Buy-side traders reported limited impacted from the ransomware hack on Industrial and Commercial Bank of China that occurred on Wednesday in US trading hours, but one noted that it seemed the “impact assessment is still taking place.”
Another senior trader observed, “Rates were off at the open, was that somehow related to ICBC? They are not nearly a big player in Treasury clearing, but if that somehow scared off participants on the 30yr auction, forcing primary to take double what they have averaged over the year (24.7% vs 12%) and had some effect on the horrible tail, well that is concerning. Auctions have already been much more in the headlights of FI participants – the last 20yr tail took markets lower – this will only focus attention more.”
In a statement the bank said, “On 8 November, 2023, US Eastern Time (9 November, 2023, Beijing Time), ICBC Financial Services (FS) experienced a ransomware attack that resulted in disruption to certain FS systems. Immediately upon discovering the incident, ICBC FS disconnected and isolated impacted systems to contain the incident. ICBC FS has been conducting a thorough investigation and is progressing its recovery efforts with the support of its professional team of information security experts. ICBC FS has also reported this incident to law enforcement. We successfully cleared US Treasury trades executed Wednesday (11/08) and Repo financing trades done on Thursday (11/09).”
The banks went on to say, “ICBC FS’s business and email systems operate independently of the Industrial and Commercial Bank of China Group. The systems of the ICBC Head Office and other domestic and overseas affiliated institutions were not affected by this incident, nor was the ICBC New York Branch.”
Email and messaging systems are typically used to communicate interest in primary bond issuance, and a ransomware attack freezing these tools could potentially prevent a firm from participating in the primary market, or even potentially spread a virus, depending upon its method of dispersion.
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