the previous year. Among these, bonds rose by RMB1,294,157 million or 12.9% to RMB11,357,727
+million.
+Focusing on the customers, the Bank strengthened the overall planning of personal loan business, vigorously marketed
+personal credit loan products, and continuously strengthened credit product innovation and service optimization through
+precise customer selection, proactive credit pre-approval, online real-time lending, multi-scenario access and other
+measures, so as to enhance residents' efficient and convenient credit financing experience and support sustainable recovery
+of consumption. Personal loans increased by RMB418,996 million or 5.1% from the end of last year. Specifically, personal
+consumption loans grew by RMB95,844 million, and personal business loans increased by RMB417,096 million.
+Item
+Equity instruments
+Funds and other
+Accrued interest
+Total
+At 31 December 2023
+In RMB millions, except for percentages
+At 31 December 2022
+Percentage
+Bonds
+The Bank actively contributed to the construction of a modern industrial system, continued to strengthen its support for
+manufacturing, strategic emerging industries, green finance, inclusive finance, rural revitalization and other key fields, and
+actively supported the construction of major projects in roads, railways, airports, urban rail transit, new urbanization and
+other fields. It also supported the reasonable financing needs of real estate enterprises, and increased the financial support
+for rental housing. As a result, the Bank's corporate loans in key strategic areas such as the Beijing-Tianjin-Hebei region,
+Yangtze River Delta, Guangdong-Hong Kong-Macao Greater Bay Area, Central China and Chengdu-Chongqing economic
+circle continued to grow. Corporate loans rose by RMB2,318,238 million or 16.8% from the end of last year. Specifically,
+short-term corporate loans and medium to long-term corporate loans increased by RMB530,547 million and RMB1,787,691
+million respectively.
+100.0
+23,210,376
+1.3
+232,442
+1.0
+Personal business loans
+1,347,136
+5.2
+930,040
+4.0
+Credit card overdrafts
+Total
+689,731
+26,086,482
+2.6
+640,152
+2.8
+100.0
+Percentage
+328,286
+Amount
+11,357,727
+10,533,702
+100.0
+DISTRIBUTION OF INVESTMENT IN BONDS BY ISSUERS
+Item
+Government bonds
+Central bank bonds
+Amount
+Policy bank bonds
+At 31 December 2023
+In RMB millions, except for percentages
+At 31 December 2022
+Percentage
+Percentage
+Amount
+(%)
+Other bonds
+Total
+100.0
+11,849,668
+1.1
+95.9
+Amount
+10,063,570
+(%)
+95.5
+187,835
+1.6
+190,869
+1.8
+183,391
+1.5
+168,855
+1.6
+120,715
+1.0
+110,408
+(%)
+2.5
+Personal consumption loans
+6,431,991
+24
+Annual Report 2023
+Discussion and Analysis
+Distribution of loans by business line
+O
+2023
+While maintaining stable and controllable asset quality, the Bank made every effort to enhance the adaptability of credit
+structure to the real economy, and promoted the targeted and direct credit supply. The Bank continued to increase credit
+support for key fields such as green finance, manufacturing, inclusive finance, strategic emerging industries, sci-tech
+innovation and rural revitalization. As at the end of 2023, total loans amounted to RMB26,086,482 million, RMB2,876,106
+million or 12.4% higher compared with the end of the previous year, of which, RMB denominated loans of domestic
+branches were RMB24,391,525 million, up by RMB2,908,561 million or 13.5%.
+2022
+Corporate loans
+Discounted bills
+Personal loans
+59.6%
+4.9%
+35.5%
+DISTRIBUTION OF LOANS BY BUSINESS LINE
+In RMB millions, except for percentages
+61.9%
+4.9%
+33.2%
+Loan
+Note: (1) Please see "Note 23. to the Consolidated Financial Statements: Loans and Advances to Customers".
+100.0
+3.0
+Reverse repurchase agreements
+1,224,257
+2.7
+864,122
+2.2
+Other
+1,077,211
+2.5
+1,000,222
+2.5
+Total assets
+44,697,079
+100.0
+39,610,146
+At 31 December 2022
+27.7
+At 31 December 2023
+Percentage
+46.0
+Discounted bills
+1,287,657
+4.9
+1,148,785
+4.9
+10,676,449
+Personal loans
+33.2
+8,234,625
+35.5
+Residential mortgages
+6,288,468
+24.1
+8,653,621
+47.8
+12,464,140
+Medium to long-term corporate loans
+Item
+Corporate loans
+Short-term corporate loans
+Amount
+(%)
+Amount
+(%)
+16,145,204
+61.9
+13,826,966
+59.6
+3,681,064
+14.1
+3,150,517
+13.6
+Percentage
+1,950
+Trust and agency services
+(17.1)
+Interest Average yield
+Average
+2022
+2023
+In RMB millions, except for percentages
+ANALYSIS OF THE AVERAGE YIELD OF LOANS AND ADVANCES TO CUSTOMERS BY BUSINESS LINE
+advances to customers
+4.05
+900,063
+22,246,265
+3.81
+951,845
+25,006,605
+Total loans and
+Average
+4.25
+17,508,798
+4.01
+776,403
+19,351,287
+Medium to long-term loans
+3.31
+156,622
+4,737,467
+3.10
+175,442
+5,655,318
+Short-term loans
+(%)
+income
+743,441
+Interest Average yield
+Item
+balance
+3.81
+951,845
+25,006,605
+Total loans and
+5.80
+75,477
+1,300,743
+Overseas business
+4.23
+348,029
+8,225,400
+Personal loans
+1.79
+15,546
+866,735
+1.47
+17,341
+income
+(%)
+balance
+income
+(%)
+Corporate loans
+balance
+14,300,597
+3.57
+12,091,996
+467,313
+3.86
+Discounted bills
+1,179,865
+510,998
+(%)
+income
+balance
+Liabilities
+126,365
+(33,372)
+159,737
+Changes in interest income
+25,032
+16,430
+8,602
+Due from banks and other financial institutions
+8,390
+4,487
+3,903
+Due from central banks
+41,161
+(898)
+42,059
+Investment
+806,458
+Discussion and Analysis
+ANALYSIS OF CHANGES IN INTEREST INCOME AND EXPENSE
+Item
+Assets
+In RMB millions
+Deposits
+Comparison between 2023 and 2022
+Increase/(decrease) due to
+Net increase/
+(decrease)
+Interest rate
+Loans and advances to customers
+105,173
+(53,391)
+51,782
+Volume
+7,920,324
+1,367,210
+22,246,265
+Due to banks and other financial institutions
+Changes in interest expenses
+Item
+Interest Average yield
+Average
+Average yield
+Interest
+Average
+2022
+2023
+In RMB millions, except for percentages
+ANALYSIS OF THE AVERAGE YIELD OF LOANS AND ADVANCES TO CUSTOMERS BY MATURITY STRUCTURE
+Interest income on loans and advances to customers was RMB951,845 million, RMB51,782 million or 5.8% higher as
+compared to that of last year, mainly due to the increase of 12.4% in the average balance of loans and advances to
+customers, and the decrease of 24 basis points in the average yield partially offset the effect of scale growth.
+Interest Income on Loans and Advances to Customers
+Interest Income
+Changes in volume are measured by the changes in average balances, while the changes in interest rate are measured by the
+changes in average interest rates. Changes resulted from the combination of volume and interest rate have been allocated to the
+changes resulted from business volume.
+(36,972)
+(104,661)
+67,689
+Changes in net interest income
+Note:
+71,295
+38,310
+109,605
+6,615
+Debt securities and certificates of deposit issued
+26,182
+14,138
+6,797
+20,935
+92,048
+71,289
+163,337
+32,797
+371,718
+Operating income
+45,486
+Settlement, clearing business and
+(%)
+Growth rate
+In RMB millions, except for percentages
+Increase/
+(decrease)
+2022
+2023
+Item
+NET FEE AND COMMISSION INCOME
+In 2023, non-interest income was RMB151,445 million, which was RMB1,078 million or 0.7% higher than that of last year,
+accounting for 18.8% of the operating income. Specifically, net fee and commission income decreased by RMB9,968 million
+or 7.7% to RMB119,357 million, and other non-interest related gains rose by RMB11,046 million or 52.5% to RMB32,088
+million.
+Non-interest Income
+Interest expense on debt securities and certificates of deposits issued was RMB56,809 million, indicating an increase of
+RMB20,935 million or 58.4% over last year, mainly due to the increased scale of the negotiable certificates of deposit
+("NCDs") and the rising interest rates of debt securities, such as certificates of deposit, issued by overseas institutions.
+Interest Expense on Debt Securities and Certificates of Deposit Issued
+Discussion and Analysis
+Annual Report 2023
+20
+20
+Interest expense on due to banks and other financial institutions was RMB103,529 million, RMB32,797 million or 46.4%
+higher than that of last year, principally attributable to the increase in the interest rates of foreign-currency borrowing
+funds.
+269,969
+Overseas business
+1,066,762
+Total deposits
+31,141,446
+47,006
+589,688
+45,418
+1.76 13,149,079
+4.41 1,006,596
+1.89 27,364,627
+1.83
+21,434
+2.13
+480,083
+1.75
+Interest Expense on Due to Banks and Other Financial Institutions
+240,614
+15,342,455
+45,439
+(0.0)
+4.69
+(1,507)
+8,803
+7,296
+Guarantee and commitment business
+(8.2)
+(715)
+8,709
+7,994
+Asset custody business
+(16.9)
+(2,402)
+14,172
+11,770
+Corporate wealth management services
+1.0
+170
+Personal wealth management and
+22,582
+26,253
+(3,671)
+(14.0)
+private banking services
+(21)
+Investment banking business
+19,586
+474
+2.4
+Bank card business
+17,906
+17,736
+20,060
+Subtotal
+cash management
+17,007
+(%)
+Average cost
+2022
+Interest
+expense
+balance
+(%)
+expense
+balance
+Item
+Average
+Average cost
+Interest
+Average
+2023
+In RMB millions, except for percentages
+Interest expense on deposits amounted to RMB589,688 million, representing an increase of RMB109,605 million or 22.8%
+over the previous year, primarily due to the increase of 13.8% in the average balance of due to customers and rise of 14
+basis points in the average cost.
+Interest Expense on Deposits
+Interest Expense
+900,063
+3.33
+0.31
+4.05
+advances to customers
+Annual Report 2023
+Corporate deposits
+19
+Interest Income on Investment
+Interest income on investment amounted to RMB338,267 million, representing an increase of RMB41,161 million or 13.9%
+as compared to that of last year, mainly due to the increase of 14.4% in the average balance of investment.
+Interest Income on Due from Central Banks
+Interest income on due from central banks was RMB53,815 million, representing an increase of RMB8,390 million or 18.5%
+as compared to that of last year, principally due to the rising average interest rate of due from overseas central banks and
+the increased size of due from domestic central bank.
+Interest Income on Due from Banks and Other Financial Institutions
+Interest income on due from banks and other financial institutions was RMB61,112 million, representing an increase of
+RMB25,032 million or 69.4% as compared to that of last year, primarily due to the rising interest rate of foreign-currency
+lending funds.
+Discussion and Analysis
+Time deposits
+ANALYSIS OF AVERAGE DEPOSIT COST BY PRODUCTS
+199,149
+218,035
+1.65
+Personal deposits
+Time deposits
+9,535,044
+2.67
+13,208,952
+7,742,072
+2.89
+Demand deposits
+5,807,411
+7,503,647
+15,135
+0.26
+223,607
+1.85
+254,834
+272,713
+2.65
+5,803,074
+150,011
+2.59
+Demand deposits
+7,228,582
+73,564
+5,407,007
+7,405,878
+68,024
+0.92
+Subtotal
+14,732,229
+1.02
+Annual Report 2023 289
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Items
+Valid caps of surplus provision for loan impairment
+in tier 2 capital
+31 December
+2022
+X01
+2023
+Reference
+31,195
+Provision for loan impairment under the weighted
+approach
+36,710
+31 December
+76
+73
+103,831
+72
+77
+Undeducted portion of non-significant minority
+182,842
+176,987
+investments in capital instruments issued by financial
+institutions that are not subject to consolidation
+Undeducted portion of significant minority investments in
+capital instruments issued by financial institutions that
+are not subject to consolidation
+X05+X07+X08+
+X09+X12+X29+
+N/A
+101,072
+X30
+30,838
+X06+X10+X13
+74
+Mortgage servicing rights (net of deferred tax liabilities)
+N/A
+75
+Deferred tax assets arising from temporary differences (net
+of deferred tax liabilities)
+29,712
+Valid cap of surplus provision for loan impairment in tier 2
+capital under the weighted approach
+consolidation*
+19,820
+38,000
+38,000
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+(ii) Consolidated financial statements
+31 December 2023 31 December 2023 31 December 2022
+Consolidated
+balance sheet
+as in published
+financial
+statements*
+290 Annual Report 2023
+Balance sheet
+scope of
+Consolidated
+balance sheet
+as in published
+financial
+statements*
+31 December 2022
+Balance sheet
+under
+regulatory
+Amounts below the thresholds for deduction
+under
+regulatory
+5,427
+Valid cap to common equity tier 1 capital instruments for
+the current period due to phase-out arrangements
+Excluded from common equity tier 1 capital due to cap
+Valid cap to additional tier 1 capital instruments for the
+current period due to phase-out arrangements
+Excluded from additional tier 1 capital due to cap
+Valid cap to tier 2 capital instruments for the current
+period due to phase-out arrangements
+Excluded from tier 2 capital for the current period due to
+cap
+84
+X02
+78
+Surplus provision for loan impairment under the internal
+ratings-based approach
+719,291
+641,029
+X03
+79
+85
+Valid cap of surplus provision for loan impairment in tier 2
+capital under the internal ratings-based approach
+255,944
+X04
+Capital instruments subject to phase-out arrangements
+80
+81
+82
+83
+327,955
+8.0%
+Reciprocal cross-holdings in tier 2 capital between banks,
+or between banks and other financial institutions
+Deductible portion of non-significant minority investments
+in tier 2 capital instruments issued by financial
+institutions that are not subject to consolidation
+Significant minority investments in tier 2 capital
+6.0%
+--
+56c
+57
+58
+Other that should be deducted from tier 2 capital
+Total regulatory adjustments to tier 2 capital
+Tier 2 capital
+970,181
+805,084
+59
+Total capital (tier 1 capital+ tier 2 capital)
+4,707,100
+4,281,079
+60 Total risk-weighted assets
+24,641,631
+22,225,272
+Requirements for capital adequacy ratio and reserve capital
+- X31
+Reference
+2022
+2023
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Items
+Tier 2 capital: Regulatory adjustments
+52
+53
+54
+55
+61
+56a
+Direct or indirect investments in own tier 2 instruments
+scope of
+consolidation*
+instruments issued by financial institutions that are not
+subject to consolidation
+Investments in tier 2 capital instruments issued by financial
+institutions that are under control but not subject to
+consolidation
+Shortfall in tier 2 capital instruments issued by financial
+institutions that are under control but not subject to
+consolidation
+31 December
+31 December
+56b
+Common equity tier 1 capital adequacy ratio
+13.72%
+14.04%
+Including: G-SIB buffer requirements
+1.5%
+1.5%
+68 Percentage of common equity tier 1 capital meeting
+buffers to risk-weighted assets
+8.72%
+9.04%
+Domestic minima for regulatory capital
+67
+69
+70
+Tier 1 capital adequacy ratio
+71
+Capital adequacy ratio
+5.0%
+5.0%
+6.0%
+Common equity tier 1 capital adequacy ratio
+8.0%
+Including: Countercyclical buffer requirements
+868
+62
+Tier 1 capital adequacy ratio
+15.17%
+15.64%
+63
+Capital adequacy ratio
+19.10%
+66
+19.26%
+Institution specific buffer requirements
+4.0%
+4.0%
+65
+Including: Capital conservation buffer requirements
+2.5%
+2.5%
+64
+Assets
+274,839
+4,042,293
+62,859
+62,716
+64,287
+64,126
+Derivative financial liabilities
+76,251
+76,251
+96,350
+96,350
+Repurchase agreements
+1,018,106
+1,007,607
+574,778
+573,279
+Certificates of deposit
+Financial liabilities measured at FVTPL
+522,811
+522,811
+528,473
+44,697,079
+44,387,457
+39,610,146
+39,336,059
+Total assets
+Liabilities
+Due to central banks
+385,198
+231,374
+2,841,385
+231,374
+2,841,385
+145,781
+2,664,901
+145,781
+2,664,901
+Placements from banks and other financial
+institutions
+528,473
+Due to banks and other financial institutions
+328,398
+385,198
+375,452
+3,930
+Other liabilities
+Total liabilities
+750,603
+40,920,491
+3,857
+465,166
+40,619,849
+3,950
+718,486
+36,094,727
+3,706
+462,600
+35,831,369
+Annual Report 2023
+291
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Equity
+Deferred tax liabilities
+900,807
+905,953
+1,364,630
+Due to customers
+33,521,174
+33,522,328
+29,870,491
+29,870,491
+Employee benefits payable
+52,098
+375,452
+51,693
+49,034
+Taxes payable
+79,263
+79,171
+102,074
+102,031
+Debt securities issued
+49,413
+330,341
+385,866
+395,982
+Derivative financial assets
+75,339
+75,339
+87,205
+87,205
+Reverse repurchase agreements
+1,224,257
+1,216,562
+864,122
+858,304
+Loans and advances to customers
+25,386,933
+25,386,933
+22,591,676
+22,591,551
+826,799
+826,799
+702,459
+702,459
+4,042,293
+3,427,892
+3,427,892
+Due from banks and other financial
+institutions
+414,258
+378,539
+Financial investments
+365,733
+Precious metals
+139,425
+139,425
+123,858
+123,858
+Placements with banks and other financial
+institutions
+323,131
+11,849,668
+11,586,558
+10,533,702
+7,549,344
+64,778
+72,758
+65,790
+73,858
+272,832
+272,738
+7,563,132
+274,771
+24,156
+17,072
+17,002
+104,669
+103,831
+101,117
+101,072
+24,186
+Cash and balances with central banks
+8,787,988
+Other assets
+10,302,218
+Financial investments measured at FVTPL
+811,957
+686,139
+747,474
+Financial investments measured at FVTOCI
+2,230,862
+8,806,849
+2,112,431
+637,851
+2,115,023
+Financial investments measured at
+amortised cost
+Long-term equity investments
+Fixed assets
+Construction in progress
+Deferred tax assets
+2,223,096
+1,369,777
+Non-compliant transitioned features
+Position in subordination hierarchy in liquidation (specify
+instrument type immediately senior to instrument)
+Undated additional tier 1
+capital bonds (Domestic)
+The Bank
+1928018
+Unique identifier
+Governing law(s) of the instrument
+The creation and issue of the
+Offshore Preference Shares
+and the rights and obligations
+(including non-contractual rights
+and obligations) attached to them
+are governed by, and shall be
+construed in accordance with, PRC
+law
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents/China
+Undated additional tier 1
+capital bonds (Domestic)
+The Bank
+2128021
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents/China
+Undated additional tier 1
+capital bonds (Offshore)
+The Bank
+Regulation S ISIN: XS2383421711
+The Notes and any other non-
+contractual obligations arising out
+of or in connection with them shall
+be governed by and construed
+in accordance with English law.
+However, the provisions in the
+terms and conditions of the Notes
+relating to subordination of the
+Notes shall be governed by and
+construed in accordance with PRC
+law and regulations
+Regulatory treatment
+Additional tier 1 capital
+Additional tier 1 capital
+Additional tier 1 capital
+Additional tier 1 capital
+(Offshore)
+The Bank
+4620
+Main features of regulatory capital instruments
+Issuer
+Preference shares
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+Position in subordination hierarchy in liquidation
+(specify instrument type immediately senior to
+instrument)
+Subordinated to depositor,
+general creditor, creditor of the
+subordinated debts and preference
+shareholders
+Additional tier 1 capital
+Non-compliant transitioned features
+No
+N/A
+Subordinated to depositor,
+general creditor, creditor of the
+subordinated debts and preference
+shareholders
+No
+N/A
+Subordinated to deposits, general
+debts, subordinated debts, tier
+2 capital bonds and undated
+additional tier 1 capital bonds
+No
+N/A
+Subordinated to deposits, general
+debts, subordinated debts, tier
+2 capital bonds and undated
+additional tier 1 capital bonds
+No
+Including: If yes, specify non-compliant features
+Additional tier 1 capital
+Additional tier 1 capital
+Additional tier 1 capital
+Other equity
+24 September 2021
+296 Annual Report 2023
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Main features of regulatory capital instruments
+Perpetual or dated
+Including: Original maturity date
+Issuer call (subject to prior supervisory approval)
+Including: Optional call date, contingent call dates and
+redemption amount
+4 June 2021
+Including: Subsequent call dates, if applicable
+(Offshore)
+Undated additional tier 1
+capital bonds (Domestic)
+Undated additional tier 1
+capital bonds (Domestic)
+Undated additional tier 1
+capital bonds (Offshore)
+Perpetual
+No maturity date
+Yes
+Perpetual
+No maturity date
+Yes
+Preference shares
+N/A
+26 July 2019
+Other equity
+Governing Capital of Commercial Banks (Provisional)
+Including: Eligible to the parent company/group level
+Instrument type
+Amount recognised in regulatory capital
+(in millions, as at the latest reporting date)
+Par value of instrument (in millions)
+Parent company/Group
+Additional tier 1 capital instrument
+RMB equivalent 19,687
+Parent company/Group
+Additional tier 1 capital instrument
+Parent company/Group
+Additional tier 1 capital instrument
+Parent company/Group
+23 September 2020
+RMB79,987
+Additional tier 1 capital instrument
+RMB equivalent 39,742
+Accounting treatment
+Original date of issuance
+USD2,900
+Other equity
+RMB80,000
+RMB70,000
+USD6,160
+Other equity
+RMB69,992
+N/A
+N/A
+N/A
+and 22 November 2025
+Yes
+Fully discretionary
+Yes
+Fully discretionary
+No
+No
+Non-cumulative
+rate) between 23 November 2020
+Yes
+Yes
+Additional Tier 1
+Capital Trigger Event or
+Tier 2 Capital Trigger Event
+Fully or partially convertible when
+an Additional Tier 1 Capital Trigger
+Event occurs;
+fully convertible when a Tier 2
+Capital Trigger Event occurs
+The initial conversion price is equal
+to the average trading price of
+the A shares of the Bank for the
+20 trading days preceding 25 July
+2014, the date of publication of
+the Board resolution in respect of
+the issuance plan
+Mandatory
+Additional Tier 1
+Capital Trigger Event or
+Tier 2 Capital Trigger Event
+Non-cumulative
+Fully or partially convertible when
+an Additional Tier 1 Capital Trigger
+Event occurs;
+fully convertible when a Tier 2
+Capital Trigger Event occurs
+The initial conversion price is equal
+to the average trading price of the
+A shares of the Bank for the 20
+trading days preceding 30 August
+2018, the date of publication of
+the Board resolution in respect of
+N/A
+M.
+Non-cumulative
+No
+N/A
+Including: If convertible, fully or partially
+N/A
+MA
+N/A
+Fully discretionary
+conversion
+No
+No
+N/A
+N/A
+Including: If convertible, conversion rate
+N/A
+N/A
+Including: If convertible, mandatory or optional
+N/A
+Non-cumulative
+Perpetual
+No maturity date
+the issuance plan
+Annual Report 2023
+N/A
+MA
+N/A
+The Bank
+The Bank
+=
+No
+No
+Common equity tier 1 capital
+=
+=
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+N/A
+No
+Mandatory
+Common equity tier 1 capital
+N/A
+295
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Main features of regulatory capital instruments
+Including: If convertible, specify instrument type
+convertible into
+Including: If convertible, specify issuer of instrument it
+converts into
+Write-down feature
+N/A
+Including: If write-down, write-down trigger(s)
+Including: If write-down, permanent or temporary
+Including: If temporary write-down, description of
+write-up mechanism
+Ordinary shares
+(A share)
+Ordinary shares
+(H share)
+Preference shares
+(Domestic)
+Preference shares
+(Domestic)
+NA
+Including: If write-down, full or partial
+No
+Perpetual
+No maturity date
+Yes
+Including: If temporary write-down, description of
+write-up mechanism
+Annual Report 2023
+298
+Parent company/Group
+Tier 2 capital instrument
+Tier 2 capital instrument
+Tier 2 capital instrument
+Parent company/Group
+Parent company/Group
+Parent company/Group
+Additional tier 1 capital instrument
+Instrument type
+Governing Capital of Commercial Banks (Provisional)
+Including: Eligible to the parent company/group level
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Additional tier 1 capital
+Including: Post-transition arrangement of Regulation
+Tier 2 capital
+Including: If write-down, permanent or temporary
+N/A
+Including: If write-down, full or partial
+Event
+Annual Report 2023
+297
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Main features of regulatory capital instruments
+Write-down feature
+Preference shares
+(Offshore)
+Undated additional tier 1
+capital bonds (Domestic)
+Undated additional tier 1
+capital bonds (Domestic)
+Tier 2 capital
+Undated additional tier 1
+No
+Yes
+Including: If write-down, write-down trigger(s)
+N/A
+Additional Tier 1 Capital Trigger
+Event or Tier 2 Capital Trigger
+Yes
+Non-viability Trigger Event
+Yes
+Non-viability Trigger Event
+capital bonds (Offshore)
+Tier 2 capital
+Additional tier 1 capital
+Including: Transition arrangement of Regulation
+Governing Capital of Commercial Banks (Provisional)
+No
+No
+No
+Subordinated to deposits, general
+debts, subordinated debts and tier
+2 capital bonds
+Subordinated to deposits, general
+debts, subordinated debts and tier
+2 capital bonds
+Subordinated to deposits, general
+debts, subordinated debts and tier
+2 capital bonds
+Permanent write-down
+N/A
+Permanent write-down
+N/A
+N/A
+occurs
+Full or partial write-down when a
+Non-viability Trigger Event occurs
+Permanent write-down
+N/A
+Full or partial write-down when an
+Additional Tier 1 Capital Trigger
+Event occurs; full write-down
+when a Tier 2 Capital Trigger Event
+No
+N/A
+Subordinated to deposits, general
+debts, subordinated debts, tier
+2 capital bonds and undated
+additional tier 1 capital bonds
+N/A
+N/A
+Including: If yes, specify non-compliant features
+Full or partial write-down when a
+Non-viability Trigger Event occurs
+converts into
+N/A
+Main features of regulatory capital instruments
+Issuer
+Regulatory treatment
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+The Bank
+1928007
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Tier 2 capital bonds
+Tier 2 capital bonds
+The Bank
+1928006
+N/A
+law
+except that the provisions of the
+Notes relating to subordination
+Tier 2 capital bonds
+The Bank
+Rule 144A ISIN: US455881AD47
+Regulation S ISIN: USY39656AC06
+The Notes and the Fiscal Agency
+Agreement shall be governed
+by, and shall be construed in
+accordance with New York law,
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents/China
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Governing law(s) of the instrument
+The Bank
+2128044
+Unique identifier
+Undated additional tier 1
+capital bonds (Domestic)
+shall be governed by, and
+construed in accordance with PRC
+N/A
+N/A
+N/A
+3.58% (dividend rate) before 23 4.45% (interest rate) before 30 July 4.04% (interest rate) before 8 June
+September 2025
+2024
+2026
+3.20% (interest rate) before 24
+September 2026
+Yes
+Yes
+Fixed to floating
+Yes
+Fully discretionary
+Fully discretionary
+Fully discretionary
+Fully discretionary
+No
+No
+No
+No
+Yes
+Including: Non-cumulative or cumulative
+Fixed to floating
+Fixed to floating
+The First Redemption Date is 23
+September 2025, in full or
+partial amount
+23 September in each year
+after
+the First Redemption Date
+The First Redemption Date is 30
+July 2024, in full or
+partial amount
+Redemption of present bonds in
+full or in part on each Distribution
+Payment Date since the First
+Redemption Date (30 July 2024).
+The Issuer has the right to
+redeem the present bonds in full
+rather than in part if the present
+bonds are no longer qualified as
+additional tier 1 capital after they
+are issued due to unpredictable
+changes in regulatory rules
+The First Redemption Date is 8 June
+2026, in full or
+partial amount
+Redemption of present bonds in
+full or in part on each Distribution
+Fixed to floating
+Payment Date since the First
+Redemption Date (8 June 2026).
+The First Redemption Date is 24
+September 2026, in full or
+partial amount
+Redemption of present bonds in
+full or in part on each Distribution
+Payment Date since the First
+Redemption Date (24 September
+2026). The Issuer has the right to
+redeem the present bonds in full
+rather than in part if the present
+bonds are no longer qualified as
+additional tier 1 capital after they
+are issued due to unpredictable
+changes in regulatory rules
+Coupons/dividends
+Including: Fixed or floating dividend/coupon
+Including: Coupon rate and any related index
+Including: Existence of a dividend stopper
+Including: Fully discretionary, partially discretionary or
+mandatory cancellation of coupons/dividends
+Including: Redemption incentive mechanism
+The Issuer has the right to
+redeem the present bonds in full
+rather than in part if the present
+bonds are no longer qualified as
+additional tier 1 capital after they
+are issued due to unpredictable
+changes in regulatory rules
+Yes
+Non-cumulative
+Non-cumulative
+N/A
+NA
+H shares of the Bank for the 20
+trading days preceding 30 August
+2018, the date of publication of
+the Board resolution in respect of
+the issuance plan
+Including: If convertible, mandatory or optional
+Mandatory
+N/A
+NA
+N/A
+conversion
+Including: If convertible, specify instrument type
+convertible into
+Common equity tier 1 capital
+N/A
+N/A
+N/A
+Including: If convertible, specify issuer of instrument it
+The Bank
+N/A
+Non-cumulative
+N/A
+NA
+Non-cumulative
+Convertible or non-convertible
+Yes
+No
+No
+No
+Including: If convertible, conversion trigger(s)
+Non-viability Trigger Event
+N/A
+N/A
+N/A
+Including: If convertible, fully or partially
+Fully or partially convertible when a
+N/A
+N/A
+N/A
+Including: If convertible, conversion rate
+Non-viability Trigger Event occurs
+The initial conversion price is equal
+to the average trading price of the
+N/A
+Including: If convertible, conversion trigger(s)
+Including: Transition arrangement of Regulation
+Governing Capital of Commercial Banks (Provisional)
+Including: Post-transition arrangement of Regulation
+Including: Non-cumulative or cumulative
+Annual Report 2023
+163,171
+X08
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Items
+Financial investments measured at FVTOCI
+Including: Non-significant minority investments in common equity tier 1 capital
+instruments issued by financial institutions that are not subject to
+consolidation
+Including: Significant minority investments in common equity tier 1 capital
+instruments issued by financial institutions that are not subject to
+consolidation
+292
+Including: Non-significant minority investments in tier 2 capital instruments
+issued by financial institutions that are not subject to consolidation
+Financial investments measured at amortised cost
+issued by financial institutions that are not subject to consolidation
+Including: Significant minority investments in tier 2 capital instruments issued by
+financial institutions that are not subject to consolidation
+Long-term equity investments
+Including: Investments in common equity tier 1 capital instruments issued
+by financial institutions that are under control but not subject to
+consolidation
+Including: Undeducted portion of non-significant minority investments in capital
+instruments issued by financial institutions that are not subject to
+consolidation
+31 December 2023
+Balance sheet
+under regulatory
+scope of
+consolidation
+2,112,431
+Including: Non-significant minority investments in tier 2 capital instruments
+Reference
+Including: Non-significant minority investments in tier 2 capital instruments
+issued by financial institutions that are not subject to consolidation
+X07
+25,386,933
+26,142,934
+Reference
+36,710
+X01
+5,427
+X02
+719,291
+Including: Non-significant minority investments in additional tier 1 capital
+instruments issued by financial institutions that are not subject to
+consolidation
+X03
+X04
+686,139
+50
+X05
+Including: Significant minority investments in common equity tier 1 capital
+instruments issued by financial institutions that are not subject to
+consolidation
+166
+X06
+176
+327,955
+scope of
+consolidation
+16,623
+2,265
+X15
+Other receivables
+200,712
+Goodwill
+8,488
+X16
+Long-term deferred expenses
+7,060
+14,364
+Repossessed assets
+Other
+139,895
+Debt securities issued
+1,364,630
+Including: Valid portion of tier 2 capital instruments and their premiums
+635,672
+X17
+Share capital
+3,432
+X09
+Including: Land use rights
+22,854
+X10
+X29
+8,787,988
+X30
+X31
+72,758
+7,980
+X11
+X14
+2,822
+Including: Undeducted portion of significant minority investments in capital
+instruments issued by financial institutions that are not subject to
+consolidation
+27,281
+X13
+Other assets
+385,866
+Interest receivable
+3,425
+Intangible assets
+X12
+356,407
+31 December 2023
+Balance sheet
+under regulatory
+Financial investments measured at FVTPL
+354,331
+354,331
+354,331
+Preference shares
+134,614
+134,614
+134,614
+134,614
+354,331
+Perpetual bonds
+219,717
+219,717
+219,717
+Capital reserve
+148,164
+148,164
+148,174
+148,174
+219,717
+Other comprehensive income
+Other equity instruments
+356,407
+31 December 2023 31 December 2023 31 December 2022 31 December 2022
+Consolidated
+balance sheet
+as in published
+financial
+statements*
+Balance sheet
+under
+regulatory
+scope of
+356,407
+consolidation*
+financial
+statements*
+Balance sheet
+under
+regulatory
+scope of
+consolidation*
+Share capital
+356,407
+356,407
+Consolidated
+balance sheet
+as in published
+Including: Non-significant minority investments in common equity tier 1 capital
+instruments issued by financial institutions that are not subject to
+consolidation
+(4,078)
+(23,756)
+Minority interests
+Total equity
+19,701
+3,776,588
+12,868
+3,767,608
+19,310
+3,515,419
+11,761
+3,504,690
+(*) Prepared in accordance with PRC GAAP.
