Opportunities and challenges of globalisation
for the (retail) banking sector
“Savings banks: the retail gateway to a global market.
Driving sustainable development”
Mr. Jiang Jianqing,
Chairman, Industrial and Commercial Bank
of China Ltd
21 – 22 September 2006, Kuala Lumpur
1
Building a New Retail Bank
Through Reform and Innovation
Jiang Jianqing
Chairman, Industrial and Commercial Bank of
China
September 2006
目
录
■ Chinese banking industry facing unprecedented
opportunities
■ The retail banking market in China is in a critical
phase of transformation
■ ICBC’s Initiative to Build the “No 1 Retail Bank in
China
3
I. Chinese Retail Banking Faces
Unprecedented Opportunities
Chinese fast economic growth and wide application of IT
technology in recent years have created new opportunities
for the Chinese banks
I. Economic Growth and Market Reform Laid Foundation
China’s Fast Economic Growth
 Since China adopted the reform and opening-up policy, China realized high-speed
economic growth for more than 20 years,
 From 1978 to 2005, Annual real GDP growth rate was more than 9.6 percent
 China has become an engine of world economy
GDP Growth 1996－2005
2005年中国
GDP超过18.2
万亿元，按可
比价格计算，
1996－2005年10
年间，GDP年
均增长率达到
8.5％，已成为
世界三大经济
增长动力源之
一。
190000
12
10
160000
8
130000
6
100000
4
70000
40000
2
1996
GDP （RNB 100 million）67884.6
GDP Growth rate（％）
9.6
1997
1998
1999
2000
2001
2002
2003
2004
2005
74462.6
78345.2
82067.5
89468.1
97314.8
105172
117390
136876
182321
8.3
9.5
9.5
8.8
7.8
7.1
8
7.5
0
9
5
I. Economic Growth and Market Reform Laid Foundation
Foreign Trade Growth
 1978－2005，China’s foreign trade volume increased from RMB 35.5
billion to RMB 12.7 trillion, with a average annual growth of 24％。
150000
90
75
120000
60
90000
45
30
60000
15
30000
0
0
-15
1978
1985
1990
1992
1994
Foreign Trade volume
1996
1998
2000
2002
2004
Growth rate
6
（I）Economy Growth and Market reform Laid
foundation (continued)
China’s resident income and deposit grow rapidly
1978 to 2004, urban resident average income per capita grew from
RMB 343 Yuan to RMB 9,421.6 Yuan, up by 13.6% annually.
10000
Urban resident disposable income per capita
from 1978 to 2004
8000
6000
4000
2000
0
人均可支配收入
1978
1980
1985
1990
1995
2000
2004
343.4
477.6
739.1
1510.2
4283
6280
9421.6
7
（I）Economy Growth and Market Reform Laid
Foundation
China’s savings banks growth and outlook
 1978 to 2005, China’s resident savings deposit grew at 27.6% annually, and
banking assets grew from 1980 by 142 folds as of 2005 year-end.
 Sound economic outlook and steady market-oriented financial reform lay
foundation for savings banks continued growth and remarkable investment
value.
374696.9
400000
300000
140000
200000
100000
399.5
0
2700
1980
RMB Outstanding Savings Deposit
2005
Banking Assets
8
（II）Diversified resident financial service demands
provide drive for bank growth
Resident wealth accumulation and consumer credit demand growth

Continued resident wealth accumulation and escalating demands for investment,
consumption on credit, trading and settlement provide constant drive for savings banks to
grow at diversified directions.

2001 to 2005, China’s consumer lending outstanding grew from RMB 699 billion Yuan to
RMB 2.2 trillion Yuan, up by 33.19% annually; ratio of consumption on bank card to social
consumer goods retail sales grew from 2.97% to 14.29%.
25000
16.00%
14.29%
20000
12.00%
15000
10000
5000
22000
2.97%
4.00%
6990
2001
Outstanding Consumer Loan
8.00%
0.00%
2005
Card Spending Ratio
9
（II）Diversified resident financial service demands
provide drive for bank growth (continued)
Resident wealth management demands growth

Sep. 2004, first RMB wealth management product was launched.

