Bank of Communications

Last updated

Bank of Communications Co., Ltd.
Native name
交通银行股份有限公司
Company type Public; state-owned enterprise
Industry Financial services
Founded
  • 1908
  • 1986;38 years ago (1986) (re-establishment)
Headquarters Shanghai, China
Key people
 Niu Ximing, chairman of the board
Peng Chun, President
Products Insurance
RevenueIncrease2.svg CN¥144.08 billion
$20.53 billion (2019) [1]
Increase2.svg CN¥88.20 billion
$12.57 billion (2019) [1]
Increase2.svg CN¥77.28 billion
$10.78 billion (2019) [1]
Total assets Increase2.svg CN¥10.670 trillion
$1.52 trillion (2020) [1]
Total equity Increase2.svg CN¥802.54 billion
$114.36 billion (2020) [1]
Owner
Number of employees
87,828 (2019) [3]
Parent Central Government of China
Subsidiaries BOCOM (Hong Kong)
BOCOM International
BOCOM Insurance
BOCOM Leasing
BOCOM Schroder [4]
Website bankcomm.com

Bank of Communications (BOCOM or BankComm) is the fifth-largest bank in mainland China. It was originally established in 1908 and was one of a handful of domestic Chinese banks that issued banknotes in modern history. Following the Chinese Communist Revolution in 1949, the mainland operation of that bank were merged into the People's Bank of China and People's Construction Bank of China under the Communist single-tier banking system, while its continuation in Taiwan eventually became part of Mega International Commercial Bank.

Contents

In 1986, the Bank of Communications was revived in the mainland as a commercial credit institution. It was listed on the Stock Exchange of Hong Kong in June 2005 [5] and the Shanghai Stock Exchange in May 2007. [6] The Bank was ranked No. 151 among the Fortune Global 500 in terms of operating income and No. 11 among the global top 1,000 banks in terms of Tier 1 capital rated by the London-based magazine The Banker. [7] In 2023, the company was ranked 53rd in the Forbes Global 2000. [8]

History

Before 1949

In 1907, Liang Shiyi proposed the formation of a Bank of Communications to redeem the Beijing–Hankou Railway from its Belgian owners and place the railway under Chinese control. [9] The Bank of Communications was formed in 1908 and provided more than half of the financing needed to buy the railway. [10] The successful redemption enhanced the prestige of Liang's Communications Clique.

The bank's name uses the word "communications" to refer to the linking of two points by a means of transportation. [11] [12]

In order to expand the business overseas, the Bank opened its first Hong Kong branch on 27 November 1934.

Continuation in Taiwan

After the Chinese Civil War ended in 1949, the Bank of Communications, like the Bank of China, was effectively split into two operations, with part of it relocating to Taiwan with the Kuomintang government. In Taiwan, the bank was also known as the Bank of Communications or Chiao Tung Bank (Chinese :交通銀行; Wade–Giles :Chiao-T'ung Yin-hang). [13] It eventually merged with the International Commercial Bank of China (中國國際商業銀行), the renamed Bank of China in Taiwan after its 1971 privatization, to become the Mega International Commercial Bank.

Re-establishment in the mainland

In the early years of the People's Republic, the bank's operations in the mainland were merged into the PBC and PCBC, while the Hong Kong branch continued to exist under the same name and was integrated in the so-called Bank of China Group. The State Council decided to re-establish the Bank of Communication as a mainland commercial bank in 1986. [14] The Bank was then restructured and re-commenced operations on 1 April 1987.[ citation needed ] Since then, its Head Office has been located in Shanghai. [14]

As of January 2005, 19.9% of the bank was owned by Hsbc holdings plc. An 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 own banking operations, its stake in BoCom, and an 8% stake in the Bank of Shanghai. HSBC also holds a 19.9% shares in Ping An Insurance through its wholly-owned subsidiary HSBC Insurance Holdings. The South China Morning Post cited Peter Wong Tung-shun, executive director at The Hongkong and Shanghai Banking Corporation, as saying that the acquisition is being considered in the light of the Chinese government's reforms of the country's securities brokerages. This includes a provision allowing foreign companies to get management control of brokerage firms. Wong did not provide a timetable for any acquisition or identify any acquisition target. The Hongkong and Shanghai Banking Corp is a wholly owned HSBC subsidiary.

On 22 July 2015, Bank of Communications sold $2.45 billion (about 14.93 billion yuan) of Basel III compliant bonds (convertible to preferred stock) "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 5 percent a year.

Operations

The Bank of Communications is among 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.

Bank of Communications currently possesses 236 domestic organs, including 30 provincial branches, 7 directly managed branches, 199 sub-branches managed by the provincial branches, with 3,529 network organs in over 239 large- and medium-sized cities. In addition, it has established 21 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. [15] According to the ranking announced by the British journal "The Banker" concerning 1,000 worldwide banks in 2011, Bank of Communications ranked 35th for its tier l capital, entering the world's top 50 banks for two consecutive years. Among the World's Top 500 Enterprises listed by Fortune in 2018, Bank of Communications ranked 168th., up by 3 as compared with 2017 and entering the World's Top 500 Enterprises for ten straight years. [16] Bank of Communications is one of the major financial service suppliers in China with its business scope covering commercial banking, securities, trust, financial leasing, fund management, insurance, offshore financial services, etc.