+3,492,929
+(iii) Description of related items
+Loans and advances to customers
+Total loans and advances to customers
+Less: Provision for loan impairment under the weighted approach
+Including: Valid cap of surplus provision for loan impairment
+in tier 2 capital under the weighted approach
+Less: Provision for loan impairment under the internal ratings-based approach
+Including: Valid cap of surplus provision for loan impairment in
+tier 2 capital under the internal ratings-based approach
+Financial investments
+Items
+560
+3,496,109
+3,756,887
+(20,839)
+Surplus reserve
+428,359
+428,007
+Convertible or non-convertible
+392,162
+General reserve
+561,637
+3,754,740
+561,303
+496,406
+Retained profits
+1,912,067
+1,905,968
+1,771,747
+1,766,288
+Equity attributable to equity holders of the
+parent company
+496,719
+X18
+392,487
+354,331
+RMB69,981
+(in millions, as at the latest reporting date)
+Par value of instrument (in millions)
+RMB269,612
+RMB86,795
+RMB45,000
+RMB70,000
+Other equity
+RMB44,947
+Other equity
+18 November 2015
+19 September 2019
+Perpetual
+No maturity date
+Yes
+Accounting treatment
+Share capital, capital reserve
+Share capital, capital reserve
+19 October 2006
+Original date of issuance
+RMB170,503
+Amount recognised in regulatory capital
+Parent company/Group
+294
+Annual Report 2023
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Main features of regulatory capital instruments
+Ordinary shares
+(A share)
+Ordinary shares
+(H share)
+Preference shares
+RMB342,731
+Preference shares
+Instrument type
+Common equity tier 1
+capital instrument
+Common equity tier 1
+capital instrument
+capital instrument
+Additional tier 1
+(Domestic)
+Additional tier 1
+capital instrument
+(Domestic)
+Parent company/Group
+19 October 2006
+Perpetual
+date of redemption or
+conversion of all the
+Domestic Preference Shares
+Coupons/dividends
+Including: Fixed or floating dividend/coupon
+Floating
+Floating
+Fixed to floating
+Fixed to floating
+Including: Coupon rate and any related index
+Commences on the First
+Redemption Date (24 September
+2024) and ends on the completion
+N/A
+4.5% (dividend rate) before 23
+November 2020, 4.58% (dividend
+4.2% (dividend rate) before 24
+September 2024
+Including: Existence of a dividend stopper
+Including: Fully discretionary, partially discretionary or
+N/A
+Fully discretionary
+mandatory cancellation of coupons/dividends
+Including: Redemption incentive mechanism
+Other equity instruments
+N/A
+Perpetual or dated
+partial amount
+The First Redemption Date is 24
+Perpetual
+Including: Original maturity date
+No maturity date
+No maturity date
+Issuer call (subject to prior supervisory approval)
+No
+No
+Including: Optional call date, contingent call dates and
+September 2024, in full or
+N/A
+redemption amount
+Including: Subsequent call dates, if applicable
+N/A
+NA
+N/A
+partial amount
+Commences on the First
+Redemption Date (18 November
+2020) and ends on the completion
+date of redemption or
+conversion of all the
+Domestic Preference Shares
+Perpetual
+No maturity date
+Yes
+N/A
+Parent company/Group
+The First Redemption Date is 18
+November 2020, in full or
+Governing Capital of Commercial Banks (Provisional)
+Including: Eligible to the parent company/group level
+General reserve
+Retained profits
+Minority interests
+Including: Valid portion of common equity tier 1 capital
+Including: Valid portion of additional tier 1 capital
+Including: Valid portion of tier 2 capital
+(iv) Main features of eligible capital instruments
+Main features of regulatory capital instruments
+Surplus reserve
+Issuer
+Governing law(s) of the instrument
+Regulatory treatment
+31 December 2023
+Balance sheet
+under regulatory
+scope of
+consolidation
+Reference
+560
+X24
+21,160
+Unique identifier
+(2,901)
+Other
+Changes in share of other owners' equity of associates and joint ventures
+Including: Preference shares
+Parent company/Group
+134,614
+X28
+Including: Perpetual bonds
+219,717
+X32
+Capital reserve
+Foreign currency translation reserve
+148,164
+Annual Report 2023
+293
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Other comprehensive income
+Reserve for changes in fair value of financial assets
+Reserve for cash flow hedging
+Including: Cash flow hedging reserve that relates to the hedging of items that
+are not fair-valued on the balance sheet
+X19
+(2,867)
+Items
+(748)
+The Bank
+1398
+Securities and Futures Ordinance of
+Hong Kong/Hong Kong SAR, China
+Preference shares
+(Domestic)
+The Bank
+360011
+Preference shares
+(Domestic)
+The Bank
+360036
+Company Law of the People's
+Republic of China, Securities Law
+of the People's Republic of China,
+Guidance of the State Council on
+Launch of Preference Shares Pilot,
+Trial Administrative Measures on
+Preference Shares, Guidance on the
+Issuance of Preference Shares of
+Commercial Banks to Replenish Tier
+1 Capital/China
+Securities Law of the People's
+Republic of China/China
+Company Law of the People's
+Republic of China, Securities Law
+of the People's Republic of China,
+Guidance of the State Council on
+Launch of Preference Shares Pilot,
+Trial Administrative Measures on
+Preference Shares, Guidance on the
+Issuance of Preference Shares of
+Commercial Banks to Replenish Tier
+1 Capital/China
+Common equity tier 1 capital
+Additional tier 1 capital
+Additional tier 1 capital
+Common equity tier 1 capital
+Common equity tier 1 capital
+X20
+Additional tier 1 capital
+Additional tier 1 capital
+Common equity tier 1 capital
+601398
+Including: Transition arrangement of Regulation
+Governing Capital of Commercial Banks (Provisional)
+Including: Post-transition arrangement of Regulation
+Ordinary shares
+(H share)
+428,007
+(1,003)
+The Bank
+(15,948)
+X21
+561,303
+1,905,968
+X23
+12,868
+X22
+X25
+(A share)
+647
+X26
+1,127
+Ordinary shares
+3,623
+X27
+Mandatory
+Mandatory
+Mandatory
+No
+Including: Fully discretionary, partially discretionary or
+No
+No
+3.74%
+No
+Mandatory
+Including: Existence of a dividend stopper
+3.48%
+mandatory cancellation of coupons/dividends
+Non-cumulative
+Including: Non-cumulative or cumulative
+No
+No
+No
+No
+Non-cumulative
+Non-cumulative
+Non-cumulative
+Annual Report 2023
+303
+Tier 2 capital bonds
+4.15%
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Main features of regulatory capital instruments
+Including: Redemption incentive mechanism
+4.45%
+15 December 2031
+Yes
+Fixed
+Debt securities issued
+Original date of issuance
+Tier 2 capital bonds
+Perpetual or dated
+12 November 2020
+Dated
+Including: Original maturity date
+16 November 2035
+Issuer call (subject to prior supervisory approval)
+Yes
+Debt securities issued
+19 January 2021
+Dated
+21 January 2031
+Yes
+Debt securities issued
+13 December 2021
+Dated
+Debt securities issued
+13 December 2021
+Dated
+15 December 2036
+Yes
+Fixed
+Including: Optional call date, contingent call dates and 16 November 2030, in full amount
+15 December 2026, in full amount
+15 December 2031, in full amount
+redemption amount
+Including: Subsequent call dates, if applicable
+N/A
+N/A
+N/A
+N/A
+Coupons/dividends
+Including: Fixed or floating dividend/coupon
+Including: Coupon rate and any related index
+Fixed
+Fixed
+21 January 2026, in full amount
+Convertible or non-convertible
+N/A
+No
+NA
+N/A
+convertible into
+Including: If convertible, specify issuer of instrument it
+NA
+N/A
+NA
+NA
+N/A
+N/A
+converts into
+Write-down feature
+Including: If write-down, write-down trigger(s)
+N/A
+Including: If write-down, full or partial
+Including: If write-down, permanent or temporary
+Including: If temporary write-down, description of
+write-up mechanism
+Yes
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+viable
+Partial or full write-down
+Permanent write-down
+N/A
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+Yes
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+RMB10,000
+viable
+Position in subordination hierarchy in liquidation (specify
+instrument type immediately senior to instrument)
+=
+KA
+N/A
+No
+Tier 2 capital bonds
+No
+Tier 2 capital bonds
+=
+No
+Including: If convertible, conversion trigger(s)
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, fully or partially
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, conversion rate
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, mandatory or optional
+N/A
+N/A
+N/A
+N/A
+conversion
+Including: If convertible, specify instrument type
+NA
+N/A
+RMB50,000
+viable
+RMB10,000
+Yes
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+viable
+Partial or full write-down
+Permanent write-down
+N/A
+Yes
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+Yes
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+viable
+Partial or full write-down
+Partial or full write-down
+Permanent write-down
+N/A
+Permanent write-down
+N/A
+Yes
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+viable
+Partial or full write-down
+Permanent write-down
+N/A
+Position in subordination hierarchy in liquidation
+(specify instrument type immediately senior to
+instrument)
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+Non-compliant transitioned features
+Including: If yes, specify non-compliant features
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+Including: If write-down, full or partial
+Including: If write-down, permanent or temporary
+Including: If temporary write-down, description of
+write-up mechanism
+Including: If write-down, write-down trigger(s)
+Write-down feature
+converts into
+Yes
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+N/A
+N/A
+N/A
+Including: If convertible, mandatory or optional
+N/A
+N/A
+N/A
+N/A
+conversion
+Including: If convertible, specify instrument type
+NA
+N/A
+N/A
+N/A
+N/A
+NA
+N/A
+convertible into
+Including: If convertible, specify issuer of instrument it
+NA
+N/A
+NA
+N/A
+NA
+N/A
+NA
+N/A
+KA
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+other applicable laws, regulations
+and normative documents
+Regulatory treatment
+Including: Transition arrangement of Regulation
+Governing Capital of Commercial Banks (Provisional)
+Including: Post-transition arrangement of Regulation
+Governing Capital of Commercial Banks (Provisional)
+Including: Eligible to the parent company/group level
+Instrument type
+Amount recognised in regulatory capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+Tier 2 capital
+Parent company/Group
+Parent company/Group
+Tier 2 capital instrument
+Tier 2 capital instrument
+Parent company/Group
+Tier 2 capital instrument
+Parent company/Group
+Tier 2 capital instrument
+RMB10,000
+RMB30,000
+RMB50,000
+RMB10,000
+(in millions, as at the latest reporting date)
+Par value of instrument (in millions)
+Accounting treatment
+Tier 2 capital
+RMB30,000
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+N/A
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+N/A
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+N/A
+The Bank
+2128052
+302
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Main features of regulatory capital instruments
+Issuer
+Unique identifier
+Tier 2 capital bonds
+The Bank
+2028050
+Governing law(s) of the instrument
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Tier 2 capital bonds
+The Bank
+2128002
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Tier 2 capital bonds
+The Bank
+2128051
+Tier 2 capital bonds
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Annual Report 2023
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+viable
+NA
+Partial or full write-down
+Permanent write-down
+N/A
+Regulatory treatment
+other applicable laws, regulations
+and normative documents
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Including: Transition arrangement of Regulation
+Governing Capital of Commercial Banks (Provisional)
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Governing law(s) of the instrument
+2028049
+The Bank
+Tier 2 capital bonds
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Including: Post-transition arrangement of Regulation
+Governing Capital of Commercial Banks (Provisional)
+Including: Eligible to the parent company/group level
+Instrument type
+Parent company/Group
+Tier 2 capital instrument
+Parent company/Group
+Tier 2 capital instrument
+Parent company/Group
+Tier 2 capital instrument
+Tier 2 capital instrument
+Parent company/Group
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+(in millions, as at the latest reporting date)
+Amount recognised in regulatory capital
+Tier 2 capital bonds
+The Bank
+2028041
+Tier 2 capital bonds
+The Bank
+1928012
+Tier 2 capital bonds
+The Bank
+1928011
+Unique identifier
+(specify instrument type immediately senior to
+instrument)
+Position in subordination hierarchy in liquidation
+Permanent write-down
+N/A
+N/A
+Permanent write-down
+Permanent write-down
+N/A
+Partial or full write-down
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+viable
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+Tier 2 capital bonds
+Yes
+Whichever occurs earlier: (i) NFRA
+Partial or full write-down
+viable
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+Tier 2 capital bonds
+Yes
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+Partial or full write-down
+Subordinated to deposits, general
+debts, subordinated debts and tier
+2 capital bonds
+RMB45,000
+Subordinated to depositor and
+general creditor, pari passu with
+other subordinated debts
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+Issuer
+Main features of regulatory capital instruments
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+300 Annual Report 2023
+N/A
+N/A
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+N/A
+N/A
+Including: If yes, specify non-compliant features
+No
+No
+Non-compliant transitioned features
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+viable
+RMB10,000
+Par value of instrument (in millions)
+mandatory cancellation of coupons/dividends
+Mandatory
+Mandatory
+Mandatory
+Mandatory
+Including: Fully discretionary, partially discretionary or
+Including: Redemption incentive mechanism
+No
+No
+No
+Including: Existence of a dividend stopper
+4.15%
+4.20%
+4.69%
+No
+Including: Non-cumulative or cumulative
+No
+No
+No
+=
+Convertible or non-convertible
+Tier 2 capital bonds
+Tier 2 capital bonds
+Main features of regulatory capital instruments
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+301
+Annual Report 2023
+Non-cumulative
+Non-cumulative
+Non-cumulative
+Non-cumulative
+No
+No
+4.40%
+Fixed
+Fixed
+Fixed
+Debt securities issued
+22 September 2020
+Dated
+24 April 2019
+Dated
+26 April 2034
+Yes
+24 April 2019
+Dated
+26 April 2029
+Yes
+Issuer call (subject to prior supervisory approval)
+Debt securities issued
+Debt securities issued
+Including: Original maturity date
+Perpetual or dated
+Original date of issuance
+Accounting treatment
+RMB30,000
+RMB30,000
+RMB60,000
+RMB10,000
+RMB45,000
+Debt securities issued
+RMB60,000
+12 November 2020
+Dated
+16 November 2030
+Yes
+Fixed
+Including: Coupon rate and any related index
+Including: Fixed or floating dividend/coupon
+Coupons/dividends
+N/A
+N/A
+N/A
+N/A
+Including: Subsequent call dates, if applicable
+redemption amount
+16 November 2025, in full amount
+24 September 2025, in full amount
+26 April 2029, in full amount
+26 April 2024, in full amount
+Including: Optional call date, contingent call dates and
+24 September 2030
+Yes
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+Yes
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+Full or partial write-down when a
+Non-viability Trigger Event occurs
+Permanent write-down
+N/A
+Issuer call (subject to prior supervisory approval)
+Including: Original maturity date
+Perpetual or dated
+Original date of issuance
+Accounting treatment
+Par value of instrument (in millions)
+Including: Optional call date, contingent call dates and
+redemption amount
+(in millions, as at the latest reporting date)
+Main features of regulatory capital instruments
+25 March 2029, in full amount
+25 March 2024, in full amount
+N/A
+The First Redemption Date is 26
+Yes
+Amount recognised in regulatory capital
+Including: Subsequent call dates, if applicable
+November 2026 in full or partial
+amount
+26 November 2026
+4.51%
+Fixed
+Fixed
+4.26%
+Fixed
+4.875%
+3.65% (interest rate) before
+Fixed to floating
+N/A
+N/A
+NA
+Including: Existence of a dividend stopper
+Including: Fixed or floating dividend/coupon
+Including: Coupon rate and any related index
+Coupons/dividends
+redeem the present bonds in full
+rather than in part if the present
+bonds are no longer qualified as
+additional tier 1 capital after they
+are issued due to unpredictable
+changes in regulatory rules
+Redemption of present bonds in
+full or in part on each Distribution
+Payment Date since the First
+Redemption Date (26 November
+2026). The Issuer has the right to
+Yes
+No
+Yes
+25 March 2034
+Undated additional tier 1
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Including: If convertible, mandatory or optional
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, conversion rate
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, fully or partially
+N/A
+N/A
+capital bonds (Domestic)
+Yes
+RMB29,997
+Tier 2 capital bonds
+RMB45,000
+25 March 2029
+21 September 2025
+Dated
+Dated
+21 March 2019
+21 March 2019
+Debt securities issued
+Debt securities issued
+RMB10,000
+RMB45,000
+USD2,000
+Debt securities issued
+21 September 2015
+Dated
+Perpetual
+No maturity date
+24 November 2021
+RMB30,000
+Other equity
+Tier 2 capital bonds
+RMB10,000
+Partial or full write-down
+No
+No
+Fully discretionary
+MA
+N/A
+N/A
+HAP
+NA
+N/A
+N/A
+NA
+N/A
+NA
+Including: If convertible, specify issuer of instrument it
+converts into
+convertible into
+Including: If convertible, specify instrument type
+N/A
+N/A
+N/A
+N/A
+MA
+N/A
+Including: If temporary write-down, description
+of write-up mechanism
+Including: If write-down, permanent or temporary
+Including: If write-down, full or partial
+Yes
+Non-viability Trigger Event
+Including: If write-down, write-down trigger(s)
+Write-down feature
+Tier 2 capital bonds
+Undated additional tier 1
+capital bonds (Domestic)
+Main features of regulatory capital instruments
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+N/A
+NA
+299
+Annual Report 2023
+MA
+N/A
+No
+N/A
+N/A
+Non-cumulative
+Non-cumulative
+Non-cumulative
+No
+No
+No
+No
+Convertible or non-convertible
+Including: Non-cumulative or cumulative
+Including: Redemption incentive mechanism
+mandatory cancellation of coupons/dividends
+Including: Fully discretionary, partially discretionary or
+No
+Mandatory
+Mandatory
+Mandatory
+Non-cumulative
+Including: If convertible, mandatory or optional
+conversion
+No
+No
+N/A
+N/A
+N/A
+Including: If convertible, conversion rate
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, fully or partially
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, conversion trigger(s)
+No
+No
+N/A
+Tier 2 capital bonds
+No
+=
+=
+Tier 2 capital bonds
+Tier 2 capital bonds
+No
+No
+No
+=
+No
+Convertible or non-convertible
+Tier 2 capital bonds
+Main features of regulatory capital instruments
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+307
+Annual Report 2023
+Non-cumulative
+Tier 2 capital bonds
+Including: If convertible, conversion trigger(s)
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, mandatory or optional
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, conversion rate
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, fully or partially
+N/A
+N/A
+Non-cumulative
+Non-cumulative
+Non-cumulative
+No
+3.02%
+Fixed
+Fixed
+Fixed
+Fixed
+Including: Coupon rate and any related index
+Including: Fixed or floating dividend/coupon
+Coupons/dividends
+N/A
+N/A
+N/A
+N/A
+Including: Subsequent call dates, if applicable
+redemption amount
+10 November 2032, in full amount
+3.32%
+N/A
+3.00%
+Including: Existence of a dividend stopper
+No
+No
+No
+Including: Non-cumulative or cumulative
+Including: Redemption incentive mechanism
+mandatory cancellation of coupons/dividends
+Mandatory
+Mandatory
+Mandatory
+Mandatory
+Including: Fully discretionary, partially discretionary or
+No
+No
+No
+No
+3.34%
+10 November 2027, in full amount
+N/A
+Including: If convertible, specify instrument type
+No
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+Including: If yes, specify non-compliant features
+Non-compliant transitioned feature
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+Position in subordination hierarchy in liquidation
+(specify instrument type immediately senior to
+instrument)
+N/A
+Permanent write-down
+N/A
+the Issuer would become non-
+viable
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+N/A
+Permanent write-down
+Partial or full write-down
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+Annual Report 2023
+308
+N/A
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+N/A
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+pari passu with other tier 2 capital
+issued by the Issuer and are pari
+passu with the present bonds; and
+subordinated debts that have been
+capital instruments and hybrid
+capital bonds; pari passu with other
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+N/A
+Partial or full write-down
+Permanent write-down
+N/A
+Partial or full write-down
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+viable
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+MA
+N/A
+N/A
+NA
+N/A
+N/A
+NA
+N/A
+KA
+N/A
+N/A
+NA
+NA
+Including: If convertible, specify issuer of instrument it
+convertible into
+NA
+conversion
+N/A
+Write-down feature
+viable
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+N/A
+Partial or full write-down
+Permanent write-down
+viable
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+Yes
+Yes
+Yes
+Yes
+Including: If write-down, permanent or temporary
+Including: If temporary write-down, description of
+write-up mechanism
+Including: If write-down, full or partial
+Including: If write-down, write-down trigger(s)
+converts into
+22 August 2032, in full amount
+22 August 2027, in full amount
+Including: Optional call date, contingent call dates and
+Partial or full write-down
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+viable
+Yes
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+viable
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+Yes
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+Partial or full write-down
+Permanent write-down
+N/A
+N/A
+viable
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+Yes
+Including: If write-down, full or partial
+Including: If write-down, permanent or temporary
+Including: If temporary write-down, description of
+write-up mechanism
+Including: If write-down, write-down trigger(s)
+Partial or full write-down
+Permanent write-down
+Permanent write-down
+N/A
+Yes
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+N/A
+No
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+Including: If yes, specify non-compliant features
+Non-compliant transitioned features
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+Position in subordination hierarchy in liquidation
+(specify instrument type immediately senior to
+instrument)
+Permanent write-down
+N/A
+Partial or full write-down
+the Issuer would become non-
+viable
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+Write-down feature
+converts into
+N/A
+NA
+N/A
+N/A
+N/A
+Including: If convertible, conversion rate
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, fully or partially
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, conversion trigger(s)
+No
+N/A
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+N/A
+Including: If convertible, specify instrument type
+N/A
+NA
+N/A
+NA
+N/A
+NA
+Including: If convertible, specify issuer of instrument it
+convertible into
+N/A
+NA
+N/A
+KA
+N/A
+N/A
+NA
+conversion
+No
+N/A
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+RMB10,000
+RMB30,000
+Accounting treatment
+Par value of instrument (in millions)
+(in millions, as at the latest reporting date)
+Amount recognised in regulatory capital
+Parent company/Group
+Tier 2 capital instrument
+Parent company/Group
+Tier 2 capital instrument
+Parent company/Group
+Tier 2 capital instrument
+Tier 2 capital instrument
+Parent company/Group
+Including: Eligible to the parent company/group level
+Instrument type
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+RMB50,000
+Tier 2 capital
+RMB10,000
+RMB10,000
+10 November 2037
+Yes
+10 November 2032
+Yes
+8 November 2022
+Dated
+8 November 2022
+Dated
+Debt securities issued
+Debt securities issued
+Debt securities issued
+18 August 2022
+Dated
+22 August 2037
+Yes
+18 August 2022
+Dated
+22 August 2032
+Yes
+Issuer call (subject to prior supervisory approval)
+Including: Original maturity date
+Perpetual or dated
+Original date of issuance
+Debt securities issued
+RMB10,000
+RMB50,000
+RMB30,000
+Tier 2 capital bonds
+Tier 2 capital
+Tier 2 capital
+Issuer
+Main features of regulatory capital instruments
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+306 Annual Report 2023
+N/A
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+N/A
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+pari passu with other tier 2 capital
+issued by the Issuer and are pari
+passu with the present bonds; and
+subordinated debts that have been
+capital instruments and hybrid
+capital bonds; pari passu with other
+Unique identifier
+Tier 2 capital
+Tier 2 capital bonds
+The Bank
+092280065
+Tier 2 capital bonds
+The Bank
+092280134
+Tier 2 capital
+Including: Transition arrangement of Regulation
+Governing Capital of Commercial Banks (Provisional)
+Including: Post-transition arrangement of Regulation
+Governing Capital of Commercial Banks (Provisional)
+Regulatory treatment
+other applicable laws, regulations
+and normative documents
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Governing law(s) of the instrument
+The Bank
+092280135
+Tier 2 capital bonds
+Tier 2 capital bonds
+The Bank
+092280066
+N/A
+Tier 2 capital bonds
+RMB equivalent 5,672
+No
+20 January 2032, in full amount
+14 April 2027, in full amount
+14 April 2032, in full amount
+redemption amount
+Including: Subsequent call dates, if applicable
+N/A
+N/A
+N/A
+N/A
+Coupons/dividends
+Including: Fixed or floating dividend/coupon
+Including: Coupon rate and any related index
+Fixed
+Fixed
+Fixed
+20 January 2027, in full amount
+14 April 2037
+Yes
+Dated
+12 April 2022
+Accounting treatment
+Original date of issuance
+Perpetual or dated
+Including: Original maturity date
+RMB35,000
+RMB5,000
+RMB45,000
+Fixed
+RMB5,000
+18 January 2022
+Dated
+20 January 2032
+Issuer call (subject to prior supervisory approval)
+Yes
+Debt securities issued
+18 January 2022
+Dated
+20 January 2037
+Yes
+Debt securities issued
+Debt securities issued
+12 April 2022
+Dated
+14 April 2032
+Yes
+Debt securities issued
+Par value of instrument (in millions)
+3.28%
+3.50%
+Annual Report 2023
+305
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Main features of regulatory capital instruments
+Tier 2 capital bonds
+Tier 2 capital bonds
+Convertible or non-convertible
+=
+No
+No
+Tier 2 capital bonds
+No
+Tier 2 capital bonds
+=
+No
+Including: If convertible, conversion trigger(s)
+Non-cumulative
+Non-cumulative
+Non-cumulative
+Non-cumulative
+3.74%
+Including: Existence of a dividend stopper
+No
+No
+Including: Fully discretionary, partially discretionary or
+Mandatory
+Mandatory
+3.60%
+Mandatory
+mandatory cancellation of coupons/dividends
+Including: Redemption incentive mechanism
+Including: Non-cumulative or cumulative
+No
+No
+No
+No
+No
+Mandatory
+(in millions, as at the latest reporting date)
+Including: Optional call date, contingent call dates and
+RMB45,000
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+N/A
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+N/A
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+N/A
+304 Annual Report 2023
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Main features of regulatory capital instruments
+Issuer
+Unique identifier
+Tier 2 capital bonds
+The Bank
+2228004
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+Tier 2 capital bonds
+The Bank
+2228005
+No
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+Permanent write-down
+N/A
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+Yes
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+injection of capital or equivalent
+support is necessary, without which
+RMB5,000
+the Issuer would become non-
+viable
+Permanent write-down
+N/A
+Non-compliant transitioned features
+Including: If yes, specify non-compliant features
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+N/A
+Partial or full write-down
+Tier 2 capital bonds
+The Bank
+2228024
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+The Bank
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Parent company/Group
+Tier 2 capital
+Parent company/Group
+Tier 2 capital instrument
+Tier 2 capital instrument
+Tier 2 capital instrument
+Tier 2 capital instrument
+RMB35,000
+RMB5,000
+Tier 2 capital bonds
+Parent company/Group
+Tier 2 capital
+Parent company/Group
+Including: Eligible to the parent company/group level
+Instrument type
+2228025
+Amount recognised in regulatory capital
+Governing law(s) of the instrument
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Regulatory treatment
+Including: Transition arrangement of Regulation
+Governing Capital of Commercial Banks (Provisional)
+Including: Post-transition arrangement of Regulation
+Governing Capital of Commercial Banks (Provisional)
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Parent company/Group
+Including: Subsequent call dates, if applicable
+Coupons/dividends
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital instrument
+RMB30,000
+Tier 2 capital
+Tier 2 capital
+Including: Fixed or floating dividend/coupon
+Including: Coupon rate and any related index
+Including: Existence of a dividend stopper
+Including: Fully discretionary, partially discretionary
+or mandatory cancellation of coupons/dividends
+Including: Redemption incentive mechanism
+Including: Non-cumulative or cumulative
+Issuer call (subject to prior supervisory approval)
+Including: Optional call date, contingent call dates
+and redemption amount
+Instrument type
+Perpetual or dated
+Original date of issuance
+Accounting treatment
+Par value of instrument (in millions)
+(in millions, as at the latest reporting date)
+Amount recognised in regulatory capital
+Capital of Commercial Banks (Provisional)
+Parent company/Group
+Tier 2 capital instrument
+RMB25,000
+Including: Eligible to the parent company/group level
+Including: Original maturity date
+RMB30,000
+No
+30 August 2033
+Yes
+Annual Report 2023
+Including: Post-transition arrangement of Regulation Governing
+Non-cumulative
+Non-cumulative
+No
+Mandatory
+Mandatory
+No
+No
+Debt securities issued
+28 August 2023
+Dated
+3.18%
+Fixed
+3.07%
+N/A
+30 August 2033, in full amount
+30 August 2038
+Yes
+28 August 2023
+Dated
+Debt securities issued
+RMB25,000
+N/A
+30 August 2028, in full amount
+Fixed
+Capital of Commercial Banks (Provisional)
+313
+Regulatory treatment
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+subordinated debts that have been
+capital instruments and hybrid
+capital bonds; pari passu with other
+N/A
+No
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+N/A
+No
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+Including: If yes, specify non-compliant features
+Non-compliant transitioned features
+Permanent write-down
+N/A
+Partial or full write-down
+the Issuer would become non-
+viable
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+311
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+Including: Transition arrangement of Regulation Governing
+N/A
+capital instruments and hybrid
+capital bonds; pari passu with other
+subordinated debts that have been
+and normative documents
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Governed by the Commercial
+The Bank
+232380037
+Tier 2 capital bonds
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+The Bank
+232380036
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+Tier 2 capital bonds
+Unique identifier
+Issuer
+Main features of regulatory capital instruments
+(In RMB millions, unless otherwise stated)
+Unaudited Supplementary Information to the Consolidated Financial Statements
+310 Annual Report 2023
+N/A
+instruments that will possibly be
+issued in the future and are pari
+passu with the present bonds
+No
+issued by the Issuer and are pari
+passu with the present bonds; and
+pari passu with other tier 2 capital
+Governing law(s) of the instrument
+Unaudited Supplementary Information to the Consolidated Financial Statements
+114,745
+Main features of regulatory capital instruments
+Other adjustments
+7
+Adjustment for off-balance sheet items
+Adjustment for securities financing transactions
+56
+Adjustments for derivative financial instruments
+4
+Adjustments for fiduciary assets
+Total consolidated assets as per published financial statements
+Consolidated adjustments for accounting purposes but outside
+3
+the scope of regulatory consolidation
+2
+1
+Items
+S/N
+(i) Correspondence between Regulatory Leverage Ratio Items and Accounting Items and their
+differences
+The following information is disclosed in accordance with the Administrative Measures for Leverage Ratio of Commercial
+Banks (Revised) (CBRC No.1, 2015).
+6. Disclosure of Leverage Ratio
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+8
+Balance of adjusted on- and off-balance sheet assets
+31 December
+2023
+43,095,556
+On-balance sheet items (excluding derivatives and SFTs)
+1
+31 December
+2022
+2023
+Items
+S/N
+31 December
+(ii) Leverage Ratio, Net Tier 1 Capital, Balance of Adjusted On- and Off-balance Sheet Assets
+and Related Information
+N/A
+41,780,554
+2,328,504
+39,728
+8,650
+2,489,886
+(22,091)
+46,978,647
+97,074
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+39,610,146
+(274,087)
+(309,622)
+44,697,079
+31 December
+2022
+(20,811)
+No
+N/A
+No
+N/A
+N/A
+N/A
+N/A
+N/A
+No
+No
+Tier 2 capital bonds
+Tier 2 capital bonds
+N/A
+Position in subordination hierarchy in liquidation (specify
+instrument type immediately senior to instrument)
+Including: If write-down, full or partial
+Including: If write-down, write-down trigger(s)
+Write-down feature
+Including: If convertible, specify instrument type convertible into
+Including: If convertible, specify issuer of instrument it converts
+into
+Including: If convertible, mandatory or optional conversion
+Including: If convertible, conversion rate
+Including: If convertible, fully or partially
+Including: If convertible, conversion trigger(s)
+Convertible or non-convertible
+Including: If write-down, permanent or temporary
+Including: If temporary write-down, description of write-up
+mechanism
+(In RMB millions, unless otherwise stated)
+N/A
+N/A
+bonds
+been issued by the Issuer and
+are pari passu with the present
+bonds; and pari passu with other
+tier 2 capital instruments that will
+possibly be issued in the future and
+are pari passu with the present
+bonds
+Subordinated to depositor and
+general creditor; but senior to
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with
+other subordinated debts that have
+equity capital, additional tier 1
+capital instruments and hybrid
+capital bonds; pari passu with
+other subordinated debts that have
+been issued by the Issuer and
+are pari passu with the present
+bonds; and pari passu with other
+tier 2 capital instruments that will
+possibly be issued in the future and
+are pari passu with the present
+Subordinated to depositor and
+general creditor; but senior to
+312 Annual Report 2023
+Including: If yes, specify non-compliant features
+Non-compliant transitioned features
+N/A
+N/A
+Partial or full write-down
+Permanent write-down
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+Yes
+N/A
+Partial or full write-down
+Permanent write-down
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+injection of capital or equivalent
+support is necessary, without
+which the Issuer would become
+non-viable
+Yes
+N/A
+N/A
+N/A
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+injection of capital or equivalent
+support is necessary, without
+which the Issuer would become
+non-viable
+N/A
+Annual Report 2023
+Partial or full write-down
+Permanent write-down
+N/A
+Yes
+Dated
+12 April 2038
+10 April 2023
+10 April 2023
+Dated
+12 April 2033
+22 December 2037
+Yes
+Yes
+Issuer call (subject to prior supervisory approval)
+22 December 2032
+Including: Original maturity date
+Dated
+20 December 2022
+20 December 2022
+Dated
+Perpetual or dated
+Original date of issuance
+Debt securities issued
+Debt securities issued
+Debt securities issued
+Debt securities issued
+RMB20,000
+Yes
+Including: Optional call date, contingent call dates and 22 December 2027, in full amount
+22 December 2032, in full amount
+12 April 2028, in full amount
+No
+Including: Existence of a dividend stopper
+3.58%
+3.49%
+3.85%
+3.70%
+Fixed
+Fixed
+Fixed
+RMB35,000
+Fixed
+Including: Fixed or floating dividend/coupon
+Coupons/dividends
+N/A
+N/A
+N/A
+N/A
+Including: Subsequent call dates, if applicable
+redemption amount
+12 April 2033, in full amount
+Including: Coupon rate and any related index
+No
+RMB5,000
+RMB20,000
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Governed by the Commercial
+The Bank
+232380016
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Banks (Provisional) and the
+Measures for Administration of
+Financial Bond Issuance in China's
+Inter-bank Bond Market, as well as
+other applicable laws, regulations
+and normative documents
+Governed by the Commercial
+Banking Law of the People's
+Republic of China, the Regulation
+Governing Capital of Commercial
+Governing law(s) of the instrument
+Tier 2 capital bonds
+Tier 2 capital bonds
+The Bank
+232380015
+Tier 2 capital bonds
+The Bank
+232280008
+Tier 2 capital bonds
+The Bank
+232280007
+Unique identifier
+Issuer
+Main features of regulatory capital instruments
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+other applicable laws, regulations
+and normative documents
+Regulatory treatment
+Including: Transition arrangement of Regulation
+Governing Capital of Commercial Banks (Provisional)
+Including: Post-transition arrangement of Regulation
+Governing Capital of Commercial Banks (Provisional)
+Including: Eligible to the parent company/group level
+Instrument type
+RMB35,000
+RMB5,000
+RMB25,000
+Parent company/Group
+Tier 2 capital instrument
+Parent company/Group
+Tier 2 capital instrument
+Tier 2 capital instrument
+Tier 2 capital instrument
+Parent company/Group
+Parent company/Group
+RMB25,000
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Tier 2 capital
+Accounting treatment
+Par value of instrument (in millions)
+Amount recognised in regulatory capital
+(in millions, as at the latest reporting date)
+Tier 2 capital
+No
+No
+Including: Fully discretionary, partially discretionary or
+NA
+MA
+N/A
+N/A
+NA
+N/A
+N/A
+NA
+N/A
+KA
+N/A
+N/A
+NA
+NA
+Including: If convertible, specify issuer of instrument it
+convertible into
+Including: If convertible, specify instrument type
+conversion
+N/A
+N/A
+converts into
+Write-down feature
+Yes
+Partial or full write-down
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+viable
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+viable
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+equity capital, additional tier 1
+general creditor; but senior to
+Subordinated to depositor and
+N/A
+N/A
+viable
+injection of capital or equivalent
+support is necessary, without which
+the Issuer would become non-
+Whichever occurs earlier: (i) NFRA
+having decided that a write-
+down is necessary, without which
+the Issuer would become non-
+viable; or (ii) any relevant authority
+having decided that a public sector
+Position in subordination hierarchy in liquidation (specify
+instrument type immediately senior to instrument)
+Including: If write-down, full or partial
+Including: If write-down, permanent or temporary
+Including: If temporary write-down, description of
+write-up mechanism
+Including: If write-down, write-down trigger(s)
+Yes
+Yes
+Yes
+Partial or full write-down
+Permanent write-down
+N/A
+N/A
+Including: If convertible, mandatory or optional
+Tier 2 capital bonds
+Main features of regulatory capital instruments
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+309
+2
+Non-cumulative
+Non-cumulative
+Non-cumulative
+Non-cumulative
+Tier 2 capital bonds
+No
+No
+No
+Including: Non-cumulative or cumulative
+Including: Redemption incentive mechanism
+mandatory cancellation of coupons/dividends
+Mandatory
+Mandatory
+Mandatory
+Mandatory
+No
+Permanent write-down
+Convertible or non-convertible
+No
+N/A
+N/A
+N/A
+N/A
+Including: If convertible, conversion rate
+N/A
+N/A
+N/A
+N/A
+=
+Including: If convertible, fully or partially
+N/A
+N/A
+N/A
+Including: If convertible, conversion trigger(s)
+Annual Report 2023
+=
+Tier 2 capital bonds
+Tier 2 capital bonds
+No
+No
+N/A
+3
+No
+Less: Asset amounts deducted in determining Basel Ill tier 1 capital
+Balance of adjusted on-balance sheet assets (excluding derivatives and SFTs)
+Replacement cost associated with all derivatives transactions (i.e. net of
+eligible cash variation margin)
+891,549
+144,638
+973,404 1,054,825
+14
+Total ASF
+30,872,838
+Required stable funding (RSF) items
+15
+Total NSFR high-quality liquid assets (HQLA)
+16
+Deposits held at other financial institutions
+228,237
+20,316
+2,239
+3,690
+1,518,072
+129,326
+for operational purposes
+17
+Loans and securities:
+2,270
+18
+Loans to financial institutions secured by
+Level 1 HQLA
+143
+5,516,388 3,922,982 20,076,829 20,970,581
+567,123
+84,787
+117
+19
+1,559,256 407,349
+195,707
+633,387
+9,103
+20
+All other liabilities and equities not included
+in the above categories
+57,141
+year
+≥ 1 year
+Weighted
+value
+523,674
+523,674 4,623,876
+4,623,876
+7,354,378 10,498,156
+13,499
+3,947 16,088,258
+33,192
+7,321,186
+55,964
+10,442,192
+8,620,911 10,171,629
+8,280,621 527,202
+340,290 9,644,427
+8,462
+2,200
+94,937
+5,037
+1,747 15,993,321
+1,027,349
+142,823 9,105,879
+8,586
+1,018,763
+2,221 4,410,426
+140,602 4,695,453
+assets
+11
+Other liabilities:
+9,103
+891,549
+144,638
+1,030,545
+1,054,825
+12
+NSFR derivative liabilities
+13
+Loans to financial institutions secured by
+non-Level 1 HQLA and unsecured loans
+to financial institutions
+Loans to retail and small business
+customers, non-financial institutions,
+sovereigns, central banks and PSES, of
+which:
+3,095,214 3,360,971 12,530,369 13,789,564
+21
+2,270
+291,204
+151,104 1,036,351
+1,105,385
+25
+Assets with matching interdependent
+liabilities
+26
+Other assets:
+27
+Physical traded commodities, including gold
+299,709
+19,526
+344,037
+30,829
+269,615
+794,715
+16,597
+28
+Assets posted as initial margin for derivative
+26,689
+22,686
+contracts and contributions to default
+funds of CCPS
+29
+NSFR derivative assets
+51,874
+30
+NSFR derivative liabilities with additional
+67,773*
+Securities that are not in default and do
+not qualify as HQLA, including exchange-
+traded equities
+24
+45,023
+value
+5,357,458
+With a risk weight of less than or equal
+to 35% under the Basel II standardised
+approach for credit risk
+679,415
+841,040
+313,569
+950,646
+Annual Report 2023 315
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+31 December 2023
+Unweighted value
+6 months
+No
+< 6
+to <1
+to < 1
+Weighted
+Items
+maturity
+months
+year
+≥ 1 year
+22
+Residential mortgages, of which:
+3,591
+3,415
+23
+With a risk weight of less than or equal
+to 35% under the Basel II standardised
+approach for credit risk
+2,368
+1,006
+6,314,285
+66,498
+No.
+13,555
+10 Liabilities with matching interdependent
+Operational deposits
+7
+Non-operational deposits (all counterparties)
+8,752,260
+4,050,371
+8
+Unsecured debt
+86,880
+86,880
+9
+Secured funding
+11,859
+10
+Additional requirements, of which:
+3,631,265
+1,441,553
+11
+Outflows related to derivative exposures and other collateral requirements
+1,250,518
+1,250,518
+12
+Outflows related to loss of funding on debt products
+13
+Credit and liquidity facilities
+14
+Other contractual funding obligations
+15
+Other contingent funding obligations
+16
+Total cash outflows
+2,036,283
+2,380,747
+8,373,703
+6
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+7.
+Quantitative Information Disclosure of Liquidity Coverage Ratio Using Advanced
+Capital Management Approach
+The Group discloses liquidity coverage ratio using Advanced Capital Management Approach in accordance with Measures
+for the Disclosure of Information on Liquidity Coverage Ratio by Commercial Banks (Yin Jian Fa [2015] No. 52).
+S/N Items
+High-quality liquid assets
+1 Total high-quality liquid assets (HQLA)
+Cash outflows
+Fourth-quarter 2023
+Total
+unweighted
+value
+Total
+weighted
+value
+7,303,208
+4
+Retail deposits and deposits from small business customers of which:
+17,127,129
+1,709,451
+3
+Stable deposits
+51,899
+1,928
+4
+Less stable deposits
+17,075,230
+1,707,523
+5
+Unsecured wholesale funding, of which:
+17,212,843
+6,173,534
+Operational deposits (excluding those generated from correspondent
+banking activities)
+191,035
+89,038
+89,019
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+8.
+Quantitative Information Disclosure of Net Stable Funding Ratio (NSFR) Using
+Advanced Capital Management Approach
+The Group discloses net stable funding ratio information in accordance with Measures for the Disclosure of Information on
+Net Stable Funding Ratio by Commercial Banks (Yin Bao Jian Fa [2019] No. 11).
+31 December 2023
+Unweighted value
+6 months
+No
+No.
+Items
+maturity
+< 6
+months
+Available stable funding (ASF) items
+1
+Capital:
+4,100,202
+2
+4,100,202
+3
+4
+Regulatory capital
+Other capital instruments
+Retail deposits and deposits from small
+business customers:
+Stable deposits
+Less stable deposits
+7 Wholesale funding:
+569∞ ∞ 2
+8
+9
+Annual Report 2023
+314
+122.03%
+Data of the above table are the simple arithmetic average of the 92 calendar days' figures of the recent quarter.
+6,668,947
+96,472
+9,521,888
+Cash inflows
+17
+Secured lending (including reverse repos and securities borrowing)
+1,167,241
+914,067
+18
+Inflows from fully performing exposures
+2,096,795
+1,367,885
+19
+Other cash inflows
+Other wholesale funding
+1,245,113
+20
+Total cash inflows
+4,509,149
+3,524,982
+Total Adjusted
+Value
+21
+Total HQLA
+22
+Total net cash outflows
+23
+7,303,208
+5,996,906
+Liquidity coverage ratio (%)
+1,243,030
+variation margin posted
+2
+All other assets not included in the above
+9,006
+contracts and contributions to default
+funds of CCPS
+29
+NSFR derivative assets
+83,987
+30
+NSFR derivative liabilities with additional
+98,755*
+19,751
+variation margin posted
+31
+All other assets not included in the above
+282,081
+324,828
+31,780
+306,932
+897,092
+categories
+32
+Off-balance sheet items
+9,028,265 231,126
+33
+Total RSF
+34
+Net Stable Funding Ratio (%)
+23,497,728
+130.17%
+(*) The amount of derivative liabilities shall be filled in for this item, which is the amount of NSFR derivative liabilities without
+regard to maturity before deducting variation margin. It is excluded from the item 26 "Other assets".
