The Business Standard (India)
China`s largest bank plans India foray
Anindita Dey / Mumbai March 22, 2006
Another Chinese bank, UBC, is also eyeing India.
After almost two years since Overseas Chinese Banking Corporation exited India, the biggest Chinese bank-Industrial and Commercial Bank of China (ICBC)-has evinced interest in setting up operations in India.
ICBC executives recently had talks with officials of the Reserve Bank of India, the banking regulator. The development assumes significance as both India and China have begun talks to increase bilateral trade.
Singapore-based United Bank of China has also applied for making a foray into India. UBC is one of the banks enlisted under the bilateral trade agreement with Singapore to get a preferential treatment while setting up its operations In India. It has approached the RBI for getting clearances to first set up a representative office.
ICBC is the largest state-owned bank in China and leads in corporate banking. It has recently concluded the world’s largest initial public offer of around $10 billion. It was the last of the government-owned banks to go public after a partial disinvestment of Bank of China and China Construction Bank last year.
ICBC controls a fifth of China’s $4.6 trillion of banking assets and has a customer base of more than 100 million at 21,223 nationwide outlets. The bank sold a combined 10 per cent stake to Goldman Sachs Group Inc, Allianz AG and American Express Co for $3.78 billion.
ICBC was set up in 1984 by the Chinese government to offer deposit and lending services to state-owned companies. The bank’s non-performing loan ratio fell from a high of 25.46 per cent in 2000 to 2.49 per cent at the end of last year.
In a press statement globally, it had mentioned that its earnings would amount to at least 100 billion yuan (US$12.43 billion) in operating profits during the current financial year, up from 90.2 billion yuan (US$11.21 billion) in 2005. It has offered 283.2 billion yuan (US$35.19 billion) of syndicated loans last year.
Overseas Chinese Banking Corporation closed its operations in India in 2004-05. Incidentally, it is also one of the Singapore-based Chinese banks designated to get preferential treatment by the Indian government under a bilateral Comprehensive Economic Cooperation Agreement. But until now, it has showed no intentions of returning to the Indian market.