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China's largest State-owned commercial bank, the Industrial and Commercial Bank of China (ICBC), said it would soon set up a fund trading center in Beijing to improve its money market operations.
The center will mainly be responsible for operations from interbank lending to the trade and repurchase of treasury and financial bonds, an ICBC spokesman said yesterday.
The trading center, which will have two divisions in Shanghai and Guangzhou, will join a commercial papers operations center launched last year to become the bank's two "flagships" of fund operations.
The establishment of the center is expected to pool a greater and more professional staff for fund operations, improve the operational and technical levels and strengthen data analysis and utilization, the spokesman said. The center will be based on the bank's fund operations department, he said.
"In the past, the aim (of money market operations) was to ensure safety," the spokesman said. "Now, we are paying more attention to profitability and liquidity."
Like other Chinese banks, the ICBC is expecting more profit from businesses other than traditional lending activities, and the money market has proven a safe approach to that goal.
It invested 7.2 billion yuan (US$867 million) in bonds in the first quarter of the year. That brought the bank 2.3 billion yuan (US$277 million) in interest payments and another 118 million yuan (US$14.2 million) in intermediary service incomes, like commissions. The bank was also the first quarter's biggest participant in the bond repurchase market.
"The profitability picture looked good," the spokesman said.
The ICBC's commercial paper operations witnessed a rapid rise during the past months. Its outstanding loans on commercial papers were 162.2 billion yuan (US$19.5 billion) at the end of March, a 94.5 percent surge from a year earlier.
The bank realized a profit of 3.98 billion yuan (US$479 million) in the first three months of the year, soaring by 45 percent on a year-on-year basis.
(China Daily April 22, 2003)
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