ICBC set to launch overseas service divisions

Industrial and Commercial Bank of China Ltd plans to launch two overseas regional cash management centers this year to provide full-scale cross-border financial services for Chinese companies and support their expansion into the global market, a senior manager at the bank said on Tuesday.

One center will be set up in Europe in May, while the other will be opened in North America in October, said Luo Xi, vice-president of ICBC, the world's largest lender by asset value.

"The amount of ICBC's overseas assets is likely to be more than 5 percent of the total by the end of this year.

"Chinese companies are entering a transformation period, changing from exporting products to directly producing goods and services overseas, which also needs banks and other financial institutions to speed up going abroad," according to Luo.

The bank's global cash management centers help clients manage cash flows, raise loans and achieve cross-border settlements based on an international capital network.

ICBC was the first Chinese commercial bank to launch global cash management services. It currently has two global cash centers in Hong Kong and South Africa.

In 2011, ICBC's cash management services were available in more than 40 countries and regions, while its clients increased 75 percent year-on-year to more than 2,000 companies.

The banking giant's overseas assets reached $132 billion last year, compared with $49.18 billion in 2010. By the end of the third quarter of 2011, ICBC's total assets amounted to 15.13 trillion yuan ($2.4 trillion), compared with 13.46 trillion yuan at the end of the previous year, according to the bank's financial report.

"The global cash centers can achieve capital centralization management and raise money for Chinese companies to participate in the construction of major international projects," said Zeng Qi, deputy general manager of ICBC's Settlement and Cash Management Department.

Gao Yonggang, chief financial officer with Datang Telecom Technology & Industry Group, said on Tuesday that China's monetary policy remains tight, although the central bank has cut the required reserve ratios of commercial banks twice since December 2011.

"To expand business overseas is more attractive now because of the relatively lower financing costs overseas, and we are expecting more creative financial services from banks," Gao said.

Chinese companies have launched more than 180,000 investment institutes in 178 countries and regions and their cumulative overseas direct investment increased to 320 billion yuan by the end of 2011, said ICBC Vice-President Luo.