INDUSTRIAL & COMMERCIAL BANK OF CHINA 2015 Results Announcement A Share Code: 601398 H Share Code: 1398
Desclaimer This material is prepared by Industrial and Commercial Bank of China Limited (the "Bank") without independent verification. It does not express or imply any representation or warranty, and the accuracy, fairness or completeness of any information stated or contained in it should also not be relied upon. The Bank and any of its affiliates, advisors or representatives will not accept any responsibility for any loss caused in any manner whatsoever due to any information stated or contained in this material. This material may contain certain forward-looking statements that involve known or unknown risks and uncertainties, and is based on the current forecasts, assumptions and expectations of the Bank and the industry (collectively, the "expectations") in which the Bank operates. Unless otherwise required by law, the Bank assumes no obligation to update such forward-looking statements whether as a result of future events or circumstances, and it does not assume any obligation to update the expectations. Although the Bank believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee that the expectations will be proved to be correct in the future. Investors should note that actual results could be different from those expectations, and should not rely upon any forward-looking contents contained in this material. - 2 -
CONTENT Financials Highlights Interest Income Fee Income Capital Credit Investment Deposit Internationalization Universal
Financial Highlights Financials 2015 2014 Change Profit before provision (RMB100 million) 4,502 4,183 7.62% Net profit (RMB100 million) 2,777 2,763 +0.52% Basic earnings per share (RMB) 0.77 0.78-1.28% Weighted average return on equity 17.10% 19.96% -2.86% Average return on total assets 1.30% 1.40% -10 bps Net interest margin 2.47% 2.66% -19 bps Non-performing loans ( NPL ) ratio 1.50% 1.13% +37 bps Allowance to NPL 156.34% 206.90% -50.56% Capital adequacy ratio* 15.22% 14.53% +69 bps * The Bank calculates the capital adequacy ratio by using the IRB advanced approach as of April 2014, according to the Regulation Governing Capital of Commercial Banks (Provisional) promulgated by CBRC. - 4 -
Steady Net Interest Income Growth Financials Total interest income RMB 871.8 billion, up 2.6% RMB100 million Item (Unit: %) 2015 2014 Change Yield on interest-generating assets 4.24% 4.58% -34 bps Cost of interest-bearing liabilities 1.94% 2.12% -18bps Net interest spread 2.30% 2.46% -16bps Net interest margin 2.47% 2.66% -19bps - 5 -
Well-regulated & Healthy Growth in Fee Income Financials RMB100 million Bank Card Personal WM & PB Sttlement, Clearing & Cash Mgmt Investment Banking Corporate WM Asset Custody Guarantee & Commitment Trust & Agency Net fee and commission income was RMB 143.4 billion, up 8.2% y-o-y Others - 6 -
Capital Indicators Performed Well Financials Net capital base Net tier 1 capital 20,121 17,811 15,212 18,121 The Bank issued tier 2 capital bonds worth of USD 2 billion offshore in the Net core tier 1 capital 17,015 14,867 overseas market in September 2015, in order to RMB 100 million replenish tier 2 capital. CAR +69 BPs 15.22% 14.53% Tier 1 CAR +129BPs 13.48% 12.19% Core tier 1 CAR +95 BPs 12.87% 11.92% 2015.12.31 2014.12.31 In November 2015, the Bank privately offered 450 million domestic preference shares, raising total funds of RMB45 billion. All these funds (net of costs of issuance) were used to replenish additional tier 1 capital. - 7 -
CONTENT Financials Highlights Interest Income Fee Income Capital Credit Investment Deposit Internationalization Universal
Modest Loan Growth and Consistent Structure Adjustment Total Loans RMB11,933.5 bn up 8.2% from 2014 end Personal Loans Discounted Bills Corporate Loans Personal Loans RMB100 million - 9 -
