The global markets business is an important engine for promoting the operational transformation of commercial banks and enhancing comprehensive service capabilities. It’s playing an increasingly vital role by creating positive opportunities to other business clusters and nurturing the resilience of the bank.
ICBC has been sensibly responding to the latest trends in global economies and international financial markets. While constantly seeking to provide an innovative global markets business, ICBC has established four business segments: investment, financing, underwriting and trading. It has a complete suite of services that incorporate foreign exchange (FX) transactions, paper trading, commodity trading, interest rate swaps, OTC bond, agent bond and FX transactions. The bank is fully devoted to providing its clients with all-round, high-quality global markets products and services.
LENDING STRONGER SUPPORT TO THE REAL ECONOMY
ICBC also continues to enhance its capacity to serve the real economy. Specifically, ICBC helps to boost supply-side structural reform, aiming to meet the financial demand in production, people’s livelihood and other fields, and actively participates in the investment of government and corporate bonds in relation to key projects, notably those focused on improving people’s livelihoods and serving green and low-carbon ends. The total investment balance in domestic and foreign currency denominated bonds has already exceeded Rmb6 trillion.
As a global systemically important bank, ICBC provides liquidity support to other market participants via a sophisticated usage of money-market tools. The average annual transaction of its interbank money-market business has exceeded Rmb40 trillion in the past five years, which is conducive to the stable operation of the financial markets.
ICBC actively implements China’s national policy to increase the weight of direct financing. While vigorously developing bond underwriting business, ICBC is eyeing for reducing financing thresholds and costs. In recent years, the bank has made great strides to help issuers meet their capital needs and reduce debt financing costs by designing tailored product solutions, selecting the right issuing time and strengthening the distribution network. It has maintained the top position in underwriting among market participants for 12 consecutive years.
CONTINUOUSLY STRENGTHENING RISK CONTROL
Relying on its global 24-hour centralised trading system, ICBC takes a “moat” of risk pre-transaction control system as a safeguard and provides support for the group’s global markets business transactions, operations, management and risk control. The bank constantly perfects the “four-in-one” system, which is composed of management measures, operating procedures, trading guidelines and internal control policies to prevent various risks in credit, markets, operations and other aspects.
PROCEEDING IN BUSINESS INNOVATION AND DEVELOPMENT
In opening up and advancing the Belt and Road (B&R) Initiative, ICBC has grasped strategic opportunities to meet clients’ demand for risk hedging, currency conversion and trading. The transaction amount of interest rates, exchange rates, commodities, credit and others totaled nearly Rmb80 trillion in 2018.
ICBC is among the first to launch RMB interest rate swap transaction in the market. Since the launch of a new quotation mechanism of loan prime rate (LPR), the first LPR-linked IRS trade in the market was completed by ICBC. Partnering with China Central Depository & Clearing Co. and Singapore Exchange, ICBC has launched ChinaBond-ICBC RMB Bond Indices for overseas institutional investors investing in RMB bonds in China, providing another avenue to tap on investment opportunities in China. FX settlement and sales have been conducted in 34 currencies, FX trading in more than 90 currencies, including 50 B&R currencies, of major countries along B&R.
ICBC supplies several transaction varieties, such as spot, forward, swap, currency swap, option, and the clients can conduct the transactions through the counter, Online Banking, Mobile Banking, E-trading Platform and Banks Cooperation Platform.
ICBC has taken the lead in establishing a corporate commodity transaction system in China’s banking industry, comprising 44 products in five categories: precious metals, base metals, energy, agricultural products and soft commodities. It is the first Chinese bank to establish the paper trading system that covers paper precious metals, paper energy, paper agricultural products, paper FX and paper base metals.
The bank is also among the first to create a Credit Risk Mitigation Warrant for private enterprises. It is the first to independently research, develop and launch an electronic trading platform in China to provide global markets product transaction services, such as FX and commodity trading. ICBC is also the forerunner in opening up China’s interbank markets and has established cooperation relationships with overseas institutional investors from 40 countries and regions.
SUPPORTING CLIENT WITH PROFESSIONAL SERVICES
ICBC has a high-quality team of global markets business traders as well as a business support staff composed of dedicated and experienced professionals covering system construction, business management, product research and development, and marketing. They provide comprehensive and timely market services for clients.
In the future, ICBC will continue to stick to its principles of providing a safe and solid foundation to conduct business while innovating and constantly improving its product suite, trading ability, client experience, and comprehensively expand, strengthen and perfect its global markets business. ICBC strives to become the first choice of clients and a market-leading global markets business service institution.
