June. 2014

Development of Cross-border RMB Business

The Internationalization of the RMB

Table of Contents

1. Introduction of ICBC and ICBC Singapore Branch

2. The RMB Internationalization

3. Services of the RMB clearing bank

4. Why partner ICBC

1. Introduction of ICBC and ICBC Singapore Branch

Strictly Confidential 5

ICBC is considered one of the best banks in the world

The largest bank in terms of

deposit

The most profitable bank in

terms of net income

Sources: Bloomberg, Global Bank Ranking

No.1The largest bank in terms of

market cap

Global Finance

“Best Integrated Corporate Bank Site-Global”

“Best Integrated Corporate Bank Site In Asia”

“Best Bank in China”

“Best Trade Finance Bank in China”

Finance Asia

“Best Bank in China”

“Best Investor Relations”

“Best Cash Management Bank”

The Asset

“Platinum Award for ALL-Round Excellence”

“No.1 China’s Most Promising Companies

(Banking & Finance)”

The No.1 The Global BankThe Best in Class

No.1 No.1

US$ bn US$ bnUS$ tn

As of 31/3/2013 As of 31/12/2012 LTM 31/12/2012

Securities Times

“Best Investment Bank (China)”

ICBC is the World’s Largest and Most

Profitable Bank

Strictly Confidential 6

Over 17,613 branches in China

383 overseas branches in 39 countries and regions

around the world

Connection with over 1,771 foreign banks in over 138

countries and regions

Over 4.38 million corporate customers and

approximately 393 million retail customers across the

world

Solid client base established through continuous

business expansion globally

Became the single

largest shareholder

of Standard Bank,

the largest bank in

South of Africa - the

most significant

overseas investment

Established

presence in Sydney,

New York, Middle

East, Doha

Acquired Seng Heng

Bank, Macau

1992,1995

London -

the first

presence

in Europe

Established

ICBC-BEA

Finance

Holding Co.

Ltd

1998

Acquired

Union bank

and

subsequently

renamed to

ICBC (Asia)

Listed in

Shanghai and

Hong Kong

Signed Strategic

Investment and

Cooperation

Agreement with

Goldman Sachs,

Allianz Group

and American

Express

2006

Entered

Indonesia

through

acquiring 90%

of Halim Bank

Established

ICBC

(Moscow)

20072000

Acquired Bank of

East Asia

(Canada)

Acquired

Thailand’s ACL

Bank PCL

Opened

branches in

Macau, Hanoi,

Abu Dhabi

Established ICBC

(Malaysia)

Setting up a

Brazilian branch

20092008

Singapore -

the very first

footprint

abroad

Accelerated since 2008

Growing Global Presence

Extensive global network

Accelerated pace of international expansion

Officially renamed

ACL Bank PCL as

ICBC (Thai) PCL

Extending the tier-2

network overseas

including the Red

Market Branch of

ICBC Macau, Deli

Branch of ICBC

Korea Branch, South

District Branch in

Jakarta of ICBC

Indonesia

2010

TokyoSeoul

Busan

Vancouver

Toronto

New York

MacauHong Kong

Jakarta

Kuala LumpurSingapore

Standard Bank,

Johannesburg

Almaty

Hanoi

MoscowLondon

FrankfurtLuxemburg

DohaAbu Dhabi

Dubai

Sydney

ACL Bank,

Bangkok

Islamabad

Mumbai

ParisBrussels

Madrid

Amsterdam

Milan

Opened branches

in Paris, Brussels,

Amsterdam, Milan

and Madrid

ICBC (Luxemburg)

renamed as ICBC

(Europe)

Announced

acquisition of

Standard Bank

Argentina

2011 2012

Opened branches

in Warsaw and

Barcelona

Increased stake in

Standard Bank

Argentina to 80%

ICBC Peru Branch

was officially

established

ICBC purchased

The Bank of East

Asia (USA), and

named it ICBC

America

2013

ICBC was

approved to be a

RMB Clearing

Bank in

Singapore

ICBC Brazil was

set up

Acquires 20%

stake in Taiwan’s

Bank Sinopac

Argentina

Sao Paulo

Strictly Confidential 7

ICBC Singapore Branch was established in November 1993, the first overseas branch of ICBC.

Awarded Qualifying Full Bank (QFB) licence in October 2012 .

The first offshore RMB Clearing Bank outside Greater China，designated by the People's Bank of China on Feb 8 2013 .

Issued 2 billion yuan (328 million US dollars) "Lion City" bonds, representing the biggest RMB-denominated bond issue so far in the Singapore market in Nov 2013.

Carried out the first FTZ RMB two-way cross-border cash pooling in Dec 2013 (100 million yuan for Bao Steel).

On 20 Feb 2014, Provided Rmb100m and Rmb70m, respectively, to Sinopharm Holding Distribution and Shanghai Baosteel Pudong International Trade – the first cross-border RMB financing between Singapore and Shanghai FTZ. Transactions were remitted through the same day via RMB Clearing Bank even though CNAP closes at 5pm.

By the end of June 2014, the total clearing amount exceeded 17 trillion yuan, and the peak daily clearing value reached nearly 300 billion yuan.

To date 77 Participating Banks all over the world have opened RMB accounts with the Clearing Bank and more are in the pipeline.

