Dubai: Industrial & Commercial Bank of China Ltd, the country’s largest state-owned lender, is targeting asset growth of up to 10 per cent in the Middle East this year as it opens new offices in Saudi Arabia and Kuwait and looks to arrange local Islamic bond sales by Chinese companies, according to its regional chief executive.
ICBC had about $4 billion of Middle Eastern assets at the end of last year, and was looking for growth of between 6 per cent and 10 per cent this year as it lends into a regional economic rebound, Zhou Xiaodong, the bank’s Middle East head, said in an interview with Zawya Dow Jones.
“It’s hard work,” Zhou said. “This year we would like to provide more project finance and syndication loans.”
ICBC set up in Dubai in 2008 and has since opened offices in Abu Dhabi and Doha. The bank is planning to open a further two offices in Riyadh and Kuwait, but is awaiting final regulatory approvals, Zhou said.
While the bank has been financing growing trade between the Arab Gulf countries and China, it has also lent money to local projects and to local companies, including Etihad Airways and Qatar Airways, Zhou said. One of its aims going forward was to provide financing for local companies and projects that have Chinese connections as regional economies recover from the financial crisis.
“We would like to finance projects that have Chinese elements,” Zhou said. “That means if the material is from China or the contractor is from China. The Chinese government is encouraging Chinese companies to go global, and we would like to support that. We are their partners in Mena and China and when they go global, that means ICBC goes global.”
Another initiative that Zhou said could take off as early as next year was a move to get Chinese firms to sell Islamic bonds, or sukuk, out of Dubai. His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, announced a plan early this year to position Dubai as a global capital for the Islamic economy.
“Dubai would like to be the centre of sukuk, and we would like to introduce some Chinese companies to issue sukuk in Dubai,” he said.
ICBC has discussed possible sukuk issuances with regulators, Zhou said, but getting such a deal done may take time.
“This is not very easy work for us,” he said. “Chinese companies aren’t familiar with this product, and also ICBC is not familiar with this, so we are in the process of introducing it.”
The government-owned ICBC made a pre-tax profit of $54 million in the Middle East last year, it said in February, a 69 per cent rise compared to 2011.
