A woman uses an automated teller machine at an Industrial and Commercial Bank of China branch on Wangfujing Street in Beijing. The bank said it plans to expand in emerging markets and wants to be the authorised bank for clearing yuan trades in more countries.
Reuters
Beijing
The Industrial and Commercial Bank of China Ltd (ICBC), China’s largest bank by market capitalisation, plans to expand in emerging markets and wants to be the authorised bank for clearing yuan trades in more countries, it said.
With global use of yuan exploding in trade and investment in recent years, ICBC hopes to be the bank that clears yuan trades in the Americas, said Wu Bin, general manager at ICBC’s International Banking Department.
“The overseas renminbi business cannot be overlooked,” Wu said in an interview at the Reuters China Summit. “We will try to be selected as the yuan clearing bank in more countries.”
Already the authorised bank for clearing yuan trades in Luxembourg and Singapore, ICBC plans to set up new branches in about another 10 countries in regions including north Africa, southeast Asia and central and eastern Europe, Wu said.
Underscoring the rising importance of the yuan, business related to the currency accounted for more than a fifth of ICBC’s overseas profits so far this year, Wu said.
In the first nine months of this year, ICBC’s overseas units saw profits surge by nearly 50% compared with the same period in 2013.
Driven by China’s ambitions to grow the yuan into a global currency to temper the dollar’s dominance and reduce the foreign exchange risks faced by Chinese companies, worldwide usage of the renminbi has spiked in recent years.
It overtook the euro to become the second-most-used currency in trade finance in 2013, spurring big Chinese banks to fight for a bigger share of the booming trade. Wu said ICBC would focus on providing financing support and services to Chinese companies looking to venture abroad and to multinational firms that want to do business in China.
“One of our main priorities is to follow Chinese firms and venture abroad,” he said.
China’s non-financial direct outbound investment jumped about 22% to $75bn in the first nine months this year compared with the year-ago period, and is projected to rise at least 10% annually for the next five years.
While there are barriers today with regards to global usage of the yuan, which cannot be freely transferred in and out of China, Wu was confident that things would change over time.
“We all understand that the process of yuan internationalisation is gradual, and it will move towards greater freedom as China opens up,” Wu said.