+10,596
+318
+Assets posted as initial margin for derivative
+29,326
+maturity
+months
+year
+≥ 1 year
+2,176
+782
+3,442
+6,412,165
+value
+5,443,723
+780
+47,737
+31,931
+24
+Securities that are not in default and do
+not qualify as HQLA, including exchange-
+traded equities
+2,471
+444,927
+130,498
+1,082,427 1,211,434
+25
+Assets with matching interdependent
+liabilities
+26
+Other assets:
+27
+Physical traded commodities, including gold
+316,583
+34,502
+324,828
+31,780
+401,515
+955,175
+28
+Annual Report 2023
+8.32%
+7.95%
+558,868
+1,216,562
+Gross SFT assets (with no recognition of netting), after adjusting for sale
+accounting transactions
+2
+12
+184,279
+190,084
+(20,193)
+(17,091)
+Less: Adjusted effective notional deductions for written credit derivatives
+11 Total derivative exposures
+10
+25,369
+18,815
+Effective notional amount of written credit derivatives
+9
+(58)
+Less: Exempted CCP leg of client-cleared trade exposures
+8
+Less: Deductions of receivables assets for cash variation margin provided in
+derivatives transactions
+7
+84,921
+Add-on amounts for PFE associated with all derivatives transactions
+Gross-up for derivatives collateral provided where deducted from the
+balance sheet assets pursuant to the operative accounting framework
+56
+94,240
+88,029
+38,689,986
+(20,811)
+38,669,175
+43,073,465
+(22,091)
+31
+13
+Less: Netted amounts of cash payables and cash receivables of gross
+SFT assets
+14
+CCR exposure for SFT assets
+Leverage ratio
+22
+41,780,554
+46,978,647
+Balance of adjusted on- and off-balance sheet assets
+21
+3,475,995
+3,736,919
+Net tier 1 capital
+20
+2,328,504
+2,489,886
+Balance of adjusted off-balance sheet assets
+19
+Weighted
+(4,727,721)
+Less: Adjustments for conversion to credit equivalent amounts
+18
+7,056,225
+8,032,036
+Off-balance sheet exposure at gross notional amount
+17
+598,596
+1,225,212
+Total securities financing transaction exposures
+16
+Agent transaction exposures
+15
+39,728
+8,650
+(5,542,150)
+< 6
+100,331
+to < 1
+to < 1
+year
+≥ 1 year
+Weighted
+value
+545,829
+545,829
+4,539,278
+4,539,278
+Other capital instruments
+4
+Retail deposits and deposits from small
+7,193,196 10,469,463
+18,723
+5,783 15,923,613
+business customers:
+7
+8
+9
+569∞ ∞ =
+Stable deposits
+Less stable deposits
+34,046
+7,159,150
+Wholesale funding:
+Operational deposits
+Other wholesale funding
+10 Liabilities with matching interdependent
+45,539
+10,423,924
+8,915,305 10,495,133
+8,588,338 435,348
+326,967 10,059,785
+12,151
+6,572
+473,024
+14,819
+458,205
+3,665
+2,118 15,832,800
+90,813
+142,747 8,986,380
+3,993,450
+3,993,450
+< 6
+months
+maturity
+280,183
+No
+344,037
+30,829
+191,052
+741,877
+32
+Off-balance sheet items
+9,821,690 234,623
+33
+Total RSF
+23,647,317
+34
+Net Stable Funding Ratio (%)
+4,029 4,523,281
+138,718 4,463,099
+130.56%
+316
+Annual Report 2023
+No. Items
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+Available stable funding (ASF) items
+1
+2
+3
+Capital:
+Regulatory capital
+30 September 2023
+Unweighted value
+6 months
+No
+(*) The amount of derivative liabilities shall be filled in for this item, which is the amount of NSFR derivative liabilities without
+regard to maturity before deducting variation margin. It is excluded from the item 26 "Other assets".
+assets
+categories
+Other liabilities:
+1,059,538
+19
+158,300
+-
+1,564,085 475,252
+246,450
+718,963
+7
+274
+20
+Loans to financial institutions secured by
+non-Level 1 HQLA and unsecured loans
+to financial institutions
+Loans to retail and small business
+customers, non-financial institutions,
+sovereigns, central banks and PSES, of
+which:
+3,282,299 3,247,418 12,067,732 13,420,905
+21
+With a risk weight of less than or equal
+to 35% under the Basel II standardised
+approach for credit risk
+Loans to financial institutions secured by
+Level 1 HQLA
+845,734
+305,444 907,055
+Annual Report 2023
+317
+Unaudited Supplementary Information to the Consolidated Financial Statements
+(In RMB millions, unless otherwise stated)
+No.
+6 months
+Items
+22
+Unweighted value
+23
+With a risk weight of less than or equal
+to 35% under the Basel II standardised
+approach for credit risk
+30 September 2023
+11
+605,105
+18
+Residential mortgages, of which:
+Loans and securities:
+2,471 6,353,025 3,856,617 19,809,048 20,953,325
+710,635
+173,904
+12
+NSFR derivative liabilities
+89,273
+13
+All other liabilities and equities not included
+in the above categories
+8,672
+710,635
+173,904
+1,041,108 1,136,731
+14
+Total ASF
+30,586,002
+1,130,381 1,136,731
+15
+17
+Required stable funding (RSF) items
+for operational purposes
+107,121
+2,131
+1,579
+26,306
+8,672
+Deposits held at other financial institutions
+16
+1,250,981
+Total NSFR high-quality liquid assets (HQLA)
+181,618
+Postcode: 300457
+Tel: 022-66283766/010-66105888
+Fax: 022-66224510/010-66105999
+ICBC-AXA Assurance Co., Ltd.
+Address: 19/F Mirae Asset Tower,
+No. 166 Lujiazui Ring
+Road, Pudong New Area,
+Shanghai, China
+Postcode: 200120
+Tel: 021-5879-2288
+ICBC Financial Asset Investment
+Co., Ltd.
+Address: 19-20/F, Tower B, Yang
+Zi S&T Innovation Center
+Phase I, Jiangbei New
+Area, No. 211 Pubin
+Road, Nanjing City,
+Jiangsu Province, China
+Postcode: 211800
+Fax: 021-5879-2299
+Address: Bank Mansion, No. 395
+Qingnian Road, Kunming
+City, Yunnan Province,
+China
+Fax: 010-66583158
+ICBC Financial Leasing Co., Ltd.
+Address: Taida MSD-B1, No. 62
+Tel: 010-66583349
+Postcode: 100033
+Address: Tower A, Xinsheng Plaza,
+No. 5 Financial Street,
+Xicheng District, Beijing,
+China
+Fax: 0571-87808207
+Tel: 0571-87803888
+Postcode: 310016
+ZHEJIANG BRANCH
+Address: No. 66 Juyuan Road,
+Shangcheng District,
+Hangzhou City, Zhejiang
+Province, China
+Fax: 0871-63134637
+Tel: 0871-65536313
+YUNNAN BRANCH
+Tel: 025-58172219
+Postcode: 650021
+Second Street, Economic
+Development Zone,
+Tianjin, China
+ICBC Credit Suisse Asset
+Management Co., Ltd.
+West Road, Pinghu City,
+Zhejiang Province, China
+Address: No. 6 Financial Street,
+Xicheng District, Beijing,
+China
+Industrial and Commercial Bank
+of China (Asia) Limited
+Address: 33/F, ICBC Tower, 3
+SWIFT: ICBKHKHH
+Fax: +852-25881160
+Tel: +852-25881188
+Email: icbchk@icbcasia.com
+Hong Kong SAR, China
+Garden Road, Central,
+Address: 33/F, ICBC Tower, 3
+Industrial and Commercial Bank
+of China Limited, Hong Kong
+Branch
+Hong Kong SAR and Macau
+SAR
+Overseas Institutions
+List of Domestic and Overseas Branches and Offices
+Annual Report 2023
+ICBC Wealth Management Co.,
+Ltd.
+320
+Postcode: 314200
+Address: No. 258 Chengnan
+Zhejiang Pinghu ICBC Rural
+Bank Co., Ltd.
+Fax: 023-85297709
+Tel: 023-85297704
+Postcode: 402760
+District, Chongqing,
+China
+Biquan Street, Bishan
+Address: No. 8 Xianshan Road,
+Chongqing Bishan ICBC Rural
+Bank Co., Ltd.
+Fax: 010-86509901
+Tel: 010-86509184
+Postcode: 100032
+Tel: 0573-85139616
+Fax: 0573-85139626
+Fax: 0891-6898001
+Fax: 021-58882888
+Postcode: 850000
+Fax: 029-87602999
+Tel: 029-87602608/87602630
+Postcode: 710004
+Address: No. 395 Dongxin Street,
+Xi'an City, Shaanxi
+Province, China
+SHAANXI BRANCH
+Fax: 0351-6248004
+Tel: 0351-6248888/6248011
+Postcode: 030001
+Province, China
+Taiyuan City, Shanxi
+Address: No. 145 Yingze Street,
+SHANXI BRANCH
+Fax: 0531-87941749/66681200
+SHANGHAI BRANCH
+Tel: 0531-66681114
+Address: No. 310 Jingsi Road,
+Jinan City, Shandong
+Province, China
+SHANDONG BRANCH
+Tel: 0971-6169722/6152326
+Fax: 0971-6152326
+Postcode: 810001
+Province, China
+Address: No. 2 Shengli Road,
+Xining City, Qinghai
+QINGHAI BRANCH
+Tel: 0532-66211001
+Fax: 0532-85814711
+Postcode: 266071
+Garden Road, Central,
+Hong Kong SAR, China
+City, Shandong Province,
+China
+Address: No. 25 Shandong Road,
+Shinan District, Qingdao
+QINGDAO BRANCH
+Postcode: 250001
+Tel: 0891-6898002
+Address: No. 8 Yincheng Road,
+Pudong New Area,
+Shanghai, China
+Tel: 021-68088888/58885888
+Address: No. 31 Jinzhu Middle
+Road, Lhasa, Tibet
+Autonomous Region
+TIBET BRANCH
+Fax: 0991-2828608
+Tel: 0991-5982005
+Postcode: 830002
+Tianshan District, Urumqi,
+Xinjiang Autonomous
+Region, China
+Address: No. 231 Renmin Road,
+XINJIANG BRANCH
+Fax: 0592-5054663
+Tel: 0592-5292000
+Postcode: 361012
+Address: No. 17 Hubin North
+Road, Xiamen City, Fujian
+Province, China
+XIAMEN BRANCH
+Postcode: 200120
+Fax: 022-28400123/022-28400647
+Postcode: 300074
+Address: No. 123 Weidi Road, Hexi
+District, Tianjin, China
+TIANJIN BRANCH
+Fax: 028-82866025
+Tel: 028-82866000
+Postcode: 610020
+SICHUAN BRANCH
+Address: No. 45 Zongfu Road,
+Jinjiang District, Chengdu
+City, Sichuan Province,
+China
+Fax: 0755-82246247
+Tel: 0755-82246400
+Postcode: 518015
+Shennan East Road,
+Luohu District, Shenzhen
+City, Guangdong
+Province, China
+Address: North Block, Financial
+Center, No. 5055
+SHENZHEN BRANCH
+Tel: 022-28400648
+Email: enquiry@icbcasia.com
+Tel: +852-35108888
+Fax: +855-23965268
+SWIFT: UBHKHKHH
+Address: Bockenheimer Landstraße
+39, 60325 Frankfurt am
+Main, Germany
+Email: icbc@icbc-ffm.de
+Industrial and Commercial Bank
+of China Limited, Doha (QFC)
+Branch
+5207, 5208 and 5209, Al
+Reem Island, Abu Dhabi,
+United Arab Emirates P.O.
+Box 62108
+Email: dboffice@dxb.icbc.com.cn
+Tel: +971-24998600
+Fax: +971-24998622
+SWIFT: ICBKAEAA
+Address: Addax Tower Offices
+Industrial and Commercial Bank
+of China Limited, Abu Dhabi
+Branch
+Fax: +971-47031199
+SWIFT: ICBKAEAD
+Email: dboffice@dxb.icbc.com.cn
+Tel: +971-47031111
+International Financial
+Center, Dubai, United
+Arab Emirates P.O.Box:
+506856
+Address: Floor 5&6, Gate Village
+Building 1, Dubai
+Industrial and Commercial Bank
+of China Limited, Dubai (DIFC)
+Branch
+Email: icbcmumbai@india.icbc.com.cn
+Tel: +91-2271110300
+Fax: +91-2271110353
+SWIFT: ICBKINBB
+Address: 801, 8th Floor, A Wing,
+One BKC, C-66, G
+Block, Bandra Kurla
+Complex, Bandra East,
+Mumbai-400051, India
+Industrial and Commercial
+Bank of China Limited, Mumbai
+Branch
+Email: service@pk.icbc.com.cn
+Tel: +92-2135208988
+Fax: +92-2135208930
+SWIFT: ICBKPKKA
+Address: 15th & 16th Floor, Ocean
+Tower, G-3, Block-9,
+Scheme #5, Main Clifton
+Road, Karachi, Pakistan.
+P.C: 75600
+Industrial and Commercial
+Bank of China Limited, Karachi
+Branch
+SWIFT: ICBKKZKX
+Email: office@kz.icbc.com.cn
+Tel: +7-7272377085
+Address: 150/230, Abai/Turgut
+Ozal Street, Almaty,
+Kazakhstan. 050046
+Industrial and Commercial Bank
+of China (Almaty) Joint Stock
+Company
+SWIFT: ICBKMMMY
+Fax: +95-019339278
+Tel: +95-019339258
+Tower, Kyun Taw Road,
+Kamayut Township,
+Yangon, Myanmar
+Address: ICBC Center, Crystal
+Bank of China Limited, Yangon
+Branch
+Industrial and Commercial Bank
+of China Limited, Frankfurt
+Branch
+Europe
+SWIFT: ICBKNZ22
+Fax: +64-93747287
+Industrial and Commercial Bank
+of China Limited, Riyadh Branch
+Address: Level 4&8, A1 Faisaliah
+Tower Building
+No: 7277-King Fahad
+Road Al Olaya, Zip Code:
+12212, Additional No.:
+3333, Unit No.: 95,
+Kingdom of Saudi Arabia
+Email: service@sa.icbc.com.cn
+Tel: +966-112899888
+Fax: 0951-5890917
+Fax: +966-112899879
+SWIFT: ICBKSARI
+Industrial and Commercial
+Bank of China Limited, Kuwait
+Branch
+Address: Building 2A (Al-Tijaria
+Tower), Floor 7&8, Al-
+Soor Street, Al-Morqab,
+Block 3, Kuwait City,
+Kuwait
+Email: info@kw.icbc.com.cn
+Tel: +965-22281777
+Fax: +965-22281799
+SWIFT: ICBKKWKW
+Industrial and Commercial
+Bank of China Limited, Sydney
+Branch
+Address: Level 42, Tower 1,
+International Towers,
+100 Barangaroo Avenue,
+Sydney NSW 2000
+Australia
+Industrial and Commercial
+Email: info@icbc.com.au
+Tel: +612-94755588
+Fax: +612-82885878
+SWIFT: ICBKAU2S
+Street, Auckland 1010,
+New Zealand
+Email: info@nz.icbc.com.cn
+Tel: +64-93747288
+Fax: +64-93747287
+SWIFT: ICBKNZ2A
+322
+Annual Report 2023
+List of Domestic and Overseas Branches and Offices
+Industrial and Commercial Bank
+of China Limited, Auckland
+Branch
+Address: Level 11, 188 Quay
+Street, Auckland 1010,
+New Zealand
+Email: info@nz.icbc.com.cn
+Tel: +64-93747288
+Industrial and Commercial Bank
+of China (New Zealand) Limited
+Address: Level 11, 188 Quay
+SWIFT: ICBKKHPP
+Tel: +855-23955880
+Email: icbckh@kh.icbc.com.cn
+PT. Bank ICBC Indonesia
+Address: The City Tower 32nd Floor,
+JI. M.H. Thamrin No. 81,
+Jakarta Pusat 10310,
+Indonesia
+Address: 6 Raffles Quay #12-01,
+Singapore 048580
+Email: icbcsg@sg.icbc.com.cn
+Tel: +65-65381066
+Fax: +65-65381370
+SWIFT: ICBKSGSG
+Industrial and Commercial Bank
+of China Limited, Singapore
+Branch
+Fax: +976-77108866
+Shangri-la Office,
+Shangri-la Centre,
+19A Olympic Street,
+Sukhbaatar District-1,
+Ulaanbaatar, Mongolia
+Email: mgdbcgw@dccsh.icbc.com.cn
+Tel: +976-77108822,
++976-77106677
+Address: Suite 1108, 11th floor,
+Industrial and Commercial Bank
+of China Limited, Mongolia
+Representative Office
+Email: busanadmin@kr.icbc.com.cn
+Tel: +82-514638868
+Fax: +82-514636880
+SWIFT: ICBKKRSE
+Industrial and Commercial Bank
+of China Limited, Busan Branch
+Address: 1st Floor, ABL Life Bldg.,
+# 640 Jungang-daero,
+Busanjin-gu, Busan
+47353, Korea
+Email: icbcseoul@kr.icbc.com.cn
+Tel: +82-237886670
+Fax: +82-27553748
+SWIFT: ICBKKRSE
+Bldg., #73 Sejong-daero,
+Jung-gu, Seoul 100-767,
+Korea
+Industrial and Commercial Bank
+of China Limited, Seoul Branch
+Address: 16th Floor, Taepyeongno
+1-Chome, Chiyoda-ku
+Tokyo, 100-6512, Japan
+Email: icbctokyo@tk.icbc.com.cn
+Tel: +813-52232088
+Fax: +813-52198525
+SWIFT: ICBKJPJT
+Email: cs@ina.icbc.com.cn
+Tel: +62-2123556000
+Fax: +62-2131996016
+SWIFT: ICBKIDJA
+Industrial and Commercial Bank
+of China Limited, Tokyo Branch
+Address: 5-1 Marunouchi
+Tel: +853-28555222
+Fax: +853-28338064
+SWIFT: ICBKMOMM
+Email: icbc@mc.icbc.com.cn
+d'Assumpcao, No. 393-
+437, 9 Andar, Edf.
+Dynasty Plaza, Macau
+SAR, China
+Industrial and Commercial Bank
+of China Limited, Macau Branch
+Address: Alm. Dr. Carlos
+Tel: +853-28555222
+Fax: +853-28338064
+SWIFT: ICBKMOMX
+Email: icbc@mc.icbc.com.cn
+Macau Landmark, 555
+Avenida da Amizade,
+Macau SAR, China
+Industrial and Commercial Bank
+of China (Macau) Limited
+Address: 18th Floor, ICBC Tower,
+SWIFT: ICILHKH1
+Fax: +852-26833900
+Garden Road, Central,
+Hong Kong SAR, China
+Email: info@icbci.icbc.com.cn
+Tel: +852-26833888
+Address: 37/F, ICBC Tower, 3
+ICBC International Holdings
+Limited
+Asia-Pacific
+Fax: +852-28051166
+Industrial and Commercial Bank
+of China (Malaysia) Berhad
+Address: Level 10, Menara Maxis,
+Kuala Lumpur City
+Email: icbcmalaysia@my.icbc.com.cn
+Tel: +603-23013399
+Fax: +603-23013388
+SWIFT: ICBKMYKL
+Street 106, Phnom Penh,
+Cambodia
+Square, No. 19-20,
+Address: 17th Floor, Exchange
+Industrial and Commercial Bank
+of China Limited, Phnom Penh
+Branch
+Tel: +856-21258888
+Fax: +856-21258897
+SWIFT: ICBKLALA
+Email: icbcvte@la.icbc.com.cn
+No. 358, Unit12,
+Sibounheuang Village,
+Chanthabouly District,
+Vientiane Capital, Lao
+PDR
+Address: Asean Road, Home
+Industrial and Commercial Bank
+of China Limited, Vientiane
+Branch
+Email: hcmadmin@vn.icbc.com.cn
+Tel: +84-28-35208991
+Street, District 1, Ho Chi
+Minh City, Vietnam
+Industrial and Commercial Bank
+of China Limited, Ho Chi Minh
+City Representative Office
+Address: 12th floor Deutsches Haus
+building, 33 Le Duan
+List of Domestic and Overseas Branches and Offices
+Centre, 50088 Kuala
+Lumpur, Malaysia
+321
+Email: hanoiadmin@vn.icbc.com.cn
+Tel: +84-2462698888
+Fax: +84-2462699800
+SWIFT: ICBKVNVN
+Industrial and Commercial Bank
+of China Limited, Hanoi Branch
+Address: 3rd Floor Daeha Business
+Center, No. 360, Kim Ma
+Str., Ba Dinh Dist., Hanoi,
+Vietnam
+Tel: +66-26295588
+Fax: +66-26639888
+SWIFT: ICBKTHBK
+Khlong Toei, Bangkok,
+Thailand
+Road, Khlong Ton,
+11th-13th Fl., Sukhumvit
+Address: 622 Emporium Tower
+Industrial and Commercial Bank
+of China (Thai) Public Company
+Limited
+SWIFT: ICBKPHMM
+Fax: +63-284032023
+Email: info@ph.icbc.com.cn
+Tel: +63-282803300
+Street Corner, 3rd Ave,
+BGC, Taguig City, Manila
+1634, Philippines
+Industrial and Commercial Bank
+of China Limited, Manila Branch
+Address: 24F, The Curve, 32nd
+Annual Report 2023
+Tel: 0951-5029739
+Tel: +352-2686661
+NINGXIA BRANCH
+Address: No. 67 Zhonghai Road,
+Jinfeng District, Yinchuan
+City, Ningxia Autonomous
+Region, China
+ICBC (London) PLC
+Address: 81 King William Street,
+London EC4N 7BG, UK
+Email: londonadmin@ld.icbc.com.cn
+Tel: +44-2073978888
+Fax: +44-2073978899
+SWIFT: ICBKGB2L
+Industrial and Commercial
+Bank of China Limited, London
+Branch
+Address: 81 King William Street,
+London EC4N 7BG, UK
+Email: londonadmin@ld.icbc.com.cn
+Tel: +44-2073978888
+Fax: +44-2073978890
+SWIFT: ICBKGB3L
+ICBC Standard Bank PLC
+Address: 20 Gresham Street,
+London, United Kingdom,
+EC2V 7JE
+Email: londonmarketing@icbcstandard.com
+Tel: +44-2031455000
+Fax: +44-2031895000
+SWIFT: SBLLGB2L
+Bank ICBC (joint stock company)
+Address: Building 29,
+Serebryanicheskaya
+embankment, Moscow,
+Russia Federation 109028
+Email: info@ms.icbc.com.cn
+Tel: +7-4952873099
+Fax: +7-4952873098
+SWIFT: ICBKRUMM
+ICBC Turkey Bank Anonim
+Şirketi
+Address: Maslak Mah. Dereboyu,
+2 Caddesi No: 13 34398
+Sariyer, ISTANBUL
+Email: gongwen@tr.icbc.com.cn
+Tel: +90-2123355011
+SWIFT: ICBKTRIS
+Annual Report 2023
+323
+List of Domestic and Overseas Branches and Offices
+Industrial and Commercial
+Bank of China Limited, Prague
+Branch, odštěpný závod
+Address: 12F City Empiria, Na Strži
+1702/65, 14000 Prague 4
+- Nusle, Czech Republic
+Email: info@cz.icbc.com.cn
+Tel: +420-237762888
+Fax: +420-237762899
+SWIFT: ICBKCZPP
+Industrial and Commercial Bank
+of China Limited, Beijing, Zurich
+Branch
+Address: Nüschelerstrasse 1,
+CH-8001, Zurich,
+Switzerland
+Email: service@ch.icbc.com.cn
+Tel: +41-58-9095588
+Fax: +41-58-9095577
+SWIFT: ICBKCHZZ
+Email: GAD@gr.icbc.com.cn
+Tel: +30-2166868888
+Fax: +30-2166868889
+Address: Amerikis 13, Athens 106
+72 Greece
+Industrial and Commercial Bank
+of China (Europe) S.A. Greece
+Representative Office
+SWIFT: ICBKPLPW
+Luxembourg
+Email: office@eu.icbc.com.cn
+Fax: +352-2686 66 6000
+SWIFT: ICBKLULU
+Industrial and Commercial Bank
+of China (Europe) S.A. Paris
+Branch
+Address: 73 Boulevard Haussmann,
+75008, Paris, France
+Email: administration@fr.icbc.com.cn
+Tel: +33-140065858
+Fax: +33-140065899
+SWIFT: ICBKFRPP
+Industrial and Commercial
+Bank of China (Europe) S.A.
+Amsterdam Branch
+Address: Johannes Vermeerstraat
+7-9, 1071 DK,
+Amsterdam, the
+Netherlands
+Email: icbcamsterdam@nl.icbc.com.cn
+Tel: +31-205706666
+Fax: +31-205706603
+SWIFT: ICBKNL2A
+ICBC Austria Bank GmbH
+Address: Kolingasse 4, 1090
+Vienna, Austria
+Industrial and Commercial Bank
+of China (Europe) S.A. Brussels
+Branch
+Email: info@be.icbc.com.cn
+Tel: +32-2-5398888
+Fax: +32-2-5398870
+SWIFT: ICBKBEBB
+Industrial and Commercial Bank
+of China (Europe) S.A. Milan
+Branch
+Address: Via Tommaso Grossi 2,
+20121, Milano, Italy
+Email: banking@it.icbc.com.cn
+Tel: +39-0200668899
+Fax: +39-0200668888
+SWIFT: ICBKITMM
+Industrial and Commercial Bank
+of China (Europe) S.A. Sucursal
+en España
+Address: Paseo de Recoletos, 12,
+28001, Madrid, España
+Email: gad.dpt@es.icbc.com.cn
+Tel: +34-912168837
+Fax: +34-912168866
+SWIFT: ICBKESMM
+Industrial and Commercial Bank
+of China (Europe) S.A. Poland
+Branch
+Address: Plac Trzech Krzyży 18, 00-
+499, Warszawa, Poland
+Email: info@pl.icbc.com.cn
+Tel: +48-222788066
+Fax: +48-222788090
+Address: 81, Avenue Louise, 1050
+Brussels, Belgium
+Email: generaldept@at.icbc.com.cn
+Tel: +43-1-9395588
+Fax: +43-1-9395588-6800
+SWIFT: ICBKATWW
+355, (C1107 CPG) Buenos
+Aires, Argentina
+Email: gongwen@ar.icbc.com.cn
+Tel: +54-1148203784
+Fax: +54-1148201901
+SWIFT: ICBKARBA
+ICBC Investments Argentina
+S.A.U. Sociedad Gerente de
+Fondos Comunes de Inversión
+Address: Blvd. Cecilia Grierson 355,
+Piso 14, (C1107CPG)
+CABA, Argentina
+Email: alpha.sales@icbc.com.ar
+Tel: +54-1143949432
+Inversora Diagonal S.A.U.
+Address: Florida 99, (C1105CPG)
+CABA, Argentina
+Tel: +54-1148202200
+Industrial and Commercial
+Bank of China Limited, Panama
+Branch
+Address: MMG Tower | 20th Floor
+| Ave. Paseo del Mar |
+Costa del Este
+Panama City, Republic of
+Panama
+Email: panama.branch@pa.icbc.com.cn
+Tel: +507-3205901
+SWIFT: ICBKPAPA
+Industrial and Commercial Bank
+of China (Argentina) S.A.U.
+Address: Blvd. Cecilia Grierson
+Africa
+Address 1: 47 Price Drive,
+Constantia, Cape Town,
+South Africa, 7806
+Address 2: T11, 2nd Floor East, 30
+Baker Street, Rosebank,
+Johannesburg,
+Gauteng, South Africa,
+2196
+Email: icbcafrica@afr.icbc.com.cn
+Tel: +27-608845323
+324
+Annual Report 2023
+ICBC
+Address: Level 20, Burj Doha, Al
+Corniche Street, West
+Bay, Doha, Qatar P.O.
+BOX: 11217
+中國北京市西城區復興門內大街55號郵編:100140
+Industrial and Commercial
+Bank of China Limited, African
+Representative Office
+B.P.278 L-2012
+SWIFT: ICBKPEPL
+Address: Calle Las Orquideas 585,
+Oficina 501, San Isidro,
+Lima, Peru
+Americas
+Industrial and Commercial Bank
+of China Limited, New York
+Branch
+Address: 725 Fifth Avenue, 20th
+Floor, New York, NY
+10022, USA
+Email: info-nyb@us.icbc.com.cn
+Tel: +1-2128387799
+Fax: +1-2125752517
+SWIFT: ICBKUS33
+Industrial and Commercial Bank
+of China (USA) NA
+Address: 1185 Avenue of the
+Americas, 16th Floor,
+New York, NY 10036
+Email: info@us.icbc.com.cn
+Tel: +1-2122388208
+Fax: +1-2122193211
+Email: consultas@pe.icbc.com.cn
+Tel: +51-16316800
+Fax: +51-16316802
+SWIFT: ICBKUS3N
+Email: info@icbkfs.com
+Tel: +1-2129937300
+Fax: +1-2129937349
+SWIFT: ICBKUS3F
+Industrial and Commercial Bank
+of China (Canada)
+Address: Unit 3710, Bay Adelaide
+Centre, 333 Bay Street,
+Toronto, Ontario, M5H
+2R2, Canada
+Email: info@icbk.ca
+Tel: +1-4163665588
+Fax: +1-4166072000
+SWIFT: ICBKCAT2
+Industrial and Commercial Bank
+of China Mexico S.A.
+Address: Paseo de la Reforma
+250, Piso 18, Col.
+Juarez, C.P.06600, Del.
+Cuauhtemoc, Ciudad de
+Mexico
+Email: info@icbc.com.mx
+Tel: +52-5541253388
+SWIFT: ICBKMXMM
+Industrial and Commercial Bank
+of China (Brasil) S.A.
+Address: Av. Brigadeiro Faria Lima,
+3477-Block B-6 andar-
+SAO PAULO/SP-Brasil
+Email: bxgw@br.icbc.com.cn
+Tel: +55-1123956600
+SWIFT: ICBKBRSP
+ICBC PERU BANK
+Industrial and Commercial Bank
+of China Financial Services LLC
+Address: 1633 Broadway, 28th
+Floor, New York, NY,
+10019, USA
+L-2449 Luxembourg,
+Address: 32, Boulevard Royal,
+of China (Europe) S.A.
+Postcode: 130022
+Avenue, Changchun City,
+Jilin Province, China
+Address: No. 9559 Renmin
+JILIN BRANCH
+Fax: 0731-84430039
+Tel: 0731-84428833/84420000
+Postcode: 410011
+City, Hunan Province,
+China
+Address: No. 619 Furong Middle
+Road Yi Duan, Changsha
+HUNAN BRANCH
+Tel: 027-69908676/69908658
+Fax: 027-69908040
+Postcode: 430071
+Address: No. 31 Zhongbei Road,
+Wuchang District, Wuhan
+City, Hubei Province,
+China
+Tel: 0431-89569718/89569523
+Fax: 0431-88923808
+HUBEI BRANCH
+Postcode: 150010
+HEILONGJIANG BRANCH
+Address: No. 218 Zhongyang
+Street, Daoli District,
+Harbin City, Heilongjiang
+Province, China
+Tel: 0371-65776888/65776808
+Fax: 0371-65776889/65776988
+Postcode: 450011
+Province, China
+Address: No. 99 Jingsan Road,
+Zhengzhou City, Henan
+HENAN BRANCH
+Tel: 0311-66000001/66001999
+Fax: 0311-66000002
+Postcode: 050051
+Shangwu Tower, No. 188
+Zhongshan West Road,
+Shijiazhuang City, Hebei
+Province, China
+Address: Tower B, Zhonghua
+HEBEI BRANCH
+Tel: 0898-65303138/65342829
+Fax: 0898-65342986
+Tel: 0451-84668270/84668577
+Fax: 0451-84698115
+Postcode: 570203
+JIANGSU BRANCH
+South Road, Nanjing City,
+Jiangsu Province, China
+List of Domestic and Overseas Branches and Offices
+319
+Annual Report 2023
+Tel: 0574-87361162
+Fax: 0574-87361190
+Postcode: 315010
+West Road, Ningbo City,
+Zhejiang Province, China
+Address: No. 218 Zhongshan
+NINGBO BRANCH
+Fax: 0471-6940048
+Tel: 0471-6940833/6940297
+Postcode: 010060
+Xincheng District, Hohhot
+City, Inner Mongolia
+Autonomous Region,
+China
+Address: No. 10 Silk Road Avenue,
+Address: No. 408 Zhongshan
+INNER MONGOLIA BRANCH
+Tel: 024-23491600
+Postcode: 110001
+Address: No. 88 Nanjing North
+Road, Heping District,
+Shenyang City, Liaoning
+Province, China
+LIAONING BRANCH
+Tel: 0791-86695682/86695018
+Fax: 0791-86695230
+Postcode: 330008
+Jiangxi Province, China
+District, Nanchang City,
+Address: No. 888, Fenghe Middle
+Avenue, Honggutan
+JIANGXI BRANCH
+Fax: 025-52858111
+Tel: 025-52858000
+Postcode: 210006
+Fax: 024-23491609
+Postcode: 750002
+Road, Haikou City, Hainan
+Province, China
+HAINAN BRANCH
+Tel: 023-62918002
+Postcode: 400061
+Road, Nan'an District,
+Chongqing, China
+CHONGQING BRANCH
+Address: No. 61 Taichang
+Fax: 010-66410579
+Tel: 010-66410579
+Postcode: 100031
+Fuxingmen South Street,
+Xicheng District, Beijing,
+China
+Mansion, No. 2
+Address: Tower B, Tianyin
+BEIJING BRANCH
+Fax: 0551-62868077
+Tel: 0551-62869178/62868101
+Fax: 023-62918059
+Postcode: 230001
+Hefei City, Anhui
+Address: No. 189 Wuhu Road,
+ANHUI BRANCH
+Domestic Institutions
+List of Domestic and Overseas Branches and Offices
+Tel: +49-6950604700
+Fax: +49-6950604708
+SWIFT: ICBKDEFF
+Industrial and Commercial Bank
+of China Limited, Luxembourg
+Branch
+Address: 32, Boulevard Royal,
+L-2449 Luxembourg,
+B.P.278 L-2012
+Luxembourg
+Email: office@eu.icbc.com.cn
+Tel: +352-2686661
+Fax: +352-2686 66 6000
+SWIFT: ICBKLULL
+Industrial and Commercial Bank
+Province, China
+Address: No. 54 Heping South
+DALIAN BRANCH
+Dalian City, Liaoning
+Tel: 0851-88609116/88620018
+Fax: 0851-85963911
+Postcode: 550001
+Address: No. 200 Zhonghua North
+Road, Yunyan District,
+Guiyang City, Guizhou
+Province, China
+GUIZHOU BRANCH
+Fax: 0771-5316617/2806043
+Tel: 0771-5316617
+Postcode: 530022
+Address: No. 15-1 Jiaoyu Road,
+Nanning City, Guangxi
+Zhuang Autonomous
+Region, China
+GUANGXI BRANCH
+Postcode: 510120
+Tel: 020-81308130
+Fax: 020-81308789
+China
+Address: No. 123 Yanjiang West
+Road, Guangzhou City,
+Guangdong Province,
+GUANGDONG BRANCH
+Address: No. 5 Zhongshan Square,
+Fax: 0931-8435166
+Postcode: 730030
+Address: No. 408 Qingyang Road,
+Chengguan District,
+Lanzhou City, Gansu
+Province, China
+GANSU BRANCH
+Tel: 0591-88087819/88087000
+Fax: 0591-83353905/83347074
+Postcode: 350005
+Province, China
+Fuzhou City, Fujian
+Address: No. 108 Gutian Road,
+FUJIAN BRANCH
+Fax: 0411-82808377
+Tel: 0411-82378888
+Postcode: 116001
+Province, China
+Tel: 0931-8436609
+Email: icbcdoha@doh.icbc.com.cn
+Tel: +974-44072758
+Fax: +974-44072751
+SWIFT: ICBKQAQA
+www.icbc.com.cn | www.icbc-ltd.com
+55 Fuxingmennei Avenue, Xicheng District, Beijing, China | Post Code: 100140
++
+SUMMARY OPERATING SEGMENT INFORMATION
+2023
+In RMB millions, except for percentages
+2022
+37 Personal Banking
+Item
+Amount
+Percentage
+(%)
+Percentage
+Amount
+(%)
+Operating income
+806,458
+100.0
+842,352
+32 Corporate Banking
+BUSINESS OVERVIEW
+Discussion and Analysis
+31
+Discussion and Analysis
+Shareholders' Equity
+As at the end of 2023, shareholders' equity totaled RMB3,776,588 million, RMB261,169 million or 7.4% higher than
+that at the end of the previous year. Equity attributable to equity holders of the parent company recorded an increase of
+RMB260,778 million or 7.5% to RMB3,756,887 million. Please refer to the "Consolidated Statement of Changes in Equity"
+for details.
+Off-balance Sheet Items
+The off-balance sheet items of the Bank mainly include derivative financial instruments, contingencies and commitments.
+For details on the nominal amount and fair value of derivatives financial instruments, please refer to "Note 21. to the
+Consolidated Financial Statements: Derivative Financial Instruments". For details on contingencies and commitments, please
+refer to "Note 47. to the Consolidated Financial Statements: Commitments and Contingent Liabilities".
+Analysis on Statement of Cash Flows
+100.0
+Net cash inflows from operating activities amounted to RMB1,417,002 million, representing an increase of RMB12,345
+million as compared to last year, principally due to the increase of net increase of due to customers. Specifically, cash
+outflows of operating assets increased by RMB351,287 million; and cash inflows of operating liabilities increased by
+RMB453,898 million.
+Net cash inflows from financing activities amounted to RMB285,444 million. Specifically, cash inflows were RMB1,422,308
+million, representing an increase of RMB466,446 million over last year, mainly due to the increased cash proceeds from
+debt securities issued; and cash outflows were RMB1,136,864 million, representing an increase of RMB116,213 million,
+mainly due to the increased cash payment for repayment of debt securities.
+Changes of Major Accounting Policies
+Since 2017, the International Accounting Standards Board has successively promulgated IFRS 17 — Insurance Contracts
+and the Amendments to IFRS 17. In accordance with the implementation requirements of the International Accounting
+Standards Board, the Group has implemented the above-mentioned new IFRS since 1 January 2023. Please refer to "Note
+3.(1) New and amendments to IFRSS that are mandatorily effective for the current year" for details.
+Reconciliation of Differences between the Financial Statements Prepared under PRC
+GAAP and Those under IFRSS
+In respect of the financial statements of the Bank prepared under PRC GAAP and those under IFRSS, net profit attributable
+to equity holders of the parent company for the year ended 31 December 2023 and equity attributable to equity holders of
+the parent company as at the end of the reporting period have no differences.
+Annual Report 2023
+Net cash outflows from investing activities amounted to RMB891,852 million. Specifically, cash inflows were RMB3,824,545
+million, representing an increase of RMB293,157 million over last year, mainly due to the increased cash proceeds from the
+sale and redemption of financial investments; and cash outflows were RMB4,716,397 million, representing an increase of
+RMB274,388 million, mainly due to the increase in cash payment for financial investments.
+Corporate banking
+381,914
+47.3
+Profit before taxation
+421,966
+100.0
+424,720
+100.0
+Corporate banking
+43 Financial Market Business
+186,946
+179,219
+42.2
+Personal banking
+150,474
+35.7
+187,093
+44.3
+0.7
+6,049
+0.7
+388,915
+46.2
+41 Asset Management Services
+Personal banking
+317,856
+39.4
+347,014
+41.2
+Treasury operations
+101,420
+12.6
+100,374
+11.9
+Other
+5,268
+Annual Report 2023
+30
+Debt securities issued amounted to RMB1,369,777 million, RMB463,824 million or 51.2% higher than that at the end of
+the previous year, principally due to the increased size of NCDs and tier 2 capital bonds issued by the Bank.
+Debt Securities Issued
+Amount
+(%)
+Amount
+(%)
+Head Office
+32,408
+Item
+0.1
+0.1
+Yangtze River Delta
+7,120,750
+21.2
+6,249,754
+20.9
+35,579
+Pearl River Delta
+Percentage
+In RMB millions, except for percentages
+At 31 December 2022
+Accrued interest
+Total
+Note:
+(1) Includes outward remittance and remittance payables.
+535,493
+1.6
+Percentage
+454,566
+33,521,174
+100.0
+29,870,491
+100.0
+DISTRIBUTION OF DUE TO CUSTOMERS BY GEOGRAPHIC AREA
+At 31 December 2023
+1.5
+4,618,362
+13.8
+4,048,164
+1,608,543
+5.4
+Overseas and other
+1,095,153
+3.2
+1,067,072
+5.3
+3.6
+33,521,174
+100.0
+29,870,491
+100.0
+Repurchase Agreements
+Repurchase agreements amounted to RMB1,018,106 million, RMB443,328 million or 77.1% higher than that at the end of
+the previous year, principally because the Bank moderately borrowed funds based on management needs.
