Chinese bank ICBC signs deal to enter US market

BEIJING — Chinese bank ICBC, the world’s largest by market value, has signed an deal that will allow it to enter the US retail banking market, the Wall Street Journal reported.

By (AFP)

Published: Sat 22 Jan 2011, 6:01 PM

Last updated: Mon 22 May 2023, 3:21 PM

ICBC, the Industrial and Commercial Bank of China, has agreed to buy a majority stake in the US subsidiary of Bank of East Asia in a deal that would make it the first Chinese state-controlled bank to acquire retail bank branches in the United States, the paper said in its Saturday edition.

The deal, which still requires the approval of US regulators, was signed Friday in Chicago on the last day of a visit by Chinese President Hu Jintao to the United States.

The price was not revealed but anonymous sources quoted by the Journal said it was around $100 million.

Advertising

The agreement comes as Beijing and Washington seek to increase trade and investment, signing $45 billion in trade deals during Hu’s visit.

ICBC has been the most aggressive of China’s ‘big four’ banks in expanding overseas, as the country’s lenders restart plans that were put on hold by the global financial crisis and seize new opportunities left in its wake.

Hong Kong-based Bank of East Asia has 13 branches in the United States, in New York and California. ICBC in January last year bought a 70-percent stake in the bank’s Canadian subsidiary.

The new deal would allow ICBC’s US customers to buy and sell the yuan. Trading in the currency is already available to clients of the Bank of China, currently the only mainland Chinese bank which has a US retail licence, the newspaper said.

China is seeking to promote the use of the yuan as an international currency for trade and investment.

The yuan’s exchange rate, determined daily by the Chinese central bank, is currently held in a narrow band against the dollar.

ICBC this week opened branches in Paris and Brussels and in January inaugurated a total of five branches in Europe, expanding its presence on the continent.

ICBC’s profit rose nearly 27 percent in the third quarter to 42.6 billion yuan ($6.38 billion), according to a statement filed with the Shanghai Stock Exchange in late October.