Big clients, intermediary services drive ABC growth

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Agricultural Bank of China (ABC), the country's third-biggest lender by assets, said it will continue to sign up clients in key industries and develop its intermediary services to drive business growth.

Now in the process of raising more than $20 billion via a dual-listing in Shanghai and Hong Kong, ABC had about 2.6 million corporate clients at the end of last year, mainly concentrated in the real economy in sectors such as manufacturing, property, power and transportation.

By the end of 2009, the Beijing-based lender, the last of China's four big state banks to go public, established "close cooperation relations" with 62 large State-owned enterprises out of the 129 under the direct oversight of the State-Owned Assets Supervision and Administration Commission.

ABC, which has the most extensive network of outlets among the country's large commercial banks, has also already sealed "comprehensive strategic cooperation" ties with the China's only two electric grid operators, its three biggest oil enterprises, five top power firms and the three telecom operators in the country.

It has also in recent years signed up as its clients a large number of leading companies in the steel, automobile, electronics and airline sectors.

The bank, whose dual listing IPO would end up as the world's biggest ever, said it will continue to strengthen cooperation with large State-owned enterprises and global Fortune 500 companies.

In addition to its continuing focus on larger customers, the bank said it will develop more innovative and high value-added products and services as part of its efforts to increase revenues from intermediary business.

ABC has in recent years expanded its cooperation with insurers and is the leader among its peers in agent insurance policy sales.

The bank served as policy sales agent for 59 insurance companies by the end of 2009, including all the leading insurers in the country.

ABC had 2.818 billion yuan in income from insurance transactions in 2009, the second largest among its peers.

ABC also beefed up cooperation with fund companies to serve as their sales agent.

ABC, which has about 50 fund companies and leading brokerages as its cooperative partners, realized 1.199 billion yuan income from the fund sales agent business.

The bank is also expanding its cash management business. It had 51,000 customers in the sector at the end of 2009, including 55 of China's top 100 companies and 35 percent of the country's top 500 firms.

ABC won the Asian Banker Achievement Award for Cash Management in China last year.

ABC also provides financial advisory, M&A advisory and other investment banking services. It is also involved in bond sale underwriting, bond investment advisory and asset-backed securitization.

The compound average growth rate of ABC's investment banking business revenue during 2007, 2008 and 2009 reached a staggering 292.2 percent, enabling the bank to win "The Best Innovative Investment Bank" and "The Best Bond Underwriter" titles in 2008 and 2009 in Security Times' annual competition.

ABC, with a complete product line in the custodian business, is also beefing up its presence in the sector. The nation's second largest in assets under custodianship, the bank realized 761 million yuan income from the service in 2009.

It also provides third-party custody services to 93 brokerages. The compound average annual growth rate of the third-party custody fees income reached 101.1 percent during 2007, 2008 and 2009.

ABC has also established cooperation with the country's three commodity exchanges and China Financial Futures Exchange. It provided deposit custody services for 161 futures companies by the end of last year.

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