The world’s largest bank sets up its European headquarter in Luxembourg
ICBC, the Industrial and Commercial Bank of China, is the most profitable bank in the world and also the largest by market capitalisation. The group, which can boast 240 million customers, now wants to expand in Europe and has opened branches in five European countries. The bank has also renamed its Luxembourg subsidiary ICBC Europe. Luxembourg Minister of Finance Luc Frieden explained to the press why this is good news for Luxembourg.
After the official opening of branches in Paris, Brussels, Amsterdam, Milan and Madrid, Finance minister Luc Frieden was proud to tell the press that Luxembourg will serve as the headquarters for ICBC business in Europe. It took him two years to convince the Chinese bank about the opportunities in Luxembourg.
“It is an enormous recognition for Luxembourg to have been chosen as European headquarters by ICBC, which is the world’s largest bank. For years now, our strategy has been to act as a gateway by which non Europeans can enter the European markets. This is good news for our financial centre and for Europe on a whole”.
At a press conference in Luxembourg, Jiang Jianqing, the chairman of ICBC said that the economic and trade relations between China and Europe have created a strong relationship between the two regions over recent years, with trade growing 33% year on year. More and more Chinese companies are investing in Europe and many of them are long term partners of ICBC.
“We need Chinese investments in Europe” pointed out Minister Frieden, “ICBC wants to support Chinese companies which want to do business in Europe”.In his speech, Luc Frieden added that despite difficulties encountered by national economies, China continues to believe in the future of Europe.
The business relationship works both ways. Luxembourg domiciled funds invest 20 billion Euros in the Chinese market each year Minister Frieden underlined that years ago he signed agreements with Chinese supervisory authorities to make this possible.
Until now, ICBC had branches in 9 European countries: Luxembourg, Germany, France, Belgium, the Netherlands, Italy, Spain, the UK and Russia. Through its 5 new branches, ICBC will deliver universal financial services such as deposits, loans, settlements, trade finance and investment banking.
For the world’s most profitable bank, with a net profit of 19 billion dollars in the first quarters of 2010, expansion is the key and opening the road to Europe inevitable. Over the long term, Chinese financial institutions want to act as commercial banks with an international vocation. “But we still have a long way to go”, admits ICBC’s chairman Jiang Jianqing. CW