Checklist of main domestic banks in China

The central bank

The central bank in China is the People's Bank of China (PBOC) which was established on December 1, 1948. The PBOC's duties and responsibilities are governed by the PRC People's Bank of China Law (see our note Summarizing Banking Law in China). The PBOC is responsible for macroeconomic policy, treasury, foreign exchange control and financial institution supervisory functions with respect to the banking industry.

Four state owned commercial banks - specialized banks

There are four governmentally funded, state-owned commercial banks in China.

Agriculture Bank of China

The Agriculture Bank of China (ABC) was set up in 1955 to carry out financial affairs in the extensive rural areas of the PRC and to finance agricultural development on behalf of the state. In 1994, the ABC was formally transformed into a commercial bank, operating on commercial principals and responsible for its own losses. The ABC currently carries on banking services similar to those offered by the other commercial banks in the PRC, including taking deposits, lending and other banking services. The ABC’s total assets are around USD 177 billion. Liabilities are understood to be somewhat more than that amount.

Bank of China

The Bank of China (BOC) is the oldest bank in the PRC, the establishment of which dates back to before the founding of the PRC in 1949. The BOC has branches in major countries and regions around the world. The BOC is a state-owned bank specialized in foreign-exchange related banking business involving using, accumulating and managing foreign exchange funds and carrying out international financial activities. The BOC is active in the money market and has set up an investment bank arm headquartered in Hong Kong. Like the other specialized banks, the BOC is required to operate as a commercial bank in a commercially competitive environment. The BOC's total assets are around USD 293 billion, with liabilities standing at a higher, undisclosed amount.

China Construction Bank

The predecessor of the China Construction Bank (CCB) was the People’s Construction Bank of China (PCBC) which was established in 1954. Its mandate is to allocate state funds to development projects, supervise the use of such funds, and make loans to construction and development projects. The CCB is specialized in managing investment in infrastructure and other construction projects. With the formal transformation into a pure commercial bank of PCBC, the CCB now operates on a commercial basis. In the past it made loans available to borrowers determined by the State to be suitable due to the importance of their projects to the State, rather than due to the economic viability of projects or of project management. The CCB’s total assets are around USD 256 billion, with total liabilities undisclosed.

Industrial and Commercial Bank of China

In preparation of the day when the People’s Bank of China (PBOC) would be declared to be the PRC's central bank, the Industrial and Commercial Bank of China (ICBC) was established in 1984 as an independent entity separate from the PBOC to handle commercial banking business. It assumed the business of taking deposits and making industrial/commercial loans originally carried on by the PBOC. ICBC business includes taking deposits from the public, making commercial loans, providing international trading or non-trading settlement services, etc. Its total assets are around USD437 billion, with total liabilities understood to be considerably more than that amount.

Three policy banks

The following three policy banks were all established in 1994. The purpose of setting up these three policy banks was to take over the policy functions from the four state owned banks in order to assist their transformation into commercial banks. Although initial capital was allocated by the State, the three policy banks are allowed to draw funds from other sources. As policy banks, they must help advance various state policies towards selected industries and countries and meet different needs of the state.

Agricultural Development Bank of China

The Agricultural Development Bank of China (ADBC) was set up for the purpose of relieving the ABC and ICBC of agriculture-related policy lending. With the establishment of the ADBC, the ABC was converted into a state-owned commercial bank.

The ADBC has a registered capital of RMB20 billion. The mandate of the ADBC is 1) to raise "agriculture policy capital" based on the credit of the State 2) to carry out "agricultural policy" financial business of the State and 3) to allocate agricultural development funds on behalf of the State. The ADBC is responsible for the approval, allocation, management, supervision and monitoring of all "agricultural policy" loans.

Export Import Bank of China

The business scope of Export Import Bank of China (China Eximbank) includes the provision of buyer's and seller's credits for the import and export of capital goods such as machine, electronic products and turn-key equipment, foreign government loans extended to such products, mixed loans, on-lending of export credit loans from foreign government and export credit insurance and guarantee.

State Development Bank

The mandate of State Development Bank is: 1) to raise and channel funds to finance medium-sized and large capital construction and technological innovation projects in the sector of infrastructure, basic and pillar industries; 2) to control and adjust, by controlling the supply of funds, the scale of fixed asset investment and to improve the investment structure and efficiency for the purpose of achieving sustained, fast and healthy growth in the national economy.

Nationwide commercial banks

Bank of Communications

The Bank of Communications is said to be one of the best performing banks in the PRC in terms of both total profits and per capita profit. The main depositors are public centres, large industrial enterprises and various other large entities. The bank's main borrowers are businesses in infrastructure industries such as transportation, post and telecommunications, electric power. Very recently, the Bank of Communications has been principally approved to accept two or more foreign shareholders who may contribute up to a 10%-15% share of equity in the bank.

China International Trust and Investment Corporation Industrial Bank

The China International Trust and Investment Corporation Industrial Bank was established in 1987 as a subsidiary of China International Trust and Investment Corporation (CITIC). This commercial bank is engaged in financing, fund-raising, deposit-taking and lending. It plays an important role in financing its parent company’s activities.

China Investment Bank

The China Investment Bank was established in 1981 with authorized capital of RMB4 billion. It is one of the 10 banks authorized to borrow foreign funds. It finances small and medium-sized businesses’ purchase of imported equipment and imported technology. It also provides working capital loans, investment, leasing, trade finance, and foreign exchange dealing. On some occasions, it has acted as an intermediary for dispensing loans under the guidance of the World Bank.

There are two more nation-wide commercial banks: China Everbright Bank and Hua Xia Bank.

Other commercial banks

Among a number of other commercial banks, the Guangdong Development Bank, Pudong Development Bank, Shenzhen Development Bank, Shenzhen Merchants Bank, Fujian Industrial Bank and Urban and Rural Cooperative Bank., Pudong Development Bank and Shenzhen Development Bank are listed banks with public shares traded on domestic stock exchanges. The Guangdong Development Bank is under restructuring with a goal of listing in the near future.

Purely private bank in China without any state funds:

The Minsheng Bank

For further information and guidance please contact Luke Filei on [email protected] or +86 10 6590 0389 in Beijing or +86 21 6289 6363 in Shanghai.