OREANDA-NEWS. August 12, 2013. ICBC increases support to real economy since January 2013, according to ICBC Interim Meeting held in Beijing today. The overall approach is to "Lend to right recipients, Renew existing loans, Optimize loan structure, Improve quality". To achieve this, loan structure should be further optimized and existing loans are renewed faster, while maintaining a reasonable credit growth in response to the State’s macro policy.

An ICBC executive said, China's social financing reached RMB 68 trillion as of today. If loan turnover increases 0.1 time every year, it will increase RMB 6-7 trillion in new loans when loan tenor is around 1 month shorter on average. This gives a huge room to lend more and step up the rearrangement of credit structure. To ICBC as a large lender extending over RMB 8 trillion in loans, an increase of 0.1 time on the loan turnover every year means lending RMB 800 billion more. Total loans every year between 2010 and 2012 were respectively 5.65 times, 6.82 times and 8.02 times the new loans, driven by the higher loan turnover. ICBC's new yuan-denominated lending during the first six months of 2013 increased RMB 485.3 billion, or 6.1%, up RMB 34.2 billion from the same period a year ago. ICBC's total loans stood at RMB 4.34 trillion, up RMB 744.6 billion year-on-year, or about 30%.

The new loans in the first half of 2013 were primarily for companies playing a major role in economic restructuring, which are companies in advanced manufacturing sector, modern services, cultural sector and strategic emerging industries. New loans to these sectors accounted for 95% of ICBC's total corporate loan growth. Total outstanding loans doubled that in 2010, over 50% of ICBC's corporate loans. ICBC provides more loans to small-and-medium enterprises (SMEs), especially micro-and-small enterprises (MSEs). For the period ending June, 2013, ICBC's total outstanding MSE loans (including personal business loans for individual industrial and commercial household) stood at RMB 1.82 trillion, up RMB 51.8 billion from the beginning of 2013. 595,000 borrowers included MSEs and personal business loan customers. To drive consumer demand and improve people's livelihood, ICBC extended RMB 251.8 billion in new personal loans such as bank card financing and consumer loans, in the first half of 2013. Meanwhile, ICBC embraces innovation to help companies raise capital from different sources. Investment banking, financial leasing, bond issuance, syndicated loans are alternatives for companies to secure cheaper debt, on top of achieving win-win with the customers.

In the upcoming six months, ICBC will maintain a reasonable credit growth and balanced lending, paying particular attention to speeding up the turnover of existing loans and building a sound loan structure, said an executive with the Bank. New loans, renewal of existing loans and securitization of credit assets are measures to increase liquidity to support economic restructuring and steady progress. To seek new growth points for driving loan business, ICBC steps up marketing effort to pursue customers in different sectors in a bid to provide strong financial support to economic restructuring, paying particular attention to "effective markets", "potential markets".ICBC sets forth sector-based credit guidelines when extending loans to companies in these four new markets, focusing on energy-saving, environmental protection, upgrade of production technology, "Information for the benefit of people", education, medical for people's livelihood.

ICBC provides a full range of financial services for the renovation of dilapidated houses in large cities, renovation of old cities (villages in cities), through loans or bond issuance. In an effort to provide more support to micro-and-small enterprises (MSEs), ICBC takes the advantage of the building of SME credit system and MSEs informantion integration as well as data mining and analysis technology to address the information asymmetry in MSEs and increase its support to them. Further, ICBC provides M&A loans and investment banking services to support mergers, helping top companies to increase production and expand business. Export credit, offshore financing against standby L/C by domestic branches, global supply chain financial service, engineering + financial are some of the services to support companies to spread their wings beyond China.