var
  IconSizeX : integer;
  IconSizeY : integer;
  myBmp : TBitmap;
  AndMask : TBitmap;
  XOrMask : TBitmap;
  IconInfo : TIconInfo;
  Icon : TIcon;
begin
  IconSizeX := GetSystemMetrics(SM_CXICON);
  IconSizeY := GetSystemMetrics(SM_CYICON);

  myBmp := TBitmap.Create;
  myBmp.LoadFromFile(bmp);

  AndMask := TBitmap.Create;
  AndMask.Width := IconSizeX;
  AndMask.Height := IconSizeY;
  AndMask.Canvas.Brush.Color := clBlack;
  AndMask.Canvas.Rectangle(0, 0, IconSizeX, IconSizeY);

  XOrMask := TBitmap.Create;
  XOrMask.Width := IconSizeX;
  XOrMask.Height := IconSizeY;
  StretchBlt(XorMask.Canvas.Handle, 0, 0, IconSizeX, IconSizeY,
             myBmp.Canvas.Handle, 0, 0, myBmp.Width, myBmp.Height, SRCCOPY);

  Icon := TIcon.Create;
  IconInfo.fIcon := true;
  IconInfo.xHotspot := 0;
  IconInfo.yHotspot := 0;
  IconInfo.hbmMask := AndMask.Handle;
  IconInfo.hbmColor := XOrMask.Handle;
  Icon.Handle := CreateIconIndirect(IconInfo);

  AndMask.Free;
  XOrMask.Free;
  myBmp.Free;

  Icon.SaveToFile(ico);
  Icon.Free;
end;