Overall: Best bank for advising Chinese institutions on BRI 2017
Industrial and Commercial Bank of China
Industrial and Commercial Bank of China has become a big player thanks to its focus on domestic growth. It is the country’s largest financial institution, with Rmb24.9 trillion ($3.78 trillion) of assets at the end of March, according to EY. But as the bank sees its domestic client base moving offshore, it is making efforts to move alongside them.
Its acquisition of Standard Bank’s UK business in February 2015 gave it control of a large commodities-trading book and a team with a long pedigree in the African markets. The growth over the last few years of ICBC Asia, its international investment banking arm, has allowed it to bring more of its clients offshore.
Even though Bank of China casts a long shadow in the offshore markets, one China specialist at a foreign bank argues that ICBC is the firm making the most impressive moves. This is evident in some of Asia’s more overlooked markets.
ICBC’s willingness to follow its domestic corporate clients into central and eastern Europe is particularly noteworthy. The bank set up a €1 billion fund in May 2016, pledging to invest in the region to further its One Belt, One Road strategy. This year alone it has lent to companies and projects in the Czech Republic, Kazakhstan, Russia and Turkey.
But ICBC’s lending power has not been limited to just one region. It lent to the Karot Hydropower plant in Pakistan, joining the deal alongside the Silk Road Fund, the Export-Import Bank of China, China Development Bank and the International Finance Corporation. The project, sponsored by China Three Gorges, is part of a plan to forge closer political and economic ties between China and Pakistan.
The bank has a presence in 42 countries, including 18 that it sees as intrinsically tied to the Belt and Road Initiative. It lent $23.5 billion in these countries in 2016, or 35.8% more than in the previous year, according to EY.
ICBC has also tried to exercise some soft power in promoting BRI, a crucial factor as Chinese companies expand overseas. Like many of its rivals, it has hosted events promoting Belt and Road, but it has gone one step further by adding data to the mix.
In July, ICBC Standard Bank announced a pair of economic indices to quantify progress under the initiative: the monthly ICBCS Belt and Road Economic Health Index and the semi-annual ICBCS Belt and Road China Connectivity Index.
ICBC still lags behind Bank of China when it comes to some elements of BRI. The latter’s lead in terms of renminbi clearing centres gives it an obvious boost, while its stronger bond franchise helps ensure a steady supply of business. But ICBC is making efforts to gain the lead in new markets for its clients, lending to Chinese-run projects in territories at the very heart of the Silk Road.
There is little more it could do to win this award.