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Introducing China's Largest Banks

Previously in Introducing China's Banking Sector, we explored the history of how China's banking sector evolved over the past 120 years and provided an overview of how the country's banking system is currently structured.


In this article, we introduce China's ten largest banks based on 2022 total assets, including each bank's history, value of total assets, relative size ranking, and ownership structure, as well as whether or not the bank is a Global Systemically Important Bank (G-SIB) as designated by the Financial Stability Board.


Ranking of Chinese Banks Based on 2022 Total Assets
Data Source: China Banking Association (中国银行业协会)

In Comparing China's Largest Banks, we compare the ten banks financially, including a revenue breakdown analysis based on revenue driver, business type, and geography, as well as a profitability analysis based on operating and net profit margins.


In The Future of China's Banking Industry, we discuss some key trends and factors that can affect the future of China's banking industry.


China Banking Series

 

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#1: Industrial and Commercial Bank of China (ICBC) 中国工商银行 (SHA: 601398)(HKEX: 1398)

ICBC was established in 1984 in order to take on the industrial and commercial credit and savings businesses previously conducted by the People's Bank of China (PBOC) after banking reforms in 1983 limited the PBOC's role to only serving as a central bank (see Introducing China's Banking Sector for further context). ICBC went public on the Hong Kong Stock Exchange (HKEX: 1398) and Shanghai Stock Exchange (SHA: 601398) in 2006 as the world's largest IPO at the time.


ICBC is a universal, nation-owned bank (国有银行) (see Introducing China's Banking Sector for a further explanation of the different classifications of bank ownership in China). ICBC had total assets of RMB39.6 trillion as of the end of 2022, ranking as China's and the world's largest bank. ICBC is a G-SIB.


#2: China Construction Bank 中国建设银行 (HKEX: 0939)(SHA: 601939)

China Construction Bank was originally founded as the People's Construction Bank of China (中国人民建设银行) in 1954 with the goal of administering state funds for construction and infrastructure related projects as part of the government's economic plan. As part of China's economic opening-up, the People's Construction Bank of China began taking on more commercial banking functions starting in 1979. In 1996, the People's Construction Bank of China was renamed China Construction Bank (中国建设银行). China Construction Bank went public on the Hong Kong Stock Exchange (HKEX: 0939) in 2005 and subsequently on the Shanghai Stock Exchange (SHA: 601939) in 2007.


China Construction Bank is a universal, nation-owned bank. The bank had total assets of RMB34.6 trillion at the end of 2022, ranking as the second largest bank in China and the second largest bank in the world based on total assets. China Constrution Bank is a G-SIB.


#3: Agricultural Bank of China 中国农业银行 (SHA: 601288)(HKEX: 1288)

The predecessor of the Agricultural Bank of China can be traced back to the Agricultural Cooperative Bank (农业合作银行) founded in 1951 to facilitate the development of China's rural economy. The Agricultural Bank of China was merged and unmerged with the People's Bank of China several times over the next three decades as the country went through various reforms. In 1979, as China began to economically open up, the Agricultural Bank of China was reinstated for the fourth and final time. The Agricultural Bank of China went public on the Shanghai Stock Exchange (SHA: 601288) and the Hong Kong Stock Exchange (HKEX: 1288) in 2010 as the world's largest IPO at the time.


The Agricultural Bank of China is a universal, nation-owned bank with two key stated goals of "serving rural revitalization" and "serving the real economy". The Agricultural Bank of China had total assets of RMB33.9 trillion as of the end of 2022, making the bank the third largest Chinese bank and the third largest bank in the world based on total assets. The Agricultural Bank of China is a G-SIB.


#4: Bank of China 中国银行 (SHA: 601988)(HKEX: 3988)

The Bank of China was formally established in 1912 as China's central bank by the Republic of China (中华民国) government, shortly after the 1911 Xinhai revolution (辛亥革命) which overthew the Qing (China's last imperial) dynasty. Following the founding of the People's Republic of China in 1949, the People's Bank of China was designated as the new central bank while the Bank of China became responsible for managing China's foreign exchange operations, international trade settlements, and overseas fund transfers. The Bank of China was restructured in 1994 to become a full-fledged commercial bank with services in both local and foreign currencies. In 2006, the Bank of China went public on the Hong Kong Stock Exchange (HKEX: 3988) and Shanghai Stock Exchange (SHA: 601988) as the first Chinese bank to launch an A-share and H-share dual listing .


The Bank of China is a universal, nation-owned bank. The bank had total assets of RMB28.9 trillion at the end of 2022, ranking as the fourth largest bank in China and the fourth largest bank in the world based on total assets. The Bank of China is a G-SIB.


#5: Postal Savings Bank of China (PSBC) 中国邮政储蓄银行 (HKEX: 1658)(SHA: 601658)

PSBC was established in 2007 as part of a reform of the postal savings system (see Introducing China's Banking Sector for further context). The bank went public on the Hong Kong Stock Exchange (HKEX: 1658) in 2016 and the Shanghai Stock Exchange (SHA: 601658) in 2019.


PSBC primarily functions as a commercial bank with a particular focus on providing financial services to sannong (三农) customers, urban and rural residents, and SMEs. Retail banking (i.e. banking services provided to individual customers) accounts for 60% to 70% of PSBC's total revenue each year.


PSBC is a nation-owned bank that is majority-owned by China Post (中国邮政), the state-owned enterprise responsible for operating postal services in mainland China. PSBC had total assets of RMB14.1 trillion at the end of 2022, ranking as the fifth largest bank in China and the 12th largest bank in the world based on total assets. PSBC is not a G-SIB.


