Industrial and Commercial Bank of China (ICBC), the mainland's largest bank, is prepared to acquire more foreign banks, possibly this year, a senior executive said.

 

"It's possible that ICBC will complete another acquisition deal in 2008," Pan Gongsheng, secretary of the ICBC's board of directors, told China Daily.

 

Pan, who also looks after the bank's merger and acquisition business, declined to elaborate.

 

ICBC will continue its global hunt for new acquisitions in the coming years, with an emphasis on emerging markets. US financial institutions, battered by the subprime mortgage crisis, may also be on the ICBC's shopping list if "such a deal facilitates our strategic development", Pan said.

 

"ICBC's major strategy will be expanding in Asia, consolidating in Europe and making a breakthrough in America." Citing Citibank and HSBC as examples, Pan said mergers and acquisitions have always been important for global banks to achieve internationalization.

 

ICBC has been keen on such deals since its Shanghai and Hong Kong listing in October 2006. It acquired a controlling stake in Indonesia's Halim Bank in December 2006 and Macao's Seng Heng Bank in August 2007.

 

In October, ICBC took an unprecedented step toward becoming the biggest shareholder in Africa's largest bank, Standard Bank, by acquiring a 20 percent stake. It was Africa's biggest foreign acquisition deal.

 

ICBC is also reportedly in talks with Thailand's ACL Bank although a deal has yet to be reached because of Thailand's cap on foreign investment in local banks.

 

Excluding Hong Kong and Macao, overseas operations will account for 6-7 percent of ICBC's total revenue by the end of this year, taking into account all the acquired businesses, Pan said.

 

The number will be highest among mainland banks, Pan said, putting ICBC ahead in the race for global M&As among mainland lenders trying to globalize.

 

On how the bank picks its potential targets, Pan said: "A strong financial position and profitability are necessary, but not essential."

 

Unlike asset management companies, which may focus more on financial aspects, ICBC focuses more on strategic development.

 

The bank has just set up an office in Moscow and is waiting for approval to open others in Doha, Dubai, New York and Sydney.

 

(China Daily January 25, 2008)