In an unconventional response to a ransomware attack, the US financial services unit of Industrial and Commercial Bank of China (ICBC) has reverted to using a physical data transfer method for conducting essential business transactions. The cyberattack, which was first reported on Thursday, disrupted the bank's systems and prompted a temporary shift to USB stick deliveries for settling US Treasury trades.
The incident mirrors recent cybersecurity breaches experienced by technology giant Nvidia (NASDAQ:NVDA) and highlights a growing concern over digital vulnerabilities in the financial sector. Despite the system disruptions, ICBC managed to clear Wednesday's US Treasury trades, although liquidity issues were observed.
The attack's timing is particularly notable given that ICBC's US unit held $23.5 billion in assets at the end of 2022.
China's stringent ban on cryptocurrencies typically acts as a protective measure for its banks against ransomware attacks, which often demand payment in anonymous digital currencies. Nevertheless, the appeal of ransomware to cybercriminals has increased sharply. Data from Chainalysis revealed that by September 2023, ransomware attack payments had soared to $500 million, marking a 50% rise from the previous year.
The identity of the perpetrators behind the ICBC cyberattack remains unknown, as the bank has not commented on potential suspects. This incident underscores the escalating threat landscape that financial institutions face and the need for robust defenses against cyber threats.
InvestingPro Insights
In light of recent events, it's important to remember that ICBC is a prominent player in the Banks industry, with a strong record of profitability and steady dividends. According to InvestingPro Tips, the bank has maintained dividend payments for 17 consecutive years, and strong earnings should allow management to continue this trend. Despite a recent decline in revenue, analysts predict that the company will remain profitable this year.
InvestingPro's real-time data reveals that ICBC's Market Cap stands at 217.73B USD, and it trades at a low earnings multiple with a P/E Ratio of 12.56. It's also worth noting that the bank offers a significant dividend to shareholders, with a Dividend Yield of 7.53%.
These insights, along with hundreds of others, are available on InvestingPro for those who wish to delve deeper into the financials of ICBC or any other company.
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