By 2005 year-end, RMB and foreign currency wealth management products issued
by banks in China amount to over 20 brands or over 100 products, and personal
customer wealth management accounts record total sum of RMB 100 billion Yuan.

China has become a region of fastest growth in consumer credit, resident trading
and settlement, and wealth management products and services, which provides
constant drive for savings banks diversified growth and service level escalation.
Prime
brands
Diversified
products and
services
Wealth
management
products
Personal
wealth
manageme
nt fund
growth
10
（III）Recapitalization promotes transform for ICBC
 ICBC’s corporate governance, asset quality and operational efficiency are
improved fundamentally during state-owned banks recapitalization and
joint-stock reform.
 Healthy
corporate
governance
structure
and
information
release
mechanism, “wealth-creating cooperation relations” among stake holders,
asset and financial standing improvements are working together to
change ICBC’s operational and management model.
 To seek for competitive advantage enhancement and to improve
shareholder return level and customer service ability abreast of ongoing
transform become the theme to ICBC’s growth in the new era.
11
II. China’s savings banks are in critical stage of
comprehensive transform
Savings banks now faces challenges as financial market openingup, competition heating, resident demands and distribution
channel diversifying. Their service mode and the banking sector
landscape is changing considerably.
The fast-growing savings banks faces also practical and critical
requirement of comprehensive transform. Business growth and
service level escalation are coordinated concurrent with
transform.
（I）To transform from savings bank to diversified retail bank
Continued resident income and wealth growth and diversified financial service
demands are pushing ICBC to transform:
from resident deposits and settlement service provider to more diversified services
provider, and
from traditional savings bank to diversified retail bank.
Housing
Car
Shopping
Travel
Education
Investment
Insurance
Settlement
•Mortgage loan, on-mortgage loan,
social housing fund loan……
•Motor consumer loan, comprehensive
consumer loan……
•Debit card, credit card, comprehensive
consumer loan……
•Debit card, credit card, insurance……
•Student-aid loan, overseas education
set loan, certificate of credit……
•Fund, banking-security link, FX trading,
bullion trading……
•Agent life insurance……
•Fund transfer express, inter-city
deposits……
13
（I）To transform from savings bank to diversified
retail bank (continued)
It becomes trend in savings banks growth to:
 build diversified service provider according to escalated resident financial service
demands and,
 to innovate new product and service spectrum including deposits, consumer credit,
settlement, wealth management, bank card and e-banking.
Bank
ing
servi
ces
•Motor loan
•Consumer loan
•Mortgage loan
•Credit card
•deposits
•Term
deposit
•Current
account
•Payment
and
Savings
settlement
demand
•safe
Financing
demand
•Personal
wealth
management
•Investment
services
•Insurance
services
•Fund services
Income growth
Wealth
accumulation
14
（II）Distribution channels diversification

Banking service mode diversification: from physical banking offices to more
diversified channels.

Drives: progress of information technology; fast growing e-banking business.
2003 to 2005, personal e-banking customer base in China grew from eight million
households to 34.6 million, up by 108% annually.
15
（III）From standard services to personalized services
Opened-up financial markets and heated competition are pushing
ICBC to transform in the following dimensions:
Product-centric
Customer-centric
Standard services
Personalized services
Product value
Customer value
16
(IV) From domestic to global services
■ Savings bank: important driving force in China’s globalization.
■ From domestic to global financial services: overseas spending,
remittance, off-shore investment and global RMB wealth
management services, etc.
■ Overseas investment
■ Domestic and
overseas customers
■ Global remittance
and Conversion
■ Off-shore investment
■Global RMB wealth
management services
■........
17
III. Innovation makes No. 1 retail bank in China
■
As market leader and the largest savings bank in China, ICBC
always pays attention to new trend of global saving banks and seeks
development in reform.
■
In line with future trend of global retail bank, we believe innovation
makes “No.1 Retail Bank in China”, and are transforming ICBC from a
traditional savings bank to a modern retail bank that provides more
diversified, comprehensive and high-tech financial services.
(I) Solid foundation to build modern savings bank
 By 2005 year-end, ICBC’s tier-one capital is up to RMB 255.59 billion Yuan;
the total assets is up to RMB 6,454.1 billion. Its retail banking business tops the
peers in terms of personal deposits, personal loan, bank card, e-banking,
agency treasury bill and open-ended fund distribution.
Product
Strength
Operating
Strength
By the end of 2005, ICBC has:



Leading Retail Banking
Business in:
Tier-one capital: RMB 255.59
billion Yuan

Personal deposit and loan
Total assets: RMB 6,454.1

Bank card and e-banking
billion Yuan

Treasury bill and open-end
Savings deposit: RMB 3,116.6
fund distribution
billion Yuan
19
(II) To innovate new retail banking products
■ To build modern bank that provides a diversified and comprehensive
range of retail banking products.
To build diversified and comprehensive modern retail bank
利用雄厚的客户基
To
leverage
础、中国境内最具竞
solid customer
争优势的分销实力和
网络体系，
base
and the
most competent
distribution
strength and
network
■ To promote interacted product-developing covering savings
deposit, wealth management and financing products, and to
design individualized wealth management and investment
plans for different customer segments.
■ To provide diversified products to meet customer needs,
including savings deposit, consumer credit, wealth
management advisory, credit and risk appraisal, asset
management, trade settlement and e-banking.
■ To provide comprehensive financial services including fund,
technology, network and intellectual support.
20
(III) To innovate financial service technology
With the most advanced operating system, IT system and settlement network, ICBC
aims at first-class high-tech financial service.
 Based on strategic positioning for all
levels of target customer segments, to
establish well-based CRM system and
identify brand, content, channel and
features of required services to be
provided to different levels of
customers.
 To consolidate the leading position as
No.1 settlement bank, No. 1 consumer
credit bank and No. 1 on-line bank in
China, and prioritize high-tech services
as new settlement areas and wealth
management in domestic and foreign
currencies.
 To provide individualized
services to all levels of
customers on a uniform
marketing platform.
 To always play leading role
in enhancing technical level
of financial services in China,
promoting consumer credit
and improving resident
wealth management level in
China.
21
(IV) To innovate financial service mode
■ To diversify service channels and make ICBC the largest internet trade
enterprise in China through a multi-functional e-banking network.
Banking
outlets +
e-banking +
self-service
devices
E-banking
customers
E-banking
trading
more than 20 million
over 80% of market share
22
(IV) To innovate financial service mode (continued)
Layered banking outlets:
Fortune Management Center – Wealth Management Center – Wealth
Management Outlet – Financial Supermarket
Fortune
Management
Center
Wealth
Management
Center
Layered
business outlets
Wealth
Management Outlet
Financial
Supermarket
23
(IV) To innovate financial service mode (continued)
Staff and brand:
■Professional individual customer managers
■High-quality brands: Elite Club, Happy Loan, Peony Card and Banking@Home.
High-Quality Brand
 Happy
High-Quality Brand
 Elite
Club
Loan
HighQuality
Brand
High-Quality Brand
 Peony
Card
High-Quality Brand
 Banking
@ Home
24
(V) To innovate financial service concept
Objective: rational, coordinated and consistent development

To push
Coordinated development of domestic and foreign currencies retail banking.
 Integration of savings deposit with new products and services like financing
and wealth management.
 Benign
To push
interaction between technical upgrade and brand innovation.
 Balanced combination of business growth and restructuring.
 Balanced
To push
combination of business growth and restructuring.
 Effective combination of business range expansion and risk
management.
 The
To push
social responsibility of retail bank. To create value for
customers.
 The constructive function of retail bank in building innovative
country and harmonious society.
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Conclusion
China’s savings banks is faced with enormous opportunity,
optimistic prospect and huge room of development.
Undergoing a strategic transformation, ICBC aims at building a
world-class financial service enterprise and welcomes
cooperation and communication from around the world on new
ways of reform and development for savings banks. And its
present reform and development project a brilliant future -ICBC will provide more comprehensive and high-quality
services and maximize values for our customers.
Thank You!
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