+Total
+1,768,620
+Northeastern China
+16.0
+13.6
+Bohai Rim
+8,811,355
+26.3
+7,629,312
+25.5
+Central China
+4,855,178
+14.5
+4,455,782
+14.9
+Western China
+5,219,348
+15.6
+4,776,285
+44.1
+45 FinTech
+Treasury operations
+77,165
+The Bank supported the high-quality development
+of sci-tech innovation enterprises through diversified
+equity financing, and improved the financial service
+support system featuring "equity, loan, debt and
+guarantee" interconnection. The Bank enriched
+equity financing products, and optimized the multi-
+dimensional and multi-level equity business system of
+"branch + subsidiary", "primary market + secondary
+market", and "financing + consulting", to enhance
+financial services for enterprises throughout the
+whole lifecycle.
+The Bank assisted in rehabilitating existing assets in
+line with the needs of governments and enterprises,
+Annual Report 2023
+Discounted Bills Business
++ Through such products and services as "ICBC
+Manufacturing Companionship", "ICBC Rural
+Revitalization Discounting" and "ICBC i Green
+Discount", the Bank intensified bills financing
+services for key fields such as sci-tech innovation,
+advanced manufacturing and green development,
+as well as key strategies such as "SRDI" and
+'rural revitalization". The Bank also promoted the
+transformation and development of bill business
+through operation innovations, including adopting a
+flexible interest rate strategy, speeding up turnover
+and building a bill purchase platform.
+In 2023, the Bank had discounted bills at an amount
+of RMB2,716,741 million, contributing an increase
+of 23.2% over the previous year, and kept the
+leading position in the market. In 2023, the Bank
+was awarded "Excellent Integrated Bank", "Excellent
+Discount Institution", "Excellent Trading Institution",
+"Excellent Settlement Institution" and "Excellent
+Innovative Product Cooperative Institution" by
+Shanghai Commercial Paper Exchange.
+36
+Discussion and Analysis
+In 2023, the Bank deepened the implementation of the
+strategy of building the "No.1 Personal Bank". Catering
+to customers' needs to spend money, make money,
+borrow money and manage money, the Bank built a new
+ecosystem of wealth management, consumer finance,
+payment and settlement, and account management
+services, and accelerated the transformation of business
+operation mode focusing on the building of "master
+payment account master wealth account
+relationship account" of personal customers.
+master
+Transformation of operation was accelerated.
+The Bank promoted the transition from "selling
+products" to "serving customers", integrated
+service resources, created new services and products
+and optimized service process based on customer
+demands, and realized the Bank's value by creating
+value for customers. The Bank built a multi-layer
+customer segmentation system for all customers,
+and seized new markets and new opportunities such
+as counties, new urban residents, personal pension,
+and Generation Z. It expanded customer sources in
+batches, developed exclusive products and services,
+and cultivated exclusive brands. The Bank deepened
+the digital transformation of personal banking, and
+leveraged digital technology to serve customers and
+empower employees. In terms of serving customers,
+the Bank built a coordination center for implementing
+the "Intelligent Brain" marketing strategy, refined
+marketing services targeted at all customers, and
+deeply implemented the "intelligent experience"
+project. By establishing a closed loop of management
+for identifying and resolving customers' problems,
+the Bank effectively improved customers' satisfaction
+and experience. In terms of empowering employees,
+the Bank created a digital intelligent management
+platform for personal banking (DIMO) and "Marketing
+Express" personal account manager work platform to
+improve work efficiency and effectiveness.
+4
+High-quality business development was pushed
+forward. The Bank kept improving the customer fund
+circulation ecosystem, accelerated the innovation of
+personal deposit products, and developed exclusive
+deposits and wealth management products for key
+customers, to better meet the differentiated service
+needs of different customer groups. Faced with the
+new situation of significant changes in the supply
+and demand relationship of the real estate market,
+the Bank pursued city-specific differentiated policies
+to meet the rigid and improving housing needs of
+residents, and actively and prudently adjusted the
+interest rates of existing residential mortgages.
+The Bank increased personal business loans and
+consumer loans focusing on areas such as self-
+employed business, private economy and bulk
+consumption. It launched innovative student loans
+based on the needs of college students at different
+stages, including enrollment, study, and graduation.
+The Bank focused on creating customer value. With
+the goal of asset preservation and appreciation for
+customers, the Bank enhanced investment research
+capabilities, created open product shelves, and
+comprehensively promoted wealth communities and
+intelligent asset allocation services. An integrated
+online and offline business pattern has been
+established to meet customers' personalized and
+companionship wealth management needs. The
+"ICBC Wealth" brand has been established. The
+"Money Link Account" service brand was launched,
+providing full lifecycle account services that cover
+intelligent account opening, intelligent account
+management, and intelligent account protection. It
+improved the process of featured debit cards and
+personalized services, and steadily increased the
+penetration rate of basic settlement products such as
+third-party payments and ICBC Messenger.
+Personal deposits
+Personal Banking
+Unit: RMB millions
++
+Investment Banking
+Trust Protection Fund Co., Ltd. The Bank has ranked
+first in the market for five consecutive years in terms
+of innovative services to meet the financing needs
+of small and medium-sized enterprises, and newly
+added bill brokerage customers that have signed
+contracts with the Bank. The Bank joined forces
+with key property insurance companies to promote
+enterprise risk management solutions for 10
+industries on a pilot basis, to support enterprises in
+forestalling and defusing production and operation
+risks. The Bank deepened strategic cooperation
+with the Beijing, Shanghai and Shenzhen stock
+exchanges, actively participated in capital market
+reform and innovation, and developed an exclusive
+interactive service model for commercial banking and
+investment.
+Cooperation with peers in digital finance was
+advanced. The Bank pressed forward with the output
+of digital projects such as data analysis, data security,
+digital transformation consulting and data platforms
+to peers, launched the bill brokerage functions
+of Xingnongtong APP, enriched the scenarios of
+acquiring third-party depository customers of the
+"Intelligent Brain" and "Ma Shang Ying" digital
+platforms, and continued to empower the digital
+transformation of financial peers.
+Settlement and Cash Management
+The Bank continued to deepen the digital
+transformation of settlement finance, and improved
+corporate account services to continuously improve
+the depth and breadth of settlement financial
+services, and effectively boost the high-quality
+development of small and micro enterprises. The
+Bank actively responded to and implemented
+the national policy of reducing fees, and steadily
+promoted reduction of fees for small and micro
+enterprises and self-employed businesses. In 2023, it
+benefited 10.44 million small and micro enterprises
+and self-employed businesses, living up to the
+responsibilities of a large bank.
+Annual Report 2023
+35
++ The Bank actively implemented the country's key
+strategies through "M&A plus" full-process services,
+with a focus on strategic emerging industries, sci-
+tech innovation and green industry development. In
+2023, by the number of M&A deals led by the Bank,
+the Bank ranked first in Refinitiv's ranking of Any
+Chinese Investment Completed, and was awarded
+the "Best Bank for M&A in China" by the Global
+Finance.
+Discussion and Analysis
+The Bank developed a one-stop, comprehensive
+and digital service solution for enterprises'
+treasury, integrating FinTech capabilities. The Bank
+improved the treasury information system to assist
+enterprises in improving their fund management
+and preventing fund management risks. The Bank
+enriched treasury management cloud services and
+created a differentiated and matrix-based financial
+management service system. The Bank facilitated
+state-owned enterprises to deepen reform, and
+extended treasury services to local state-owned
+enterprise customers. It has established cooperation
+with hundreds of provincial and municipal state-
+owned enterprises in treasury services.
+ICBC profoundly participated in the building
+of overseas treasury centers for multinational
+enterprises, assisted Chinese-funded enterprises
+in going global through internal and external
+collaboration, and provided customers with global
+treasury comprehensive solutions relying on its
+global network, domestic and overseas integrated
+technology system and professional service team.
+At the end of 2023, the Bank maintained
+13,738 thousand corporate settlement accounts,
+representing an increase of 1,455 thousand over the
+end of the previous year. It had 2,027 thousand cash
+management customers, including 11,563 global
+cash management customers.
+and provided comprehensive financial support for
+expanding effective investment, mitigating debt risks,
+and serving the real economy. The Bank expanded
+the full-scenario asset securitization services for
+enterprises, optimized the full-process services of
+"REITS+", and launched the first Belt and Road asset
+securitization project in China as a project arranger.
+The Bank developed its restructuring consulting
+service model, enriched the product "toolkit", and
+helped enterprises improve operating quality and
+efficiency, thus effectively preventing and defusing
+financial risks. The Bank integrated the advantages
+of industry research, risk control, and FinTech
+resources of the Group to provide customers with
+professional consulting services such as financial
+advisory, risk control advisory, and management
+consulting. Relying on the "ICBC e Security" big data
+risk control platform, the Bank assisted customers in
+achieving early risk identification and warning.
+The Bank continued to consolidate its advantages in
+bond underwriting and underwrote 2,711 domestic
+bonds in 2023, with a total amount of RMB2.08
+trillion. The Bank underwrote 95 ESG bonds with
+a total amount of RMB112,875 million, including
+green bonds, sustainability bonds, and social bonds.
+The Bank underwrote 33 panda bonds for 20
+overseas customers, with a total amount of RMB21.4
+billion.
++
+Personal loans
+Unit: RMB millions
+8,653,621
++
+4
++
+The Bank strengthened the full-journey construction
+of customer services, advanced customer
+segmentation services, and built a full-chain product
+service ecosystem composed of "research, selection,
+selling and management". The Bank created a new
+paradigm for serving entrepreneurial customers,
+and released the entrepreneurial partner banking
+service system with the theme of "Forwarding
+with Our Partners for Entrepreneurial Glory". It has
+set up approximately 900 "Entrepreneurs Service
+Centers". To achieve the upgrading and promotion
+of family trusts, the Bank collaborated with partners
+to release the innovative "Collective Charity Trust
+Service Ecosystem" version 2.0 (Donor-advised Fund
+model), and won the "Shanghai Financial Innovation
+Award of the Year" from the Shanghai Municipal
+Government. The Bank collaborated with partners to
+launch the "Prolong Life Joyfully" series of special
+purpose family trust for elderly care in an innovative
+manner, thus solving customers' pain points in the
+field of elderly care security. It also advanced the
+implementation of family office comprehensive
+consulting services.
+The Bank was awarded the "Best Entrepreneur
+Client Service in Private Banking in China" by The
+Asian Banker and the Wealth, and the "Best Private
+Bank for Big Data Analytics and Al in China" by the
+Financial Times of the UK.
+At the end of 2023, the Bank maintained 262.9
+thousand private banking customers, representing
+an increase of 36.9 thousand or 16.3% over the
+end of the previous year. Assets under management
+totaled RMB3.07 trillion, representing an increase of
+RMB443.1 billion or 16.9%.
+Private Banking
+Bank Card Business
+Under the framework of "GBC+", the Bank
+deepened the basic project of merchant marketing,
+continuously expanded the coverage of financial
+services for merchants, and provided a package
+of comprehensive services. The total number
+of merchants has exceeded 12 million, and the
+acquiring transaction value has reached RMB4.5
+trillion. Service quality and efficiency have been
+improved markedly. The Bank carried out an action
+to "stimulate domestic demands and consumption
+in cooperation with tens of millions of merchants to
+offer preferential services for hundreds of millions
+of customers" and more than 500 "ICBC I GO"
+sales promotion activities focusing on the clothing,
+food, housing, transportation, sports, tourism, and
+entertainment of residents. It was the first one
+among domestic financial institutions to support the
+building of a cultural tourist station, and increased
+credit support for automobiles, home decoration and
+other bulk consumptions, to help expand domestic
+demand and stabilize economic growth.
+A new ecosystem of lifestyle services based on ICBC
+e Life 6.0 platform was created. In cooperation with
+high-quality top platforms, the Bank developed eight
+ecosystems composed of "takeout, catering, tourism,
+shopping, supermarket, theme parks, digital movie,
+and car owner life", and three life circles of "office
+life, community life, and scenario life", achieving
+mutual promotion between B end and C end,
+enriching the rights and interests service system, and
+providing better customer feedback.
+Product innovation was intensified. The Bank
+developed innovative ride codes across Hong
+Kong, Macao and Zhuhai. It simultaneously issued
+fashionable Macao-themed cards at home and
+abroad. The "China-Laos Railway" online ticketing
+APP acquiring project was developed and put into
+service. To support the payment acceptance for the
+FISU World University Games and the Asian Games,
+the Bank launched "tied foreign card" products
+in an innovative way, ensuring the convenience of
+mobile payments for overseas visitors to China, and
+providing a "safe, efficient, diverse and convenient"
+payment environment.
+As at the end of 2023, the Bank had issued 1,230
+million bank cards, up 10.88 million over the end of
+the previous year, including 1,077 million debit cards
+and 153 million credit cards. The balance of credit
+card overdrafts was RMB689,731 million. In 2023,
+ICBC bank cards registered a consumption volume of
+RMB20.84 trillion, including RMB18.60 trillion from
+debit cards and RMB2.24 trillion from credit cards.
+38
+Annual Report 2023
++
+Bank was awarded the "Best Wealth
+Management Bank in Asia Pacific" and "Best Digital
+Brand Campaign" by The Asian Banker, and the
+"Outstanding Retail Bank" and "Outstanding Wealth
+Management Bank" by JRJ.com. At the end of
+2023, the number of personal customers increased
+by 19.80 million over the end of the previous year
+to 740 million. Assets under management totaled
+RMB20.71 trillion. Specifically, personal deposits
+reached RMB16,565,568 million, representing
+an increase of RMB2,020,262 million or 13.9%.
+Personal loans stood at RMB8,653,621 million,
+representing an increase of RMB418,996 million
+or 5.1%. Funds under agency sales amounted to
+RMB419.7 billion, government bonds under agency
+distribution were valued at RMB52.2 billion, and
+personal insurance products under agency sales were
+reported at RMB97.4 billion.
+The
+4
+8,234,625
+7,944,781
+16,565,568
+12,497,968
+14,545,306
+ווה
+2021
+2022
+2023
+2021
+2022
+2023
+Annual Report 2023
+37
+Discussion and Analysis
+The Bank collaborated with peers in serving the
+real economy. The Bank developed a financial
+industry consortium with the characteristics of
+ICBC, to jointly support the real economy. The Bank
+assisted China Securities Depository & Clearing
+Corporation Limited in successfully completing the
+first batch of cross-border fund clearing on newly
+added Southbound Trading Link trading days, and
+established a comprehensive partnership with China
+0.7
+The Bank cooperated with local governments
+throughout China to show its responsibilities as
+a large bank. The Bank facilitated the reform of
+the national fiscal system, and assisted the central
+budget units in launching the integrated system of
+agency fiscal budget. It served the circulation of
+fiscal funds in a safe and efficient manner, and did
+a good job in the centralized payment on behalf
+of the treasury. More than 400 political and legal
+organ customers at all levels have been unveiled on
+the "Intelligent Politics and Laws", a political and
+legal case fund management platform, including
+over 200 unveiled in 2023. The Bank consolidated
+the foundation of a lead bank for social security
+business, with more than 4,000 "social security-bank
+integrated outlets" in China, ranking first among
+peers.
+Comprehensive services have been increasingly
+considerate. The Bank improved the comprehensive
+service system that combined financing, consulting
+and commercial services, creating a sound ecosystem
+of growing with small and micro enterprises. The
+Bank promoted a series of activities such as "ICBC
+Inclusive Finance Travel" and "Visiting Tens of
+Thousands of Enterprises, Enhancing Confidence and
+Improving Services", promoted the "ICBC Business
+Matchmaking" and "Agricultural Matchmaking"
+platforms, and provided one-stop services such
+as product recommendation, supply and demand
+matchmaking, and financing support.
+32
+Annual Report 2023
+Discussion and Analysis
++
+The Bank consolidated its credit advantage in the
+manufacturing industry. Guided by the strategies
+of building a great power in manufacturing
+and science & technology, the Bank served the
+breakthroughs in core technologies of key industrial
+chains, and actively supported high-quality
+advanced manufacturing enterprises. The Bank
+solidified the foundation of financial services for the
+manufacturing industry, and launched a special plan
+for providing financial support for the development
+of advanced manufacturing clusters in conjunction
+with the Ministry of Industry and Information
+Technology. The balance of loans to manufacturing
+stood at RMB3.8 trillion, representing an increase of
+RMB828,870 million or 27.3% over the end of the
+previous year.
+The Bank continued to optimize the construction
+of specialized technology finance institutions,
+established the Head Office's Technology Finance
+Center, and preliminarily formed a four-level
+interconnective professional service system for
+the Head Office, branches, sub-branches and
+outlets. It deepened the "Chunmiao Action", and
+increased financing for technology enterprises. The
+Bank strengthened the "equity, loan, debt and
+insurance" interconnection, granted more loans
+to Specialization, Refinement, Differentiation and
+Innovation ("SRDI") enterprises, gave play to the
+role of sci-tech innovation in driving the modern
+industrial system, and supported the virtuous
+circle of "sci-tech industry finance". The
+balance of loans to strategic emerging industries
+reached RMB2.7 trillion, representing an increase of
+RMB948,405 million or 54.1% over the end of the
+previous year.
+60 Major Controlled Subsidiaries
+and Equity Participating
+Company
+-
+The Bank endeavored to support the major strategies
+and key fields in relation to the high-level opening
+up and the Belt and Road Initiative. The Bank also
+held a forum on facilitating the optimization of
+business environment for foreign investment, and
+released a financial proposal for foreign-invested
+enterprises at the forum. The Bank provided full-
+spectrum financial services for over 120 thousand
+foreign-invested enterprises to come to China for
+business development and expansion. In the fields
+of ensuring the supply of strategic resources, serving
+Chinese manufacturing enterprises "Going Global",
+and supporting infrastructure connectivity and green
+and low-carbon development, the Bank vigorously
+supported Chinese enterprises in laying out high-
+quality resources abroad, advanced manufacturing
+enterprises in making the best of both domestic
+and overseas markets, and pushed forward the
+implementation of landmark infrastructure projects.
+In 2023, the Bank won the "Best Domestic Bank for
+Belt and Road" award from the Global Finance and
+the "Project Finance House of the Year" award from
+The Asset again.
+Annual Report 2023
+33
+Discussion and Analysis
+Corporate loans of domestic branches by
+industry of loan customers
+Corporate deposits
+The Bank continuously stepped up financial support
+for private enterprises and kept improving financial
+services for these enterprises. It held a private
+enterprise symposium, and released the Financial
+Support Action Plan for High-quality Development of
+Private Enterprises. The bank-wide "Five Emphases"
+series activities were held to support the high-
+quality development of private enterprises. The
+Bank also held financial training programs for senior
+management of private enterprises.
+Unit: RMB millions
+Focusing on the services for the real economy, the Bank optimized
+the guideline on corporate banking credit, reasonably expanded total
+financing, accurately supported key areas and weak links of the real
+economy, enhanced the adaptability of credit structure to the real
+economy, and ensured the targeted credit supply. The Bank continuously
+improved customer structure, with a breakthrough made in medium
+customers. It promoted the in-depth development of systematic marketing,
+and accelerated the building of a customer structure composed of large,
+medium, small and micro enterprises and personal customers in balanced
+proportions. At the end of 2023, corporate loans reached RMB16,145,204
+million, representing an increase of RMB2,318,238 million or 16.8% over
+the end of last year. Corporate deposits stood at RMB16,209,928 million,
+representing an increase of RMB1,538,774 million or 10.5%. Corporate
+customers numbered 12,059 thousand, up 1,366 thousand.
+57 Comprehensive Operation and
+Subsidiary Management
+18.3
+52,740
+12.4
+Other
+7,381
+1.7
+Corporate Banking
+5,668
+47 Internet Finance
+Note: Please see "Note 49. to the Consolidated Financial Statements: Segment
+Information" for details.
+49 Outlet Building and Service
+Improvement
+51 Human Resources
+Management, Employees
+and Institutions
+54 International Operation
+1.3
+Transportation, storage and postal services
+Manufacturing
+24.1%
+15.8%
+5.1%
+2021
+2022
+2023
+Inclusive Finance
+Catering to customer demands, the Bank continuously
+improved the coverage, accessibility and satisfaction
+of inclusive financial services, and made efforts to
+alleviate the difficulties of small and micro customers in
+accessing financing. As at the end of 2023, the balance
+of inclusive small and micro enterprise loans amounted
+to RMB2,227,752 million, representing an increase of
+RMB677,436 million or 43.7% over the beginning of the
+year. Inclusive small and micro enterprise loan customers
+numbered 1,467 thousand, representing an increase
+of 451 thousand. The average interest rate of inclusive
+small and micro enterprise loans newly granted in the
+year was 3.55%, significantly reducing financing costs. In
+2023, the Bank was awarded the "Best Inclusive Financial
+Service Bank of the Year" by the Financial News (China).
+Its inclusive finance services that combined financing,
+consulting and commercial services were awarded
+"Example Cases of Innovative Service Delivery" by China
+International Fair for Trade in Services for the third
+consecutive year, and the innovation case of its digital
+inclusive product - "Planting e Loan" was awarded the
+"Outstanding Case of Inclusive Finance Service Innovation
+of the Year" by The Chinese Banker.
+Other
+Product system has become increasingly compatible.
+A digital inclusive center was set up to improve
+the development mode of digital inclusive. The
+Bank launched a new-generation Quick Lending for
+Operation featuring open application and flexible
+withdrawal, upgraded digital credit products, and
+significantly improved the capability and coverage
+of inclusive finance services. The Bank simplified
+the "Online Revolving Loan" procedures, advanced
+the direct connection of mortgage registration
+system, improved processing efficiency, launched
+Channel operation has become increasingly efficient.
+The Bank actively developed an integrated online
+and offline small and micro customer service model,
+making inclusive finance services accessible. The
+Bank developed an inclusive edition of mobile
+banking online to provide a one-stop exclusive
+service channel for inclusive finance. It strengthened
+the inclusive finance service capability of outlets,
+and expanded the coverage of inclusive services of
+outlets.
+Risk control system has become increasingly sound.
+In order to apply technology to risk control, the
+Bank established and improved a multi-dimensional
+credit risk prevention and control system for "One
+Customer+ N Products", and developed a full-
+process risk management system featuring "data
+driven, intelligent warning, dynamic management
+and continuous operation". The Bank combined
+digital risk control with loan management by
+experts, and strengthened online and offline cross-
+validation to effectively identify risks. It has achieved
+"active prevention, smart control and comprehensive
+management", laying solid foundation for
+sustainable development of inclusive finance.
+a
+34
+Annual Report 2023
+Discussion and Analysis
+innovative scenarios such as "Personal e-Enterprise
+Quick Loan", and expanded credit support for self-
+employed businesses. Focusing on the key fields
+of supply chain, the Bank developed a customized
+financing plan to stabilize, consolidate and reinforce
+the supply chain. With the standardized product
+system, the Bank accurately focused on regional
+and customer characteristics, furthered innovation
+in specific scenarios for branches, and improved the
+pertinence and adaptability of services for small and
+micro customers.
+2.0%
+Mining
+2.6%
+Leasing and commercial services
+15.5%
+16,209,928
+Water, environment and public utility management
+14,671,154
+11.6%
+13,331,463
+Production and supply of electricity, heating, gas and water 10.7%
+Real estate
+5.1%
+Wholesale and retail
+4.6%
+Construction
+2.9%
+Science, education, culture and sanitation
+Institutional Banking
+199,465
+The Bank advanced the comprehensive development
+of green finance and kept its leading position.
+The Opinions on Promoting the High-quality
+Development of Green Finance of ICBC were
+developed, upgrading the seven major systems
+of green finance, including layout, products, risk
+control, management, research and organization.
+As at the end of 2023, green loans under the
+NFRA's criteria amounted to nearly RMB5.4 trillion,
+representing an increase of nearly RMB1.4 trillion
+over the end of the previous year.
+210,185
+Amount
+(%)
+33,521,174
+81.9
+Amount
+29,870,491
+(%)
+82.8
+3,369,858
+8.2
+3,187,712
+8.8
+1,018,106
+Percentage
+2.5
+1.6
+1,369,777
+3.3
+905,953
+2.5
+1,641,576
+4.1
+1,555,793
+4.3
+40,920,491
+100.0
+36,094,727
+574,778
+Percentage
+In RMB millions, except for percentages
+At 31 December 2022
+At 31 December 2023
+0.6
+Structure of liabilities
+Item
+Due to customers
+Due to banks and other financial institutions
+Repurchase agreements
+Debt securities issued
+Other
+Total liabilities
+Due to Customers
+Discussion and Analysis
+2023
+2022
+81.9%
+Due to customers
+82.8%
+8.2%
+Due to banks and
+other financial institutions
+2.5%
+Repurchase agreements
+1.6%
+3.3%
+Debt securities issued
+2.5%
+4.1%
+Other
+4.3%
+100.0
+Due to customers is the Bank's main source of funds. As at the end of 2023, due to customers was RMB33,521,174 million,
+RMB3,650,683 million or 12.2% higher than that at the end of the previous year. In terms of customer structure, corporate
+deposits increased by RMB1,538,774 million or 10.5%; and personal deposits increased by RMB2,020,262 million or
+13.9%. In terms of maturity structure, time deposits increased by RMB4,176,147 million or 27.6%, while demand deposits
+decreased by RMB617,111 million or 4.4%. In terms of currency structure, RMB deposits stood at RMB31,837,835 million,
+representing an increase of RMB3,684,821 million or 13.1%. Foreign currency deposits were equivalent to RMB1,683,339
+million, with a decrease of RMB34,138 million or 2.0%.
+8.8%
+O
+Demand deposits
+7,366,691
+22.0
+8,076,256
+27.0
+Subtotal
+16,209,928
+48.4
+14,671,154
+49.1
+Personal deposits
+Time deposits
+Demand deposits
+Subtotal
+10,481,727
+31.3
+8,553,919
+6,083,841
+18.1
+5,991,387
+20.1
+16,565,568
+49.4
+14,545,306
+48.7
+Other deposits (1)
+Distribution of due to customers by business line
+22.1
+6,594,898
+28.6
+8,843,237
+2023
+48.4%
+49.4%
+0.6%
+26.4
+2022
+Corporate deposits
+49.1%
+Personal deposits
+48.7%
+0.7%
+1.6%
+Accrued interest
+1.5%
+Annual Report 2023
+29
+Discussion and Analysis
+Other deposits
+In RMB millions, except for percentages
+Corporate deposits
+Time deposits
+DISTRIBUTION OF DUE TO CUSTOMERS BY BUSINESS LINE
+(%)
+Percentage
+(%)
+Amount
+Amount
+Item
+Percentage
+At 31 December 2022
+At 31 December 2023
+In 2023, the Bank ranked first in the market in terms
+of the amount of clearing on behalf of Shanghai
+Gold Exchange, and the scale of enterprise gold
+leasing and interbank gold leasing. The Bank was
+awarded "First Prize of the Excellent Financial
+Member" and "Best Product Promotion Contributor"
+again by the Shanghai Gold Exchange.
+Asset Securitization Business
+The Bank enhanced the inclusiveness of precious
+metal physical products, and launched a new
+version of small specification affordable Ruyi gold
+bars, lowering the threshold for purchasing gold.
+Tailored to the preferences of young customers, the
+Bank developed the second phase of "Harry Potter"
+products. In line with regional characteristics, it
+developed the "Magnificent Sichuan • Traveling
+Panda" series products, and won the "Happy Tianfu
+Chengdu Gift" gold award.
+•
+In terms of foreign institutional investors trading
+business in China's interbank market, the Bank
+actively served foreign institutional investors from
+more than 60 countries and regions throughout
+the world, to meet their needs for investment and
+trading in China's interbank market. The Bank
+won the "Excellent Settlement Agent under Global
+Connect Business" and the "Excellent Contributors
+to International Business" granted by China Central
+Depository & Clearing Co., Ltd., and the "Cross-
+border Subscription Pioneer (Underwriter)" granted
+by Bond Connect Co., Ltd.
+Precious metal services targeted at corporate and
+institutional customers were improved. Focusing
+on the construction of a modern industrial system,
+the Bank consolidated financial services for
+enterprises in the industry chain of precious metals,
+and developed raw material financing services for
+emerging industries that apply precious metals,
+such as petroleum refining, photovoltaics, and new
+materials. The Bank actively satisfied the demand
+for interbank gold leasing, and steadily promoted
+the cooperation of banks in association to gold
+accumulation products, to further meet the asset
+allocation needs of customers in urban and rural
+markets.
+Precious Metal Business
+44
+In 2023, the Bank was ranked first place in the banking
+industry in NFRA's IT supervision ratings, keeping the
+leading position among peers. The Bank's five technical
+achievements won PBC's "FinTech Development
+Awards", of which the banking FinTech online database
+transformation project won the First Prize. The Bank
+won a number of FinTech awards, including the "Best
+Process Automation Project", the "Best Data Management
+Implementation" and the "Best Banking as a Service
+Technology in China" granted by The Asian Banker, and
+the "Institution of Excellence in Financial Innovation" and
+the "Outstanding Cases of Fintech Innovation" granted
+by The Chinese Banker. The Bank's Al big model was
+ranked first in the "Top 10 Financial Informatization Events
+in 2023" by the Financial Computerizing of PBC. It was
+the only innovative application of big model technology
+selected in the banking industry. The Bank was the first
+and the only one to receive the highest level of financial
+digital capability maturity certification from the National
+Financial Technology Certification Center.
+Discussion and Analysis
+FinTech
+Adhering to technology-driven development and value
+creation, the Bank quickened the pace of building a tech-
+empowered bank and D-ICBC. It cemented the foundation
+of production and operation safety, enhanced the ability
+to drive innovation by technology, deeply cultivated the
+D-ICBC digital ecosystem, and deepened the reform
+of information technology systems and mechanisms to
+develop a new engine that meets the requirements of
+high-quality development.
+Consolidating the Foundation of Production
+and Operation Safety
+The Bank actively responded to the complicated and
+changing external situation and the new challenges
+brought by technological innovation, adhered to
+the production safety measures, and deepened the
+transformation of production, operation and maintenance.
+It improved the cyber security defense capability on all
+fronts, and further enhanced the technical capability of
+data security. The availability of the Bank's information
+system remained above 99.99%, providing strong support
+for the Bank's digital transformation.
++
+The data security management system was refined.
+The Bank improved data security management
+system, intensified data security organization
+guarantees, and formed an integrated data security
+management organization structure featuring
+interaction between the Head Office and branches
+and well-defined responsibilities. The Bank
+optimized the data security technology management
+framework, reinforced the data security technology
+defense system, ameliorated the data security
+technology platform, and accumulated standardized
+data security technology capabilities. The Bank
+continuously pressed for the implementation of
+tiered and classified data security standards, carried
+out data security risk assessment and emergency
+drills, and intensified promotion and training in this
+regard to enhance the bank-wide awareness of
+protecting data security.
+The Group's cyber security defense capability was
+improved. The Bank continuously improved the
+overall management mechanism for cyber security,
+enriched the threat information bank, enhanced
+vulnerability threat awareness, strengthened the
+disposal of internet attack sources, and regularly
+verified its effectiveness. It stepped up efforts in
+building the cyber security team and enhancing
+the capability of defensing cyber-attacks, actively
+optimized and upgraded the enterprise-level cyber
+range, and carried out innovation in distributed
+range in conjunction with national labs. The
+Bank actively carried out special investigations
+and reinforcement of cyber security throughout
+the Group, improved cyber security plans such as
+ransomware attacks, and enhanced the overall
+capability of cyber security protection of the Group.
+A leading operation maintenance and disaster
+recovery backup system has been put in place.
+The Bank strengthened modular operation and
+maintenance service capabilities from a business
+perspective, and enhanced production and
+maintenance capabilities such as end-to-end
+monitoring of the entire chain, and high availability
+of disaster recovery. It upgraded the architecture
+of operation and maintenance tools, and steadily
+pushed forward the transformation of production
+and maintenance. The Bank comprehensively
+upgraded the disaster recovery support system,
+enhanced the high intra-city availability of important
+business systems and the practical capability of
+non-local disaster recovery takeover, promoted
+the construction of non-local autonomous and
+controllable disaster recovery cloud platforms, and
+strengthened the disaster recovery capabilities of
+core business scenarios on all fronts.
+Annual Report 2023
+In terms of the over-the-counter ("OTC") bond
+business, the Bank was among those that first
+participated in the issuance of Shanghai Clearing
+House OTC bonds issued by the Export-Import
+Bank of China and the Agricultural Development
+Bank of China to small and medium-sized financial
+institutions. It also distributed the financial bonds
+and green bonds of the Agricultural Development
+Bank of China with the themes such as "supporting
+the construction of high-standard farmland", as well
+as the OTC local government bonds in 35 provinces
+(autonomous regions, municipalities directly under
+the Central Government, and cities specifically
+designated in the state plan), to assist in building
+a multi-level bond market system, and actively
+support green finance, agricultural development and
+regional development. The Bank won the "Excellent
+Underwriter Award for Over-the-Counter Circulating
+Bonds", the "Excellent Underwriter Award for Over-
+the-Counter Local Government Bonds" granted by
+China Central Depository & Clearing Co., Ltd. and
+the "Excellent Participant in OTC Bond Business" by
+Shanghai Clearing House.
++
+4
+42
+Annual Report 2023
+Annual Report 2023
+.99
+Discussion and Analysis
+Financial Market Business
+Money Market Activities
++
+In terms of foreign exchange settlement and
+sales and foreign exchange trading on behalf of
+customers, the Bank strengthened dissemination of
+the foreign exchange risk-neutral philosophy, and
+promoted the philosophy and currency risk hedging
+products to foreign-related enterprises online and
+offline by various means, in order to help enhance
+the awareness of risk aversion and the capability of
+managing currency risk. Support for micro, small and
+medium-sized enterprises was enhanced. A number
+of branches have completed the first currency risk
+hedging transaction for micro, small and medium-
+sized enterprises under the third-party guarantee
+within their jurisdiction, effectively lowering the
+business access threshold and transaction costs
+for customers. The Bank accelerated product and
+service innovation, and added seven cash exchange
+currencies, to provide high-quality financial services
+for major events such as the Chengdu FISU World
+University Games and the Asian Games Hangzhou.
+It launched RMB foreign exchange option services in
+electronic trading platforms and Chat Dealing system
+to improve customers' experience.
+Digital
+In terms of foreign currencies, the Bank
+strengthened the analysis and judgment of changes
+in the fund liquidity and interest rates of foreign
+currency markets. While ensuring liquidity safety,
+it flexibly devised financing maturity and currency
+variety to improve the use quality and efficiency
+of foreign currency funds. As a quotation bank in
+the interbank foreign currency lending market, the
+Bank actively participated in the settlement express
+project of China Foreign Exchange Trade System and
+other business innovations, continuously maintaining
+its leading position in China's foreign currency
+market. In 2023, the Bank continuously won many
+honors, including the "Best Foreign Currency
+Lending Panel Bank", the "Best Foreign Currency
+Lending Member" and the "Best Foreign Currency
+Repurchase Member" granted by China Foreign
+Exchange Trade System.
+Investment
+In terms of RMB bonds, the Bank persisted in serving
+the real economy, and gave play to its role as a large
+state-owned bank in financial services. It constantly
+consolidated its advantages in government bond
+investment, providing strong fund support for
+economic development. The Bank continuously
+facilitated enterprise bond investments in key fields
+such as green development, advanced manufacturing
+and sci-tech innovation.
+In terms of foreign currency bonds, the Bank steadily
+engaged in foreign currency bond investment, and
+domestically adjusted the structure of investment
+portfolios. It continuously improved the security and
+yields of the portfolios, and stepped up supports to
+advanced manufacturing, sci-tech innovation, green
+finance and so on. Furthermore, it activated the
+offshore market and steadily advanced "Southbound
+Connect" bond investment transactions. The Bank
+I came in first among Chinese-funded banks in the
+selection of "Top Investment Houses in Asian G3
+Bonds" by The Asset for the third consecutive year,
+constantly improving its market image.
+Annual Report 2023
+43
+Discussion and Analysis
+Treasury Trading Business on Behalf of
+Customers
+In terms of RMB, the Bank effectively fulfilled
+the responsibilities assigned by PBC for primary
+dealers in the open market, efficiently assisted with
+the dissemination and transmission of prudent
+monetary policies, and actively increased funding
+support for financial institutions in the market. The
+Bank scientifically developed financing strategies,
+rationally devised financing maturities, varieties and
+counterparty structures, and constantly improved
+the efficiency of treasury operations.
+transformation was deepened on all fronts. Fully
+leveraging advantages of independent research
+and development, the Bank launched the functions
+such as automatic inquiry via artificial intelligence
+machine and intelligent transaction assistant, and
+achieved further breakthroughs in the fields such as
+intelligent transactions and risk control throughout
+the entire business process. The Bank continuously
+refined system functions and institutional
+systems, monitored and assessed the credit status
+of counterparties in a forward-looking way,
+effectively prepared risk response plans, and strictly
+implemented various risk prevention and control
+measures, in order to ensure fund security.
+45
++
+Enhancing the Innovative Technology-driven
+Capabilities
+The building of the "Best Mobile Banking" has
+stepped up to a new stage. Towards the direction
+of intelligence, simplicity and humanization,
+the Bank launched innovative personal mobile
+banking (version 9.0), focusing on mega wealth,
+full financing, consumption promotion, strong
+intelligence, and better experience, to create a
+panoramic digital financial service system. The
+Bank took the lead in the industry to launch such
+services as family wealth, inclusive financing for
+people and enterprises, wrap-around homepage,
+3D precious metal exhibition hall, etc., continuously
+enhancing the momentum of digital innovation.
+The Bank innovated the scenarios of consumption,
+rural areas, convenient services, and cross-border
+business, upgraded the right and interest center 2.0,
+and provided new experiences for customers in one-
+stop inquiry about and use of customer rights and
+interests. At the end of 2023, the Bank had 552
+million personal mobile banking customers, with
+more than 229 million monthly active mobile users,
+leading the industry in terms of customer base and
+activity.
+The Bank opened a new chapter in the open banking
+ecosystem. Relying on corporate internet banking
+and mobile banking, the Bank created the "ICBC e
+Cloud" corporate digital financial service platform,
+and launched the SRDI service column, inclusive
+column, and other services for exclusive customer
+groups, providing customers with ecological services
+that integrate multiple financial and business
+scenarios. At the end of 2023, the Bank had 15.12
+million corporate internet banking customers, with
+6.17 million monthly active corporate internet
+banking customers, ranking first in the industry
+in terms of customer base and activity. The Bank
+built the "ICBC e Pooling" open financial service
+platform, to enhance basic service capabilities from
+the perspective of users. It launched a new portal for
+open banking services, and formed a comprehensive
+service solution tailored to the needs of platform-
+based customers. It also provided integrated and
+comprehensive financial services to meet customers'
+diversified financial needs.
+Annual Report 2023
+47
+Discussion and Analysis
++
+Dual-driven online services were offered for rural
+revitalization. The Bank built an online accessible
+service system focusing on ICBC "Xingnongtong"
+App and "Xingnongtong" mobile banking version,
+to assist in promoting financial services in rural
+areas. The Bank provided exclusive loans, large-
+value deposits and other financial services for
+rural customers in county areas, serving over 160
+million active customers accumulatively. The Bank
+launched featured products such as Planting e Loan,
+county-level exclusive deposits, and large-value
+certificates of deposits, and provided "Agricultural
+Matchmaking" services for over 350 thousand
+agriculture operators. In conjunction with China
+CO-OP Group and the supply and marketing
+cooperatives at all levels, the Bank integrated finance
+into core supply and marketing business scenarios
+such as agricultural materials trade and agricultural
+product sales. The Bank established a "targeted
+assistance and consumption column" to assist in
+revitalizing rural industries.
