1. The document discusses ICBC's strategy for international expansion based on its competitive advantages in the Chinese domestic banking market. 2. ICBC's main competitive advantages include its large scale and full suite of financial services, extensive network coverage, strong customer relationships, robust IT infrastructure, and risk management capabilities. 3. Leveraging these competitive advantages, ICBC aims to expand internationally by focusing on trade finance and serving Chinese companies going global, as well as developing its offshore RMB business and presence in emerging markets.

1. 1
CORPORATE EXPENSE
MANAGEMENT SOLUTIONS
DRIVE SAVINGS | BENEFIT EMPLOYEES | MANAGE GLOBALLY | MAXIMISE CONTROL | DRIVE SAVINGS | BENEFIT EMPLOYEES | MANAGE GLOBALLY | REAL BUSINESS. REAL SOLUTIONS.SM
HKUST – SZ PT MBA
ICBC International expansion
Strategy
Group 1
Feb 2014

2. Agenda
• ICBC Business introduction.
• Challenge on China Banking Market and opportunity in international.
• ICBC current Competitive advantage and industry KSF.
• How competitive advantage can help to international expansion.
• Conclusion.
2

3. Overview
3
1984 Industrial and Commercial Bank of China Limited, formerly
known as Industrial and Commercial Bank of China, was established.
2005 Wholly restructured to a joint-stock limited company
2006 Listed on SSE and SSHK
2007 Ranked as No. 1 Bank in Stock Value

4. Revenue Structure
4
39.9% UP
79%
70%

5. Challenges from Domestic Banking Market
 Interests rate Labialization  New Market entrance, incl
bank with foreign capital
5
0
2
4
6
8 Deposite ( 1Y
benchmark)
Load(1~3Y
benchmark)
 The bloom of Internet
Finance:  Estimated almost 800b RMB out flow from bank deposit to internet finance
 It raised the carrying cost of bank’s deposit, and also cannibalize the capital fund.
Net interest Margin
ICBC about 2.6%
Big 5 2%~2.6%
TW 1%
Japan 1%~1.2%

6. Size of price of international Market
Spurred needs for
migration,
education and
tourism.
China Copr go
outside.
China High net
worth client
Investment
RMB offshore
business
Emerging
market
opportunity .
2003-2006 2007-2011
State owned
company
Private
company
China Annual Value of FDI
Unit: Million $
$774.7
$2048.3
$580.8
$51.3
11%
9%
11%
7%
9%
0% 5% 10% 15%
Bratain
Germany
Singapore
Italy
US
% Enterprises use RMB as
settlement currency
• In Feb 2013, ICBC Singapore branch
become the 1st RMB clearing bank
outside China
• In the whole 2013, ICBC Singapore branch
have completed 38,000 clearing
settlements, the total amount arrived to
2.6 trillion RMB.
• Up to 2013, The number of Chinese emigrants has reached 934.3 million
• Up to 2012, Chinese students studying abroad reached 1,136,900
• In 2013 China's outbound tourism reached 98 million passengers
• 60% contribution to global
economy
• Closed trade with China market
• Low barriers to entry

7. Top 10 Ranking Bank has International Expansion

8. Good coverage in
all tiers cities
High
sales
turnover
Highest
numbers of
ATMs in
country
Good return
and low risk
products
Capability to cope
with different
Customer profiles
Diversified
investment
Matured
operations
Secured
security
system
Focused talent
development
Motivated
employees
Leadership in finance
solutions providers
Account
management
High Quality
Of Services
Great
corporate
relationship
Trusty brand
image
Capital risk
management
Strong IT
operations in
Internet and
Mobile Apps
Staff trainings
Network coverage
Cross sale
capability
Full Finance
Solutions
Win
Customers’
Trust
Efficient
Transactions
ICBC’s ACTIVITY MAP

9. ICBC competitive advantages in Domestic
 Full finance solutions
 Good network coverage (outlet, Internet and Mobile Apps)
 Account management/customer relationship
 Strong IT and operations
 Capital risk management

10. How competitive advantage can help to ICBC
International Expansion?
Key Success factor for
International banking
Competitive advantage support
Global Network and expert • Strong profit to support international expand
investment.
• Can focus on China related market:
Import/export related Trade finance market.
China Corp global expansion.
Strong IT and Operation • IT and operation advantage can expand on
global service.
Global capital Risk management • Need to build up
Cross sale capability in global
account
• Scale Full Finance Solution capability

11. Recommendation: International Expansion
Domestic Market
expansion: Interest income
International
expansion
International
expansion
SizeofPrice
Competitive advantage
Strong
Weak
Strong
Domestic Market
expansion: Non Interest
income
Current In 5 Year

12. ICBC Global Banking Strategy

13. International Expansion Result: Good Progress

14. International Expansion Result: Good Progress
1.5
2
2.5
3
3.5
4
2007 2008 2009 2010 2011 2012
International Operational Income %
international income

15. ICBC: Pride of China

16. Q&A

17. HSBC Competitive Advantage

18. International Expansion Result: Good Progress
30%

19. International Expansion Result: Good Progress