Industrial and Commercial Bank of China Enters Australian Market
The Industrial and Commercial Bank of China (ICBC) is considered to be the largest bank in the world, employing more than 350,000 people and offering multi-dimensional, innovative services to its extensive customer base. Following the approval of a branch license from the Australian Prudential Regulations Authority, the ICBC is set to pursue its goal of forming alliances with Australian banks under the leadership Mr. Ruixiang Han, who arrived in Sydney recently to take up his position as general manager of ICBC Australia.
ICBC is majority-owned by the Chinese Government with stock market listings in Hong Kong and Beijing, and a market worth of approximately $US250 billion. As the largest corporate lender and retail deposit taker in China’s domestic market, the ICBC plays a crucial role in the Chinese financial system. In August 2007, when the sub-prime credit crisis knocked the share prices of established global banks, including JP Morgan and Citigroup, ICBC moved into the lead as the world’s largest bank by market capitalization, where it remains.
Establishing ICBC Australia is a strategic move in the bank’s quest to globalize its operations. Mr. Han expressed his confidence that within the next ten years ICBC will be a significant foreign player in Australia’s commercial banking arena. In October 2007, ICBC bought a twenty percent share in Standard Bank of South Africa as part of its globalization strategy. Global expansion of the Industrial and Commercial Bank of China is also seen as a means to reduce the group’s reliance on the Chinese market and is reportedly in response to calls for diversification of revenue from ICBC investors, which include the likes of Dresdner Bank, Goldman Sachs and American Express.
ICBC Australia will be focusing on growing its business through the servicing of corporate clients, particularly those with business interests in China, as well as Chinese companies operating in Australia. Currently ICBC Australia is operating from its headquarters in Sydney, with plans to set up a network of offices covering other major centers within the next few years. With a large number of Chinese based customers in Brisbane, Perth and Melbourne, it is likely that ICBC Australia will focus on these centers first.
The coming months are likely to prove interesting as ICBC Australia makes its presence known in Australia’s financial circles.