+Overseas internet finance developed steadily. The
+Bank launched a column of mobile banking services
+for the Greater Bay Area, achieving mutual identity
+recognition, scenario sharing, and fund connectivity.
+"Cross-border e Payroll" services were rendered in
+nine countries and regions, and overseas internet
+finance services have covered 43 countries and
+regions. Overseas personal mobile banking (version
+8.0) and overseas enterprise internet banking
+(intelligent version) were launched in an innovative
+way, providing more choices for overseas institutions
+to develop local markets.
+Cultivating New Momentum of Digital
+Operation and Enhancing Enterprise-level
+Digitalization Capability
++
+Intelligent upgrading of remote banking services was
+pushed forward. The "Intelligent Service Center"
+has been upgraded with high quality. The Bank was
+the first among peers to apply large-scale model
+technology to scenarios such as seat assistant,
+in order to ensure multilingual services during
+significant events such as the Chengdu FISU World
+University Games and the Asian Games Hangzhou.
+The annual service volume was 2.15 billion, and
+the answering rate and intelligent diversion rate
+stayed ahead of peers. The Bank accelerated the
+construction of the "Digital Operation Center",
+established a billion-level customer contact platforms
+such as WeChat ecosystem, intelligent outbound
+calling, and outbound SMS, and created the most
+comprehensive media matrix in the industry, covering
+mainstream high-traffic platforms in the industry.
+The Bank improved the efficiency in building the
+"Business Empowerment Center", with more than
+700 million intelligent outbound calling in the year.
+The scale of intelligent outbound calling was the
+largest and widest. The Bank actively promoted the
+upgrading of capabilities such as content production
+of new media, customer experience analysis, online
+risk prevention and control, and employee business
+support, in order to empower business development
+and brand promotion.
+Customer services were promoted in a coordinated
+manner for better quality. The Bank built an
+enterprise-level digital experience management
+platform to understand feedback from customers
+and employees, thus continuously improving the
+capability of digital management of customer
+experience. The Bank deepened the root cause
+management and online centralized handling of
+complaint issues, optimized product experience,
+strengthened the ability of remote customer service
+personnel to deal with complaints online, and
+improved customer service assessment. To solve
+customers' pressing difficulties and problems, the
+Bank carried out a mobile banking experience
+activity for all staff, and further refined process
+design focusing on key functions such as registration
+and login, account management, transfer and
+remittance, and facial recognition authentication, in
+an effort to improve customer experience.
+Initial progress has been achieved in the building
+of a digital operation system. The Bank created
+an integrated chain of understanding, acquiring
+and activating customers and transforming value
+online in the digital era, and built a digital customer
+contact matrix. Based on platforms such as personal
+mobile banking, corporate mobile banking,
+internet banking, and enterprise WeChat, the Bank
+capitalized on new digital tools to promote the
+acquisition, retention, activation, and prevention of
+loss of all customers in a layered manner throughout
+the lifecycle of customers. The Bank carried out
+intensive, online, and large-scale maintenance of
+long-tail customers, and deepened joint operation
+for key customer groups such as wealth, credit
+card, third-party payment, agency issuance, and
+inclusive small and micro customers, to support
+the appreciation of customers' financial assets, and
+make digital financial services accessible to more
+customers.
+48
+Annual Report 2023
+Fifth, elderly industry finance achieved sound development. Closely following the country's layout of the
+silver economy and the pension industry planning of each region, the Bank optimized credit policies and increased
+financial support for the elderly industry, to boost the high-quality development of the silver economy. The Bank
+provided comprehensive financial service solutions to meet the financial needs of enterprises in the pension
+industry for investment and financing, account management, payment and settlement, and digital and intelligent
+scenario construction. The Bank made good use of the policy instrument of special refinancing for inclusive
+pensions to provide good financial services for inclusive pension enterprises.
+Reinforcing New Infrastructure of Digital
+Finance and Deepening the Construction of
+Core Platforms
+Aiming at building D-ICBC, the Bank accelerated the
+construction of a digital financial service system that is
+compatible with a modern economic system, to develop
+a new mode of digital financial development with a focus
+on building platforms, enhancing capabilities, expanding
+scenarios, and building ecosystems. In 2023, digital
+business accounted for 99.0% of the total.
+Internet Finance
+The building of the technical data talent team was
+enhanced. The Bank continuously optimized the
+structure of technology talents. Relying on the "Tech
+Elite" recruitment brand and the centralized training
+mechanism, the Bank accelerated the transformation
+of grassroots FinTech functions towards innovative
+R&D and marketing service support, and
+strengthened the high-quality technology supply
+capacity. The Bank kept improving the environment
+for the development of information technology
+talents, and actively carried out exchange projects
+such as targeted support for information technology
+talents, in an effort to build a top-notch information
+technology talent team. The Bank continuously
+enhanced the professional capabilities of information
+technology talents, and deployed multi-level talent
+training programs targeted at leading and backbone
+talents, focusing on digital transformation and
+FinTech. The Bank promoted the in-depth integration
+of data talent cultivation and business development.
+The Group had 9,375 data analysts, covering various
+professional lines and coming from domestic and
+overseas institutions. It has formed a digital talent
+foundation, which consists of junior, middle and
+senior levels, and combines full-time and part-time
+positions. Through modeling competitions, data
+elites, cross-sector exchanges, integration of industry,
+academia, and research, and systematic training
+and practice, the Bank set up a flexible analyst team
+dedicated to "data + business + application", to
+deepen the integration of data and industry, and
+empower business development.
+Upholding the philosophy of technology self-reliance,
+the Bank upgraded the ECOS technology ecosystem,
+promoted technology breakthroughs in key fields of core
+technologies, accelerated the transformation of cutting-
+edge technological research results into business value,
+and fully empowered digital transformation, to support
+overall business development with high-end technologies.
++
+The Bank's flexible, reliable clouds and distributed
+technology system was upgraded. The Bank actively
+promoted the plan on Group-wide clouding
+infrastructure construction, bringing the number
+of cloud nodes to more than 200 thousand, and
+the number of business containers to over 140
+thousand. The scale kept the bank in an industry-
+leading position. Customer information and personal
+accounts have been fully migrated to the "cloud +
+distributed" autonomous and controllable platform,
+and achieved full architecture transformation of retail
+banking. More than 80% of the business volume
+in the Bank's core system was based on the single
+track operation of an open platform. The Bank has
+smoothly tackled the real test of multiple business
+peaks and complex scenarios in 2023.
+The cultivation of new technology platform support
+capabilities and scenario applications were advanced.
+The Bank established the first 100 billion-level fully
+stack autonomous and controllable Al big model
+technology system in the industry, and took the
+lead in achieving innovative applications in multiple
+financial business fields. It enhanced the technical
+capability of the enterprise-level data middle office
+and big data platform with the real-time data
+warehousing capability, thereby optimizing data
+permission and comprehensively improving the
+timeliness and availability of big data resources. The
+Bank continuously advanced the construction of
+Robot Process Automation (RPA) technology platform
+and its application to business. The platform has
+been applied in 37 business lines. 13 comprehensive
+digital employees and over 1,000 digital employees
+for process automation were under construction,
+with an intelligent efficiency of over 30 thousand
+people per year, helping to improve employees'
+burden.
+The Bank accelerated the exploration of applying
+cutting-edge technology research achievements. It
+explored the application of privacy computing in
+cross-institution scenarios, collaborated with financial
+peers to achieve interbank fund flow verification
+based on such technology, and received acclaim from
+regulators. The Bank released the Research Report on
+Quantum Computing Financial Application to actively
+explore quantum computing application in the
+financial industry. It also joined forces with leading
+enterprises to promote collaborative innovation. The
+quantum key distribution and encryption functions
+were launched in external business terminals to
+enhance the security of financial data transmission.
+Deeply Cultivating the Digital Ecosystem of
+D-ICBC
+The Bank continuously deepened the integration of
+technology, data, and business, and steadily promoted
+the development of D-ICBC. A series of digital innovation
+achievements have been made. D-ICBC has been
+playing an increasingly pivotal role in empowering the
+transformation and innovative development of the Bank.
+Discussion and Analysis
+For details, please refer to the section headed "Hot
+Topics in the Capital Market - Hot Topic 5: Continuous
+Deepening of D-ICBC".
+The Bank kept improving information technology
+innovation mechanisms, and reinforced the building of
+information technology talent teams. It deepened the
+information technology basic governance, continued
+to improve financial innovation response efficiency and
+supply capability, and unleashed the vitality of the Bank's
+FinTech innovation. The Bank invested RMB27,246 million
+in FinTech in 2023, and it had 36 thousand FinTech
+personnel, accounting for 8.6% of all employees across
+the Bank.
++
+Technical innovation mechanism was improved. The
+Bank continuously refined the open competition
+mechanism, did a good job in selecting and
+evaluating the projects in key business and
+technology fields, and selected and rewarded
+the technology projects of great significance
+to the Bank and typical outstanding projects in
+digital transformation, which highlighted the
+practice and performance-oriented approach, and
+exerted the benchmark and demonstration effect.
+The Bank continuously improved the product
+management mechanism, implemented enterprise
+risk management requirements, expanded the
+coverage of the Group's product catalog, created
+a normalized operation mechanism, improved the
+experience enhancement mechanism featuring the
+internal closed loop of technology, and increased the
+proportion of resolved R&D experience problems.
+46
+Annual Report 2023
+4
+Discussion and Analysis
+The governance of technology and data foundation
+was deepened. The Bank strengthened product
+and demand management, organized the exit of
+inefficient products and functions, and developed
+a demand integration and improvement plan.
+The Bank deepened the integration of R&D and
+operation, enhanced the "One Click Deployment"
+capability of application versions, and built a
+one-stop production workbench for application,
+operation and maintenance personnel, significantly
+improving efficiency. The Bank refined the basic
+management of technology equipment resources
+and developed a plan to enhance the management
+of technology equipment resources. The Bank carried
+out data asset inventory and ownership confirmation,
+continuously expanded data resources, deepened
+data governance, and solidified the foundation of
+digital management. In the exploration of FinTech
+ethics, the Bank issued the Administrative Measures
+for FinTech Ethics, and embedded the requirements
+of FinTech ethics throughout the entire process
+of technology application, innovation and R&D, in
+order to enhance the effectiveness of technology
+management in the new context.
+Deepening the Reform of Technical System
+and Mechanism
+Fourth, elderly wealth management kept improving. The Bank integrated various products such as deposits,
+wealth management, funds, insurance, etc. to meet the wealth preservation and appreciation needs of elderly
+customers and those who were getting old, and launched multiple exclusive products and related rights and
+interests, providing diversified financial investment modes for personal customers to achieve their elderly care
+goals. Relying on holding themed activities on elderly related holidays by outlets and online channels, the Bank
+delivered lectures on pension policies and pension investment knowledge to assist residents in reserving elderly
+care funds.
+In 2023, the Bank issued eight asset-backed
+securities, all of which were NPL securitization
+programs, with a total amount of RMB5,966 million.
+First, the layout of pension finance kept improving. The Bank provides financial solutions targeted at
+governments, enterprises and individuals. It actively gave play to the organizational role of the Pension Finance
+Committees of the Head Office and branches, strengthened cross-sector, cross-level and cross-customer group
+coordination and collaboration across the Group, and formed a pattern of unified planning and classified
+management. The Bank improved the product and service system of pension fund finance, elderly service finance,
+and elderly industry finance, took the lead in the industry to establish a pension finance business indicator system
+covering nine lines and 31 indicators, and developed and put into operation a pension finance data platform.
+Second, the Bank stays ahead of its peers in terms of pension management. The Bank launched a
+panoramic view of pension finance services, allowing customers to conveniently query the pillar 1, pillar 2, and
+pillar 3 pension assets through mobile banking, and independently carry out pension planning and measurement.
+In terms of pillar 1 basic pension insurance, the Bank comprehensively provided financial services to support
+various reforms of social security, actively participated in social security informatization, and went all out to
+ensure the operation of social security funds. The Bank ranked high among peers in terms of the scale of social
+security deposits and the number of financial social security cards issued. In terms of pillar 2 enterprise annuity
+and occupational annuity, the Bank and its subsidiary ICBC Credit Suisse Asset Management Co., Ltd. have "full-
+license" qualifications for trusteeship management of annuity, account management, custody, and investment
+management. As at the end of 2023, total pensions under management of the Group reached RMB4.1 trillion.
+In terms of pillar 3 personal pension, the Bank took the lead among financial institutions to launch personal
+pension business, and developed a diversified product line covering pension savings, pension wealth management,
+pension target funds, and commercial pension insurance. It provides customers with full-process services such as
+account opening, fund contribution, product investment, benefit receipt, and personal income tax withholding and
+payment.
+Expert rules
+Reach
+coordination
+Outlet front marketing
+¦ Online active reach
+Anti-disturbance monitoring
+.99
+Annual Report 2023
+39
+Discussion and Analysis
+Strategy
+computing
+BB
+IV.
+Leveraging Channel Advantages to Create an Ecological Service System
+First, building a full-journey wealth companionship system. Relying on the mobile banking wealth
+community, the Bank launched three innovative tools: automatic fund investment plan, index-based
+fund selection, and hot topic-based fund selection, to meet the personalized and companionship wealth
+management needs of customers and create the "Wise Gold" brand. Meanwhile, the Bank took the
+lead in the industry to launch family finance service mode, providing such services as family relationship
+management, family asset management and family interests management. The service was upgraded from
+serving one person to serving one family. As at the end of 2023, the number of followers of the wealth
+community exceeded 39 million, and the wealth community received wide recognition from customers.
+Second, strengthening the integrated online and offline operations. The Bank actively carried out
+the "ICBC Wealth 518, 828 and 1118" series activities to continuously expand the full customer service
+scenarios, strengthen the advantages of digitalization of wealth community service elements, dynamic
+operation location, automated path access, personalized investment companionship, intelligent sales
+adaptation, and customer business clustering, and improve refined operation and customer experience.
+Empowering Outlets Services and Implement Platform-based Business Management
+First, jointly creating a new ecosystem of digital services. Adhering to the service philosophy of "digital
+finance" and relying on digital assets and digital technology, the Bank explored data-driven new models
+in the field of wealth management, provided platform support for digital management of products, multi-
+dimensional customer profiling, marketing strategy coordination, digital operation of customer groups,
+and ultimate experience evaluation, and comprehensively structured a new ecosystem of ONE-ICBC digital
+services. Second, endeavoring to cultivate new capabilities of digital operation. The Bank launched
+the Digital Intelligent Operation Platform for Personal Banking (DIMO), which integrates 28 professional
+systems, applies digital thinking to deconstruct the logic of personal banking transformation, builds four
+innovative segments: intelligent decision-making, intelligent reach, intelligent operation, and intelligent
+management, creates a one-stop workbench for operation and management, empowers outlets to improve
+service quality and efficiency, and achieves more efficient business management and more targeted customer
+service.
+40
+40
+Intelligent
+decision-making
+Business view
+III.
+Digital Intelligent Operation Platform
+for Personal Banking (DIMO)
+Intelligent Brain
+and feedback
+Third, remarkable achievements were made in elderly customer services. Adhering to the philosophy of
+loving, assisting, and serving the elderly, the Bank actively provided considerate pension finance products and
+services for the people. Focusing on the needs of elderly customers, the Bank pushed forward the upgrading of
+outlet facilities catering to the needs of elderly customers, refined the "ICBC Aixiangban" elderly customer service
+brand, improved the functions of the "Happy Life" version of mobile banking, developed an "ICBC Sharing Station
++ Elderly Care" outlet service scenario, and promoted the complementary connection of online and offline service
+channels. The Bank carried out various "respecting and loving the elderly" actions, launched comprehensive
+financial account security locks, and provided financial security education to help the elderly build a line of defense
+for financial fraud.
+Discussion and Analysis
+вв
+New Breakthroughs Made in
+Personal Wealth Management
+In 2023, the Bank continued to deeply implement the No.1 Personal Bank Strategy, with the goal of creating
+customer value and improving customer experience. It accelerated the construction of a new ecosystem of
+digital customer services, promoted the construction of "master wealth accounts" for customers, strengthened
+its customer reach, and improved the quality and efficiency of internal business management, to help residents
+generate more property income. During the reporting period, the balance of personal financial assets of the Bank
+exceeded RMB20 trillion, maintaining a leading position in the market.
+I.
+II.
+E3
+ICBC
+Increasing Diversified Supply to Meet Customer Needs
+Promoting Intelligent Asset Allocation to Improve Value
+First, continuously iterating the "Intelligent Brain" strategies and functions. With the "Intelligent
+Brain" as the center of marketing strategy, the Bank made efforts to improve customer perception and
+computational accuracy. A total of 61 intelligent models and 7,200 marketing service strategies have been
+deployed, covering over 50 thousand products, services, and promotion activities. It generated real-time
+differentiated service plans for a total of 740 million customers, forming a new approach and mechanism
+of digital services for personal customers. In 2023, the "Intelligent Brain" strategy service was provided to
+200 million customers, directly facilitating customers to purchase key products worth RMB1.87 trillion, 2.14
+times that of 2022. Second, improving the "intelligent asset allocation" service system. The Bank
+accelerated the iteration and upgrading of asset diagnosis and planning functions, restructured the scenario
+models of children's education, elderly care planning, and large-value expenditures, and developed a one-
+stop, personalized asset allocation service platform. In 2023, the Bank provided intelligent asset allocation
+services for nearly 6 million customers, driving AUM up more than RMB440.0 billion and facilitating product
+transactions of approximately RMB500.0 billion.
+Investment and wealth management
+Lending and financing
+Consumption payment Customer
+Account management
+perception
+Process monitoring Assessment
+Effect statistics
+First, improving savings deposit products and services. While providing customers with full maturities
+and full varieties of savings deposit products, the Bank launched the "Zhi Cun Bao" service to render digital
+services such as periodic automatic deposits and receipts for customers and better respond to their demand
+for convenient services. Second, building an open inclusive wealth management system. Relying on
+the digital financial capabilities of ICBC, the Bank launched an innovative automatic investment plan. The
+Bank set a purchase threshold at RMB1 based on the inclusive philosophy, so as to meet the three types
+of fund management needs of customers, i.e. "spare money management, sound profitability, and income
+advancement", and provide product support for customers to create long-term value. Third, increasing the
+supply of stable fund products. Based on market trends and customer appetite, the Bank increased the
+supply of index fund products, launched innovative personalized investment tools such as "target investment
+and automatic intelligent fund investment", and guided customers with high and medium risk appetite to
+make investments in adverse situations and improve return elasticity.
+Intelligent
+operation
+Model forecast
+Intelligent
+reach
+Actively seizing opportunities for development, the
+Bank enhanced its investment management and
+research capabilities on all fronts and tried to satisfy
+diversified financial demands at the two ends of product
+and investment. At the product end, it improved the
+professionalism of financial services such as wealth
+management, mutual fund, insurance, pension fund, etc.
+and developed the "ICBC Asset Management" brand to
+satisfy customers' demands for wealth preservation and
+appreciation. In terms of wealth management, the Bank
+leveraged its advantage in inclusive wealth management
+service to better satisfy the diversified demands of
+investors, and saw a rapid growth of key inclusive
+finance customers, including new urban residents, rural
+residents and self-employed businesses. In terms of fund,
+it actively catered to the diversified demands of investors
+and bettered companionship for them by tapping into
+its comprehensive advantages such as great business
+varieties, a rich product system and good performance in
+medium- and long-term investment. In terms of insurance,
+the Bank vigorously explored the issuance of insurance
+asset management products, strengthened its diversified
+investment and project development capabilities, and
+actively enhanced the quality and efficiency of its
+response to customer demands. At the investment end,
+the Bank fully capitalized on the wealth management,
+fund and insurance licenses of its integrated subsidiaries,
+focused on product selling through various channels,
+project recommendation, risk control and assessment,
+and intensified supports to investments in high-end
+manufacturing, SRDI enterprises, inclusive small and micro
+enterprises, sci-tech innovation, green development and
+so on, in a bid to fuel China's modern economy system
+building with new development philosophy.
+Wealth Management Services
++
+At the end of 2023, the balance of wealth
+management products reached RMB1,857,056
+million, of which RMB1,607,477 million was the
+balance of wealth management products of ICBC
+Wealth Management. Please refer to the section
+headed "Business Overview Comprehensive
+Operation and Subsidiary Management" for details
+on the business development of ICBC Wealth
+Management.
+The Bank continued to refine product structure,
+and provided innovative custody services for broad-
+based index funds such as STIB 100 ETF, CSI 2000
+ETF and BSE 50 Index, as well as theme index funds
+such as SOE ETF and Sci-Tech Innovation Theme ETF.
+It provided custody service for the first new energy
+REITS product in the market. The Bank stayed ahead
+of its peers in terms of the scale of "Southbound
+Bond Connect" custody business and the number
+of clients. At the end of 2023, the insurance assets
+under custody totaled RMB7.0 trillion, the mutual
+funds under custody amounted to RMB3.7 trillion,
+and the pension funds under custody of the Bank
+stood at RMB2.8 trillion, all ranking first in the
+industry.
+The Bank accelerated service innovation. It held
+a custody innovation cooperation forum, to
+disseminate custody service and its concept of
+"integration for win-win results, and building
+ecosystem", opening a new chapter in platform-
+based ecological development. It was awarded
+the "Best Custodian Bank in China" by The Asian
+Banker and the "Model Custodian Bank for Mutual
+Funds over 25 Years" by the China Fund News and
+the "Tianji Award for Outstanding Asset Custodian
+Bank" by the Securities Times.
+At the end of 2023, assets under custody (excluding
+fund escrow business) reached RMB21.9 trillion,
+which included assets under fund administration of
+RMB2.4 trillion.
+Asset Management Services
+Pension Services
+The
+Bank strengthened annuity marketing
+capabilities. It successfully won the bids for the
+qualifications of entrusted management and account
+management of multiple large enterprises' annuities.
+It actively carried out tiered marketing, and
+promoted the coordinated development of large,
+medium, and small customers. The pilot program of
+personal pension was launched steadily. It took the
+lead in passing the acceptance of connection with
+the new versions of the Personal Pension Information
+Management Service Platform and the Personal
+Pension Banking and Insurance Industry Information
+Platform of the Ministry of Human Resources
+and Social Security, and stayed ahead of peers in
+achieving closed-loop management of the entire
+business process.
+New achievements have been made in digital
+transformation. The Bank took the lead in the
+industry to launch a panoramic view of mobile
+banking pension finance services, achieving a unified
+display of the "three pillars" of pension assets. It
+continuously enhanced the service capability of the
+pension entrusted investment monitoring system,
+and refined the user experience of "ICBC e Pension".
+At the end of 2023, the entrusted annuity funds
+amounted to RMB554.1 billion. The Bank managed
+13.14 million individual enterprise annuity accounts,
+and the annuity funds under custody reached
+RMB1,378.1 billion. The Bank ranked first among
+peers in terms of the scale of entrusted enterprise
+annuity funds, number of individual enterprise
+annuity accounts and annuity funds under custody.
+The Bank won the "Tianji Award for Pension
+Financial Services Bank" granted by the Securities
+Times again. It also won such awards as "Pension
+Finance Organizations of the Year" granted by
+the yicai.com.
+Annual Report 2023
+41
+Discussion and Analysis
+Intelligent wealth
+management
+Great Achievements Made in Pension Finance Service
+The Bank advanced the overall planning of pension
+finance in an orderly manner. The Bank kept
+improving the top-level design, strengthened overall
+planning and promotion, and achieved positive
+results in the ecosystem construction of scenarios
+such as "Net Making and Patching", "Civil Affairs +
+Elderly Care + Finance", and Mobile Banking Pension
+Finance Column.
+Discussion and Analysis
+Asset Custody Services
+Risk management
+Intelligent brain
+Data report
+.99
+Customer reach
+Data customization
+Customer group
+operation
+Ecological scenario
+Data management
+Intelligent account
+Cash flow tracing
+Marketing resources
+Annual Report 2023
+Intelligent
+management
+Compliance
+management
+Ultimate experience
+Team management
+In 2023, the Bank continued to improve the layout of pension finance work under the guideline of the
+Central Financial Work Conference. The Bank optimized the supply of pension finance products and services,
+and promoted innovation in comprehensive and ecological service models, to effectively meet the needs of
+governments, enterprises, and individuals for pension finance. Through continuous development, the Bank has
+established a pension finance operation pattern featuring standardized management, professional teams, complete
+products, and efficient operation, maintaining a leading position in basic pension insurance, annuity management,
+personal pension, elderly customer services, and elderly industry finance.
+153
+328
+386
+60,335
+41,367
+America
+74
+74
+786
+(except Hong Kong SAR
+85,048
+87,215
+Europe
+and Macau SAR)
+91
+153
+871
+African Representative Office
+420,208
+1
+447,899
+3,699
+90
+Total
+397
+454
+3,722
+3,573
+Investment in Standard Bank (1)
+416
+413
+3,538
+3,245
+444,177
+416,635
+Subtotal
+(50,786)
+(50,847)
+Eliminations
+1
+1,289
+Discussion and Analysis
+135,854
+Discussion and Analysis
+Assets
+MAJOR INDICATORS FOR OVERSEAS INSTITUTIONS
+Annual Report 2023
+54
+Stable yet improving performance by overseas
+institutions amidst a complicated international
+environment. The Bank continuously enhanced
+global financial servicing capabilities in corporate
+& investment banking, global cash management,
+retail banking, internet finance, project financing,
+financial markets, asset management, and asset
+custody among others. The Bank established a global
+financial service system for personal customers
+to improve cross-border servicing capacity, which
+supports business scenarios in "ICBC Global Pay"
+and brazes the "YES ICBC" service brand.
+Global network was further optimized. The Jeddah
+Branch officially started business operations in Saudi
+Arabia. As at the end of 2023, the Bank had been
+operating 413 overseas institutions in 49 countries
+and regions, coupled with indirect coverage of 20
+African countries as a shareholder of the Standard
+Bank Group. In total, it had 259 institutions in 30
+countries that have participated in the Belt and
+Road initiative. The Bank also entered into business
+relationships with 1,445 foreign banks in 143
+countries and regions. Its service network has full
+coverage of six continents and key international
+financial centers around the world.
+International cooperation was enhanced
+continuously. As the chair of the BRICS Business
+Council Chinese Chapter, the Bank lived up to its
+responsibilities and effectively served the multilateral
+cooperation among BRICS countries. The Bank has
+been facilitating the upgrading of China-Europe
+economic and trade relations relying on China-
+Europe Business Council ("CEBC"). The Bank
+strengthened the Belt and Road Bankers Roundtable
+("BRBR") mechanism to promote high-quality
+development of the Belt and Road. A number of
+achievements have been included in the official
+achievement list of the third "Belt and Road"
+Forum for International Cooperation. The Bank
+actively served international exhibitions, including
+China International Import Expo, China Import and
+Export Fair and China International Fair for Trade in
+Services, to facilitate high-standard opening up.
+(in USD millions)
++
+RMB internationalization was promoted in a steady
+and prudent way. The Bank deeply carried out
+"Chunxu Action" to provide pro-active solutions for
+global market players in cross-border RMB businesses
+such as cross-border settlement, investment and
+financing as well as risk management. With the
+designation as the official RMB clearing bank in
+Brazil, the Bank has been authorized as the official
+RMB clearer in 11 countries. The Bank pushed
+forward the account system building supporting
+separate accounting units in Free Trade Zones,
+established China-Indonesia Cross-border RMB
+Service Center" in Fujian, and actively supported
+the innovative development of cross-border
+RMB business in Shanghai Lingang Special Area,
+Guangdong-Hong Kong-Macao Greater Bay Area
+and Hainan Free Trade Port. The Bank facilitated
+the execution of the country's first-ever LNG import
+transaction settled in cross-border RMB. It provided
+innovative services for multinational companies
+in trade settlement and treasury management,
+facilitating FDI investment and utilization. Cross-
+border RMB business application scenarios were
+built to support the development of micro, small
+and medium-sized enterprises. In 2023, cross-border
+RMB business reached RMB9.24 trillion.
+The strategy of becoming the "Preferred Bank for
+Foreign Exchange Business" was implemented in
+depth. The Bank deeply served the construction
+of a strong trading power, continuously stepped
+up with the "Chunrong Action" to strengthen
+support to key export companies and foreign-
+funded enterprises, and continuously upgraded its
+financial services in international settlement and
+trade finance via the "single window" platform.
+It continuously solidified the foundation for high-
+quality development of foreign exchange business,
+promoted the construction of grassroots flagship
+institutions for foreign exchange business, enhanced
+flexible support for grassroots foreign exchange
+business, and comprehensively improved compliance
+management of foreign exchange risk control.
++
+Taking the "international vision for global operation"
+principle, the Bank has made constant efforts to improve
+its operation system both in and outside China, integrating
+local and international currencies. Leveraging on its global
+operation edge, the Bank has been constantly sharpening
+cross-border financial services, with a view to supporting
+high-quality implementation of the Belt and Road and
+China's high-level opening-up.
+International Operation
+3,935
+53
+Annual Report 2023
++
+Profit before taxation
+(in USD millions)
+At the end At the end
+136,959
+Asia-Pacific Region
+97
+95
+of 2022
+of 2023
+1,050
+551
+213,726
+201,941
+2022
+2023
+of 2022
+of 2023
+Macau SAR
+Hong Kong SAR and
+Item
+At the end At the end
+Number of institutions
+1,522
+413
+Institutions (country/region)
+Note: (1) The assets represent the balance of the Bank's investment in Standard Bank and the profit before taxation represents the
+Bank's gain on investment recognized by the Bank during the reporting period.
+ICBC Leasing is mainly engaged in the financial leasing
+of large-scale equipment in key areas such as aviation,
+shipping, energy and power, rail transit, equipment
+manufacturing and areas requiring SRDI. It provides
+a range of financial and industrial services such as
+the transfer of leasing assets, asset trading and asset
+management.
+At the end of 2023, ICBC Credit Suisse Asset
+Management managed 247 mutual funds, and 590
+annuities, separately managed accounts and special
+portfolios, with assets totaling RMB1.72 trillion.
+ICBC Leasing
+In response to multiple challenges such as
+fluctuations in the capital market and the
+introduction of new regulations on fund fee
+reductions, ICBC Credit Suisse Asset Management
+strictly controlled various risks, enhanced investment
+and research professionalism, and strengthened
+intra-group collaboration, to maintain stable business
+development on the whole. ICBC Credit Suisse Asset
+Management accelerated the development of social
+security fund, annuities, personal pension and other
+pillar III pension investment management business,
+and constantly and steadily expanded its scale. ICBC
+Credit Suisse Asset Management improved customer
+service system and quality, and enhanced post-
+investment companionship. ICBC Credit Suisse Asset
+Management strengthened investor protection, and
+continuously promoted investor education, which
+was evaluated as excellent for five consecutive years
+in the assessment of the national securities and
+futures investor education base.
++
+occupational annuity, basic endowment insurance
+investment manager and mutual fund investment advisor,
+and was one of the "fully qualified" fund companies in
+the industry.
+ICBC Credit Suisse Asset Management is mainly engaged
+in fund raising, fund sales, asset management and other
+businesses approved by CSRC. It had many business
+qualifications such as mutual fund, QDII, enterprise
+annuity, specific asset management, domestic (foreign)
+investment manager of social security fund, RQFII,
+insurance fund management, special asset management,
+ICBC Credit Suisse Asset Management
+Based on the risk management route of "active prevention,
+smart control and comprehensive management", the
+Bank implemented requirements of the "Five-pronged
+Risk Management Approach" in depth, and refined the
+Group-wide risk management system that can cover the
+risk characteristics of integrated subsidiaries. The Bank
+intensified penetrating management and monitoring of
+subsidiaries and strengthened systematic, standardized and
+intelligent management of equity investment information.
+Meanwhile, the Bank stepped up efforts in the building
+of the three lines of defense of subsidiaries, improved risk
+prevention & control and internal control and compliance
+capabilities, and pursued high-quality development.
+new
+The Bank continued to refine the Group's integrated
+governance system, strengthened the management
+mechanism featuring "leading coordination and focusing
+on lines", and consolidated and improved the Group
+headquarters' integrated governance capability. The
+Bank continuously optimized the integrated subsidiary
+governance model with Party building, corporate
+governance and equity management at its core, promoted
+synergy between the integration strategy and the
+internationalization strategy in a coordinated manner,
+and further refined the Group control and coordination
+mechanism. The Bank also optimized the subsidiary
+governance mechanism, strengthened the efficiency
+of the role of full-time and part-time directors, and
+promoted deep integration of Party building and corporate
+governance of domestic subsidiaries. Meanwhile, the
+Bank optimized the strategic evaluation mechanism and
+promoted deep and accurate transmission of the Group's
+strategy to subsidiaries. The Bank strengthened capital
+management, promoted IT building, data governance and
+digital transformation, and further improved the influence
+of subsidiaries in their industries as well as their core
+competitiveness and customer service capabilities.
+Comprehensive Operation and Subsidiary
+Management
+Discussion and Analysis
+Investments in Standard Bank (South Africa)
+African Representative Office (South Africa)
+Annual Report 2023
+56
+Institutions (country/region)
+Africa
+Inversora Diagonal (Argentina)
+Panama Branch (Panama)
+The Bank remained committed to serving national
+strategies and the real economy, focused on main
+business, refined specialized business, and formed a multi-
+field integrated development layout covering fund, leasing,
+insurance, debt-for-equity swap, wealth management,
+FinTech, overseas investment banking, etc. Total market
+financial service capability further improved.
+ICBC (Argentina) (Argentina)
+ICBC Investments Argentina
+(Argentina)
+The aviation business segment achieved
+results in supporting the high-quality development
+of domestic air
+aircraft
+transportation and
+manufacturing industries through innovation and
+collaboration. ICBC Leasing continuously expanded
+cooperation with high-quality domestic airlines to
+cement the foundation of the civil aviation industry.
+It released the ARJ21 Aircraft Value White Paper
+in conjunction with COMAC and Civil Aviation
+University of China, to enhance the brand influence
+of "YES ICBC" through active marketing and
+promotion abroad. The Bank successfully launched
+the Airbus full lifecycle management project through
+innovation and collaboration across business
+segments. Positive results have been achieved in the
+innovation of the leasing business in the aviation
+industry chain and aircraft engines.
+57
+Note: Overseas and other assets include investments in associates and joint ventures.
+Annual Report 2023
+58
+International continued to refine the
+development layout of corporate financing,
+investment, sales and trading, asset management,
+and market research. Focusing on the financing
+needs of high-quality enterprises in key industries,
+ICBC International assisted customers in strategic
+emerging industries to go public in Hong Kong.
+The scale of green bond underwriting hit a new
+high, and the stock and bond underwriting business
+I was among the first echelon in the market. ICBC
+International steadily enhanced its planning
+capability for investment and financing in key
+areas such as rural revitalization, green and low-
+carbon development, healthcare and medicine,
+advanced manufacturing, and sci-tech innovation.
+ICBC International actively promoted innovation
+in product sales and trading as well as customer
+development, continuously refined and restructured
+asset management business, and strove to build
+an investment banking research brand with market
+influence.
+ICBC
+ICBC International is a wholly owned subsidiary of the
+Bank in Hong Kong SAR, China. It is mainly engaged in
+sponsorship and underwriting for listing, underwriting for
+bond issuance, financial consulting, direct investment, sales
+and trading, asset management, market research, etc. and
+provides all-round cross-border comprehensive financial
+services for corporate and personal customers.
+ICBC-AXA was awarded the "Ark Award for
+Insurance Services for Health and Elderly Care" by
+the Securities Times, the "Best Insurance Institution
+for the People" by the yicai.com and the "Golden
+Dragon Award
+Best Life Insurance Subsidiary of
+Banks of the Year" by the Financial News (China).
+ICBC International
+To improve customer experience, ICBC-AXA steadily
+expanded health and elderly care service and
+improved its efficiency. It innovated the coordinated
+mode of elderly care institutions, reserved high-
+quality elderly service resources, and collaborated
+with six institutions to complete institutional care
+services. ICBC-AXA continued to iterate and upgrade
+the value-added services of critical illness and medical
+insurance products, and expanded and reinforced
+the coverage of inclusive insurance, benefiting about
+400 thousand people, with a cumulative insurance
+amount of approximately RMB1.38 trillion.
+Annual Report 2023
+the construction of the "Insurance Code" platform
+of the Shanghai Insurance Exchange. It undertook
+the first inclusive accident insurance product co-
+insurance project of the "Insurance Code", and
+launched multiple exclusive products, such as
+accident insurance and medical insurance.
+ICBC-AXA persisted in leveraging the strengths
+of insurance to satisfy the needs of the people
+in light of the Group's strategy. It supported
+the construction of a multi-level security system,
+vigorously developed commercial health and pension
+insurance business, actively participated in the pillar
+III personal pension account business and inclusive
+medical projects, explored and enriched the security
+plans for special groups such as new citizens,
+and practiced the philosophy of insurance for the
+people. ICBC-AXA continued to promote digital
+transformation and improve customers' full-journey
+experience.
+4
+ICBC-AXA operates various insurance businesses such as
+life insurance, health insurance and accident insurance,
+as well as reinsurance of the aforesaid businesses,
+businesses permitted by national laws and regulations to
+use insurance funds and other businesses approved by
+regulatory authorities.
+ICBC-AXA
+Domestic comprehensive leasing business was carried
+out focusing on key areas of the real economy, such
+as manufacturing, strategic emerging industries,
+SRDI, green, private enterprises, inclusive, and
+agriculture. The first distributed photovoltaic project
+was launched to provide targeted support for small
+and medium-sized SRDI enterprises. ICBC Leasing
+actively explored a host of high-quality leading
+potential customers in professional machinery and
+equipment industries, such as engineering machinery
+and agricultural machinery. ICBC Leasing supported
+rural public infrastructure construction through the
+Qingdao fishery and photovoltaic complementary
+project, making helpful explorations in supporting
+rural revitalization with financial leasing.
+In terms of maritime business, ICBC Leasing
+supported domestic shipping and shipbuilding
+industries in making new breakthroughs. ICBC
+Leasing supported the building of China's first
+modern transoceanic communication optical cable
+laying ship, and steadily promoted the reserve and
+implementation of innovative marine economic
+projects such as marine fisheries, cultural tourism, oil
+and gas, and green energy projects.
++
+Discussion and Analysis
+It intensified the supply of diversified products in
+line with regulatory policies and market changes.
+Two personal pension insurance products have
+been put on the market in the first batch, which are
+available throughout all channels. ICBC-AXA also
+enriched the product content and open channels of
+auxiliary product lines such as accident insurance,
+medical insurance, and group insurance. ICBC-AXA
+actively participated in inclusive security, and joined
+416
+ICBC (Canada) (Canada)
+ICBC (Mexico) (Mexico)
+ICBC (Brasil) (Brazil)
+ICBC (Peru) (Peru)
+Office (Vietnam)
+Ho Chi Minh City Representative
+Hanoi Branch (Vietnam)
+ICBC (Thai) (Thailand)
+Singapore Branch (Singapore)
+ICBC (Indonesia) (Indonesia)
+ICBC (Malaysia) (Malaysia)
+Manila Branch (Philippines)
+Seoul Branch (South Korea)
+Busan Branch (South Korea)
+Mongolia Representative Office
+(Mongolia)
+Tokyo Branch (Japan)
+ICBC (Macau) (Macau, China)
+Macau Branch (Macau, China)
+Vientiane Branch (Lao PDR)
+Hong Kong Branch (Hong Kong, China)
+ICBC (Asia) (Hong Kong, China)
+ICBC International (Hong Kong, China)
+Asia-Pacific Region (except Hong Kong SAR and Macau SAR)
+Hong Kong SAR and Macau SAR
+Institutions (country/region)
+DISTRIBUTION OF OVERSEAS INSTITUTIONS
+Discussion and Analysis
+55
+Annual Report 2023
+As at the end of 2023, total assets of the Bank's overseas institutions (including overseas branches, overseas
+subsidiaries and investment in Standard Bank) were USD420,208 million, representing 6.7% of the Group's total
+assets. Specifically, total loans amounted to USD180,356 million, and due to customers was USD151,895 million.