ICBC Singapore Branch: History &Timeline

Strictly Confidential 8

2. The RMB Internationalization

Strictly Confidential 9

World’s 2nd largest economy with GDP over US$8 trillion in 2013.

China surpassed US as largest trading nation in the world with trade flow of almost US$4 trillion

Largest foreign reserve holding of more than $3.8 trillion as at end 2013.

China’s trade with the world will drive

RMB Internationalization

Strictly Confidential 10

RMB overtook 22 currencies in the last 3 years

Strictly Confidential 11

RMB rising in importance as global trade

settlement and payment currency

Currently China had signed currency swap contracts with 24 countries and regions with the scale of 2.5 trillion RMB.

In April 2014, RMB held its position as the seventh-ranked global payments currency and accounted for 1.43% of global payments.

In October 2013, RMB became the second most used currency in trade finance, overtaking the Euro.

Strictly Confidential 12

Singapore pips London as RMB clearing

center helped by ICBC

Ever since last year's nomination of ICBC as the RMB clearing bank in Singapore, the Singapore RMB payment flows have been accelerating.

According to SWIFT data, the value of Singapore's RMB payments in March rose 375 percent from a year earlier, taking up 6.8 percent of the overall RMB payments. Singapore has surpassed London to rank second globally as a clearing center for RMB.

Strictly Confidential 13

Investment Global ReservesTrade

The route of RMB internationalization

Strictly Confidential 14

Beijing

- Exporting to China

-RMB financing from

China

- RODI from China

-RMB purchase

- Currency Swap

-Importing from

China

-RFDI to China

-Deposit in Clearing Bank

or via Non-Resident

account

-Investment in China

inter-bank bond market

- RQFII - Issue offshore

bond

Flowing out of

China

Flowing back into

China

Channel of Cross-border RMB

3. Services of the RMB clearing bank

Services Provided By Clearing Bank

• RMB clearing & settlement

• RMB deposits

• RMB FX conversion & money market & bond

• Intra day liquidity support

• RMB banknotes

• Collateralized liquidity facilitiest (in progress).

ICBC RMB Clearing Bank Services

ICBC SGCNAPS Code:

102100099988

SWIFT Code:ICBKSGSGCLR

Receiving Bank

ICBC HO

Participant ICBC SG

ICBC (Asia)UBHKHKHH

ICBC group as correspondent bank

Banks in China(Non-ICBC)

ICBC Group

Banks in Hong Kong

Banks in the related region

MT103/202

CNAPS

ICBCGSCP

ICBCGSCP

SWIFT

RTGS

Payment Route

Book transfer

Clearing Days

Singapore 1Mainland China 2Hongkong Whether clearing services provided

1 Business day Business day Business day Yes

2 Public Holiday Business day Business day *Yes

3 Public Holiday Public Holiday Business day *Yes

4 Public Holiday Business day Public Holiday *Yes

5 Public Holiday Public Holiday Public Holiday No

1 No clearing services will be provided for payment to or from mainland China if that day is a public holiday in mainland China.2 No clearing services will be provided for payment to or from Hong Kong if that day is a public holiday in Hong Kong.

Straight-Through-Processing(STP)

Taiwan

0830-2230* 0830-1645

Hong Kong-RTGS

China-CNAPS

24h

Book Transfer

Non Straight-Through-Processing(non-STP)

Taiwan

0830-2200* 0830-1630

Hong Kong-RTGS

China-CNAPS

0830-2330*

Book Transfer

Clearing Hours

Value: RMB 100 million

Clearing Value & Volume

1066.00 1438.28 2178.90 3837.70 4509.21

5919.49 6932.61

17730.57

24113.17

27394.97

21952.23

24557.53

29667.31

2230 2464 29064730

64858480

10748

22392

28487

44306

31835

39688

43561

0

10000

20000

30000

40000

50000

60000

70000

0.00

5000.00

10000.00

15000.00

20000.00

25000.00

30000.00

35000.00

40000.00

45000.00

50000.00

Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14

Value Volume Expon. (Value) Expon. (Volume)

Strictly Confidential 21

4. Why partner ICBC

Strictly Confidential 22

Why partner ICBC

System capabilities - Centralised clearing platform

• Real time information sharing

• Automated conversion between CNAPS & SWIFT messages

• Automated selection of most efficient payment route

• Support 7*24 hours processing for straight through payment

• Longest clearing servicing hours for payment to mainland China

• Speedy, efficient straight through processing of payments

Strictly Confidential 23

Expertise

• Experienced & dedicated RMB clearing operation team based in Head Office working hand in hand with local operation team to ensure high quality service provided to participants.

Competitive pricing

• World’s Largest Bank in terms of Customer RMB Deposits enables us to offer competitive interest rate on RMB deposit, financing cost & clearing fee thereby reducing participants’ operating costs

Why partner ICBC

Strictly Confidential 24

Liquidity

provider role

PBOC

appointed

Clearing Bank

Collaboration

with MAS

Dedicated

task force

Strong liquidity support from Head Office.

Strong support from PBOC

As RMB Clearing Bank works closely with MAS and

industry players to develop the local RMB market.

Dedicated task force to focus on ever-emerging

regulatory landscape.

Why partner ICBC

Thank you!

Disclaimer

This document is prepared by Industrial and Commercial Bank of China Limited, Singapore

branch. While we take all reasonable care in preparing this document, no responsibility or

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