China’s Biggest Bank ICBC Hit by Ransomware Attack

The US arm of China’s largest bank said Thursday that it was hit by a ransomware attack, forcing clients to reroute trades and disrupting the US Treasury market.

State-owned ICBC is the biggest of China’s “Big Four” banks and the world’s largest lender by assets, according to S&P Global.

ICBC Financial Services, which is headquartered in New York, said in a statement that the attack, which happened on Wednesday, had been reported to law enforcement. ICBC Financial Services added that it was in the process of investigating the incident and trying to recover from the cyberattack.

“We successfully cleared US Treasury trades executed Wednesday … and [repurchase agreements] financing trades done on Thursday,” it said in the statement.

A ransomware attack is a type of malicious software that encrypts a user’s files or system, rendering them inaccessible.

The systems of ICBC’s head office in Beijing and other domestic and overseas units were not affected by this incident, nor was the ICBC New York Branch, the statement said.

On Friday, China’s Foreign Ministry said the bank was paying close attention to the incident.

It “has completed emergency handling and supervision to minimise risk impact and losses,” ministry spokesperson Wang Wenbin told reporters at a regular press briefing.

Global financial regulators are assessing the fallout.

“We are aware of the cybersecurity issue and are in regular contact with key financial sector participants, in addition to federal regulators. We continue to monitor the situation,” a Treasury spokesman said.

The bilateral trade volume between China and Nigeria in the first three quarters of 2023 stood at $17.25bn, Consul General of China in Lagos, Yan Yuging said this week.

Nigeria has become China’s second-largest trade partner in Africa, and China is Nigeria’s largest global source of imports.

The Financial Times and Reuters quoted some market participants as saying trades going through ICBC were disrupted, which affected market liquidity. It’s unclear whether the incident contributed to the weak 30-year bond auction conducted by the US Treasury Thursday.

There was a “sharp selloff” in Treasuries after the auction, Senior Analyst at Swissquote Bank, Ipek Ozkardeskaya wrote in a Friday note to investors, saying yields rose for a range of different bonds.

“Of course, the sudden jump in US yields hit appetite in US stocks yesterday,” she said. “The US bond auction brought along a lot of volatility, questions, and uncertainty.”