ICBC to Double Europe Presence
By DINNY MCMAHON
BEIJING—Industrial & Commercial Bank of China Ltd. plans to open five branches in Europe over the next two weeks, more than doubling the European presence of China's biggest lender in its latest move to establish a global footprint.
ICBC will open branches in Paris, Brussels, Amsterdam and Milan this week, and Madrid the week after, a spokesman for the bank said in response to questions from The Wall Street Journal.
In the wake of the global financial crisis, Chinese firms have rapidly expanded internationally, presenting a huge opportunity for the country's banks to grow their overseas operations. But China's banks so far have been slow to follow their traditional clients abroad, constrained by inexperience in international markets, restrictions imposed by overseas regulators, and a conservative domestic regulatory regime wary of the banks moving too fast.
Still, the banks' expansion is starting to pick up pace, with ICBC entering Vietnam, Malaysia, Thailand and Canada last year.
ICBC has been more active than other Chinese banks in expanding abroad, focusing for the most part on building a presence in Asia. In recent years, it has taken over small retail banks in Indonesia and Thailand, rebranding both with ICBC's name. That has given it a network of fewer than 20 branches in each country, adding to the small network it set up on its own in about 10 other countries across Asia and the Middle East. In addition, it took over Bank of East Asia Ltd.'s collection of about six branches in Canada last year.
As a result, ICBC had almost 200 branches in 28 countries and regions, including Hong Kong and Macau, at the end of last year that generated profit of about $1 billion, according to a statement from the bank at the time. ICBC had more than 16,000 outlets in mainland China at the end of June.
In Europe, however, ICBC has lagged behind smaller Chinese rival Bank of China Ltd., which has traditionally been regarded as the most international of China's banks. Bank of China has branches in 11 cities around Europe, including Moscow. Both are far behind major global banks: Citigroup Inc., for example, has thousands of bank branches outside of the U.S. under its own brand and those of local subsidiaries.
China's banks haven't always found it easy to move into new markets, coming up against reluctance from local regulators to let them in. ICBC was only cleared to open a branch in New York in 2008, after the issue had become a sore point for Beijing. U.S. regulators had been reluctant to allow Chinese institutions to open branches in the U.S. because of concerns over whether Chinese regulators were equipped to properly supervise their banks and enforce anti-money-laundering standards.
—Kersten Zhang and Victoria Ruan contributed to this article.
