Banking News
- ICBC hopes to boost consumer banking
Date: 12-Apr-2007 Sources: (Shenzhen Daily)
INDUSTRIAL and Commercial Bank of China (ICBC), the country's largest lender, hopes to sustain annual returns and flesh out its portfolio by enlisting Goldman Sachs in developing consumer-oriented investment products.
ICBC, which like Bank of China and China Construction Bank, is trying to get away from decades of lending to State firms and moving into fees-based businesses, will attempt to move away from lending-driven profit growth, chairman Jiang Jianqing said Tuesday.
The lender will focus especially on credit cards, a burgeoning sector driven by consumption growth as the world's fourth-largest economy grows at double digits, and wealth management.
ICBC is now the largest domestic card issuer in terms of transactions, with consumers spending 100 billion yuan (US$12.94 billion) on its cards in 2006, he added.
'In future, the main driver of our bottom line would be consumer banking,'Jiang said.
The bank, which had the world's largest initial public offering in October in Shanghai and Hong Kong, has a long way to go, Jiang conceded.
Fees-based businesses and their associated assets now made up about half of the bank's overall assets, which Jiang said was lower than the average of 60 to 65 percent among major competitors. He did not elaborate.
In 2006, ICBC's net interest income rose 6.2 percent to 163.1 billion yuan. But net fee and commission income soared 55 percent to 16.3 billion yuan, accounting for 9 percent of its operating income as the bank rolled out wealth management products to increasingly prosperous customers in China.
By comparison, fee and commissions income comprise some 18 percent of Bank of China's operating income.
ICBC has underperformed rivals in lending expansion partly because of its sheer size. The lender posted 10.4 percent loans growth in 2006.
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