$16,760,000,000,000
Bank of Communications
Net Worth
Started in (City)
Started in (Country)
China
Incorporation Date
01st December, 1908
Bankruptcy Date
-
Founders
- Liang Shiyi
About
Bank of Communications Limited founded in 1908, is the fifth-largest bank in mainland China. Established in 1908, the Bank of Communications claims a long history in China and is one of the banks to have issued banknotes in modern Chinese history. It was listed on the Stock Exchange of Hong Kong in June 2005 and the Shanghai Stock Exchange in May 2007. The Bank was ranked No.151 among Fortune Global 500 in terms of operating income by the Fortune and No.11 among the global top 1,000 banks in terms of Tier 1 Capital rated by the London-based. It operates its business through four business segments: Corporate Banking, Retail Banking, Treasury, and Other. The Corporate Banking business segment includes corporate loans, bills, trade finance, corporate deposits, and remittances. The Retail Banking business segment consists of retail loans, retail deposits, credit cards, and remittances. The company also operates through various geographical segments: Northern China, North-Eastern China, Eastern China, Central & Southern China, and Western China. Today, the Bank of Communications is amongst the top 5 leading commercial banks in China and has an extensive network of over 2,800 branches covering over 80 major cities. Apart from Hong Kong, the Bank has also established overseas branches in New York, Tokyo, Singapore, and representative offices in London and Frankfurt. As of end-2002, the Bank had over 88,000 employees and a total asset reaching RMB 5.15 trillion.
Beginning
The Bank of Communication was founded in 1908 and emerged as one of the first few major national and note-issuing banks in the early days of the Republic of China. It was chartered as “the Bank for developing the country’s industries”. To expand the business into the overseas arena, the Bank opened its first Hong Kong Branch on 27 November 1934. After the Chinese Civil War ended in 1949, the Bank of Communication, like the Bank of China, was effectively split into two operations, part of it relocating to Taiwan with the Kuomintang government. In Taiwan, the bank is also known as Bank of Transportation, Chiao Tung Bank. It eventually merged with the International Commercial Bank of China the renamed Bank of China in Taiwan after its 1971 privatization to become the Mega International Commercial Bank. Following the State Council’s decision to restructure the Bank in 1986, the Bank was then restructured and re-commenced operations on 1 April 1987. Since then, its Head Office has been relocated from Beijing to Shanghai.
After the Chinese Civil War ended in 1949, the Bank of Communications, like the Bank of China, was effectively split into two operations, part of it relocating to Taiwan with the Kuomintang government. In Taiwan, the bank was also known as the Bank of Communications. It eventually merged with the International Commercial Bank of China, the renamed Bank of China in Taiwan after its 1971 privatization, to become the Mega International Commercial Bank.
Road to Success
Today, the Bank of Communication is amongst the top five leading commercial banks in China and has an extensive network of over 2,800 branches covering over 80 major cities. Apart from Hong Kong, the Bank has also established overseas branches in New York, Tokyo, Singapore and representative offices in London and Frankfurt. As of the end of 2002, the Bank had over 88,000 employees and a total asset reaching RMB 5.15 trillion. Bank of Communication currently possesses 128 domestic organs including 30 provincial branches, seven directly-managed branches, ninety sub-branches managed by the provincial branches with 2,643 network organs in over 220 large- and medium-sized cities. Besides, it has established twelve overseas organs including branch banks in Hong Kong, New York, San Francisco, Tokyo, Singapore, Seoul, Frankfurt, Macau, Sydney, and Ho Chi Minh City, BOCOMUK in London, and a representative office in Taipei. According to the ranking announced by the British journal “The Banker” concerning 1,000 worldwide banks in 2011, Bank of Communication ranked 35th for its tier l capital, entering the world’s top 50 banks for two consecutive years. Among the World’s Top five hundred Enterprises listed by Fortune in 2011, Bank of Communication ranked 397th up by 43 as compared with 2010 and entering the World’s Top five hundred Enterprises for three straight years. On July 22, 2015, Bank of Communications Co. sold dollar 2.45 billion of Basel III compliant bonds “used to replenish the bank’s additional Tier 1 Capital.” The bond is registered on the Hong Kong stock exchange, and pays a coupon of five percent a year. In January 2005, 19.9 percent of the bank is owned by HSBC Holdings plc. HSBC spokeswoman said HSBC and its affiliate, the Bank of Communications, would seek to acquire a brokerage to expand their operations in China. The plan was part of HSBC’s broader China expansion strategy, but "there is nothing further to disclose at the present." HSBC’s operations in China include its banking operations, its stake in BoCom and an 8% stake in the Bank of Shanghai.
Challenges
During 2016, China’s development was confronted by challenges related to a range of evolving risks and uncertainties, as well as their interdependency, both at home and abroad. China’s economy maintained stable growth, albeit at a slightly lower rate, with continuing economic transformation and upgrading providing momentum to sustain continued development. The Group proactively pursued myriad opportunities and actively managed the challenges related to the current environment. As of the end of the year, the Group’s assets exceeded RMB8 trillion and net profit increased by 1.03% year on year for 2016, maintaining a trend of stable development. In particular, the decrease in net interest margin, resulting from ongoing interest rate liberalization, was offset by robust non-interest income growth and effective cost reduction, resulting in an unchanged level of profit growth compared to last year. The Group has made remarkable progress in restructuring its businesses and developing its management.
Failures
In the second half of 2016, the Bank started an “innovation project for outlet service mode”, using “intelligent devices” to meet the comprehensive transaction needs of customers. Under the new and good mode, the staff offered services in branch, not limited to counter area, which achieved solid performance. First, the effectiveness of counter services diversion is high. The retail counter services were reduced significantly at the pilot outlets, while the number of staff at the branch increased. Second, the operating efficiency improved remarkably. The Bank promoted self-service operations to customers, simplified the operation flow and the authorization procedures, customized the interface design, and developed service packages for related transactions, all of which highly reduced the average waiting time of customers. In addition, the selling skills of staff were enhanced. Under the new mode, staff of the Bank provides personal banking services with the need of individual customers, thereby increasing sales. Furthermore, the effectiveness of channel diversion was remarkably high. The use of advanced technology successfully diverted existing retail service customers at the pilot outlets, enabling BoCom to maintain a level of replacement of counter services by e-banking services higher than the industrial average. Lastly, the businesses of physical outlets improved steadily. The daily average savings deposits and the number of active clients increased significantly, compared to those at the beginning of the year. Such a new operation mode started improving the development of the retail banking businesses.
CEOs
- Li Xiaohui