ICBC Helps to Promote Transformation of Development Pattern
OREANDA-NEWS. April 25, 2011. In 2010, ICBC seized the opportunity arising from establishing a multi-level financial market system in China to boost performance and accelerate innovation. As a result, both profitability and competitiveness of its global market services were enhanced simultaneously. These services not only made more contributions to the operating income and profit of the Bank, but also played an important role in promoting ICBC's strategic adjustment in income structure and transformation of development pattern, reported the press-centre of ICBC.
It is said that ICBC made a ground-breaking move in 2010 to carry out the profit center reform in the head office's department of global market, a reform featuring value creation as the center, independent audit, combination of responsibility, obligation and interest, incentives with restraints attached, and risks with corresponding returns. The reform aimed to promote specialized operation and ensure sustained growth in profitability under the capital constraint. After one year of reform and development, the performance of ICBC's global market services improved significantly, its RMB bond portfolio yields beating market average.
Meanwhile, ICBC also made achievements in innovation of global market services. For one aspect, the Bank made vigorous efforts in product innovations, for example, becoming the first one to offer RMB bond trading and settlement services overseas, taking the lead in launching personal account silver trading, successfully handling the first transaction of loan transfer, becoming one of the first banks to offer exchange services between RMB and New Taiwan Dollar, RMB and Rouble, RMB and Ringgit. For another aspect, the Bank continued to explore a scientific way to develop its business. ICBC identified expansion of product lines and customer base as the breakthrough in its development strategy, and actively pushed forward the centralized management reform of global market services in overseas subsidiaries as well as the establishment of a global trading system.
Thanks to the boosting of investment and trading capabilities of global market services, ICBC enjoyed greater influence in the market, leading its peers in a number of areas in terms of global market services. ICBC won a host of awards bestowed by the Treasury Department of the Ministry of Finance, China Central Depository & Clearing Co., Ltd, National Inter-bank Funding Center and China Foreign Exchange Trading System based on multiple criteria, including "Excellent Underwriters of Book-entry T-bonds of 2010", "Excellent Settlement Member (Bond Deal)", "Excellent Settlement Member (Bond Settlement)", "Most Influential Organization Award", "Best Derivatives Trading Award" in the inter-bank home currency market, "Best Spot Market Maker of the Year", and "Best Derivatives Market Maker of the Year" in the foreign exchange market, which fully demonstrated the recognition of ICBC's position in the market.
As interest rate liberalization proceeded accordingly and more pressure on use of fund, it would be very difficult for commercial banks to realize sustainable development, especially one with sustained growth in profitability, by solely relying on interest spread, said a relevant person-in-charge with ICBC. Global market service, therefore, has become an important step of ICBC to improve fund utilization and increase income from non-interest spread. In the next move, the Bank will further promote the development of global market services, taking advantage of the opportunities emerging from RMB internationalization, exchange rate reform, interest rate liberalization and the development of commodity markets in order to boost investment and trading capabilities and income share. Besides, the Bank is making great efforts to build an independently developed trading management platform for global market services.
Stepping up innovations in its products, with the focus on key areas regarding exchange rate, interest rate, commodities and credit, ICBC will also deepen its understanding about customer needs, improve functions and designs of its products, endeavor to increase customer satisfaction, and enhance its capability of value creation with a view to fostering new sources of profit growth in global market services.
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