Comprehensive SWOT Analysis of ICBC Bank – A Multinational Chinese Banking Company

Quick Stats on ICBC Bank

Founder	Jiang Jianqing
Year Founded	1984
Origin	Beijing, China
No. of Employees	453,048
Company Type	Public
Market Cap	$253.534 Billion (2021)
Annual Revenue	CN¥725.12 Billion (2018)
Net Income/ Profit	CN¥298.72 Billion (2018)

 

Product & Services by ICBC Bank

Being one of the oldest bank in the world:

• Finance and insurance consumer 
• Loans and credit products
• Cash management and Treasury service
• Lending of Equipment 
• Trade finance

Competitors of ICBC Bank 

Being one the largest banks to be rated in the top 10 in the market, it still has a lot of competitors all over the world. Below are the top competitors of ICBC Bank:

• Bank of America
• Bank of China
• Agricultural Bank of China
• HSBC Bank
• China Construction Bank
• JP Morgan Chase
• CitiGroup 

Now that we have seen the history of the company, Let us move to the structured SWOT analysis of ICBC Bank. 

SWOT Analysis of ICBC Bank

SWOT analysis of ICBC Bank analyzes its strengths, weaknesses, opportunities and threats. It deals with two factors: internal and external. Strength and weakness are based on internal factors whereas opportunities and threats rely on external factors of the bank.

To better understand the SWOT analysis of ICBC bank, refer to the infographics below.

Below is a step-by-step detailed guide to help you with the SWOT analysis of ICBC Bank.

Strengths of ICBC Bank

Strengths are the firm’s capabilities and resources that it can use to design, develop, and sustain a competitive advantage in the marketplace.

• Brand Significance: The bank was the largest in the world by total assets in the years 2017 and 2018. Also, the bank was continuously placed in 1st position in the top 1000 world banks ranking. 
• Functioning Efficiency: ICBC is one of the foremost in the sector to localize its overseas procedures to improve its functional efficiency. It executed this by maintaining a close alliance with the monetary associations of approximately 20 nations.
• Strong Customer Base: ICBC has an extended network of banks and customers which gives it a sturdy ground for scaling and income generation. The bank has 17,100+ household branches, 330+ overseas associations, and around 2,000+ correspondent banks globally. It has approximately 5.1 million corporate clients and 465 million individual customers.
• Various Businesses: Unlike other banks, it has a diversified portfolio of its revenue streams. This enables them not to be dependent on anyone’s service. It has adopted a versatile banking model, along with conventional banking, investment banking, asset management, insurance, and wealth management.
• Highly Capitalized: ICBC Bank has proven to be a highly capitalized company in the past. It will surely be able to withstand any type of crisis in the future and wouldn’t need to rely on the government during the crisis.

Weaknesses of ICBC Bank

Weaknesses of ICBC can either be an absence of strengths or resources of capabilities that are required but at present, the organization doesn’t have.

• Weak in Exploring Niche Markets: Niche markets and local monopolies that company’s like ICBC can exploit are fast disappearings. The customer network that ICBC has promoted is smaller and less effective.
• Declining Per-unit Revenue for ICBC: Competitiveness in the industry is putting downward pressure on profitability. A starting guide to managing this situation for the company is, objectively assessing the present value propositions of the various products.
• Loyalty Among Suppliers is Low: Given the history of ICBC coming up with innovations to drive down prices in the supply chain.
• Easily Imitable Business Model: The Business Model of ICBC can be easily imitated by the competitors in the industry name industry. To overcome these challenges company name needs to build a platform model that can integrate suppliers, vendors, and end-users.
• Need to Invest More in New Technologies: According to the country’s scale of expansion and the geographical areas ICBC Bank needs to invest more funds in technology to coordinate the processes across the board. Currently, the investment in technology is not on par with the vision of the company.

Opportunities for ICBC Bank

Opportunities are potential areas where the firm can identify potential for growth, profits, and market share.

• The Trend of Customers Migrating to Higher End Services: It represents a great opportunity for ICBC, as the firm has strong brand recognition in the premium segment, and customers have experience with excellent customer services provided by ICBC in the lower segment. It can be a win-win for the company and provides an opportunity to increase profitability.
• Moderate Growth Rate: Following a moderate growth rate in the business, a financial uptick and increase in client spending provide an opportunity for ICBC Bank to attract new clients and increase its share of the total industry.
• Customer Preferences are Fast-changing: Driven by rising disposable incomes, easy access to information, and fast adoption of technological services, customers today are more willing to try new services in the market. ICBC has to carefully monitor not only wider trends within the regional banks’ industry but also in the wider financial sector.
• Beneficial Government Regulations: Increasing government regulations are making it difficult for unorganized players to operate in the regional banks’ industry. This can provide ICBC with an opportunity to increase its customer base.
• Development of Technology: Since the FinTech industry is growing at a very rapid pace, there are advancements in technologies too. Using these kinds of technologies can increase efficiency and decrease cost.

Threats to ICBC Bank

Threats are factors that can be potential dangers to the firm’s business models because of changes in macroeconomic factors and changing consumer perceptions. Threats can be managed but not controlled.

• Trade Relation Between US and China can affect ICBC’s Growth Plans: This can lead to a full-scale trade war which can hamper the potential of ICBC to expand operations in China.
• Competitors Catching up with Product Development: Even though at present the ICBC is still the leader in product innovation in the regional banks’ segment, it is still facing stiff challenges from international and local competitors. 
• Global Competitors: If ICBC Bank wants to expand their business around the world, they have to be careful of what policies they make or how they provide their services in the foreign market or how they market themselves, where already existing local banks are what the people trust in. 
• Increased Marketing Efforts: Due to the rise of digital marketing, there is an increasing number of promotional messages which are being sent by competitors. It clutters up the space, which leads to losing out on customers. ICBC Bank is well versed and trying to adopt a variety of the latest digital marketing skills to get ahead of the competition. You must also check out these skills to achieve the same.
• Environmental Criticism: Global environmental bodies have blamed ICBC for failing to stick to its colonial-environmental norms and of being insincere because it was involved in the financing of the controversial Gilgel Gibe III Dam in Ethiopia.

Now that we have come to the end of this thorough SWOT Analysis of ICBC Bank. Let’s see the summation of this article in the conclusion.