+Profit before taxation during the period was USD3,699 million, accounting for 6.2% of the Group's profit before
+taxation.
++
+Institutions (country/region)
+ICBC (USA) (USA)
+ICBCFS (USA)
+Phnom Penh Branch (Cambodia)
+Riyadh Branch (Saudi Arabia)
+Kuwait Branch (Kuwait)
+Sydney Branch (Australia)
+New York Branch (USA)
+America
+ICBC (Austria) (Austria)
+Prague Branch (Czech Republic)
+Zurich Branch (Switzerland)
+Bank ICBC (JSC) (Russia)
+ICBC Turkey (Turkey)
+ICBC Standard Bank (UK)
+ICBC (London) (UK)
+London Branch (UK)
+10
+Yangon Branch (Myanmar)
+ICBC (Almaty) (Kazakhstan)
+Karachi Branch (Pakistan)
+Mumbai Branch (India)
+Dubai (DIFC) Branch (UAE)
+Abu Dhabi Branch (UAE)
+Doha Branch (Qatar)
+Greece Representative Office (Greece)
+Madrid Branch (Spain)
+Milan Branch (Italy)
+Amsterdam Branch (the Netherlands)
+Brussels Branch (Belgium)
+Paris Branch (France)
+Frankfurt Branch (Germany)
+Luxembourg Branch (Luxembourg)
+ICBC (Europe) (Luxembourg)
+Institutions (country/region)
+Europe
+ICBC (New Zealand) (New Zealand)
+Auckland Branch (New Zealand)
+Warsaw Branch (Poland)
+100.0
+era, the Bank established probity culture research
+center, advanced the construction of education
+base for probity culture, and produced a series of
+warning and educational films to learn lessons from
+cases, and further deepen the comprehensive and
+strict governance of the Party. The Bank established
+the first innovative cultural education base in the
+financial industry, and developed it into an important
+platform for transmission of innovation culture, so
+as to stimulate innovation and creativity throughout
+the Bank. Its corporate culture cultivation was
+awarded "10-year Typical Experience of Corporate
+Culture in the New Era" by China Research Institute
+of Enterprise Culture, improving ICBC's cultural
+influence.
+100.0
+Structure of employee gender
+5.2%
+Below Associate
+•
+17.7%
+Associate
+65.1%
+Bachelor
+11.8%
+⚫ Master
+0.2%
+Doctorate
+Structure of employee educational background
++
+Annual Report 2023
+52
+42
+О
+Male
+Female
+49.3%
+Operation management
+13.9%
+Corporate banking
+Operation and comprehensive support 14.8%
+41.5%
+Personal banking
+0
+Structure of employee specialization
+As at the end of 2023, the Bank had a total of
+419,252 employees, including 7,210 employees in
+major domestic subsidiaries, and 15,767 in overseas
+institutions. The Bank's employee gender ratio
+remained generally balanced and there was no
+significant change from the end of last year. In the
+future, the Bank will continue to pay attention to
+the employee gender structure, strengthen tracking
+and monitoring in areas such as personnel exit and
+recruitment, and take effective measures to maintain
+a balanced and stable gender ratio.
+27.2%
+41-50 years old
+Above 51 years old
+27.3%
+31-40 years old
+25.1%
+Below 30 years old
+Structure of employee age
+Discussion and Analysis
+50.7%
+20.4%
++
+Basic Information on Employees and
+Institutions
+The Bank's 2023 remuneration plan was prepared
+and implemented as per the internal decision-making
+process. The execution of total annual salaries was
+reported to the authority for filing according to
+national regulations. During the reporting period, the
+Bank's Senior Management fulfilled the indicators
+concerning economic, risk and social responsibilities
+well, and the final results will be determined after
+deliberation by the Board of Directors.
+and Gong Xiao Cheng" digital employees, covering
+all online and offline channels such as mobile
+banking, remote banking and outlets, and serving
+960 million customers in 2023. The Bank further
+promoted service collaboration among online
+platforms, physical outlets, remote customer service,
+and account managers, to achieve a consistent
+experience of "one-point access, all-channel
+response".
+The Bank expedited all-channel layout and promoted
+channel coordination. The Bank advanced the
+construction of a core service platform for digital
+finance, and established an intelligent, ubiquitous,
+and integrated channel system. It accelerated the
+construction of "ICBC Customer Services" official
+account, with more than 100 million followers.
+It upgraded the cloud outlets 2.0, and formed
+"online stores of outlets" and "cloud outlets
+of customers", with more than 1.2 billion visits
+annually. The Bank released the "Gong Xiao Zheng
+The Bank continuously improved the services of its
+outlets. It fully leveraged the scale advantage of
+physical channel resources, enhanced "ICBC Sharing
+Station+" public welfare services for the benefit
+of the people, and enriched the functions of such
+services. In 2023, it established 6,156 ecological
+outlets with the themes of "ICBC Sharing Station+"
+governance, life, wealth, public welfare, happiness,
+and inclusive finance, increasing the total number
+to more than 11 thousand. The Bank organized
+15.5 thousand ICBC Sharing Stations to expand the
+supply of convenient services in an orderly manner,
+and serve key groups such as outdoor workers,
+students participating in senior high school and
+college entrance examinations, and the elderly. In
+2023, a total of 95 thousand activities were carried
+out, including the Learn-from-Lei Feng voluntary
+service activity entitled "Voluntary Action with You
+in Warm Spring", the "Summer Care Trio" series
+of theme activities, and the "ICBC Aixiangban for
+Double Ninth Festival", benefiting more than 12
+million people. A total of 20 outlets of the Bank
+were awarded "Top 100 Demonstration Units of
+the Chinese Banking Industry for Civilized and
+Standardized Services" by the China Banking
+Association, ranking first in the industry.
+The Bank advanced the construction of inclusive
+finance service points in rural areas in an orderly way.
+Focusing on rural Party building, government affairs,
+agricultural product production and marketing, the
+Bank explored ecological co-building with county
+and township-level governments, village committees,
+large leading enterprises, local enterprises, and self-
+employed businesses. It has set up 4,760 inclusive
+finance service points in rural areas, covering 1,523
+counties across the country. In 2023, the Bank
+handled 3,323 thousand transactions for rural
+customers, and carried out 51 thousand activities
+to combat telecommunications fraud, cherish
+credit, protect consumers' rights and interests and
+disseminate basic financial knowledge, which served
+1,347 thousand customers and effectively improved
+the capability of rural financial services.
++
+Discussion and Analysis
+49
+Annual Report 2023
+Digital empowerment was deepened to open up
+new prospects in operation services. The Bank
+accelerated the reform of outlet operations. It
+comprehensively pushed forward the construction
+of full-journey customer services, and promoted
+online booking and identification and guidance
+services in stores throughout the bank. Scenario-
+based transformation and process reengineering
+were implemented for difficult business operations
+of outlets such as account opening and closure,
+foreign exchange remittance, and inheritance, to
+provide powerful tools to solve customers' pressing
+difficulties and problems. The Bank accelerated the
+empowerment of intelligent technology in business
+operations and the application of new technologies
+such as digital humans and big models in the
+field of operations. The first intelligent assistant
+for outlet employees based on big models was
+officially put into operation, to improve outlet
+efficiency. The annual volume of intelligent business
+processing in the field of operations reached 320
+million, representing an increase of 14% over the
+previous year. Initial progress has been achieved
+in the digital transformation of cash operations.
+Over 200 outlets have introduced the centralized
+physical delivery service model for personal expense
+accounts, deposits and withdrawals and other
+scenarios on a trial basis. Online booking services
+for local and foreign currency banknotes and small
+changes were promoted throughout the Bank. The
+Bank also comprehensively promoted a new task-
+driven treasury operation model. The functions
+and scenarios of self-service channels constantly
+expanded. The Bank promoted bank-government
+interconnection services such as electronic social
+security, tax and fee payment, smart medical
+insurance, credit report, and e-CNY at the smart
+ATMs of outlets. It created the "government service
+halls" by the side of customers. It accelerated the
+upgrading of elderly services at the intelligent
+terminal, launched the function of automatically
+shifting to large font interface for the elderly
+customers, and placed the high-frequency usage
+function of elderly customers on the homepage, so
+as to significantly reduce the threshold for elderly
+customers to use self-service devices.
+The Bank took solid steps to promote the
+optimization of outlets. While strengthening the
+management of outlet access and maintaining overall
+stability, the Bank consolidated the scale competition
+advantage of outlets, increased the number of
+outlets in counties and towns, scientifically dissolved
+inefficient and dense outlets, and continuously
+optimized the layout and structure of outlets. In
+2023, 670 outlets were reorganized, 52 new outlets
+were set up in key areas of cities with relatively
+insufficient service supply, and 57 new outlets
+started operations in county-level areas, covering
+15 counties where there were no ICBC outlets
+previously. The coverage rate of county-level outlets
+increased to 86.9%. Outlet resources have been
+increasingly compatible with regional socio-economic
+resources. The Bank deepened the construction of
+low-carbon outlets and elderly service outlets, and
+decorated 1,045 outlets to ensure outlets are always
+beautiful and new. It continuously improved the
+hardware facilities and services of outlets. At the end
+of 2023, the Bank had 15,495 outlets, 21,023 self-
+service banks, 76,203 intelligent devices and 53,745
+automatic teller machines ("ATMs"). The transaction
+volume of ATMs reached RMB4,587.0 billion in the
+year.
+Positive results have been achieved in the pilot
+promotion of e-CNY. The Bank promoted business
+innovation to achieve online payment of taxes
+in e-CNY, completed the first bulk commodity
+clearing in Shanghai Clearing House, and launched
+intelligent prepaid manager products in the prepaid
+consumption scenarios. It launched the supply chain
+financial service solutions based on e-CNY smart
+contracts, allowing merchants to make payments
+through one QR code. It continuously expanded the
+scale of e-CNY salary payment, and developed e-CNY
+SIM card hardware wallets and other products. The
+innovation of the pilot e-CNY application scenario
+in the securities industry won the first prize in
+the second Capital Financial Innovation Incentive
+Program. In 2023, the number of effective e-CNY
+personal wallets increased by 15.85 million; the
+number of corporate wallets increased by 1.34
+million; and the number of e-CNY merchant stores
+increased by 2.71 million.
+living scenarios. It strengthened education payment
+supervision, alleviated school reconciliation pressure,
+and enriched parental payment methods, serving
+I over 31 thousand primary and middle schools and
+kindergartens, and covering over 12 million parental
+payment customers.
+Serving the digital industry. The Bank innovated
+industry solutions for automobile production
+and sales, industrial chain platforms, and factor
+resource markets, catering to the needs for margin
+management in the trading market, integrated
+payment and settlement of production, supply
+and sales, and financing needs of upstream and
+downstream enterprises in the industrial chain.
+Serving digital livelihoods. The Bank deepened
+cooperation with leading online freight platforms
+and well-known life service platforms, to provide
+considerate services such as agency salary payment,
+inclusive loans, credit cards, medical insurance
+and social security, daily payment, and exclusive
+rights for new urban residents, including truck
+drivers, delivery men, and takeaway riders. Serving
+digital government. Keeping up with the pace of
+digital government construction, the Bank provided
+comprehensive financial service solutions for
+segmented scenarios, covering areas such as "All-
+in-One Code", "All-in-One Network", "Intelligent
+City", "Intelligent Politics and Law", and "Intelligent
+Culture and Tourism", to improve the digitalization
+and intelligence in government affairs. Serving digital
+education. Catering to the digital transformation
+needs of the education market, the Bank innovated
+the "Education Cloud" comprehensive ecological
+service solution, embedding financial services
+such as "collection, payment, reconciliation, and
+clearing" into campus registration, examination,
+accommodation, logistics and other academic and
++
+Building a New Digital Openness Ecosystem
+and Fully Serving the Real Economy
+The digital risk control capability of online platforms
+kept improving. The Bank strengthened the
+prevention and control of risks in online fraudulent
+transactions, established a tiered management
+system for e-banking customer limits, improved the
+accuracy of limit control for personal customers, and
+implemented dynamic management of corporate
+internet banking payment limits. The Bank improved
+the intelligent risk identification mechanism for
+online transactions, deepened the application of
+new device fingerprint technologies, and promoted
+the facial recognition function of enterprise internet
+banking, to effectively prevent the risks arising from
+online fraudulent transactions, and protect the
+security of customer funds. The Bank consolidated
+compliance risk management, achieved the
+collaborative control of personal customers with a
+high money laundering risk through online channels,
+improved APP personal information protection
+policies, and further strengthened the protection of
+customer information in the e-banking system.
+4
+Discussion and Analysis
+Outlet Building and Service Improvement
+419,252
+50
+Discussion and Analysis
+4
+The Bank's employee remuneration consisted of basic
+remuneration, performance-based remuneration and
+welfare income. In particular, the basic remuneration
+depended on an employee's value contribution and
+ability to perform duties, and the performance-based
+remuneration was based on the overall situation of
+the Bank, the employee's institution or department,
+and the employee's personal performance
+measurement results. Meanwhile, the performance-
+based remuneration to the Senior Management
+and employees in positions that have a significant
+influence on risks was subject to a deferred payment
+and recourse deduction mechanism, so as to balance
+risks and incentives. For employees who violated
+regulations and disciplines or had abnormal exposure
+to risk losses within their duties, their performance-
+based remuneration for the corresponding period
+shall be deducted, withheld and recovered according
+to the severity of the violation. During the reporting
+period, according to relevant measures, the Bank
+deducted, withheld or recovered payment of
+corresponding performance-based remuneration to
+employees who were subject to disciplinary action or
+other treatment due to violation of regulations and
+disciplines or abnormal exposure of risk losses within
+their duties.
++ The Bank adopted a remuneration policy that is in
+line with corporate governance requirements, in
+combination with high-quality development targets,
+in adaptation to the risk management system and
+talent development strategy, and well-matched with
+employees' value contribution, so as to advance
+the sound operation and high-quality development
+of the whole bank. The Bank's remuneration
+management policy was formulated and adjusted
+in strict accordance with applicable national
+regulations, regulatory requirements and corporate
+governance procedures. The Bank continuously
+optimized the remuneration resource allocation
+mechanism with value creation as the core,
+resolutely maintained a fair allocation concept of
+incentives commensurate with restraints, transmitted
+the Group's strategic objectives for business
+management, and allocated more remuneration
+resources to the grassroots employees, for the
+purpose of mobilizing and inspiring the business
+vitality of institutions at all tiers.
+Remuneration Policy
+Discussion and Analysis
+51
+Annual Report 2023
+"Iron triangle" refers to corporate customer managers of sub-branches, outlet heads and account managers of outlets.
+Annual Report 2023
+1
+Focusing on building a learning organization and a
+learning bank, ICBC strove to implement a number
+of high-quality training programs, to effectively
+facilitate training at all levels and continuously
+enhance the comprehensive quality and performance
+capability of cadres and employees. For management
+personnel, the Bank implemented training programs
+such as "ICBC Leadership" training for heads
+of domestic institutions, training for heads of
+overseas institutions, capability improving program
+for heads in charge of credit division, capabilities
+improving program for newly appointed heads in
+charge of personal financial services, and operating
+capabilities improving program for heads of tier-
+two branches, to strengthen their strategic thinking
+and management competence. For professionals,
+the Bank implemented programs such as ICBC
+Modern Finance Lecture, "D-ICBC" training, "Sword
+Sharpening Program" for discipline inspection line,
+and training for organization heads from institutions
+directly managed by the Head Office, to improve
+their professional and business capabilities. For front-
+line employees, the Bank implemented the rotating
+training program for outlet heads, "iron triangle"
+training for "GBC+" outlets to continuously
+improve the competence and services of outlet
+staff. Focusing on the growth of talents, the Bank
+implemented a series of programs including Training
+for Young and Middle-aged Cadres, Training for
+International Talents Training, Training for Expatriate
+and Reserve Talents, Training for New Employees
+and Management Trainees, and Training for
+New Employee Mentor, building a full-chain, and
+systematic training system.
+The Bank carried forward the excellent traditional
+culture of China, adhered to honesty and
+trustworthiness, profit from righteousness, prudence,
+integrity and innovation, and compliance with
+laws, and continuously enriched and improved the
+corporate culture of ICBC in the new period. The
+Bank carried out rich and diverse cultural activities,
+and launched 80 cultural model units to promote
+exchange and mutual learning of corporate culture.
+To reinforce probity culture construction in the new
+With the focus on high-quality development of
+operations, centering on key areas of business
+development and competition, the Bank assigned
+more human resources to strategic areas and
+improved operating capability by enhancing the
+quality and efficiency of human resources. Focusing
+on key areas such as sci-tech innovation, green
+development, emerging business, inclusive finance,
+and digital transformation, the Bank continued to
+propel the building of marketing, credit, technology,
+and data teams, improved talent cultivation,
+introduction, motivation, and utilization, and strove
+to build a high-level financial team that meets the
+requirements of building a financial robust country.
+The Bank expedited the empowerment of sci-tech
+data, refined organizational functions, and improved
+the development mechanism for frontline employees
+to stimulate talent vitality.
++
+Human Resources Management
+Human Resources Management,
+Employees and Institutions
+The Bank took solid steps to provide sound financial
+services for the FISU World University Games and
+the Asian Games. As the exclusive official banking
+partner for the 31st Chengdu FISU World University
+Games and the 19th Asian Games Hangzhou, the
+Bank successfully completed the cash exchange,
+foreign bank card acceptance and e-CNY services
+during the two international events by launching
+universal outlets, mobile banking vehicles, new
+currency exchange machines, exclusive customer
+service hotlines, mobile banking column, exclusive
+APP financial service column, and other multi-level
+and three-dimensional online and offline service
+channels. There were no errors, complaints, or public
+opinions about the Bank during the events.
++
+"1
+⚫ FinTech
+9.6%
+Risk and compliance management
+20.2
+84,745
+22.0
+3,586
+12.8
+5,743,425
+Western China
+18.6
+78,004
+20.9
+3,402
+11.1
+4,946,259
+Central China
+15.6
+65,433
+16.3
+Northeastern China
+1,597,213
+3.6
+1,600
+16,297
+100.0
+44,697,079
+Total
+unallocated assets
+(9.4)
+(4,238,888)
+Eliminated and
+8.5%
+5.5
+3.3
+547
+9.5
+4,255,879
+Overseas and other
+9.2
+38,494
+9.8
+22,977
+14.9
+2,655
+Bohai Rim
+Number of
+employees
+% of total
+institutions
+Number of
+institutions
+% of total
+assets
+millions)
+Item
+Assets
+(in RMB
+GEOGRAPHIC DISTRIBUTION OF ASSETS, INSTITUTIONS AND EMPLOYEES AT THE END OF 2023
+6,680,826
+branches and branches directly managed by the
+Head Office, 459 branches in capital cities and tier-
+two branches, 15,227 outlets, 27 institutions directly
+managed by the Head Office and their branches, and
+134 major subsidiaries and their branches.
+1.0%
+Non-banking business
+⚫
+1.8%
+● Emerging business
+2.4%
+⚫ Other
+6.5%
+As at the end of 2023, the Bank had a total of
+16,297 institutions, representing a decrease of
+159 as compared with the end of the previous
+year. Among them, there were 15,884 domestic
+institutions and 413 overseas ones. Domestic
+institutions included the Head Office, 36 tier-one
+Head Office
+% of total
+employees
+19.0
+11.3
+47,503
+12.1
+1,966
+15.6
+6,993,931
+Pearl River Delta
+8,502,997
+60,802
+14.5
+2,513
+22.9
+10,215,437
+Yangtze River Delta
+5.1
+21,294
+0.2
+28
+15.4
+US Risk Committee
+ICBC Investment
+Discussion and Analysis
+ICBC Investment is one of the first pilot institutions in
+China to conduct debt-for-equity swaps of banks. It holds
+the franchise license of non-bank financial institution and
+is mainly engaged in debt-for-equity swaps and supporting
+businesses.
+of the Board of Directors
+ICBC Wealth Management
+15.6
+47,328
+1.31
+Bohai Rim
+4,285,481
+16.4
+3,621,603
+63,835
+3,816,621
+16.5
+69,989
+1.83
+Central China
+4,064,415
+1.49
+15.6
+1.43
+15.5
+3.2
+18,443
+2.47
+Yangtze River Delta
+5,616,187
+21.5
+57,869
+36,930
+4,798,204
+20.7
+32,910
+0.69
+Pearl River Delta
+4,055,692
+0.66
+43,192
+1.06
+3,561,290
+29,203
+2.99
+Overseas and other
+1,460,720
+5.6
+31,284
+4.2
+2.14
+6.3
+11,371
+0.78
+Total
+26,086,482
+100.0
+1,461,063
+978,246
+2.06
+22,301
+15.3
+40,888
+1.15
+Western China
+4,766,575
+18.3
+68,298
+1.43
+4,225,369
+18.2
+71,038
+1.68
+Northeastern China
+1,082,666
+4.2
+747,980
+353,502
+3.95
+2.9
+Mining
+295,219
+2.0
+2,619
+0.89
+226,500
+sanitation
+1.8
+1.19
+Other
+761,866
+5.1
+16,474
+2.16
+2,706
+657,994
+2.45
+2.7
+432,570
+2.9
+14,078
+3.25
+359,345
+2.9
+8,337
+7,513
+Science, education, culture and
+383,799
+2.6
+8,882
+2.31
+340,146
+2.09
+5.3
+17,422
+2.65
+NPL ratio
+Percentage
+NPL ratio
+Item
+Loan
+(%)
+Percentage
+NPLs
+Loan
+(%)
+NPLs
+(%)
+Head Office
+754,746
+(%)
+At 31 December 2023
+At 31 December 2022
+In RMB millions, except for percentages
+Total
+14,862,466
+100.0
+262,773
+1.77
+12,555,491
+100.0
+260,931
+2.08
+The Bank continued to propel the optimization and
+adjustment of the credit industry structure and stepped
+up efforts to shore up the development of the real
+economy. Loans to transportation, storage and postal
+services increased by RMB434,784 million or 13.8% over
+the end of the previous year, which were mainly used to
+strongly support key transportation projects in the Yangtze
+River Delta, Guangdong-Hong Kong-Macao Greater Bay
+Area and other regions, and transportation construction
+projects making up for deficiencies in the western regions.
+Loans to leasing and commercial services increased by
+RMB402,870 million, up 21.3%, which were mainly used
+to meet the increased financing needs of customers in
+areas such as investment and asset management, and
+enterprise headquarters, park and commercial complex
+management services. Loans to manufacturing increased
+by RMB401,583 million, up 20.6%, mainly granted to
+leading backbone enterprises and key projects in high-
+end manufacturing such as new-generation information
+technology, integrated circuits, new energy vehicles,
+and large-scale refining and chemical projects. Loans to
+production and supply of electricity, heating, gas and water
+increased by RMB382,445 million, representing a growth
+rate of 31.6%, mainly to enhance the adaptability with the
+national industrial structure adjustment, increase financing
+support for clean energy transformation, and achieve
+balanced growth in the coal power supply guarantee and
+clean energy fields. Loans to water, environment and
+public utility management grew by RMB211,196 million
+or 14.0%, mainly for major projects in the areas of new
+urbanization and water conservancy facilities as well as the
+areas of people's livelihood such as urban public utilities
+and environmental remediation.
+The Bank continued to strengthen risk management of
+financing in various industries, improved the quality and
+efficiency in the disposal of non-performing assets, and
+properly carried out risk prevention and mitigation in key
+areas. With these efforts, the loan quality was generally
+stable.
+Annual Report 2023
+DISTRIBUTION OF LOANS AND NPLS BY GEOGRAPHIC AREA
+Discussion and Analysis
+29,793
+Construction
+1.36
+100.0
+11.4
+2,467,572
+10.6
+Guaranteed loans
+2,715,345
+10.4
+2,979,342
+2,544,651
+Unsecured loans
+Total
+9,947,491
+26,086,482
+38.1
+8,221,000
+35.4
+11.0
+100.0
+Pledged loans
+9,977,153
+DISTRIBUTION OF LOANS BY COLLATERAL
+In RMB millions, except for percentages
+At 31 December 2023
+At 31 December 2022
+Percentage
+Percentage
+43.0
+Item
+(%)
+Amount
+(%)
+Loans secured by mortgages
+10,444,304
+40.1
+Amount
+23,210,376
+100.0
+OVERDUE LOANS
+101,889
+0.39
+79,509
+0.34
+87,118
+0.33
+0.40
+91,177
+34,181
+0.13
+19,543
+0.08
+330,424
+1.27
+0.40
+93,802
+0.42
+107,236
+Overdue periods
+Less than 3 months
+3 months to 1 year
+1 to 3 years
+Over 3 years
+Total
+At 31 December 2023
+In RMB millions, except for percentages
+At 31 December 2022
+% of total
+% of total
+Amount
+loans
+Amount
+loans
+Discussion and Analysis
+23,210,376
+67
+As at the end of 2023, the allowance for impairment losses on loans stood at RMB756,391 million, of which RMB756,001
+million at amortised cost, and RMB390 million at fair value through other comprehensive income. Allowance to NPLs was
+213.97%, showing an increase of 4.50 percentage points over the end of last year; allowance to total loans ratio was
+2.90%, keeping flat with the end of the previous year.
+Total
+28
+538
+Transfer:
+to stage 1
+46,568
+Stage 3
+(42,004)
+to stage 2
+(7,253)
+12,411
+(5,158)
+to stage 3
+(2,596)
+(4,564)
+(44,930)
+Movements of allowance for impairment losses on loans
+and advances to customers measured at FVTOCI
+Stage 1
+510
+251,923
+321,170
++ By giving full play to its debt-for-equity swap
+license and professional advantage in this field
+and focusing on serving the real economy and
+preventing and defusing financial risks, ICBC
+Investment strengthened the bank-corporate
+cooperation and the investment-loan coordination,
+improved integrated financial services that combine
+equity and debt, enriched the varieties of debt-
+for-equity investment plans and private equity
+fund products, and made steady progress in the
+quality development of market-based debt-for-
+equity swap projects. Meanwhile, ICBC Investment
+greatly supported enterprises in their de-leveraging,
+leverage stabilizing, strength gaining, and reform
+promoting. It continuously enhanced the ability
+and effectiveness of risky asset disposal across the
+Group, played an active role in the formulation
+of corporate debt restructuring, debt-for-equity
+swap plans and reorganization plans, standardized
+corporate governance and production & operation,
+helped enterprises tide over difficulties through
+reform and continuously improved the asset quality
+of banks. Further playing its role as a shareholder,
+ICBC Investment dispatched directors and supervisors
+to the debt-for-equity swap enterprises and got
+deeply involved in the corporate governance of
+such enterprises, and promoted the healthy and
+sustainable development of enterprises.
+MOVEMENTS OF ALLOWANCE FOR IMPAIRMENT LOSSES ON LOANS
+In RMB millions
+Movements of allowance for impairment losses on loans
+and advances to customers measured at amortised cost
+Item
+672,224
+Stage 1
+Stage 3
+Total
+Stage 2
+Balance at 1 January 2023
+278,715
+141,586
+Stage 2
+47,526
+(46)
+46
+255
+342,730
+(352)
+(1,626)
+(1,723)
+5
+156,240
+Balance at 31 December 2023
+257,031
+361
+1
+6
+29
+390
+Note: Please see "Note 23. to the Consolidated Financial Statements: Loans and Advances to Customers" for details.
+756,001
+Other movements
+previously written off
+14,915
+Charge/(reverse)
+27,041
+89,529
+26,736
+143,306
+(108)
+224
+116
+Write-offs and transfer out
+(72,721)
+(72,721)
+(270)
+(270)
+Recoveries of loans and advances
+14,915
+Annual Report 2023
+284,031
+5.96
+4.2
+0.45
+118,574
+0.51
+138,448
+26,086,482
+0.53
+44,224
+116,527
+0.19
+23,210,376
+100.00
+According to the five-category classification, pass loans amounted to RMB25,250,275 million at the end of 2023,
+representing an increase of RMB2,812,697 million when compared with the end of the previous year and accounting for
+96.79% of total loans. Special mention loans stood at RMB482,705 million, representing an increase of RMB31,077 million,
+and accounting for 1.85% of the total, with a drop of 0.10 percentage points. NPLs amounted to RMB353,502 million,
+showing an increase of RMB32,332 million, and NPL ratio was 1.36%, with a decrease of 0.02 percentage points.
+DISTRIBUTION OF LOANS AND NPLS
+In RMB millions, except for percentages
+At 31 December 2022
+At 31 December 2023
+Percentage
+100.00
+NPL ratio
+0.68
+0.38
+482,705
+In RMB millions, except for percentages
+At 31 December 2022
+Amount Percentage (%)
+96.79
+22,437,578
+96.67
+158,372
+1.85
+1.95
+353,502
+1.36
+321,170
+1.38
+98,527
+451,628
+Percentage
+NPL ratio
+Item
+14.1
+91,426
+2.48
+3,150,517
+13.6
+99,066
+3,681,064
+3.14
+12,464,140
+47.8
+201,319
+1.62
+10,676,449
+46.0
+Medium to long-term corporate loans
+Short-term corporate loans
+1.96
+271,615
+Loan
+(%)
+NPLs
+(%)
+Loan
+(%)
+NPLs
+(%)
+Corporate loans
+16,145,204
+61.9
+292,745
+1.81
+13,826,966
+59.6
+25,250,275
+172,549
+Amount Percentage (%)
+Total
+Financial Technology Department
+Internal Control & Compliance Department
+Legal Affairs
+Department
+Operation Management
+Department
+Security Department
+Board of directors of subsidiaries
+for Deepening Reform
+Management of Branches
+Risk management departments and internal control &
+compliance departments of branches and subsidiaries
+Second line of defense
+Primary reporting line
+Secondary reporting line
+Asset & Liability
+Management Committee
+Risk Management
+Committee
+Credit Risk
+Senior management of subsidiaries
+Management Committee
+Office of Steering Group
+Internal Control &
+Compliance Department
+the Board of Directors
+-Enterprise risk, market risk, country risk
+Credit risk
+Liquidity risk, interest rate risk
+in the banking book
+Operational risk, compliance risk,
+money laundering risk
+Reputational risk
+Executive Office
+Strategic risk
+Legal risk
+Operational risk
+Production safety management
+Risk Management
+Department
+Credit and Investment
+Management Department
+Asset & Liability
+Management Department
+IT and cyber security risk
+Market Risk
+Management Committee
+Operational Risk
+Management Committee
+Internal Audit Bureau
+The Bank fully promoted the digitalization of credit risk
+management, explored the multi-scenario application
+of big data, Al and other advanced technologies, and
+promoted the construction of a multi-dimensional and
+visual risk monitoring and early warning system. The
+Bank launched a number of digital projects, including an
+investment and financing operation management platform
+and an intelligent risk control platform for retail credits, to
+enhance the intelligent assistance capability of systems in
+management and decision-making.
+Credit Risk Analysis
+At the end of 2023, the Bank's maximum exposure to
+credit risk, without taking into account any collateral
+and other credit enhancements, was RMB46,604,256
+million, representing an increase of RMB5, 139,499 million
+compared with the end of the previous year. Please
+refer to "Note 50.(a)(i) to the Consolidated Financial
+Statements: Maximum Exposure to Credit Risk Without
+Taking Into Account of Any Collateral and Other Credit
+Enhancements". For mitigated risk exposures of credit
+risk asset portfolio of the Bank, please refer to the section
+headed "Credit Risk" of the 2023 Capital Adequacy
+Ratio Report of Industrial and Commercial Bank of China.
+Limited.
+64
+Annual Report 2023
+Discussion and Analysis
+The Bank earnestly implemented macro-control policies
+such as "16-point set of financial measures for the
+real estate", and maintained reasonable and moderate
+real estate financing, giving an impetus to the positive
+circulation of finance and real estate. The Bank struck
+a sound balance between new supply of financing and
+the prevention and resolution of existing risks, actively
+responded to changes in the real estate market, and
+effectively managed risks in the real estate sector. The
+Bank continuously ameliorated the direction of new
+financing, and promoted the high-quality and stable
+development of real estate investment and financing.
+The Bank strictly implemented various national laws,
+regulations and policies on the management of local debts,
+and strictly secured the bottom line of legality, compliance
+and no regional systemic risk. For small and medium-sized
+financial institutions, the Bank, based on the impacts of
+the measures for the risk classification of financial assets
+and the New Capital Regulation, stepped up routine
+monitoring capability to strictly prevent risk spillovers.
+DISTRIBUTION OF LOANS BY FIVE-CATEGORY CLASSIFICATION
+Pass
+Special mention
+NPLs
+Substandard
+Doubtful
+Loss
+Item
+residential mortgages, and strictly implemented the key
+links of substantial risk prevention and control such as
+authentic "customers, transactions, mortgages, housing
+prices, and down payments"; the Bank enhanced the
+management of personal loan collateral and promoted the
+application of "online evaluation" of collateral; the Bank
+continuously refined post-lending management, focusing
+on key tasks such as monitoring, collection, and disposal.
+It also continued to iterate and upgrade the monitoring
+model strategy, and pushed forward the digitalization and
+upgrade of post-lending management.
+The Bank accurately grasped the layout and direction of
+investment and financing business and strengthened credit
+risk management. In terms of corporate credit business,
+the Bank continued to give more support for such areas as
+strategic emerging industries, sci-tech innovation, digital
+economy and intelligent manufacturing; the Bank actively
+bolstered major projects under construction and projects
+making up for deficiencies in the "14th Five-Year Plan";
+the Bank actively supported the urban-rural collaborative
+development, focusing on areas such as urban-rural
+integration, key county-level infrastructure, agriculture-
+related industry chains, and agricultural modernization;
+the Bank deeply explored and cultivated green credit
+market, and boosted the development of various green
+investment and financing business such as green loans,
+green bonds, green wealth management and green leasing
+in an all-round way; it also kept improving differentiated
+region credit policies with the focus on the coordinated
+development strategies for the regions, including Beijing-
+Tianjin-Hebei, Greater Bay Area, Yangtze River Delta
+and Chengdu-Chongqing Economic Circle. In terms of
+personal credit business, the Bank strictly controlled the
+"entrance end" of loans and standardized personal loan
+business requirements based on product characteristics;
+the Bank strengthened the risk prevention and control of
+The Bank continued to ameliorate investment and
+financing operation mechanisms. At the entrance end,
+the Bank improved customer access management.
+At the threshold end, the Bank restructured duration
+management system from perspectives of portfolio and
+concentration. At the exit end, the Bank highlighted the
+governance of compliance risks in the disposal of non-
+performing assets. It comprehensively empowered the
+construction of the intelligent credit risk control system
+"Three Gates, Seven-color Pools". The Bank deepened
+the management of basic rules on credit risk, refined
+the management framework of financial asset risk
+classification, continuously advanced the building of the
+unified investment and financing risk limit management
+system for integrated subsidiaries, and specified the risk
+management requirements for off-balance sheet business.
+The Bank continued to deepen the special governance of
+integrity risks arising from credit areas, and adhered to
+the comprehensive and integrated remediation of credits,
+covering various investment and financing business.
+Internal Audit Sub-bureau
+Third line of defense _
+Risks not mentioned above have been incorporated
+into the enterprise risk management system.
+Credit Risk
+Credit Risk Management
+Credit risk is the risk where loss is caused to the banking
+business when the borrower or counterparty fails to
+meet its contractual obligations. The Bank's credit risks
+mainly originate from loans, treasury operations (including
+deposits with banks and other financial institutions,
+placements with banks and other financial institutions,
+reverse repurchase agreements, corporate bonds and
+financial bonds investment), receivables and off-balance
+sheet credit business (including guarantees, commitments
+and financial derivatives trading).
+The Bank strictly adheres to regulatory requirements
+regarding credit risk management, diligently fulfills
+established strategies and objectives under the leadership
+of the Board of Directors and the Senior Management,
+and implements an independent, centralized and vertical
+credit risk management mode. The Board of Directors
+assumes the ultimate responsibility for the effectiveness
+of credit risk management. The Senior Management is
+responsible for executing the strategies, overall policy
+and system regarding credit risk management approved
+by the Board of Directors. The Credit Risk Management
+Committee of the Senior Management is the reviewing
+and decision-making organ of the Bank in respect of credit
+risk management, is responsible for reviewing material and
+important affairs of credit risk management, and performs
+its duty in accordance with the Charters of the Credit
+Risk Management Committee. The credit and investment
+management departments at different levels undertake
+the responsibility of coordinating credit risk management
+at respective levels, and the business departments
+implement credit risk management policies and standards
+for their respective business areas in accordance with their
+functions.
+Annual Report 2023
+63
+At the be
+At the level of Head Office
+At the level of the Board of Directors
+Discussion and Analysis
+According to the regulatory requirement on loan risk
+classification, the Bank implemented five-category
+classification management in relation to loan quality
+and classified loans into five categories: pass, special
+mention, substandard, doubtful and loss, based on the
+possibility of collecting the principal and interest of loans.
+In order to implement sophisticated management of credit
+asset quality and improve risk management, the Bank
+implemented the twelve-category internal classification
+system for corporate loans. The Bank applied five-category
+classification management to personal credit assets and
+ascertained the category of the loans based on the number
+of months in default, expected loss ratio, credit rating,
+collateral and other quantitative and qualitative factors.
+At 31 December 2023
+31,696
+1.62
+1,287,657
+15.8
+55,359
+2.35
+1,949,461
+15.5
+58,944
+2,351,044
+3.02
+2,295,720
+15.5
+43,958
+1.91
+1,892,850
+15.1
+Leasing and commercial services
+38,188
+Manufacturing
+0.61
+NPLs
+(%)
+Loan
+(%)
+NPLs
+(%)
+services
+Transportation, storage and postal
+24.1
+17,530
+0.49
+3,149,183
+25.1
+19,324
+3,583,967
+2.02
+Water, environment and public utility
+1,722,981
+762,226
+5.1
+40,957
+5.37
+724,802
+5.8
+Real estate
+44,531
+Wholesale and retail
+679,049
+4.6
+29,886
+4.40
+531,845
+6.14
+heating, gas and water
+0.69
+8,406
+11.6
+20,493
+1.19
+1,511,785
+12.0
+23,864
+1.58
+management
+Production and supply of electricity,
+1,594,025
+10.7
+12,537
+0.79
+1,211,580
+9.6
+(%)
+Discounted bills
+Loan
+NPL ratio
+27.7
+25,394
+0.39
+Personal consumption loans
+328,286
+1.3
+6,431,991
+4,390
+232,442
+1.0
+3,985
+1.71
+Personal business loans
+1,347,136
+1.34
+5.2
+0.44
+24.1
+4.9
+1,148,785
+4.9
+Personal loans
+8,653,621
+33.2
+27,827
+60,757
+8,234,625
+35.5
+49,555
+0.60
+Residential mortgages
+6,288,468
+0.70
+11,639
+0.86
+930,040
+1.38
+At the end of 2023, corporate NPLs were RMB292,745 million, showing an increase of RMB21,130 million when compared
+with the end of the previous year, and representing a NPL ratio of 1.81%, with a decrease of 0.15 percentage points.
+Personal NPLs amounted to RMB60,757 million, showing an increase of RMB11,202 million, and represented a NPL ratio of
+0.70%, with an increase of 0.10 percentage points.
+Annual Report 2023
+65
+66
+99
+321,170
+Discussion and Analysis
+In RMB millions, except for percentages
+At 31 December 2023
+At 31 December 2022
+Percentage
+NPL ratio
+Percentage
+DISTRIBUTION OF CORPORATE LOANS AND NON-PERFORMING CORPORATE LOANS OF DOMESTIC BRANCHES BY
+INDUSTRY OF LOAN CUSTOMERS
+100.0
+23,210,376
+1.36
+4.0
+8,454
+0.91
+Credit card overdrafts
+Total
+689,731
+26,086,482
+2.6
+16,901
+2.45
+640,152
+2.8
+11,722
+1.83
+100.0
+353,502
+Item
+1.22
+1.38
+4,238.62
+paid-in capital
+Principal business
+Institution
+2023
+In RMB100 millions
+capital/
+Issued share
+At 31 December 2023
+Total assets
+Discussion and Analysis
+Annual Report 2023
+60
+China (Argentina) S.A.
