Industrial and Commercial Bank of China Limited (RCode: 601398:) announced its 2011 interim results on August 25. In accordance with the International Financial Reporting Standards, ICBC's after-tax profit in the first half of 2011 was RMB 109.6 billion, up 29% year-on-year. Earnings per share and net assets per share were RMB 0.31 and RMB 2.46, up RMB 0.06 and RMB 0.35 respectively when compared to the same period last year. Annualized return on average total assets and return on weighted average equity rose respectively 0.18 percentage points and 1.22 percentage points from a year earlier, to 1.55% and 25.12%.

In light of the market adversity, ICBC has stepped up its risk management efforts since January this year. ICBC embarked on a program of the set-up and application of internal rating system and strictly followed the "Three Rules and One Guidelines" to continuously enhance the Bank's risk management and quality of credit assets. In the first half of 2011, ICBC's bad loan balance and ratio registered "both decline" on top of "both declined" in its eleventh year. Bad loan rate moved down to 0.95% at the end of June, the first time under 1%, the best record in ICBC history. Meanwhile, provision coverage rate of bad loans surged 32.94 percentage points further over the end of 2010 to 261.14%, a significant boost to the Bank's risk capabilities. In particular, ICBC have controlled the risk exposure relative to the loans to local government financing vehicles and property loans. At the end of June, non-performing rate of loans to local government financing vehicles was controlled at 0.25%. Full cash flow coverage and basic coverage of all the loans together accounted for over 94%. Balance and percentage of non-performing property loans have been continuously declined. At the end of June, non-performing rate of property loans to corporate clients fell to 0.70%, rate of bad housing loans to personal customers was 0.37%.

Worthy of note was that, ICBC has demonstrated the coordinated development and sustainable profitability growth marked by its improvement in business model and revenue structure.

In extending credit, ICBC has maintained a good balanced growth in credit outlay during the first six months of 2011. RMB loans released by domestic branches have increased RMB 410.9 billion, or 6.6%, from the beginning of the year. In terms of loan recipients, ICBC focused on small business loans, trade finance solutions and personal loans. At the end of June, the total amount of small business loans outstanding reached RMB 591.7 billion, up RMB 119.2 billion, or 25.2%, from beginning of the year. The growth was 4.5 times as much as the increase of all corporate loans in the Bank. Domestic outstanding trade finance reached RMB 592.3 billion, rising 21.2% from the beginning of the year and making up 34% of total outstanding liquidity loans. Balance of domestic personal loans rose RMB 177.6 billion, or 10.9% from the beginning of the year to RMB 1810.8 billion at the end of June, of which, personal consumer loans, personal business loans rose 20.6% and 22.2% respectively since January 2011. Growth of non-housing loans accounted for 75.6%, for the first time more than that of personal housing loans.

In liability business, ICBC remained as the world's No.1 savings bank by having a balance of customer deposits of RMB 12.05 trillion, up RMB 901.6 billion, or 8.1%, from the beginning of the year. Of which, balance of savings deposit in all domestic branches was RMB 5679.1 billion at the end of June, up 8.3% over the end of previous year. "Double No.1" in terms of existing deposits and new deposits. Meanwhile, in January-June period of this year, ICBC sold RMB 2.78 trillion of independently-developed wealth management products, up 36.6% against the same period of last year. The wealth management products of ICBC met the demand of customers for diversified services, but attracted many new deposits flowing into the Bank as well. Stable source of capital laid a solid foundation for ICBC's sound operation. At the end of June, the Bank's loan to deposit ratio of 61.2% was 6.9 percentage points lower than the industry average.

ICBC's intermediary businesses, another driver of the Bank, showed robust growth and strong competitive edge. Especially investment banking, precious metal, private banking, asset custody, cash management and credit card, emerging intermediary businesses with stellar performance, drove the fast growth of fee and commission income. In the first half of the year, ICBC's net fee and commission income reached RMB 53.8 billion, representing a year-on-year increase of 45.8%, accounting for 23.27% of the Bank's total revenue, up 4.14 percentage points from a year earlier. Of which, in the first half of 2011, ICBC generated a revenue of RMB 13.16 billion from investment banking, representing an increase of 51.8% year-on-year and 23.1% of all revenue from intermediary businesses. ICBC traded 85,500 tons of precious metal, or 3.5 times as much for the whole of 2010. Over 3.7 million precious metal customers marked the fast expansion of the customer base. Number of private banking customers jumped 34% year-on-year to reach 22,000. Revenue from private banking intermediary businesses in January-June period went beyond RMB 420 million, a surge of 172% from a year earlier. Net worth of assets under ICBC custody was RMB 3.3 trillion, up 13.4 percent from the beginning of the year. ICBC is the only custodian bank in the country with over RMB 3 trillion of assets under custody. ICBC holds on to the top spot in card issuance volume, cardholder expenditure volume and overdraft volume. More than 70 million ICBC cards are in circulation. During the first six months of 2011, total amount of money which has been spent or withdrawn using an ICBC bank cards was nearly RMB 1.5 trillion, of which expenditure by ICBC credit cards moved up 59.9% year-on-year to RMB 431.8 billion.

While making steady progress in globalization and integrated operation, ICBC not only diversified its profitability source and improved its service capacity, but created a good beginning to ensure the long-term sustainable growth. ICBC's five European branches and branches in Pakistan were opened to business in the first half of the year. On August 5, the Bank has reached agreement with The Standard Bank of South Africa Limited on the sale and purchase of Standard Bank Argentina. This marked a new progress of ICBC in gaining international presence. Domestic and overseas subsidiaries are moving together under a new mechanism. In the January-June period, a turnover of RMB 406 billion in cross-border renminbi business tripled that of last year's. In the first half of 2011, ICBC International, a full-licensed investment bank in Hong Kong, successfully participated in the IPO of Prada and Ferragamo, IPO projects of significant influence in international market with underwriting amount of USD 14 billion. As of end of June, ICBC has a network of 220 overseas subsidiaries located within 29 countries and regions spreading over five continents. So far, FOVA, an integrated business processing system for overseas subsidiaries, has been installed in 27 overseas subsidiaries. ICBC leverages its unified IT platform across the globe to promote nine product lines outside China, namely, retail banking, bank card, electronic banking, fund clearing, finance, global cash management, investment banking, asset management and trade finance, driving significant progress in the number of overseas customers and business scale. At the end of June, total assets in ICBC's overseas subsidiaries moved up 37.2% from end of previous year to USD 103.869 billion, while pre-tax profit grew 43.0% year-on-year to USD 735 million.