OREANDA-NEWS. September 19, 2011. ICBC continues to gather pace on its precious metal business in the first half of this year, pulling further away from the peers. At the end of June, ICBC traded over 85,000 tons of precious metal, or 3.5 times as much for the whole of 2010, and recorded a turnover of over RMB 840 billion, up 93% against 2010's. The Bank's over 3.7 million precious metal customers represented a fast growing customer base, reported the press-centre of ICBC.

Since January this years ICBC takes concrete steps to build up its product offering to drive its precious metal business. In terms of physical precious metal, ICBC either sells its own branded products (87 specifications under 17 categories) or represents products of other companies (56 specifications under 17 categories). Among the commercial banks in China, ICBC offers the most number of physical precious metal products. During the first six months of this year, ICBC has sold 68 tons of physical precious metal, around 7 tons more than the total quantity sold in 2010.

In offering precious metals for customer to buy or sell, the surging market prices of precious metal internationally drive the impressive growth in the trading volume of gold or silver (via accounts) since beginning of this year, increasing by multi-fold. In the January-June period of 2011, the closing volume rose 250% over the whole 2010, especially the growth of silver trades (via account) and deferred settlement of silver (on behalf of Shanghai Gold Exchange) which was significant. In the first half of 2011, every day on average over 300 tons of silver were traded via account with cumulative turnover tantamount to 3.9 times as much for the whole 2010, and over 290 tons of silver were traded on deferred settlement with cumulative turnover tantamount to 3.4 times as much for the whole 2010.

In terms of precious metal financing, ICBC fosters closer ties with large gold group corporation, companies either producers or users of gold to launch the gold leasing service and provide loans pledged by precious metal. The aim is to support the growth of gold industry. During the first six months of 2011, ICBC has leased 28 tons of gold to the concerned gold companies, marking the beginning of ICBC's attempt on the financial services to an industry.

In order to serve the customers better, ICBC was the first bank in China to roll out a new service for customers to trade platinum through accounts in January this year, offering more channels for customers to invest in precious metal. Besides, ICBC and World Gold Council jointly launched the "Accrual Gold" service, the only financial product currently available in the domestic market for customers to invest in gold at daily average price. The advantage is to spread the investment cost evenly and effectively, and to the greatest extent, avoid the risk arising from the fluctuation of gold price. "Accrual Gold" is a service designed for all customers to buy gold in small quantity at low risk, to preserve and add value on the assets. "Accrual Gold", an upgrade to the former "Ruyi Gold Accrual", is warmly received by the customers since launched. Today, ICBC has more than 1.3 million gold accrual customers, who have accrued more than 13 tons of gold so far.

Meanwhile, ICBC takes continual step on service innovation. The Bank moves faster in setting up outlets and offering services for buying back physical precious metal. In March this year, ICBC opened its first center in Beijing for selling and repurchasing gold. The Center is the first standard flagship store among the domestic banks for the sales, repurchase, display and trading of precious metal. Besides offering advisory and experiential one-stop services to cater for different needs of the customers, the new Center also buys back investment gold bars of ICBC brand and other pure gold products. This signifies the competitive advantage of ICBC services in trading and settlement of gold, covering all the steps for customers to buy gold for investment and sell gold for cash. ICBC also expedites the process of setting up an overseas precious metal business center leveraging the global service network of ICBC Group and information technology. Silver products are now available for sale in ICBC Macau and ICBC London. This demonstrates ICBC's effort in extending precious metal business outside China.

An executive with ICBC said, ICBC is moving towards a "capital-saving" business development model and diversified profit-making pattern by pushing ahead precious metal business, a business of strategic importance to ICBC. Prospect for commercial banks in China to focus on precious metal business is good, given the increasing size of China's precious metal market. In the next step, through product innovation, resource consolidation and channel set up, ICBC will continue the effort to explore the potential of precious metal market, and move faster to provide integrated, professional and global services for customers to invest in precious metal. ICBC aims to reinforce its domestic dominance (the largest bank in China playing the role of precious metal market maker) and asset management bank of international influence in precious metal.