According to the Hong Kong Securities and Futures Commission's Web site, ICBC was approved on May 27 to set up ICBC International Capital Ltd. The Web site said the new entity will conduct securities trading and corporate-finance advisory services. ICBC already has a 75%-owned investment-banking unit in Hong Kong, ICEA Capital Ltd., with Bank of East Asia Ltd.
The diversification effort by China's big banks, all of which are state-controlled, is part of a broader, continuing transformation of the Chinese banking sector into modern financial-services institutions from the state-directed policy tools they were up until the late 1990s.
That transformation includes expansion beyond the mainland. For example, China Merchants Bank has just agreed to take a 53% stake in midsize Hong Kong lender Wing Lung Bank Ltd., giving it dozens more branches in Hong Kong.
Although it lost out on the Wing Lung bid, ICBC has made considerable progress in foreign expansion. Besides a regulatory approval it won to set up a branch in Sydney last month, ICBC in October made China's biggest-ever overseas acquisition when it agreed to pay about $5.5 billion to buy 20% of South Africa's Standard Bank Group Ltd., becoming the African lender's biggest shareholder.
ICBC isn't the first of China's big state-owned lenders to establish an investment-banking unit in Hong Kong. Bank of China Ltd. set up BOC International Holdings Ltd., its investment-banking subsidiary, in Hong Kong in 1998, and China Construction Bank has wholly owned CCB International (Holdings) Ltd.