Loan Quality Basically Remained Stable RMB100 million 2015.12.31 2014.12.31 Loans NPLs NPL Ratio Loans NPLs NPL Ratio Corporate Loans 78,695 1,353 1.72% 76,125 923 1.21% Discounted Bills 5,221 5.24 0.10% 3,503 0.71 0.02% Personal Loans 35,419 437 1.23% 30,635 321 1.05% Total 119,335 1,795 1.50% 110,263 1,245 1.13% In 2015, due to the economic transformation and slowing economic growth in China, the Bank's NPLs and NPL ratio grew compared with the year beginning. As a whole, the Bank' s credit asset quality remained stable with the risk under control. As at 31 December 2015, the Bank's NPL balance was RMB179.5 billion, up RMB55 billion compared with the end of the previous year; NPL ratio was 1.50%, up 37 BPs compared with the end of the previous year. The balance of allowance for loan impairment reached RMB 280.7 billion, an increase of RMB23.1 billion over the end of the previous year; allowance to NPL was 156.34%; allowance to total loans ratio was 2.35%. - 10 -
Optimized the Structure of Investment Portfolio Equity instruments and others RMB234.2 billion Debt instrument investment structure 2015.12.31 2014.12.31 Debt instruments RMB4,775.8 bn Debt instruments RMB4,268.6 bn Balance and percentage of investment in bonds not related to restructuring RMB100 million Balance Percentage Government bonds 14,687 32.3% Non-Restructuring 90.8% Restructuring 3.9% Others 0.6% Central bank bills 3,252 7.2% Policy bank bonds 15,131 33.3% Other bonds 12,417 27.2% Total 45,487 100.0% - 11 -
Deposit : Decent Growth Customer Deposit: RMB16,281.9 bn up by 4.7% Deposit structure of deposits from customers Corporate deposits Amount Percentage Personal Deposits Other Deposits Corporate Deposits Time deposits 39,293 24.1% Demand deposits 45,077 27.7% Subtotal 84,370 51.8% Personal deposits Time deposits 42,106 25.9% Demand deposits 33,905 20.8% Subtotal 76,011 46.7% Other deposits (1) 2,438 1.5% RMB100 million Total 162,819 100.0% Note: (1) Includes outward remittance and remittance payables - 12 -
Global Channel Development Advanced Steadily Acquisition of 60% shares in Standard Bank PLC Acquisition of 92.8169% in Turkey-based Tekstilbank Riyadh Branch started business Yangon Branch started business ICBC (Mexico) started business The Bank has 404 institutions in 42 economies, and indirectly covered 20 African countries Total assets amounted to USD279.83 billion, up 18.6% from 2014 end. Pre-tax profits amount to USD3.2 billion, up 4.7% y-o-y - 13 -
Comprehensive Service Platform Boosts Synergy ICBC-AXA 60% holding ICBC-AXA actively promoted the transformation of regular premium, and its premium income increased by 52.8% year on year. Its business scale and market position constantly improved. ICBC-CS 80% holding ICBC Credit Suisse Asset Management grasped the favorable opportunity of improving multi-tier capital market and leveraged its advantage as an allaround asset management platform. The operating income and net profit grew by 95.2% and 155.3%, respectively. ICBC-Leasing 100% holding By assiduously developing international and domestic markets and key industries, ICBC Leasing reported the increase of total assets and net profit by 26.8% and 17.4%, respectively. Its asset scale, operation income and total profit retained a leading position among peers. ICBCI 100% holding By leveraging its role as an investment banking platform, ICBC International improved its profitability through businesses such as underwriting of overseas bonds for Chinese enterprises and cross-border asset management service. - 14 -
Outlook In 2016, the global economy will continue its slow recovery; China's economy will be at a critical stage of economic gear shifting and structural adjustment, facing large economic downturn pressure. However, the economic development has great potential, tenacity and leeway and therefore will remain the medium-high growth. In 2015, the Bank initiated the implementation of a new round of ten-year development outline and three-year development planning. It overcame many adverse factors and accomplished the business objectives of the year. 2016 is the starting year of the national 13 th five-year plan and the key year of the Bank's transformation and development. The Bank will continue to ensure the development with higher quality and efficiency by stabilizing the quality, pursuing innovations and propelling the reform based on the strategic orientation in a new era. 1 2 3 Strengthen the asset quality management and keep risks under control Step up the business transformation and further enhance the ability to serve the real economy Accelerate the innovation and establish the new advantage of competition and development - 15 -
THANK YOU A Share Code: 601398 H Share Code: 1398