In November 2023, Bank of Communications joined the ranks of global systemically important banks (Bank of China, Industrial and Commercial Bank of China (ICBC), China Construction Bank and Agricultural Bank of China), becoming the fifth on the too-big-to-fail list. Global systemically important banks (G-SIBs) are required to hold between 1% and 3.5% additional capital, depending on their rating. Bank of Communications' additional capital requirement is 1%. [17]

Shareholders

The major shareholders (ordinary shares) as of 31 December 2016 [2]
RankNameNumber of shares %Footnotes
1The Ministry of Finance, excluding subsidiaries19,702,693,82826.53A + H shares, government entity
1.1 Shanghai Haiyan Investment Management 808,145,4171.09A shares, state-owned enterprise
1.2 Yunnan Hehe Group 745,305,4041.00A shares, state-owned enterprise
2 HSBC (and its subsidiaries)14,147,386,09519.05H shares
3 National Social Security Fund 10,919,909,78314.70A + H shares, government entity
4 China Securities Finance 1,698,194,8092.29A shares, state-owned enterprise
5 Capital Airport Holding 1,246,591,0871.68A shares, state-owned enterprise
6 Wutongshu Investment Platform 794,557,9201.07A shares, state-owned enterprise
7 FAW Group 663,941,7110.89A shares, state-owned enterprise
Total50,726,726,05468.3

Leadership

See also

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References

  1. 1 2 3 4 5 "Annual Report 2018". Bank of Communications. Retrieved 31 May 2019.
  2. 1 2 "2016 Annual Report" (PDF). Bank of Communications. 18 April 2017. Retrieved 14 May 2017.
  3. ↑ "OCBC Bank Annual Report 2019" (PDF). OCBC Bank. Retrieved 23 February 2020.
  4. ↑ "Stocks". Bloomberg News . 6 June 2023.
  5. ↑ Bank of Communications to list in HK June 23, China Daily 2005-06-13. Retrieved 2018-06-03
  6. ↑ "FACTBOX-China's BoCom enjoys strong Shanghai listing". Reuters. 15 May 2007. Retrieved 31 August 2022.
  7. ↑ Bank of Communications 2019 Annual Report
  8. ↑ "The Global 2000 2023". Forbes. Archived from the original on 29 January 2024. Retrieved 7 February 2024.
  9. ↑ Dayer, Roberta Allbert (1981). Bankers and Diplomats in China, 1917-1925: The Anglo-American Relationship. Abingdon, UK and New York: Frank Cass. p. 22. ISBN   9781135167585. In 1907 Liang Shih-i proposed the establishment of a Bank of Communications which would handle domestic and foreign funds for the redemption of the Peking-Hankow railway.
  10. ↑ Lee, En-han (1977). China's Quest for Railway Autonomy, 1904-1911: A Study of the Chinese Railway-rights Recovery Movement. Singapore University Press. p. 223. ... three domestic loans of 5,000,000 taels, 1,000,000 taels, and 7,500,000 taels (CH$10,000,000) each, to be made through the Ministry of Finance, the Imperial Bank of China (ta-ch'ing yin-hang) and the Bank of Communications respectively. The loan provided by the Bank of Communications would be repaid by the issuing of internal bonds.
  11. ↑ "Communication, n.". The Oxford English Dictionary.
  12. ↑ Trotter, R.A., Captain J. K. (1881). "The Military Prize Essay, 1881. Military Operations in the United Kingdom Considered, Particularly as Influenced by the Enclosed Nature of the Country". The Journal of the Royal United Service Institution. XXV (CIX): 3. Means of Communication. These may be divided into rail communications, road communications, and water communications.
  13. ↑ Tsai, Ching-yuan (1 June 1975). "President C. K. Yen carries on". Taiwan Today. His financial accomplishments included a revision of the tax system, budget and foreign exchange reforms, acceleration of economic development, and reactivation of the Central Bank of China, the Bank of China and the Bank of Communications.
  14. 1 2 "Guó wù yuàn guān yú chóng xīn zǔ jiàn jiāo tōng yín háng de tōng zhī" 国务院关于重新组建交通银行的通知 (Press release) (in Chinese (China)). State Council of the People's Republic of China. 24 July 1986 [digital version was published on 6 September 2013]. Retrieved 30 October 2017.
  15. ↑ "交通银行简介" (in Chinese (China)). Retrieved 25 December 2018.
  16. ↑ "Bank of Communications (BKFCF) Stock Price, Financials and News". Fortune. Retrieved 25 December 2018.
  17. ↑ "China's Bank of Communications makes 'too-big-to-fail' list". Nikkei Asia. Archived from the original on 24 February 2024. Retrieved 26 February 2024.
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