ICBC is seeking to triple overseas earnings by 2016 and targeting more business with Middle Eastern companies after previously focusing on the local units of Chinese firms in the region.
Bloomberg /Dubai
Industrial & Commercial Bank of China Ltd, the world’s most profitable lender, said it will consider acquisitions in the Middle East as part of plans to boost profit from the region by 50% this year.
“We’re looking to see if there are acquisition opportunities,” Zhou Xiaodong, chief executive officer for the Middle East, said in an interview from the lender’s Dubai offices. “It’s a good strategy. Part of the reason why ICBC grew so fast in Hong Kong is because of acquisitions.”
ICBC is seeking to triple overseas earnings by 2016 and targeting more business with Middle Eastern companies after previously focusing on the local units of Chinese firms in the region, Zhou said.
The bank has a goal to increase earnings from the Middle East by half this year and plans to open retail branches in Kuwait, Saudi Arabia and the UAE.
ICBC lent $600mn to regional clients including Emirates airline, Qatar Airways and Dubai Electricity & Water Authority in 2013. This year it is seeking to boost lending to Dubai real estate projects, energy companies in Abu Dhabi and infrastructure work in Qatar. In January it advanced $201mn to Dubai-based real estate investment company SKAI Holdings for the development of a hotel on the Palm Jumeirah.
“There’s a deep blue sea of opportunity for ICBC to develop its business in the Middle East,” Zhou said, adding that profit from the region was $33mn last year. “The Middle East business will play a very important role.”
China is the third largest trading partner with the UAE, and the second largest trading partner with Saudi Arabia. Trade with Saudi Arabia jumped 188% between 2007 and 2012, according to data compiled by Bloomberg.
ICBC expects to become the first Chinese lender in Saudi Arabia, the Middle East’s largest economy, when it opens later this year in Riyadh and may also apply for two further branches in the country, Zhou said. It is also in talks with the Central Bank of the UAE about retail branches in the country.
Approximately 2,500 Chinese companies are registered in Dubai, mostly in construction, according to the emirate’s Chamber of Commerce. More than 200,000 Chinese expatriates live in Dubai, the chamber says.