+126.59
+880.89
+4,809.13
+13.81
+134.90
+Major Domestic Subsidiaries
+628.44
+Net assets
+ICBC Credit Suisse Asset Management Co., Ltd.
+ICBC Financial Asset Investment Co., Ltd.
+7.03
+162.62
+3,179.89
+125.05
+Insurance
+ICBC-AXA Assurance Co., Ltd.
+7.59
+Net profit
+429.40
+180
+Leasing
+ICBC Financial Leasing Co., Ltd.
+19.42
+187.32
+228.06
+2
+Fund management
+2,783.81
+Financial asset
+USD120 million
+ARS171,933 million
+Industrial and Commercial Bank of
+Securities clearing,
+securities margin
+trading
+Commercial banking
+Industrial and Commercial Bank of
+China (Canada)
+Industrial and Commercial Bank of
+China Mexico S.A.
+23.24
+446.71
+2,956.72
+USD369 million
+Commercial banking
+Industrial and Commercial Bank of
+China (USA) NA
+Industrial and Commercial Bank of
+China Financial Services LLC
+USD50 million
+4.94
+1,435.51
+EUR200 million
+Commercial banking
+(17.95)
+172.67
+3,411.74
+TRY8,845 million
+Commercial banking
+219.27
+Commercial banking
+4,629.73
+(51.04)
+Commercial banking
+ICBC PERU BANK
+China (Brasil) S.A.
+2.11
+40.35
+389.57
+BRL202 million
+Commercial banking
+22.92
+Industrial and Commercial Bank of
+50.83
+486.08
+MXN1,597 million
+Commercial banking
+33.56
+336.77
+2,327.21
+CAD208 million
+1.73
+237.14
+270
+475.22
+61.74
+36.62
+46.39
+77.49
+Note: Loans and advances to customers are deemed overdue when either the principal or interest is overdue. For loans and advances to
+customers repayable by installments, the total amount of loans is deemed overdue if part of the installments is overdue.
+42.55
+47.63
+Note: Calculated according to the Circular on Amending the Definitions and Calculation Formula of Basic Indicators for Off-site
+Supervision of the Banking Sector issued by the former CBIRC in 2022, and measured at the Group's level.
+Overdue loans stood at RMB330,424 million, representing an increase of RMB46,393 million from the end of the previous
+year, among which, loans overdue for over 3 months amounted to RMB223,188 million, representing an increase of
+RMB32,959 million.
+68
+Audit Committee of
+Risk Management Committee
+Board of Supervisors
+Department
+First line of defense
+Business departments of
+branches and subsidiaries
+Global Market
+Bank Card
+Department
+Annual Report 2023
+Institutional Banking
+RESCHEDULED LOANS
+LOAN MIGRATION RATIO
+18.61
+1.09
+1.12
+1.05
+2021
+2022
+2023
+31 December
+Rescheduled loans and advances measured in accordance with the Measures for Risk Classification of Financial Assets
+of Commercial Banks amounted to RMB82,723 million. Specifically, rescheduled loans and advances overdue for over 3
+months amounted to RMB8,575 million.
+31 December
+In percentages
+At
+At
+At
+Doubtful
+Substandard
+Special mention
+Pass
+Item
+31 December
+1,786.25
+Personal Banking
+Department
+(Chief Risk Officer)
+69 Market Risk
+63 Credit Risk
+Management System
+62 Enterprise Risk
+RISK MANAGEMENT
+Discussion and Analysis
+61
+Annual Report 2023
+71 Interest Rate Risk in the
+Banking Book
+Standard Bank is the largest commercial bank in Africa. Its scope of business covers commercial banking, investment
+banking, life insurance business and other areas. The Bank continued to hold 324,963,464 shares or 19.39% of Standard
+Bank and to be its single largest shareholder. Based on mutual benefit and win-win cooperation, the two sides furthered
+their cooperation in equity cooperation, customer expansion, project financing, product innovation, risk management,
+FinTech and staff exchange, etc. As at the end of 2023, Standard Bank recorded total assets of ZAR3,065,745 million and
+net assets of ZAR276,920 million. It generated a net profit of ZAR50,303 million in the year.
+Major Equity Participating Company
+13.25
+202.57
+205.14
+160
+investment
+Wealth management
+ICBC Wealth Management Co., Ltd.
+44.73
+Standard Bank Group Limited
+Business departments
+72 Liquidity Risk
+76 Reputational Risk
+Vice Presidents
+Senior Executive Vice President
+Senior Executive
+President
+Board of Directors
+The Bank's organizational structure of risk management comprises the Board of Directors and its special committees, the
+Board of Supervisors, the Senior Management and its special committees, the risk management departments, the internal
+audit departments, etc. The risk management organizational structure of the Bank is illustrated below:
+Discussion and Analysis
+Corporate Banking
+74 Operational Risk
+Annual Report 2023
+62
+Cyber Security Risk
+77 Information Technology and
+In 2023, the Bank adhered to the principle of "laying a sound foundation
+for risk control", and deeply applied the "Five-pronged Risk Management
+Approach" to the iterative upgrade and implementation of the enterprise
+risk management system. The Bank strengthened the top-level design for
+risk management, ameliorated the rules for enterprise risk management
+and other systems, and established and improved the risk officer
+management mechanism. The Bank consolidated the responsibilities of the
+three defense lines for risk management, and enhanced the effectiveness
+of enterprise risk management. The Bank conducted a comprehensive
+inspection of various potential risks, and continuously improved the
+I capability of overseas institutions and subsidiaries in risk data penetration
+management, to reflect the overall picture of the Group's risks in a
+sufficient and dynamic manner. The Bank intensified risk prevention and
+control throughout the whole process of digitalization, and sped up the
+building of an enterprise-level intelligent risk control platform. The Bank
+strengthened risk prevention and control in emerging fields, intensified the
+risk management of cooperation institutions in investment and financing
+business, and well conducted the risk management of products throughout
+their whole lifecycle.
+etc.
+Enterprise risk management is a process to effectively identify, assess,
+measure, monitor, control or mitigate and report risks in order to ensure
+the realization of the Group's operating and strategic objectives by setting
+up an effective and balanced risk governance structure, fostering robust
+and prudent risk culture, formulating unified risk management strategies
+and risk appetite, and implementing the risk limit and risk management
+policies. The principles of enterprise risk management of the Bank include
+full coverage, matching, independence, perspectiveness and effectiveness,
+Enterprise Risk Management System
+77 Country Risk
+62
+526.36
+17.31
+RUB10,810 million
+699
+300,016
+537
+1,762,288
+1,363
+Total
+137
+0.3
+34,828
+356,671
+5,578
+509
+4
+57
+6,237
+379 125,300
+Hybrid
+type
+Equity
+investment
+income
+53
+Classified by
+242
+3.1
+49.9
+857,583
+42.4
+728,853
+In RMB millions, except for percentages
+Amount Percentage (%)
+Major Overseas Subsidiaries
+Major Controlled Subsidiaries and Equity Participating Company
+Other assets
+Total
+48,994
+Non-standard debt assets
+Cash, deposits and reverse repurchase agreements
+Asset type
+DIRECT AND INDIRECT INVESTMENTS OF ICBC WEALTH MANAGEMENT IN WEALTH MANAGEMENT PRODUCTS AS
+AT THE END OF 2023
+Discussion and Analysis
+59
+Annual Report 2023
+100.0
+1,201 1,607,477
+Bonds
+52,452
+96.6
+906
+Percentage
+At 31 December 2023
+Number of
+tranches Amount
+1,011 1,552,597
+Matured products
+Number of
+tranches Amount
+609 317,053
+tranches Amount
+430 261,980
+Amount
+1,707,212
+Number of
+Products issued
+At 31 December 2022
+Number of
+tranches
+1,190
+(%)
+Publicly
+In RMB millions, except for tranches and percentages
+WEALTH MANAGEMENT PRODUCTS OF ICBC WEALTH MANAGEMENT THAT WERE ISSUED, MATURED, AND EXISTED
+DURING THE REPORTING PERIOD
+At the end of 2023, the balance of ICBC Wealth
+Management products reached RMB1,607,477
+million, all of which were net-worth products.
+Enriching wealth management product shelves
+to provide diversified investment options. Deeply
+grasping the wealth preservation and appreciation
+needs of residents, ICBC Wealth Management
+released a new product system of "Wen Xin Zhi
+Yuan", increasing the proportion of low-risk
+products with stable performance, small draw-
+down and good experience. It launched innovative
+products with the themes of the Belt and Road,
+rural revitalization, and the Great Bay Area, and
+took the lead in the industry to roll out the first
+batch of personal pension products. It won the
+"People's Craftsmanship Brand Award" conferred
+by people.cn, and the "Golden Bull Award - Wealth
+Management Subsidiary of Banks" conferred by
+China Securities Journal.
+tech innovation, advanced manufacturing, green
+and low-carbon development as well as key regions,
+and kept raising the funding for modern industry
+system and its proportion. It was awarded "Best
+Asset Management Organization for Responsible
+Investment" by finance.sina.com and the "Top 50
+ESG Practices Responsible Wealth Management
+Subsidiary" by The Economic Observer.
+Integrating into the overall wealth management
+landscape and enhancing customer service
+capabilities. ICBC Wealth Management developed
+the customer service system of "comprehensive
+response through one-point access" and the "Cai
+Ming Bai" customer companionship brand, launched
+online columns such as "product translator",
+"concept research society" and "market express",
+and conducted offline activities like "walking tens of
+thousands of miles to hold one thousand activities in
+100 cities" and other series of activities. By visiting
+rural areas, universities and communities, it delivered
+financial knowledge to customers, and saw a rapid
+growth in the number of key inclusive customers,
+including new citizens, customers in rural areas
+and self-employed businesses. It was awarded the
+"Best Wealth Management Subsidiary of Banks for
+Investment Education Brand of the Year" by the
+Financial News (China) and the "Excellent Investment
+Education Companionship Case" by JRJ.com.
+-
+Leveraging professional investment advantages
+to improve the quality and efficiency of the real
+economy. ICBC Wealth Management continuously
+strengthened the capabilities of major assets
+allocation and diversified strategic investment,
+deepened investment-research linkage, and explored
+high-quality assets. It increased investment in sci-
+ICBC Wealth Management engages mainly in the issuance
+of wealth management products, wealth management
+advisory and consulting services as well as other activities
+approved by NFRA.
+Item
+1,552,905
+96.6
+fundraising
+321,334
+558
+300,016
+537
+927 1,630,751
+Fixed-
+offered
+method
+Classified by
+3.4
+190
+39,618
+90
+38,036
+107
+55,076
+173
+offered
+Privately
+54,880
+3.1
+79,527
+4.6
+Commercial banking
+China (Almaty) Joint Stock Company
+Industrial and Commercial Bank of
+China (New Zealand) Limited
+Industrial and Commercial Bank of
+China (Europe) S.A.
+36.60
+144.50
+767.03
+KZT8,933 million
+Commercial banking
+Industrial and Commercial Bank of
+NZD234 million
+of China (Thai) Public Company Limited
+1,255.53
+7,956.60
+THB20,107 million
+Commercial banking
+Industrial and Commercial Bank
+of China (Malaysia) Berhad
+14.78
+300.14
+90.52
+1,075.70
+1,496.98
+11.93
+Commercial banking
+185.60
+1,869.45
+23,187.95
+USD1,083 million
+26.24
+501.62
+1,514.15
+200.83
+USD200 million
+Bank ICBC (joint stock company)
+ICBC Turkey Bank Anonim Şirketi
+ICBC Austria Bank GmbH
+ICBC Standard Bank PLC
+ICBC (London) PLC
+(54.87)
+540.70
+5,693.51
+EUR437 million
+Commercial banking
+Commercial banking
+Banking
+21.03
+MYR833 million
+Industrial and Commercial Bank
+117,271.56
+HKD44,188 million
+Industrial and Commercial Bank of China Commercial banking
+(in USD
+millions)
+Net profit
+millions)
+millions)
+(in USD
+19,174.54
+(in USD
+Total assets
+Issued share
+capital/
+paid-in capital
+Principal business
+Institution
+2023
+At 31 December 2023
+100.0
+1,718,415
+Net assets
+Commercial banking
+825.26
+ICBC International Holdings Limited
+20.51
+438.87
+2,931.31
+IDR3.71 trillion
+Commercial banking
+PT. Bank ICBC Indonesia
+(Macau) Limited
+7.59
+(Asia) Limited
+3,829.93
+MOP589 million
+Commercial banking
+Industrial and Commercial Bank of China
+(484.27)
+925.89
+7,209.00
+HKD5,963 million
+Investment banking
+46,051.23
+(49,681)
+(345,192)
+As at the end of 2023, the common equity tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy
+ratio calculated by the Bank in accordance with the Capital Regulation (Provisional) stood at 13.72%, 15.17% and 19.10%,
+respectively, complying with regulatory requirements¹.
+78
+Borrower A
+Borrower B
+Production and supply of electricity, heating, gas and water
+Transportation, storage and postal services
+211,750
+0.8
+175,022
+0.7
+loans
+Borrower C
+0.5
+Borrower D
+Finance
+127,667
+0.5
+Borrower E
+Finance
+131,941
+Amount
+Industry
+Borrower
+Item
+Loan concentration to the single largest borrower (%)
+Loan concentration to the top ten borrowers (%)
+At
+At
+At
+31 December
+2023
+31 December
+2022
+31 December
+2021
+4.5
+23.5
+3.8
+3.6
+16.0
+14.2
+The table below shows the details of the loans granted to the top ten single borrowers of the Bank as at the end of 2023.
+In RMB millions, except for percentages
+% of total
+114,281
+As at the end of 2023, the total amount of loans granted by the Bank to the single largest borrower and top ten single
+borrowers accounted for 4.5% and 23.5% of the Bank's net capital base, respectively. The total amount of loans granted
+to the top ten single borrowers was RMB1,105,393 million, accounting for 4.2% of the total loans.
+0.4
+Borrower G
+Discussion and Analysis
+on
+The Bank strictly complies with regulatory requirements
+market risk management, has implemented an
+independent, centralized and coordinated market
+risk management model, and formed a management
+organizational structure featuring the segregation of the
+front, the middle and the back offices in the financial
+market business. The Board of Directors assumes the
+ultimate responsibility for monitoring market risk
+management. The Senior Management is responsible
+for executing the strategies, overall policy and system
+concerning market risk management approved by
+the Board of Directors. The Market Risk Management
+Committee of the Senior Management is the reviewing
+and decision-making organ of the Bank in respect of
+market risk management, is responsible for reviewing
+material affairs of market risk management, and performs
+its duty in accordance with the Working Regulations
+for the Market Risk Management Committee. The risk
+management departments at different levels undertake the
+responsibility of coordinating market risk management at
+respective levels, and the business departments implement
+market risk management policies and standards for
+their respective business areas in accordance with their
+functions.
+In 2023, the Bank continued to deepen the Group's
+market risk management. In light of the new regulations
+and the latest management practices, the Bank improved
+the market risk management system, and revised core
+institutional documents such as market risk management
+rules. It effectively disseminated the Group's risk appetite,
+approved the Group's market risk limit plan for 2023,
+optimized trading strategies, refined limit monitoring,
+and strengthened early warning and prompt, in an
+effort to enhance the limit management of domestic
+and overseas institutions. It took solid steps to promote
+the implementation of the New Capital Regulation,
+strengthened the Group's capability of consolidated
+measurement of capital requirements under the new
+market risk standards, and actively promoted the
+implementation of the internal model method for market
+risk under the New Capital Regulation. It deeply refined
+the market risk management system, established and
+improved the model library and management mechanism,
+and continuously ameliorated the intelligence of the
+market risk management system.
+Over 5 years
+Management of Market Risk in the Trading
+Book
+The Bank kept strengthening trading book market risk
+management and product control, and adopted the value-
+at-risk (VaR), stress testing, sensitivity analysis, exposure
+analysis, profit/loss analysis, price monitoring and other
+means to measure and manage trading book products.
+For VaR of the trading book, please refer to "Note 50.(c)(i)
+to the Consolidated Financial Statements: VaR".
+69
+Currency Risk Management
+In 2023, the Bank kept a close eye on the changes in
+market trends. By adhering to the currency risk neutrality
+principle, it actively took multiple management measures
+such as limit management and hedging, and improved the
+matching degree of the Group's foreign exchange asset
+and liability currencies. The currency risk of the Group was
+maintained within a reasonable range.
+FOREIGN EXCHANGE EXPOSURE
+In RMB (USD) millions
+At 31 December 2023
+At 31 December 2022
+USD
+Item
+Currency risk is the risk of adverse movements of exchange
+rate resulting in losses to the bank on the foreign currency
+exposure, which is due to the currency structure's
+mismatch between foreign currency assets and liabilities.
+The Bank's objective of currency risk management is to
+control the impact of exchange rate fluctuations on the
+Bank's financial position and shareholders' equity within
+a tolerable extent. The Bank manages such risk principally
+by the limit management and hedging of risks. The Bank
+carries out sensitivity analysis and stress testing of currency
+risk on a quarterly basis, and the Senior Management
+and the Market Risk Management Committee review the
+currency risk reports on a quarterly basis.
+Annual Report 2023
+Market risk is defined as the risk of loss to a bank's on- and off-balance sheet activities caused by adverse movements in
+market rates (including interest rates, exchange rates, stock prices and commodity prices). The Bank is primarily exposed
+to interest rate risk and currency risk (including gold). Market risk management is the process of identifying, measuring,
+monitoring, controlling and reporting market risk. The objective of market risk management is to control market risk
+exposures within a tolerable level and maximize risk-adjusted return according to the Bank's risk appetite.
+Market Risk
+Borrower H
+Production and supply of electricity, heating, gas and water
+Production and supply of electricity, heating, gas and water
+Transportation, storage and postal services
+77,833
+0.3
+69,500
+0.3
+67,663
+0.3
+Borrower |
+Borrower J
+Total
+Transportation, storage and postal services
+Finance
+65,520
+0.2
+64,216
+0.2
+1,105,393
+4.2
+For credit risk capital measurement, please refer to the section headed "Credit Risk" of the 2023 Capital Adequacy Ratio
+Report of Industrial and Commercial Bank of China Limited.
+Borrower F
+Exposure of on-balance sheet foreign
+BORROWER CONCENTRATION
+Large Exposures Management
+96
+1,439
+(95)
+(1,439)
+6,655
+1,320
+(6,466)
+1,008
+(1,320)
+14,922
+(73,298)
+(14,922)
+equity
+income
+equity
+income
+84,941
+(20)
+(1,008)
+74
+Annual Report 2023
+1 to 5 years
+(4,169,555)
+(2,592,876)
+3 months to
+1 year
+8,976,842
+9,441,460
+(5,622,895)
+(7,389,824)
+Less than
+3 months
+Note:
+At 31 December 2022
+At 31 December 2023
+In RMB millions
+INTEREST RATE RISK EXPOSURE
+As at the end of 2023, the Bank had a positive cumulative interest rate sensitivity exposure within one year of
+RMB3,353,947 million, representing an increase of RMB1,302,311 million from the end of the previous year, mainly because
+of the increase in repriced or matured loans and advances to customers within one year. The Bank had a positive cumulative
+interest rate sensitivity exposure above one year of RMB282,408 million, representing a decrease of RMB1,083,170 million,
+mainly resulted from the increase in repriced or matured due to customers above one year.
+Interest Rate Exposure Analysis
+Note: Please refer to "Note 50.(d) to the Consolidated Financial Statements: Interest Rate Risk in the Banking Book".
+91,766
+16,673
+(79,879)
+(16,673)
+Effect on
+In accordance with relevant regulatory rules, the Bank strictly carried out various work on large exposures management
+in an orderly manner, and further improved the large exposures management system, including the construction of large
+exposure management systems, to strengthen large exposures limit management, and to continuously improve large
+exposures management.
+net interest
+net interest
+The Bank's management system for interest rate risk in
+the banking book conforms to the system importance,
+risk status and business complexity, and fits the Bank's
+overall development strategy and the enterprise risk
+management system. The system mainly consists of the
+following elements: a sound risk system; an effective risk
+governance structure; sound risk management strategies,
+policies and procedures; effective risk identification,
+measurement, monitoring, control and mitigation that
+cover all areas; a complete internal control and review
+mechanism; a fully-built risk management system; and
+adequate information disclosure and reporting. The Bank
+strictly complied with regulatory requirements for interest
+rate risk in the banking book, effectively managed interest
+rate risk in the banking book at the Bank and consolidated
+level, and developed a sound governance structure for
+interest rate risk management in the banking book that is
+fully built and well-structured, with clearly defined rights
+and responsibilities. The Board of Directors and the Senior
+Management are vested with the ultimate and executive
+responsibilities, respectively, for managing interest rate risk
+in the banking book. The Asset & Liability Management
+Department of the Head Office takes the leading role
+in managing interest rate risk in the banking book, and
+other departments and institutions play their roles in
+implementing policies and standards concerning interest
+rate risk in the banking book. The Internal Audit Bureau
+and the Internal Control & Compliance Department of the
+Head Office are responsible for reviewing and evaluating
+duties in respect of interest rate risk in the banking book.
+The objective of management of interest rate risk in the
+banking book: The Bank aims at maximizing the risk-
+adjusted net interest income within the tolerable level
+of interest rate risk under its risk management and risk
+appetite. The Bank formulated strategies and clarified
+Management of Interest Rate Risk in the
+Banking Book
+Interest rate risk in the banking book is defined as the
+risk of loss in the economic value and overall profit of
+the banking book arising from adverse movements in the
+interest rate and maturity structure, etc.
+Interest Rate Risk in the Banking Book
+Please refer to the section headed "Market Risk" of the
+2023 Capital Adequacy Ratio Report of Industrial and
+Commercial Bank of China Limited issued by the Bank for
+further information on market risk capital measurement.
+Please refer to "Note 50. (c)(ii) to the Consolidated
+Financial Statements: Currency Risk" for the exchange rate
+sensitivity analysis.
+Discussion and Analysis
+objectives and modes for managing interest rate risk
+in the banking book based on risk appetite, risk status,
+macroeconomic and market changes. Based on the pre-
+judging of the interest rate trend and measurement
+results of the changes in overall profit and economic
+value, the Bank formulated and put into practice relevant
+management policies, and adopted a coordinated
+approach to using interest rate risk control tools to
+mitigate and manage risks, so as to ensure the Bank's
+actual interest rate risks conform to its bearing capability
+and willingness. On the basis of management strategies
+and objectives, the Bank developed policies and made clear
+the modes and instruments for managing interest rate risk
+in the banking book. By developing and modifying such
+methods as on-balance sheet adjustment and off-balance
+sheet hedging to manage interest rate risk, adeptly using
+quantity, pricing and derivative instruments regarding
+assets and liabilities, and applying the limit management
+system, business plan, performance assessment and capital
+evaluation in all areas for interest rate risk management
+and assessment, the Bank achieved effective control of
+interest rate risk at the business lines, the branches, the
+affiliates and the products and portfolios easily affected by
+interest rate risk.
+Annual Report 2023
+44,984
+312,561
+20,088
+142,785
+Total foreign exchange exposure, net
+exchange items, net
+Discussion and Analysis
+70
+In line with the principles of comprehensiveness, prudence
+and foresight, the Bank's stress testing on interest rate risk
+in the banking book adopted the interest rate risk exposure
+measurement approach and standardized duration
+approach to measure the effect of interest rate exposure
+changes under different stress scenarios on the overall
+profit and economic value. Based on the domestic and
+overseas regulatory requirements, the bank-wide asset and
+liability business structure, operation and management as
+well as risk appetite, the Bank set stress testing scenarios
+for interest rate risk in the banking book by taking into
+account the current interest rate level, historical changes
+and trends, total assets and liabilities and their term
+characteristics, business development strategies, customer
+behaviors and other factors, and conducted stress testing
+quarterly.
+In 2023, adhering to a steady and prudent interest rate
+risk appetite, the Bank grasped changes in the monetary
+policy cycles and market expectations in a forward-looking
+manner, improved the mechanism for dynamic adjustment
+to interest rate risk management strategies, and continued
+to optimize the interest rate exposure and duration
+mismatch structure of assets and liabilities. The Bank
+strengthened the ability to predict and respond to interest
+rate fluctuations in domestic and foreign currencies, bonds,
+credits, and other markets, and kept improving the digital
+management of interest rate risks, to consolidate the high-
+quality operating results from balanced, coordinated and
+sustainable current earnings and long-term value.
+Annual Report 2023
+Total
+Other
+HKD
+USD
+RMB
+Currency
+in interest rate
+Effect on
+- 100 basis points
+In RMB millions
+Effect on
+in interest rate
++100 basis points
+Supposing that there is parallel shift of overall market interest rates, and taking no account of possible risk management
+actions taken by the Management to mitigate the interest rate risk, the analysis on interest rate sensitivity of the Bank
+categorized by major currencies at the end of 2023 is shown in the following table:
+Interest Rate Sensitivity Analysis
+Analysis on Interest Rate Risk in the Banking Book
+Discussion and Analysis
+71
+Effect on
+RMB
+453,471
+Transportation, storage and postal services
+RMB
+Country risk is the risk incurred to a bank arising from
+the inability or refusal by the debtor to repay bank debt,
+losses suffered by the bank or its commercial presence in
+such country or region and other losses due to political,
+economic and social changes and events in a country or a
+region. Country risk may be triggered by the deterioration
+of economic conditions, political and social turmoil, asset
+nationalization or expropriation, government's refusal to
+pay external debt, foreign exchange control or currency
+depreciation in a country or a region.
+The Bank strictly observes regulatory requirements on
+country risk management. The Board of Directors assumes
+the ultimate responsibility for the effectiveness of country
+risk management. The Senior Management is responsible
+for executing the country risk management policies
+approved by the Board of Directors. The Risk Management
+Committee of the Head Office is responsible for reviewing
+matters regarding country risk management. The Bank
+manages and controls country risk with a series of tools,
+including country risk assessment and rating, country risk
+limit, country risk exposure monitoring and stress testing.
+The Bank reviews the country risk rating and limits at least
+once every year.
+In 2023, facing the increasingly complicated and severe
+external environment, the Bank strictly abode by regulatory
+requirements and, with consideration of its business
+development needs, continued to strengthen country
+risk management. The Bank closely observed changes
+in country risk exposures, constantly tracked, monitored
+and reported country risk, and timely updated and
+adjusted the country risk rating and limits. It continued
+to strengthen early warning mechanism for country risk,
+proactively conducted stress testing on country risk and
+effectively controlled country risk while steadily promoting
+internationalization.
+Information Technology and Cyber
+Security Risk
+Information technology and cyber security risk refers
+to the operational, legal or reputational risk incurred in
+various IT activities by natural factors, human factors,
+technical vulnerabilities and managerial deficiencies, mainly
+involving areas such as technology governance, cyber and
+information security, innovative research and development,
+production and operation, business continuity, and
+technology outsourcing. The Bank incorporated
+information technology and cyber security risk into its
+enterprise risk management system, and established and
+continuously refined the long-term mechanism of joint
+prevention and control for the three lines of defense.
+In 2023, the Bank coordinated development and security,
+and regarded the prevention and control of information
+technology and cyber security risk as an important part of
+FinTech work, for the purpose of high-quality development
+through high-standard security. The Bank continuously
+improved cyber security capabilities, strengthened
+support for information system production and operation,
+reinforced special inspection on cyber security, and
+improved contingency plan for cyber security, to
+consolidate the foundation for production and operation
+safety. The Bank strengthened the prevention and control
+of digital transformation risks, and kept an eye on
+emerging and traditional risks in the digital environment.
+During the reporting period, the Bank's overall risks were
+controllable.
+Country Risk
+Annual Report 2023
+Discussion and Analysis
+CAPITAL MANAGEMENT
+The Bank implements a group-based capital management
+mechanism, and takes capital as the object and an
+instrument for its management activities, including
+planning, measurement, allocation, application and
+operation. The Bank's capital management aims at
+maintaining an appropriate capital adequacy ratio and
+continuously meeting capital supervisory regulations
+and policies; ceaselessly strengthening and enhancing
+the capital base and supporting business growth and
+implementation of strategic planning; establishing a
+value management system focusing on economic capital,
+reinforcing capital constraint and incentive mechanism
+and improving capital allocation efficiency; innovating
+and expanding capital replenishment channels, raising
+capital quality and optimizing capital structure. The Bank's
+capital management covers various operating entities in
+the Group, and its contents include capital adequacy ratio
+management, economic capital management, capital
+investment and financing management.
+In 2023, the Bank established and refined the lean capital
+management, continuously improved scientific capital
+raising, efficient allocation, precise measurement, long-
+term constraint and normal optimization management
+mechanism, and continued to elevate the capital
+use efficiency. It appropriately conducted capital
+replenishment, optimized the capital structure and reduced
+the cost of capital, thus laying a solid capital foundation
+for the Bank to serve the real economy. The Bank actively
+responded to the implementation of the New Capital
+Regulation to ensure the smooth switching of regulatory
+rules and the smooth operation of the capital adequacy
+ratio. In 2023, all capital indicators performed well, of
+which the capital adequacy ratio was kept at a sound and
+appropriate level.
+Capital Adequacy Ratio and Leverage
+Ratio
+77
+Discussion and Analysis
+In 2023, the Bank deepened the implementation of
+the Group's reputational risk management rules and
+requirements, and continuously improved the group-wide
+and whole-process reputational risk management system
+and working mechanism, to improve the quality and
+efficiency of reputational risk management. It strengthened
+the normalization of reputational risk management, and
+deepened the governance of risk sources, to safeguard the
+Bank's image. In addition, regarding the issues of social
+focusing, the Bank timely responded to social concerns,
+organized and promoted influential brand communication
+activities, to enhance the Bank's brand image. The
+Bank leads the market in terms of network influence
+and reputation value. During the reporting period, the
+reputational risk of the Bank stood in a controllable range.
+Reputational risk is defined as the risk of negative
+comments on a bank from stakeholders, the public
+or the media as a result of the behaviors of the bank
+or practitioners or external events and so on, thereby
+damaging brand value, detrimental to normal operation,
+and even affecting market and social stability. Reputational
+risk may arise in any part of the Bank's operation and
+management, and usually co-exists and correlates with
+credit risk, market risk, operational risk and liquidity
+risk. Good reputation is central to the operation and
+management of a commercial bank. The Bank highly
+values its reputation and has incorporated reputational risk
+management in the corporate governance and enterprise
+risk management system to prevent reputational risk.
+The Board of Directors is responsible for reviewing and
+finalizing bank-wide policies concerning reputational risk
+management that are in line with the strategic objective of
+the Bank, establishing a bank-wide system of reputational
+risk management, monitoring the overall status and
+effectiveness of reputational risk management across
+the Bank and assuming the ultimate responsibility for
+reputational risk management. The Senior Management
+is responsible for leading reputational risk management
+of the Bank, implementing the strategies and policies
+established by the Board of Directors, reviewing and
+finalizing the rules, measures and operating procedures
+for reputational risk management, preparing plans for
+responding to and coping with extraordinarily major
+reputational risk events and ensuring the proper and
+effective operation of the reputational risk management
+system. The Bank has established a special reputational
+risk management team to take charge of the daily
+management of reputational risk.
+The Bank strictly complies with regulatory requirements
+on operational risk management. The Board of Directors,
+the Board of Supervisors, the Senior Management and its
+Operational Risk Management Committee are respectively
+responsible for decision-making, supervision and execution
+with respect to operational risk management, and
+relevant departments act as the "three lines of defense"
+for operational risk management pursuant to their
+management functions, thus forming an operational risk
+management system with close connection and mutual
+checks and balances. Institutions and departments function
+as the first line of defense, assume the direct responsibility
+for respective operational risk management. Classified
+management departments such as Internal Control &
+Compliance, Legal Affairs, Security, Financial Technology,
+Finance & Accounting, Operation Management and
+Human Resources as well as cross-risk management
+departments including Credit and Investment Management
+and Risk Management jointly perform the functions
+as the second line of defense, which are respectively
+responsible for the lead management of operational risk,
+the classified management of certain type of operational
+risk and the management of operational risk across credit
+and market risks. The Internal Audit Department performs
+the functions as the third line of defense and assumes
+the responsibility for supervision, and is responsible
+for supervising the effectiveness of operational risk
+management.
+In 2023, the Bank improved the standards for collecting
+operational risk loss data, restructured operational
+risk management system and consolidated the quality
+of operational risk loss data, in line with regulatory
+focuses and operational risk trends, the operational
+risk management requirements of NFRA, and its own
+management needs. It steadily advanced the project on
+meeting operational risk standard approach under the New
+Capital Regulation, and coordinated the self-assessment
+of operational risk and control, to enhance operational
+risk control in a constant manner. To improve the long-
+term case prevention mechanism, the Bank consolidated
+the primary responsibilities for case prevention, deepened
+the case risk governance in key fields, optimized case
+assessment mechanism, stimulated internal motivation for
+self-examination and self-correction, and continuously and
+deeply carried out case warning and education. Besides, it
+strengthened the grid-based intelligent control mechanism
+for abnormal employee behavior, consolidated and
+examined the primary responsibility for management and
+control, and deepened the special governance of abnormal
+behavior. During the reporting period, the operational risk
+control system of the Bank operated smoothly, and the
+operational risk was controllable on the whole.
+Please refer to the section headed "Operational Risk"
+of the 2023 Capital Adequacy Ratio Report of Industrial
+and Commercial Bank of China Limited issued by the
+Bank for further information on operational risk capital
+measurement.
+Legal Risk
+Legal risk is the risk of incurring legal sanctions, regulatory
+penalties, financial losses, reputational losses or other
+negative consequences that arises out of or in connection
+with the failure of a bank to comply with relevant laws,
+regulations, administrative rules, regulatory provisions or
+requirements of other relevant rules during the bank's
+operation; the unfavorable legal defects that exist in
+products, services or information provided to clients,
+transactions engaged in, and contracts, agreements or
+other documents executed by the bank; legal disputes
+(litigation or arbitration proceedings) between the bank
+and its clients, counterparties and stakeholders; important
+changes in relevant laws and regulations, administrative
+rules, regulatory provisions and other relevant rules;
+and other relevant legal events that occur internally and
+externally.
+Based on the objective to ensure legal and compliant
+operation, the Bank always attaches great importance
+to establishing a sound legal risk management system,
+forming a full-process legal risk prevention and control
+mechanism to support and secure business innovation and
+market competition, and to prevent and eliminate various
+potential or practical legal risks. The Board of Directors
+is responsible for reviewing and determining the strategy
+and policy relating to legal risk management, and assumes
+the ultimate responsibility of legal risk management.
+The Senior Management is responsible for executing the
+strategy and policy relating to legal risk management,
+examining and approving relevant important affairs.
+The Legal Affairs Department of the Head Office is in
+charge of legal risk management across the Group, with
+relevant business departments providing related support
+and assistance on legal risk prevention and control. The
+affiliates, domestic and overseas branches undertake the
+responsibility of legal risk management of their respective
+institutions.
+In 2023, the Bank continued to strengthen legal risk
+management, by improving the risk prevention and control
+capacity in legal risk management, ensuring the legal
+and compliant operation, healthy business development
+and overall business stability of the Group. In accordance
+with new laws and regulations, its business rules, relevant
+agreements and system construction were improved, and
+legal risk prevention and control in key areas and links
+was further pushed forward in line with new requirements
+of financial regulators. The Bank also conducted ongoing
+monitoring of legal risks and improved both the vertical
+interconnection and horizontal coordination mechanism
+between the Head Office and branches. By systematically
+embedding legal risk prevention and control into business
+negotiations, product design, contract signing and other
+links, the Bank made risk prevention and control more
+prospective, proactive and targeted. It improved the cross-
+border coordination and management for legal work,
+Annual Report 2023
+75
+Discussion and Analysis
+strengthened the legal risk management of overseas
+institutions, and enhanced the training of legal talents
+for overseas business, thus properly responding to cross-
+border legal issues emerging in the development of
+international operations. Moreover, the Bank ameliorated
+the function design and management mechanism for
+the electronic signing system, to further enhance its risk
+control capability and usability, and effectively prevent
+and control operational risk, legal risk and reputational
+risk caused by misuse of contract seal. It continuously
+reinforced authorization management, related party
+management, and trademark management, and made
+efforts to constantly institutionalize risk management and
+control, and refine the structure of the system. The Bank
+devoted great energy to strongly dealing with lawsuit cases
+to protect the Bank's rights and interests in accordance
+with laws and avoid and reduce risk losses. In addition
+to the active assistance in online judicial inquiry and
+enforcement, the Bank played a positive role in improving
+the efficiency of law enforcement and case handling by
+competent authorities and building a social credibility
+system. The Bank widely carried out legal training and
+education activities to enhance the awareness of legality
+and compliance among the Group's employees.
+Money Laundering Risk
+Money laundering risk refers to the possibility that the
+products and services provided by a bank in the course
+of business operation and management are used for
+money laundering, terrorist financing, proliferation
+financing and other upstream criminal activities of money
+laundering, thereby causing the bank to suffer losses. Any
+money laundering risk event or case may bring serious
+reputational risk and legal risk, and lead to customer loss,
+business loss and financial loss.
+In strict compliance with anti-money laundering ("AML")
+laws and regulations of China and host countries (regions)
+of overseas institutions, the Bank sincerely fulfilled the
+legal obligations and social responsibilities concerning
+AML, and took the initiative to adapt to the AML situation
+in the new era. Guided by the "risk-based" principle and
+focusing on "one basic framework and four management
+pillars", the Bank continuously improved the Group's AML
+governance structure, optimized customer due diligence
+mechanisms, and strengthened money laundering risk
+assessment and control. It deepened the construction of
+a digital AML ecosystem, strengthened AML supervision,
+inspection and auditing, and advanced AML training and
+team building. Besides, it gradually developed an AML
+management mode with its own characteristics in line with
+international standards, thus further improving the quality
+and efficiency of AML management. During the reporting
+period, the Bank's money laundering risk was controllable.
+76
+Annual Report 2023
+Reputational Risk
+At the end of 2023, the Bank calculated its capital
+adequacy ratios at all levels in accordance with the
+Capital Regulation (Provisional). According to the scope
+of implementing the advanced capital management
+approaches as approved by the regulatory authorities, the
+Bank adopted the foundation internal ratings-based ("IRB")
+approach for corporate credit risk, the IRB approach for
+retail credit risk, the internal model approach ("IMA") for
+market risk, and the standardized approach for operational
+risk that met the regulatory requirements. The regulatory
+weighting approach was adopted for credit risk uncovered
+by the IRB approach and the standardized approach was
+adopted for market risk uncovered by the IMA.
+Discussion and Analysis
+RESULTS OF CAPITAL ADEQUACY RATIO CALCULATION OF THE GROUP AND PARENT COMPANY
+At 31 December 2023
+13.72
+13.55
+14.04
+14.03
+Tier 1 capital adequacy ratio (%)
+15.17
+15.00
+Common equity tier 1 capital adequacy ratio (%)
+15.64
+Capital adequacy ratio (%)
+19.10
+19.28
+19.26
+19.60
+1
+The Bank's capital adequacy ratios comply with additional regulatory requirements on systemically important banks.
