Industrial and Commercial Bank of China (ICBC) has extended close to RmB520bn-worth (US$76.12bn) of trade finance to domestic businesses during the first half of 2009.
The bank’s outstanding trade loans stood at RmB365.7bn (US$53.53bn) at the end of June, an increase of RmB110bn (US$16.10bn), or 42.7%, compared to the start of the year, according to an official statement released by the bank.
The increase in lending stands in stark contrast to general market trends which point to a shrinking trade finance market, with most western banks constrained by increased risk aversion and lack of liquidity.
World trade is seeing historic drops in trade volumes, which some partly blame on the lack of trade finance. In China, during the first half of 2009, China’s total imports and exports declined by 23.5%.
However, ICBC has stated that trade finance is a “strategic” business for the bank, and will be working to increase its provision of trade finance.
During the first half of this year, the balance of international trade finance amounted to US$11.86bn, rising from 68.42% compared to the beginning of the year. This is a faster increase in international trade finance compared to other domestic large-scale banks.
Trade finance is also performing well compared to other forms of financing offered by ICBC. At the end of June, its ratio of bad loans for trade finance stood at 0.2%, which is lower than the non-performance rate of the bank’s total loan balance.
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