#6: Bank of Communications 交通银行 (HKEX: 3328)(SHA: 601328)

The Bank of Communications was first founded in 1908 towards the end of imperial China in order to raise funding to purchase railways (presumably from European countries that built railways in China at the time). The Bank of Communications was also one of the earliest banks responsible for issuing currency in China. In 1958, as part of communist reforms following the founding of the People's Republic of China, the Bank of Communications was merged with the People's Bank of China and the People's Construction Bank of China (中国人民建设银行), the predecessor to what is now China Construction Bank. In line with China's economic opening up, the Bank of Communications was restructured in 1986 and officially reinstated in 1987 as China's first nationwide state-owned commercial bank with a joint-stock ownership structure. In 2004, HSBC acquired a 19.9% stake in the Bank of Communications. The Bank of Communications went public on the Hong Kong Stock Exchange (HKEX: 3328) in 2005 and subsequently on the Shanghai Stock Exchange (SHA: 601328) in 2007.


The Bank of Communications is a nation-owned universal bank with the Ministry of Finance of the People's Republic of China holding the largest share at 24%, HSBC holding the second largest share at 19%, and the National Council for Social Security Fund (全国社会保障基金理事会) holding the third largest share at 15.6% as of the end of 2022. The bank had total assets of RMB13.0 trillion at the same time period, ranking as the sixth largest bank in China and the 15th largest bank in the world based on total assets. The Bank of Communications is not a G-SIB as of the time of writing, although it is speculated that the bank may be designated as a G-SIB in the future.


#7: China Merchants Bank 招商银行 (SHA: 600036)(HKEX: 3968)

China Merchants Bank was formed in 1987 during China's economic opening-up. The bank was China's first joint-stock commercial bank to be wholly-owned by corporate legal entities (as opposed to government entities such as the Ministry of Finance), although many of the corporate entities are state-owned companies. The bank went public on the Shanghai Stock Exchange (SHA: 600036) in 2002 and the Hong Kong Stock Exchange (HKEX: 3968) in 2006. China Merchants Bank has differentiated itself from competitors through private banking products and services that have been particularly well-received over the past few years.


China Merchants Bank is a universal bank that is neither nation-owned nor privately-owned (see Introducing China's Banking Sector for a further explanation of Chinese bank ownership types). The bank had total assets of RMB10.1 trillion as of the end of 2022, ranking as China's seventh largest bank and the 25th largest bank in the world based on total assets. China Merchants Bank is not a G-SIB.


#8: Industrial Bank 兴业银行 (SHA: 601166)

Industrial Bank was originally founded in Fujian province as Fujian Industrial Bank (福建兴业银行) in 1988 by three state-owned companies as one of the first joint-stock commercial banks in China. The bank initially focused only on conducting financial activities in Fujian, before expanding to Shanghai and other major cities across China as the country's economy rapidly grew. In 2003, Fujian Industrial Bank was renamed Industrial Bank (兴业银行). The bank went public on the Shanghai Stock Exchange (SHA: 601166) in 2007.


Industrial Bank is a universal bank that is neither nation-owned nor privately-owned. The bank had total assets of RMB9.3 trillion as of the end of 2022, ranking as China's eighth largest bank and the 28th largest bank globally based on total assets. Industrial Bank is not a G-SIB.


#9: Shanghai Pudong Development (SPD) Bank 上海浦东发展银行 (浦发银行) (SHA: 600000)

SPD Bank was formed in 1992 as part of the Chinese central government's plan to develop Shanghai into an international economic center and a pioneer city for China's economic opening-up. The bank went public on the Shanghai Stock Exchange (SHA: 600000) in 1999. Over the years, SPD Bank expanded into a nationwide bank covering 31 out of China's 34 province-level administrative regions. The bank's goals are to both pursue national economic strategies as well as to promote the economic development of Shanghai.


SPD Bank is a universal bank that is ultimately owned by the Shanghai local government. The bank had total assets of RMB8.7 trillion at the end of 2022, ranking as China's ninth largest bank and the 30th largest bank in the world based on total assets. SPD Bank is not a G-SIB.


#10: China CITIC Bank 中信银行 (SHA: 601998)(HKEX: 0998)

The predecessor of CITIC Bank can be traced to a banking unit formed by CITIC Group (中信集团) in 1985 to facilitate international bank transfers during the early stages of China's economic opening-up. The unit was subsequently re-organized into China CITIC Bank in 1986 with an expanded scope covering savings and loans as well as foreign exchange. In 1993, China CITIC Bank became the first mainland Chinese financial institution to issue Yankee bonds (i.e. US dollar-denominated bonds publicly issued in the US by foreign entities). In 2007, the bank went public on the Hong Kong Stock Exchange (HKEX: 0998) and the Shanghai Stock Exchange (SHA: 601998).


China CITIC Bank is a universal bank that is also a subsidiary of CITIC Group (中信集团), a state-owned conglomerate ultimately owned by the Chinese central government. China CITIC Bank had total assets of RMB8.5 trillion at the end of 2022, ranking as China's 10th largest bank and the 29th largest bank in the world based on total assets. China CITIC Bank is not a G-SIB.


Further information about CITIC Group is in our article here.


Note: S&P Global Market Intelligence data ranks SPD Bank as smaller than CITIC Bank whereas the domestic ranking in China by the China Banking Association (中国银行业协会) ranks SPD Bank as larger than CITIC Bank. We think the discrepancy may be due to S&P potentially having used 2021 total assets data for SPD in their ranking, since SPD released their 2022 annual report after the S&P ranking was published. The domestic ranking by the China Banking Association (here) uses 2022 total assets data for all banks.

 

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