+15.66
+3,945,322
+4,281,079
+4,361,390
+Item
+Group
+Parent
+Company
+Group
+Parent
+Company
+Net common equity tier 1 capital
+3,381,941
+equivalent
+3,121,080
+2,824,565
+Net tier 1 capital
+3,736,919
+3,393,346
+3,475,995
+3,152,660
+Net capital base
+4,707,100
+In RMB millions, except for percentages
+At 31 December 2022
+Annual Report 2023
+3,065,855
+operational risks faced by the Bank, including internal
+fraud, external fraud, employment system and workplace
+safety, customers, products and business activities, damage
+to physical assets, IT system, execution and delivery and
+process management. Among these, external fraud,
+execution, delivery and process management constitute
+major sources of operational risk losses of the Bank.
+At the end of 2023, RMB liquidity ratio and foreign
+currency liquidity ratio of the Bank were 54.5% and
+88.8% respectively, both meeting the regulatory
+requirements. Loan-to-deposit ratio was 76.7%.
+At
+At
+At
+Item
+2023
+Regulatory 31 December 31 December 31 December
+criteria
+The Bank assesses liquidity risk status by comprehensive
+use of a variety of methods and tools such as liquidity
+indicator analysis and liquidity exposure analysis.
+2022
+RMB
+>=25.0
+54.5
+42.3
+41.5
+Liquidity ratio (%)
+Foreign currency
+2021
+Liquidity Risk Analysis
+In 2023, the Bank adhered to a steady and prudent
+liquidity management strategy, and the Group's liquidity
+was stable. The Bank intensified the monitoring of funds
+and maintained a proper and sufficient liquidity reserve,
+with stable and orderly liquidity and customer payment.
+The Bank facilitated the ongoing upgrading of the liquidity
+risk management mechanism and system, and continuously
+enhanced the automation and intelligence level of liquidity
+risk monitoring, measurement and control. The Bank
+strengthened on- and off-balance sheet liquidity risk
+management in local and foreign currencies in domestic
+and overseas institutions, optimized the multi-level and
+multi-dimensional liquidity monitoring and early warning
+system, and enhanced the Group's liquidity risk prevention
+and emergency response capabilities.
+affiliates that are likely to have a material impact on the
+liquidity risk, and contain the liquidity risk management
+under normal and stressed scenarios. The liquidity risk
+management strategy specifies the overall objective and
+mode of liquidity risk management and lists major policies
+and procedures. The policies for liquidity risk management
+are formulated in accordance with external and macro
+operating environments and business development of the
+Bank, with a view to striking an effective balance among
+security, liquidity and profitability. The Bank conducts stress
+testing quarterly or by subject by fully considering various
+macro and micro factors that may affect the liquidity of
+the Bank, changes in the external operating environment,
+regulatory requirements, and business characteristics and
+complexity of the Bank.
+63,797
+74
+657,753
+USD
+equivalent
+94,665
+exchange items, net
+Exposure of off-balance sheet foreign
+(310,686)
+(43,709)
+Please refer to "Note 50. (d) to the Consolidated Financial Statements: Interest Rate Risk in the Banking Book".
+Liquidity Risk
+4,451,963
+3,958,454
+Liquidity risk is the risk that the Bank is unable to raise funds on a timely basis at a reasonable cost to settle liabilities as
+they fall due, or perform other payment obligations and satisfy other funding demands arising from the normal course
+of business. Liquidity risk may arise from the following events or factors: material adverse changes in market liquidity,
+withdrawal of customers' deposits, drawing of loans by customers, overdue payment of debtors, mismatch between assets
+and liabilities, difficulties in assets realization, operating losses and risk associated with its affiliates.
+72
+Annual Report 2023
+Discussion and Analysis
+The Bank's liquidity risk management system conforms
+to its overall development strategy and overall risk
+management system, and is commensurate with the
+business scale, business nature, complexity and other
+aspects of the Bank. The system includes the following
+fundamental elements: a sound risk system; effective
+governance structure for liquidity risk management;
+sound strategy, policy and procedures for liquidity risk
+management; effective identification, measurement,
+monitoring and control for liquidity risk and a complete
+management information system. In respect of liquidity
+risk management, the Bank's governance structure
+embodies the decision-making system comprising the
+Board of Directors and its special committees as well
+as the Asset and Liability Management Committee
+and the Risk Management Committee of the Head
+Office; the supervision system comprising the Board
+of Supervisors, the Internal Audit Bureau and the
+Internal Control and Compliance Department of the
+Head Office; and the execution system comprising the
+Asset and Liability Management Department, leading
+management departments of on- and off-balance sheet
+businesses, the information technology departments,
+operation management departments of the Head Office
+and relevant departments of branches. Each of these
+systems performs the corresponding functions of decision
+making, supervision and execution according to division of
+responsibilities.
+Objective of liquidity risk management: By establishing
+and improving the liquidity risk management system,
+the Bank aims at realizing effective identification,
+measurement, monitoring and control of the liquidity
+risk at the Group level, the Bank, the affiliates, the
+branches and the business lines, and ensuring the liquidity
+demand is satisfied at a reasonable cost in time under
+the normal business scenario and the stress scenario. The
+Bank's liquidity risk management strategy and policy are
+formulated in accordance with the liquidity risk appetite,
+and they cover all businesses on- and off-balance sheet, all
+domestic and overseas business departments, branches and
+>=25.0
+88.8
+Liquidity Risk Management
+88.9
+At 31 December 2022
+(15,617,408)
+517,820
+(107,581)
+(1,065,013)
+(412,689)
+3 months
+to 1
+1 
+year
+(1,961,803)
+1 to 5
+years
+299,076
+Over
+5 years
+Undated
+658,151
+17,033,573
+15,935,539
+Total
+3,614,927 3,776,588
+3,403,976 3,515,419
+Note:
+Please refer to "Note 50. (b) to the Consolidated Financial Statements: Liquidity Risk".
+Operational Risk
+106.1
+Operational Risk Management
+Operational risk is defined as the possibility of loss
+resulting from insufficient or problematic internal
+processes, employees and IT systems or from external
+events, including legal risk, but excluding strategic
+and reputational risk. There are seven major types of
+(14,661,992)
+At 31 December 2023
+(344,569)
+1 month
+76.7
+1 to 3
+months
+76.7
+77.3
+Annual Report 2023
+RMB and foreign currency
+Discussion and Analysis
+Loan-to-deposit ratio (%)
+73
+The daily average liquidity coverage ratio for the fourth
+quarter of 2023 was 122.03%, 1.00 percentage point
+lower than the previous quarter, mainly because of the
+decreased cash inflows in the next 30 days. High-quality
+liquid assets cover cash, available central bank reserve
+under stress and primary and secondary bond assets that
+can be included in the liquidity coverage ratio under the
+regulatory requirements. For the quantitative information
+for liquidity coverage ratio based on the former CBIRC's
+Administrative Measures for the Information Disclosure
+of Liquidity Coverage Ratio of Commercial Banks, please
+refer to the section headed "Unaudited Supplementary
+Information to the Consolidated Financial Statements".
+As at the end of 2023, the liquidity exposure for less than
+1 month turned from negative to positive, mainly due to
+the increase of matured reverse repurchase agreements
+within corresponding term. The negative liquidity exposure
+for 1 to 3 months and 3 months to 1 year expanded and
+the positive liquidity exposure for 1 to 5 years decreased,
+I mainly due to the increase of matured due to customers
+within corresponding term. The positive liquidity exposure
+for over 5 years expanded, which was mainly due to the
+increase in matured loans and advances to customers and
+bond investments within corresponding term. In 2023,
+the Bank maintained stable and abundant funds, balanced
+and steady growth in assets and liabilities, reasonable and
+appropriate cash flows of various maturities, and safe and
+steady liquidity operation.
+LIQUIDITY EXPOSURE ANALYSIS
+In RMB millions
+Less than
+Net stable funding ratio aims to ensure commercial banks
+have sufficient stable sources of funding to meet the
+needs for stable funding of assets and off-balance sheet
+risk exposures. The net stable funding ratio is the ratio of
+the available stable funding to the required stable funding.
+As at the end of the fourth quarter of 2023, the net stable
+funding ratio was 130.56%, 0.39 percentage points higher
+than that at the end of the previous quarter, mainly due
+to the rapid growth of stable funds available for use. For
+the quantitative information for net stable funding ratio
+in accordance with the former CBIRC's Disclosure Rules
+on Net Stable Funding Ratio of Commercial Banks, please
+refer to the section headed "Unaudited Supplementary
+Information to the Consolidated Financial Statements".
+Overdue/
+repayable
+on demand
+Year-on-year growth
+(RMB100 millions)
+(RMB100 millions)
+Loan growth
+25,530
+21,247
+29,086
+2019
+1,723
+18,815
+Growth rate of ICBC loans
+2021
+4,283
+2,433
+3,555
+Growth rate of loans of
+all financial institutions
+2020
+2022
+2023
+The above figure shows the growth of domestic RMB loans.
+Endeavoring to serving the development of the
+manufacturing industry. The Bank advanced the
+construction of a "leading financial service provider
+for manufacturing", and initiated the Special Plan for
+Supporting the Development of Advanced Manufacturing
+Cluster through Financing. The balance of loans to
+manufacturing exceeded RMB3.8 trillion, representing an
+increase of over RMB800.0 billion, maintaining a leading
+position among peers in terms of both total amount
+and growth. The Bank comprehensively enhanced
+infrastructure service capabilities, and increased loans
+to key projects such as transportation, water conservancy
+and energy. Domestic corporate loans increased by RMB2.3
+trillion, representing a year-on-year growth of RMB690.1
+billion.
+Note:
+II. Highlighting Major Responsibilities
+and Core Business and Contributing to
+Building a Modern Industrial System
+5,491
+13,323
+Hot Topic 2: Constantly Improving the
+Quality and Efficiency of Serving the Real
+Economy
+10.6%
+First, asset and capital investment efficiency
+remained stable. ROA and ROE were 0.87% and
+10.66%, respectively, both maintaining a relatively good
+level among comparable peers. The Group's NIM was
+1.61%, consistent with the change trend of peers. The
+cost on domestic RMB deposits remained stable with a
+slight decline, and the interest rate on new time deposits
+has significantly decreased year-on-year. Second, the
+Bank continuously enhanced the stability and
+sustainability of non-interest income. In 2023, the
+Bank generated a non-interest income of RMB151.4
+billion, representing a year-on-year increase of 0.7%.
+Specifically, net fee and commission income amounted
+to RMB119.4 billion, ranking first among peers; fee-
+based income from such products as credit card, third-
+party payment, syndicate arrangement underwriting and
+management, spot foreign exchange settlement and
+trading and agency insurance grew remarkably. The Bank
+recorded other non-interest income of RMB32.1 billion,
+representing a year-on-year increase of 52.5%. Third,
+quality and efficiency improved in a cost-effective
+manner. Operating expenses amounted to RMB238.7
+billion in 2023, representing a year-on-year decrease of
+0.3%. Cost-to-income ratio was 28.28%, showing a good
+input-output efficiency compared to peers.
+III. Optimizing Credit Structure and
+III. Making Every Effort to Stabilize Asset
+Quality and Effectively Forestalling and
+Controlling Credit Risk
+The
+credit risk control capability was enhanced
+continuously, and the quality of the Group's credit assets
+was stable and controllable. First, core indicators
+improved steadily. The Group's NPL ratio decreased by
+2BP from the year beginning to 1.36%. The balance of
+loan allowance stood at RMB756.4 billion, up RMB83.6
+billion over the year beginning; allowance to total loans
+ratio was 2.90%, the same as that at the beginning of
+the year, and allowance to NPLs ratio was 213.97%, up
+4.5 percentage points over the year beginning, indicating
+that the Bank's risk resistance capacity has been further
+enhanced. The price scissors between overdue loans and
+NPLs have remained negative for 15 consecutive quarters.
+Second, the investment and financing structure
+was continuously optimized. The Bank strengthened
+planning and guidance, reinforced policy empowerment,
+and well managed the direction, volume and pace of
+investment. It made a sound layout for investment and
+financing business in a forward-looking manner, and
+continued to promote the management of the shift of
+existing loans. As a result, the investment and financing
+structure has been increasingly adapted to the national
+strategy, regional resource endowment and the Bank's
+operating capacity, thus effectively preventing structural
+risk. Third, the quality and efficiency of risk assets
+continued to improve. The Bank continued to promote
+the intensive, standardized and specialized disposal of NPLs
+through comprehensively application and innovation of
+various disposal methods, continuous optimization of the
+disposal structure and unblocked disposal channels of risk
+assets, and improved the utilization efficiency of financial
+resources.
+In the next stage, the Bank will adhere to the principle
+of pursuing progress while ensuring stability, promoting
+stability through progress, and establishing the new
+before abolishing the old, to improve the quality of
+financial supply. The Bank will strive to build a clean and
+healthy balance sheet and a balanced, coordinated, and
+sustainable income statement, and endeavor to open up
+new prospects in the course of high-quality development
+of ICBC.
+In 2023, the Bank continued to implement economic and
+financial policies, adhered to the principle of commercial
+sustainability, accurately grasped the market needs during
+the recovery and development of the real economy, and
+improved the quantity and quality of financial supply.
+Meanwhile, the Bank attached importance to the building
+of a sound business ecosystem, and promoted its high-
+quality development to bring greater returns to investors.
+I.
+Shouldering the Responsibilities as a
+Large Bank, and Hitting a Record High
+in the Total Amount and Growth of
+Investment and Financing
+In 2023, the Bank insisted on producing effect early
+on and making sufficient efforts to actively support
+stable growth. At the end of 2023, domestic RMB
+loans (excluding placements with banks and other
+financial institutions) rose by RMB2.91 trillion over the
+year beginning, representing a year-on-year increase of
+RMB355.5 billion, ranking first in the market in terms of
+balance and growth. The balance of RMB-denominated
+bond investment reached RMB10.5 trillion, up RMB1.28
+trillion over the year beginning. The Bank granted full-
+spectrum financing of over RMB4.7 trillion to the real
+economy by diversified financial services, including on-
+and off-balance sheet loans, bond investment and equity
+investment. The growth of such financing hit a record high
+and maintained a leading position in the market.
+Annual Report 2023
+85
+Discussion and Analysis
+12.8%
+13.5%
+12.6%
+13.5%
+12.3%
+12.6%
+11.6%
+11.1%
+9.8%
+Strengthening High-quality Financial
+Services for Key Fields
+87
+supply of high-quality rural revitalization financial
+supply. Agriculture-related loans rose by RMB960.0 billion
+or over 29%, maintaining a leading position among peers.
+At the end of 2023, the growth rate of loans in key
+areas such as the Beijing-Tianjin-Hebei Integration, the
+Yangtze River Delta, the Guangdong-Hong Kong-Macao
+Greater Bay Area, the Chengdu-Chongqing Economic
+Circle, and the central region was higher than the
+average of the Bank.
+Management
+of lines of
+defense
+Management
+of the
+bottom line
+Head Office and
+subordinate institutions
+Key fields
+Active
+prevention
+Smart
+control
+Comprehensive
+management
+Annual Report 2023
+Discussion and Analysis
+Data and
+System
+II.
+Adhering to the intelligent credit risk control of "Three
+Gates and Seven-color Pools", the Bank further applied
+new credit approval rules to overseas institutions and
+integrated subsidiaries, intensified investment and
+financing planning and duration management, promoted
+the continuous optimization of investment and financing
+structure, defused risks in key areas in an orderly manner,
+and achieved positive results in asset quality improvement.
+At the end of 2023, the Group's NPL ratio was 1.36%,
+with a decrease of 0.02 percentage points from the year
+beginning. Following the principles of marketization and
+commercial sustainability, the Bank maintained a stable
+and orderly granting of real estate credits, to satisfy the
+reasonable financing needs of the real estate enterprises.
+The Bank strengthened intelligent monitoring and early
+warning of real estate loans, developed differentiated
+risk control plans for each real estate customer, and
+accelerated the risk disposal of key real estate enterprises.
+At the end of 2023, the NPL ratio of loans to the real
+estate of domestic branches was 5.37%, down 0.77
+percentage points over the beginning of the year. In the
+field of local debts, the Bank, following the principle of
+business sustainability, granted most of related loans
+to regions with sound economic and financial strength
+and appropriate debt taking, and to the market-oriented
+operation projects with sufficient cash flows from
+operating activities such as projects vital to the people's
+livelihood and industrial support projects. The Bank
+strengthened the risk investigation of existing financing,
+mitigated risks in a forward-looking manner, and steadily
+cooperated with local governments to prevent and resolve
+financing risks by multiple market-oriented methods.
+III. Improving Intelligent Risk Management
+to Effectively Respond to Emerging Risks
+The Bank sped up the construction of an enterprise-level
+intelligent risk control platform, continuously improved
+the ICBC e-series intelligent risk management systems,
+and continuously enhanced the capability of early
+identification, warning, exposure, and resolution of risks,
+so as to effectively prevent risk contagion across markets,
+businesses, and fields. The Bank strengthened risk control
+in the digital environment, covering various elements of the
+entire digital transformation process, as well as emerging
+and traditional risks in the digital environment, to support
+the development of new digital business formats and
+models. In terms of model risk management, the Bank
+established a sound full-lifecycle management mechanism
+for model risks, covering the entire process of model
+development, validation, deployment, evaluation, and
+exit, so as to enhance the systematic management of
+model risks. The Bank regularly conducted the centralized
+inventory and risk assessment of models to strengthen the
+88
+Annual Report 2023
+foundation for centralized and unified management of
+models. In terms of climate risk management, the Bank
+actively conducted climate risk research, strengthened
+climate risk rating, monitoring and reporting, and
+information disclosure, and continuously improved climate
+risk management mechanisms, according to international
+regulatory requirements. Based on the stress scenario of
+the Central Banks and Supervisors Network for Greening
+the Financial System (NGFS) and the actual conditions in
+China, the Bank achieved localized calibration of stress
+scenarios, and established a transmission model related to
+the transformation risk of climate risk, to conduct climate
+risk stress testing in a forward-looking manner. In terms
+of risk management for investment and financing
+cooperation institutions, the Bank expanded the
+coverage of risk management, continuously improved the
+access management and collective review of cooperation
+institutions and products, and strengthened the monitoring
+and control of risks arising from cooperation institutions
+and businesses.
+Hot Topic 4: Solidifying the Ecological
+Foundation by GBC+ Projects
+In 2023, the Bank promoted the GBC + projects in a
+coordinated manner, comprehensively covering eight tasks:
+GBC interaction, fund undertaking, the "Net Making and
+Patching" program, sharpening of outlets' competitive
+edge, construction of mobile banking APP, rural
+revitalization by urban-rural collaborative development,
+payment agency service, and merchant marketing.
+The Bank deepened scenario construction, digital
+empowerment, channel support, and comprehensive
+collaboration, achieved collaboration and mutual
+promotion and extension of capital chain, customer
+chain, service chain and value chain, and consolidated
+the foundation for high-quality development.
+First, the Bank reinforced the customer chain along
+the capital chain, leveraged the financial advantages
+of industrial chain and supply chain, identified target
+customers, and continuously expanded the customer chain,
+focusing on customers' capital and information flows.
+The Bank applied digital means to targeted marketing
+of fund undertaking, provided support for maintaining
+internal customers and expanding external customers,
+and promoted the circulation of funds within the Bank.
+In 2023, the Bank developed 13,219 targeted customers,
+bringing in new deposits of RMB33.63 billion.
+Second, the Bank refined the service chain focusing
+on the customer chain, and built scenarios and
+platforms. It exclusively built the "National Coordinated
+Fund Management System for Pension Insurance",
+expanded the "ICBC Anxin Asset Management" scenario
+in an innovative way, and developed the "e-Nong Xin
+An" migrant worker salary supervision product. The
+Bank provided GBC customers with a one-stop supply of
+"finance + government service", "finance + industry",
+and "finance + people's livelihood", and continuously
+enhanced customer loyalty.
+Discussion and Analysis
+Strengthening the Prevention,
+Resolution and Governance of Risks in
+Key Fields and Steadily Improving Asset
+Quality
+Business
+management
+Personnel
+management
+Authorization
+and Risk limit
+IV. Focusing on Value Creation and Steadily
+Advancing Retail and Inclusive Business
+Το
+promote the high-quality development of
+inclusive finance, the Bank built a digital inclusive
+center, and boosted the development of small and micro
+enterprises relying on the three core online businesses
+"Online Revolving Loan, Quick Lending for Operation
+and Digital Supply Chain". The balance of inclusive
+loans exceeded RMB2.2 trillion, representing a growth
+of 43.7%. The Bank gave priority to retail loans and
+adhered to the No.1 Personal Bank Strategy. In 2023,
+personal non-mortgage loans increased by RMB562.5
+billion, representing a year-on-year growth of RMB342.0
+billion. The Bank refined the products such as "Repay as
+You Wish" and their functions. Personal business loans
+increased by RMB417.1 billion in 2023, representing a
+year-on-year growth of RMB189.5 billion. Seizing the
+opportunity for consumption recovery, the Bank saw an
+increase of more than RMB140.0 billion in the balance
+of personal consumption loans and credit card
+overdrafts, representing a growth of RMB152.5 billion
+year-on-year. Actively responding to changes in the real
+estate market, the Bank expedited business transformation,
+and granted nearly RMB300.0 billion of second-hand
+housing loans cumulatively in 2023. The proportion
+of such loans in total housing loans increased by 9.0
+percentage points compared to the previous year.
+Discussion and Analysis
+V. Solidifying Operating Foundation and
+Maintaining a Reasonable Interest
+Margin
+The Bank adhered to the pricing of loan risks,
+conscientiously implemented the market-oriented
+adjustment mechanism for deposit interest rates, and
+promoted the three adjustments of nominal deposit
+rates and floating points. It guided the optimization of
+deposit term structure, and made achievements in the cost
+management and control for cost on RMB deposits.
+In 2024, the Bank will continue to launch more powerful,
+consolidated and targeted financial services, focusing on the
+development of the real economy and customer demand.
+It will continue to refine the funding supply structure, and
+achieve high-quality development of credit operations.
+Hot Topic 3: Enterprise Risk Management
+and Asset Quality
+Adhering to the eternal theme of preventing and
+controlling financial risks, the Bank continuously improved
+the enterprise risk management system of "Five-
+pronged Risk Management Approach" for domestic and
+overseas institutions, on- and off-balance sheet business,
+commercial and investment banking and other business,
+online and offline business, as well as the Head Office
+and subordinate institutions. It refined the four-pronged
+approach to people, money, defense lines, and bottom
+lines, and reinforced "active prevention, smart control
+and comprehensive management". The Bank consolidated
+the three defense lines for risk management, enhanced
+enterprise risk management capabilities, and served as a
+cornerstone for ensuring financial stability.
+I.
+Continuously Deepening the "Five-
+pronged Risk Management Approach"
+and Comprehensively Upholding Security
+The Bank established a risk officer management system,
+and reinforced the staffing and management of risk
+officers in the first defense line departments of the
+Head Office, domestic branches, overseas institutions,
+and integrated subsidiaries, to improve the quality and
+efficiency of enterprise risk management. The Bank
+improved the risk monitoring mechanism of "Five-pronged
+Risk Management Approach", regularly investigated
+potential enterprise risks of all institutions, customers and
+products, and dynamically updated response plans and
+prevention measures, to respond to risks in a forward-
+looking manner. The Bank established a sound product risk
+management system, refined product risk identification,
+assessment, and review processes, strengthened product
+catalog and system management, and enhanced product
+risk control throughout the entire lifecycle. Upholding
+the risk-neutral philosophy, the Bank strengthened the
+monitoring and early warning of risks in bond, money,
+foreign exchange, commodity and stock, and tightened
+the management of risk limits, to effectively respond to
+various external risk events and market fluctuations. The
+Bank further improved the enterprise risk management
+mechanism, incorporated operational risk and production
+safety into the enterprise risk management, continuously
+solidified the bottom line for compliant operations at
+home and abroad, continuously strengthened information
+technology and cyber security risk control, and cemented
+the foundation for management of various risks.
+Domestic and overseas
+institutions
+Five-
+pronged
+Risk
+Manage-
+On- and off-balance
+sheet business
+Commercial banking,
+investment banking and
+other business
+Online and offline
+business
+ment
+Approa
+-ch
+Risk
+governance
+Monitoring and
+Investigation
+Building an enterprise risk management system
+suitable for world-class modern financial institutions
+with Chinese characteristics
+The advantages of sci-tech innovation finance
+continued to expand. Special services such as "Chunmiao
+Action" were carried out, targeting high-tech and SRDI key
+customer groups. Loans to strategic emerging industries
+rose by nearly RMB950.0 billion, with a growth rate of over
+54%. To improve and upgrade green finance brand,
+the Bank accelerated innovation in financing products
+such as green bonds, funds, and wealth management. At
+the end of 2023, green loans by the statistical standard of
+the NFRA reached nearly RMB5.4 trillion, representing an
+increase of nearly RMB1.4 trillion over the end of last year,
+maintaining a leading position among peers in terms of
+total amount and growth. The Bank deeply implemented
+the special action of rural revitalization, and increased the
+86
+Annual Report 2023
+Annual Report 2023
+Interconnectedness
+Since 1 January 2023, the Group has implemented IFRS 17 - Insurance Contracts. In accordance with the Standard,
+the Group made retroactive adjustments to relevant data and indicators for the comparable periods in 2022.
+2023
+At 31 December
+In RMB millions
+At 31 December
+Total
+Parts uncovered by internal model approach
+Operational risk-weighted assets
+Parts covered by internal model approach
+Market risk-weighted assets
+Parts covered by internal ratings-based approach
+Parts uncovered by internal ratings-based approach
+Credit risk-weighted assets
+Item
+RISK-WEIGHTED ASSETS
+Discussion and Analysis
+79
+2022
+Annual Report 2023
+19.26
+19.10
+Capital adequacy ratio (%)
+15.64
+15.17
+Tier 1 capital adequacy ratio (%)
+14.04
+13.72
+Common equity tier 1 capital adequacy ratio (%)
+4,281,079
+22,225,272
+24,641,631
+Risk-weighted assets (1)
+4,707,100
+Net capital base
+Note: (1) Refers to risk-weighted assets after capital floor and adjustments.
+22,860,683
+15,331,991
+20,488,486
+In RMB millions, except for percentages
+45,931,590
+7.74
+3,556,297
+3,637,990
+47,246,121
+7.70
+7.95
+46,978,647
+Balance of adjusted on- and off-balance sheet assets
+Leverage ratio (%)
+3,736,919
+Net tier 1 capital
+30 June
+2023
+2023
+2023
+Item
+31 December 30 September
+At
+At
+At
+13,248,337
+7,528,692
+7,240,149
+234,534
+203,207
+123,270
+1,013
+80,583
+122,624
+1,546,414
+24,641,631
+1,533,579
+22,225,272
+Please refer to the 2023 Capital Adequacy Ratio Report of Industrial and Commercial Bank of China Limited issued by the
+Bank for further information on capital measurement.
+LEVERAGE RATIO
+111,264
+At
+1,127
+275,764
+22,091
+(20,839)
+3,293
+3,623
+560
+1,766,288
+1,905,968
+496,406
+561,303
+428,007
+148,174
+148,164
+356,407
+356,407
+3,141,891
+20,811
+3,404,032
+Common equity tier 1 capital deductions
+Other
+Valid portion of minority interests
+Retained profits
+General reserve
+Surplus reserve
+Valid portion of capital reserve
+Common equity tier 1 capital
+Paid-in capital
+Item
+2023
+At 31 December At 31 December
+In RMB millions, except for percentages
+Discussion and Analysis
+CAPITAL ADEQUACY RATIO
+2022
+Goodwill
+8,488
+8,320
+333,382
+Surplus provision for loan impairment
+528,307
+635,672
+Valid portion of tier 2 capital instruments and related premiums
+805,084
+970,181
+Tier 2 capital
+3,475,995
+3,736,919
+Net tier 1 capital
+584
+354,915
+354,331
+354,978
+354,331
+647
+Valid portion of minority interests
+Additional tier 1 capital instruments and related premiums
+Additional tier 1 capital
+Other intangible assets other than land use rights
+8,490
+7,473
+Cash flow hedge reserve that relates to the hedging of items that are not
+(2,867)
+(2,962)
+Valid portion of minority interests
+fair-valued on the balance sheet
+7,980
+7,980
+institutions that are under control but not subject to consolidation
+Net common equity tier 1 capital
+3,381,941
+3,121,080
+Investments in common equity tier 1 capital instruments issued by financial
+At
+31 March 31 December
+2023
+2022
+3,560,849 3,475,995
+44,231,978 41,780,554
+8.05
+2024 marks the 75th anniversary of the founding of the
+People's Republic of China, a crucial year for achieving
+the goals and tasks of the 14th Five-Year Plan, and also
+the first year of the new journey for ICBC after its 40th
+anniversary. Under the guidance of Xi Jinping Thought on
+Socialism with Chinese Characteristics for a New Era, the
+Bank will firmly follow the path of financial development
+with Chinese characteristics, uphold the goal of building
+a strong nation with financial power, focus on the vision
+of building a world-class modern financial institution with
+Chinese characteristics, and adhere to the leading role of
+high-quality Party building for high-quality development
+and high-level safety. Moreover, the Bank will give full play
+to the crucial role of high-efficiency reform, endeavor to
+provide high-quality services, and effectively play the key
+role in serving the real economy and the ballast stone role
+in maintaining financial stability.
+Discussion and Analysis
+OUTLOOK
+Annual Report 2023
+82
+4,646,525
+Cross-jurisdictional claims and liabilities
+management subsidiary
+1,762,288
+Balance of wealth management products issued by the wealth
+381,280
+Wealth management business
+1,010,151
+Assets of non-banking affiliates
+The Bank will stick to a blueprint to the end, adhere to
+the combination of strategic heritage and innovation, and
+consolidate the four strategic layouts of "leveraging our
+strengths, tackling areas of weaknesses and solidifying
+the foundation". It will deepen the implementation of
+key strategies of No.1 Personal Bank, Preferred Bank for
+Foreign Exchange Business, Key Regions and Urban-Rural
+Collaborative Development, etc., and continue to exert
+its advantages, fill up the gaps, strengthen the bottom
+lines and forge new strengths. The Bank will strive to
+promote the "five transformations" of modern layout,
+diversified structure, ecological foundation, digital driver
+and intelligent risk control, and spare no efforts to build
+an incorruptible, modern, stable, digital and trustworthy
+ICBC by your side.
+804,507
+8,416,358
+Complexity
+15,907
+72,043
+Number of domestic operating institutions
+Derivatives
+Number of personal customers (in 10,000)
+Number of corporate customers (in 10,000)
+Agency and commission-based business
+Payments settled via payment systems or correspondent banks
+Assets under custody
+Securities and other financing instruments issued
+Substitutability
+1,069
+8,448,017
+20,047,724
+Securities measured at fair value
+Focusing on serving the Chinese modernization, the Bank
+will take solid steps in "Five Priorities" of technology
+finance, green finance, inclusive finance, pension finance
+and digital finance, actively support the construction of
+"three major projects" of affordable housing construction,
+dual-use public infrastructure construction, and urban
+village reconstruction, and reinforce services to major
+national strategies, key areas and weak aspects. The
+Bank will focus on manufacturing and other major
+businesses, promote the development of new quality
+productive forces, and lay out the future to build financial
+infrastructure with ICBC characteristics.
+The Bank will adhere to the connotative high-quality
+development, promote the realization of effective
+improvement in quality, proper growth in quantity, and
+precise risk prevention and control, and build a healthier
+and cleaner balance sheet and a balanced and sustainable
+income statement. The Bank will continue to grow stronger
+and do better, consolidate its position as the largest bank,
+balance the relationship among value creation, market
+position, risk control and capital constraints, improve
+operational efficiency and risk resistance capability,
+and enhance global layout capacity and international
+competitiveness, to accelerate the building of a strong
+financial institution.
+Annual Report 2023
+2023
+2022
+2021
+2020
+2019
+(RMB100 millions)
+Net profit
+3,177
+3,134
+3,651
+3,621
+3,502
+Operating income
+(RMB100 millions)
+Note:
+7,760
+8,065
+8,001
+83
+Discussion and Analysis
+HOT TOPICS IN THE CAPITAL MARKET
+Hot Topic 1: Highlights of High-quality
+Development
+In 2023, the Bank boosted the high-quality economic
+development with high-standard financial services, pursued
+the strategy of "leveraging our strengths, tackling areas of
+weaknesses and solidifying the foundation", and improved
+and reinforced the balance between speed and quality,
+development and security as well as other important
+relations. It effectively responded to the evident narrowing
+of net interest margin, higher volatility of financial market,
+and more risk control challenges, and achieved stable
+operating results with sound momentum and improved
+quality. The Bank continued to demonstrate the "Strong,
+Excellent and Large" features, and delivered a remarkable
+performance to investors.
+I.
+640,334,459
+Going All Out to Serve the Real Economy
+and Effectively Improving Service Quality
+business, and inclusive services significantly higher than
+that of total loans. The Bank reasonably arranged the
+rhythm of lending, and achieved the highest loan balance
+in recent years. Second, bond investment increased by
+over RMB1 trillion. Bond investment hit a new high of
+RMB11.36 trillion, representing an increase of RMB1.29
+trillion. Third, deposit competitiveness improved
+markedly. Deposits reached RMB33.5 trillion, up RMB3.7
+trillion over the beginning of the year, increasing by
+more than RMB3 trillion for the second consecutive
+year and continuously giving an impetus to the real
+economy. Personal and corporate deposits developed in
+a balanced and coordinated manner. Fourth, customer
+base was continuously consolidated. The Bank was
+the first among peers to see a number of corporate
+customers exceeding 12.00 million. A customer ecosystem
+in which large, medium, small and micro customers
+were coordinated kept improving. The total number of
+customers further increased, with the number of personal
+customers rising to 740 million.
+II.
+Comprehensively Tapping Potential and
+Improving Efficiency, and Achieving
+Reasonable Profit Growth
+Faced with multiple business challenges, the Bank
+continuously improved its refined management, stimulated
+endogenous business momentum, and successfully tackled
+multiple disadvantages to income. The Group recorded a
+total operating income of RMB806.5 billion for 2023, with
+the year-on-year decrease limited to 4.3%. Consequently,
+net profit rose by 0.8% year-on-year to RMB365.1 billion,
+hitting a record high.
+8,609
+8,424
+The Bank continuously improved the quality and efficiency
+of financial services, to accurately satisfy the needs of
+the real economy and effectively help stabilize economic
+growth. As at the end of 2023, the Group's total assets
+amounted to nearly RMB45 trillion, maintaining its leading
+position in the world. First, total loans increased while
+loan structure improved. Loans rose by RMB2.88 trillion
+or 12.4% over the beginning of the year to RMB26.1
+trillion, maintaining a leading position among peers.
+Highlighting the major responsibilities and core business,
+the Bank saw a growth of loans to key businesses such
+as manufacturing, green business, strategic and emerging
+2,567,839
+3,806,517
+3,881,035
+Securities and other financing instruments issued
+3,429,792
+Intra-financial system liabilities
+2,248,245
+47,393,490
+Balance of adjusted on- and off-balance sheet assets
+Intra-financial system assets
+2023
+In RMB millions
+Indicator
+Interconnectedness
+Indicator category
+Size
+In accordance with the Guidelines on the Disclosure of
+Global Systemically Importance Assessment Indicators
+for Commercial Banks issued by the former CBIRC and
+the Instructions for G-SIB Assessment Exercise issued by
+the Basel Committee on Banking Supervision, the Bank
+calculated and disclosed the global systemically importance
+assessment indicators.
+Global Systemically Importance Assessment
+Indicators of Commercial Banks
+Assessment Indicators of Systemically
+Important Banks
+The Bank continuously improved the EVA value ecosystem
+and leveraged the leading and driving role of capital. It
+further optimized the economic capital measurement
+policy, and increased the preferential allocation to key
+areas such as manufacturing, green development, sci-
+tech innovation, strategic emerging industries and rural
+revitalization. The Bank improved the capital constraint
+mechanism and comprehensively strengthened capital
+management of domestic and overseas branches,
+controlled institutions and departments of the Head
+Office. It increased the use of economic capital in incentive
+assessment, and actively promoted the adjustment of asset
+structure and the enhancement of value creation capacity.
+Economic capital management of the Bank includes three
+major aspects: measurement, allocation and application.
+Economic capital indicators include Economic Capital (EC),
+Risk-Adjusted Return on Capital (RAROC) and Economic
+Value-added (EVA). All of the above are applied in
+credit resource allocation, risk constraint, performance
+assessment, expenditure allocation, product pricing and
+customer management, etc.
+Allocation and Management of Economic
+Capital
+8.32
+Note: The Bank's leverage ratio complies with additional regulatory requirements on systemically important banks. Please refer to
+"Unaudited Supplementary Information to the Consolidated Financial Statements" for details on disclosed leverage ratio
+information.
+Capital Financing Management
+On the basis of capital replenishment by retained profits,
+the Bank proactively expanded the channels for external
+capital replenishment and continuously promoted the
+innovation of capital instruments, to reinforce capital
+strength, optimize capital structure and control the cost of
+capital rationally.
+Issuance Progress of Capital Instruments
+The Bank issued two tranches of tier 2 capital bonds of
+RMB55.0 billion each in China's national inter-bank bond
+market in April and August 2023. All proceeds were used
+to replenish the Bank's tier 2 capital in accordance with
+the applicable laws as approved by relevant regulatory
+authorities.
+6,434,397
+In November 2023, the First Extraordinary General Meeting
+of 2023 of the Bank reviewed and approved the Proposal
+on the Issuance Amount of Capital Instruments, approving
+the Bank to issue tier 2 capital instruments of RMB240.0
+billion or foreign currency equivalent. In order to meet the
+latest regulatory requirements, the issuance amount of
+RMB130.0 billion or foreign currency equivalent of undated
+capital bonds with write-down feature that have not been
+issued after being reviewed and approved by the First
+Extraordinary General Meeting of 2022 will no longer be
+used. The above-mentioned amount has been incorporated
+into the proposal for re-application. The issuance plan of
+the above-mentioned capital instruments is still subject to
+the approval of relevant regulatory authorities.
+88
+Annual Report 2023
+Discussion and Analysis
+Issuance Progress of Total Loss-Absorbing
+Capacity Non-capital Debt Instruments
+In February 2024, the First Extraordinary General Meeting
+of 2024 of the Bank reviewed and approved the Proposal
+on the Issuance Amount of Total Loss-Absorbing Capacity
+Non-capital Debt Instruments, approving the Bank to issue
+no more than RMB60.0 billion total loss-absorbing capacity
+non-capital debt instruments. The issuance plan of total
+loss-absorbing capacity non-capital debt instruments is still
+subject to the approval by relevant regulatory authorities.
+For details on the issuance of capital instruments of the
+Bank, please refer to the announcements published by the
+Bank on the website of SSE, the "HKEXnews" website of
+HKEX and the website of the Bank.
+80
+84
+Substitutability
+718,647,269
+41,780,554
+2022
+In RMB millions, unless otherwise specified
+Intra-financial system liabilities
+Balance of adjusted on- and off-balance sheet assets
+Intra-financial system assets
+Indicator
+Indicator category
+Size
+In accordance with the Measures for Assessment of Systemically Important Banks and the Notice on Launching the
+Assessment Data Completion of Systemically Important Banks issued by PBC and the former CBIRC, the Bank calculated and
+disclosed the 2022 assessment indicators of domestic systemically important banks.
+Assessment Indicators of Domestic Systemically Important Banks
+Discussion and Analysis
+81
+Annual Report 2023
+2,182,999
+2,540,971
+160,052
+Cross-jurisdictional liabilities
+Cross-jurisdictional claims
+21,062,084
+Underwritten transactions in debt and equity markets
+2,304,370
+Trading volume of fixed-income securities
+8,896,224
+Trading volume of listed equities and other securities
+Payments settled via payment systems or correspondent banks
+Assets under custody
+1,231,759
+Notional amount of over-the-counter ("OTC") derivatives
+9,906,744
+Trading and available-for-sale securities
+765,333
+Global (cross-jurisdictional) activity
+Level 3 assets
+Complexity
+392,162