ICBC Makes Significant Progress in Global Service Delivery
OREANDA-NEWS. March 02, 2012. 2012 marks the 20th anniversary of ICBC's globalization. Over the course of two decades, ICBC marches on in the great age of China's reform and opening up to execute its globalization strategy and meet the increasing demand of customers for global financial services. With the improving competitive edge of the overseas subsidiaries, ICBC increases its geographical spread in terms of scale, quality and efficiency, making significant progress in serving the worldwide customers across different markets, reported the press-centre of ICBC.
Since the first overseas branch Singapore Representative Office established in 1992, by end-2011 ICBC had a global network of 239 fully licensed overseas subsidiaries spanning 33 countries/regions to deliver highly efficient and excellent services, and built a position in Africa by holding a 20% stake in the Standard Bank of South Africa. Being an important part of ICBC's overseas presence, the Bank's network of correspondent banks has grown to 1,553 banks covering 136 countries/regions from 1992's 208 banks in 60 countries/regions.
While spreading effort on a global scale, ICBC works on two fronts. The first point is the localization of overseas subsidiaries. Another point is the joint force between domestic and overseas branches to increase the competitiveness of overseas subsidiaries under an integrated business operation in home and foreign currencies. Total assets of all ICBC overseas subsidies stood at USD 132 billion at the end of 2011. Except the new subsidiaries in 2011, all other ICBC overseas subsidiaries have posted profit during the first year of operation. Since 2000, both assets and profits of overseas subsidiaries grow at a compound rate of around 39%. Return of equity (ROE) is 12.4% on average, a rate higher than many large American and European banks.
IT platforms are the key to ICBC's globalization.
The Bank sets up different IT platforms to connect the domestic and overseas systems in order to drive its overseas business and encourage branches in China and overseas to work together. In 2006, ICBC was the first Chinese bank to launch FOVA, an independently developed integrated business processing system for overseas subsidiaries. FOVA covers many areas: deposit, loan, remittance, bank card, Internet Banking, international settlement, trade finance and global market. So far, FOVA has been installed in all 34 ICBC overseas subsidiaries except ICBC Asia.
Worthy of note is that, leveraging FOVA and different banking licences held by the overseas subsidiaries, ICBC builds up its global service capacity to expand its key product lines in domestic branches to overseas, with a clear focus to serve the needs of "go global" companies. In supporting Chinese enterprises to "go global", ICBC offers investment banking services and financial support for top customers' overseas mergers and acquisitions and investment projects. By end-2011, total outstanding loans to "go global" companies reached USD 12.9 billion. In overseas retail banking services, ICBC offers localized services by issuing bank cards for overseas Internet Banking customers to bank online. At the end of 2011, ICBC has secured 555,000 new overseas personal customers.
Among the 33 overseas subsidiaries with the Internet Banking system installed, ICBC has 162,000 personal customers and 14,000 corporate clients to use its overseas Internet Banking. Nine overseas subsidiaries issue credit cards and 17 overseas subsidiaries issue debit cards, under the unified overseas credit card system set up in Hong Kong. In cash management, ICBC is the first bank in China to launch global cash management service. So far, the Bank has built partnership with 2,232 customers.
ICBC effectively extends its service radius by setting up Asia Pacific Cash Management Center in Hong Kong, and China-Africa cash management platform with South Africa Standard Bank. In addition, ICBC International, a subsidiary under ICBC, has participated in many IPO projects of global significance. The growing popularity of ICBC Financial's securities clearing and financing services is witnessed by the over USD 20 trillion of securities clearing amount.
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