On July 22, Industrial Bank (IB) entered into the “Agreement of Shanghai Futures Exchange for Futures Margin Depository Business Engaged by Financial Institution of the Banking Industry” with Shanghai Futures Exchange (SHFE), becoming a depository bank designated by the exchange officially. Then, the bank has obtained the futures margin depository qualification of the four major futures exchanges in China (the other three are China Financial Futures Exchange (CFFEX), Dalian Commodity Exchange (DCE) and Zhengzhou Commodity Exchange (ZCE)), further extending its business in the futures market.
As learnt by the reporter, IB signed a strategic cooperation agreement with SHFE as early as June 2014, and both parties have, based on their respective business features and competitive edges, deepened cooperation in a number of areas including service, product innovation, channel sharing, customer resource development, personnel training, market cultivation, cooperative research and information exchange, etc. It is an important fruit for the all-round strategic cooperation between both parties that IB becomes the depository bank designated by SHFE.
“Over these years, we have actively got involved in self-run trading of gold and silver futures of SHFE, and committed ourselves to offering all-sided futures supporting services for domestic futures market.” Wu Ruoman, General Manager of the Futures Finance Department of IB, introduced that as early as 2006, the bank set up a special futures business team to learn the market needs of futures companies and institutional customers in a proactive manner and actively push forward the bank-futures cooperation including futures margin depository and bank-futures transfer. In recent years, considering the types of products released by SHFE and other commodity futures markets and the needs of industrial customers, IB has also launched many financing products and services, such as pledge of warehouse receipts and hedge financing, to further extend its business coverage while intensifying its services to the real economy.
SHFE topped the three commodity exchanges in China in terms of trading amount and value of registered standard warehouse receipts. Becoming a depository bank designated by SHFE, Wu indicated, is helpful for the bank to extend its futures business domain, reinforce its position in the market of futures margin depository, and further improve its capacity to offer services to the real economy. Meanwhile, IB will carefully perform its responsibilities as a depository bank, provide the exchange and its members with superior and efficient depository banking services, and broaden the scope of trade financing service for the types of products released by SHFE, with a view to boosting the all-round strategic cooperation between both parties and promoting the development of the futures market jointly.
As indicated by relevant data, by the end of 2014, the amount of margin in China’s futures market hit about RMB 300 billion for the first time, and this massive market scale has attracted a great number of banks. Though IB has only launched the futures margin depository bank service for a short time, relying on its extensive bank-futures cooperation foundation established for years and advantages in integrated institutional banking cooperation, it quickly started cooperation with futures companies in the futures margin depository and bank-futures transfer, boasting robust development momentum.
By the end of June, IB has witnessed a scale of futures margin depository more than RMB 60 billion and the daily settlement volume with exchanges hit over RMB 10 billion. Specifically, IB ranked front among the 12 depository banks with regard to the futures margin depository and settlement business volume with CFFEX. The bank now is cooperating with 119 futures companies, which account for almost 80% of the total, and there are 79 futures companies available for bank-futures transfer. With its outstanding all-round business performance, IB was appraised as an “excellent” one in the annual assessment of depository banks conducted by CFFEX and DCE in 2014.