ICBC : Industrial and Commercial Bank of China (1398)

Let's stick to discussing about ICBC rather than socialism or capitalism in this thread.
I derived quite a bit of useful information on ICBC earlier from all our discussions

Anyway, just to highlight in case anyone isn't aware, ICBC will release it's Fy13 results soon in March. Any dividends, if declared, will be payable usu in June.

CNY discount on this counter disappearing fast

(29-01-2014, 11:39 AM)Wildreamz Wrote: CNY discount on this counter disappearing fast

Ya, a pity it went up so fast today. Was hoping to add a bit more.
Maybe will come back down next week if there's some report on some other default

HK$4.35 at the moment

http://finance.yahoo.com/q?s=1398.HK&ql=0

(30-06-2013, 09:39 AM)greengiraffe Wrote: Temasek seems to be a big garang guni - after becoming a strategic holder in Olam, they are very keen to be big bankers in China... may be local bankers like OCBC and UOB should just hoot like Temasek...

http://www.bloomberg.com/news/2013-06-28...-icbc.html

Temasek has accumulated more than $17 billion of holdings in Beijing-based ICBC, China Construction Bank Corp. (939) and Bank of China Ltd. over the past two years, according to data compiled by Bloomberg.

Singapore’s Temasek Increases Its Stake in Chinese Lender ICBC

By Klaus Wille - Jun 28, 2013 8:49 PM GMT+0800
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Temasek Holdings Pte, Singapore’s state-owned investment company, raised its stake in Industrial & Commercial Bank of China Ltd., adding to its interests in state-controlled lenders of the world’s second-largest economy.
Temasek bought 126 million shares at an average price of HK$4.602 each, or a total of about HK$580 million ($75 million), according to a Hong Kong stock exchange statement yesterday. That raised Temasek’s holdings in the Hong Kong shares of ICBC to 8.07 percent from 7.92 percent. Stephen Forshaw, a spokesman for Temasek in Singapore, confirmed the transaction by telephone.
Temasek bought 3.55 billion ICBC shares from Goldman Sachs Group Inc. (GS) in April last year and then disclosed the purchase of a further 83.7 million shares in the Chinese lender the following month. It bought 280 million shares of the bank for HK$5.50 each last month, according to a May 21 filing.
Temasek has accumulated more than $17 billion of holdings in Beijing-based ICBC, China Construction Bank Corp. (939) and Bank of China Ltd. over the past two years, according to data compiled by Bloomberg. Global firms including Goldman Sachs and Bank of America Corp. have divested holdings as new capital rules known as Basel III make it more expensive to hold minority stakes in banks.
To contact the reporter on this story: Klaus Wille in Singapore at kwille@bloomberg.net
To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net

U guys hv any concern abt the competition from online banking from tencent?

you can watch this video.....online banking will break the stranglehold on deposits and increase their cost.....and one thing to take note is their return on assets are low............watch video at 11.55.



http://valuebuddies.com/thread-4809-post...l#pid77604

(20-03-2014, 02:35 PM)funman168 Wrote: U guys hv any concern abt the competition from online banking from tencent?

It is a lesser revenue for the bank, with the newly imposed credit approval requirement...

ICBC adopts stricter rules on selling trust products

SINGAPORE - Industrial and Commercial Bank of China (ICBC) has stepped up scrutiny over the distribution of third-party trust investments, in a sign that banks in China are becoming more prudent in selling wealth management products after the recent defaults of two trust loans.

In January, China Credit Trust failed to repay the final year interest on a 3 billion yuan (S$615 million) trust loan sold via ICBC. Following the default, trust products sold by private bankers at ICBC need to gain approval from a credit committee within the commercial bank, a source at ICBC said. That additional layer of approval was not needed before the incident, which caused numerous protests from investors in front of ICBC branches.

Before, private bankers at ICBC could source third-party trust products and sell them directly to their high net worth clients, the ICBC source said. The bank did not require additional credit approval because the products were deemed to be of little risk as there were no precedents of default, the source noted.

Credit committees at the bank are now expected to assess the viability of underlying projects to which the trust is lending, the tenor of the loans and whether the return is sufficient for the risk, the person said.

ICBC, the world’s largest bank, declined to comment. A banking analyst from an auditing firm confirmed the new policy at ICBC.
...
http://www.todayonline.com/chinaindia/ch...t-products

(20-03-2014, 02:35 PM)funman168 Wrote: U guys hv any concern abt the competition from online banking from tencent?

No concern if you consider the source of their (Tencent, Alibaba etc) income (interbank deposits). And their overall size (iirc <1% of the whole financial sector at the moment).

If there is really money to be made there, why don't Google and Amazon follow suit in the US?

Edit: Also, as I mentioned in an old post, financial products like Yu'e Bao is a no moat business strategy that, based on SWOT analysis, faces significant threat from changes in financial policies of the PRC government (who owns 60% of ICBC and 3 other state owned banks), and intense competition from both other internet companies and the financial sector.

http://www.reuters.com/article/2014/03/2...0020140325

And I believe they are also at a significant liquidity risk that I don't think users of such financial product aware.

(26-03-2014, 12:57 PM)Wildreamz Wrote:

(20-03-2014, 02:35 PM)funman168 Wrote: U guys hv any concern abt the competition from online banking from tencent?

No concern if you consider the source of their income (Tencent, Alibaba etc). And their overall size.

If there is really money to be made there, why don't Google and Amazon follow suit in the US?

IMHO, i think if the trend continues, it may be a concern. And iirc, Tencent, alibaba pays the short term deposits around 4-5%, the short term returns of 5% will be a strong draw to attact more and more online deposits.

I am not sure how it will turn out eventually but when tencent and alibaba are willing to pay short term interest for 4-5%, i think something is seriously wrong because for that to happen, i expect tencent and alibaba to make short term return of 6-7% but how realistic and how sustainable is that...

Yuebao and similar financial products was created mid 2013 during the Chinese liquidity crunch, when interbank rates were abnormally high.

Lately, the Chinese interbank rates has been stable, reducing Yue Bao's financial products' annualized return from 6.74% during Lunar New Year to around 5.56% as of 19th March 2014.

http://www.reuters.com/article/2014/03/2...BV20140320

The trend is expected to continue given the growing size of Yue Bao (lack of new avenue to invest) and the lower interbank rates (reversion to mean). Some analyst predict that return would stablize at around 3-4%.

http://www.businessspectator.com.au/arti...-awakening

Sure, financial product will erode some of the profitability of China Banks in general, but given their small size (less than 1-2% of the financial sector), and their bleak outlook (IMHO), what should be the reasonable estimate of their long term impact?

At 3-4%, would you invest in financial product or with the Big 4 banks in China offering similar rates of return?