Gateway to Europe

Gao Ming, chairwoman of ICBC Europe, says that Luxembourg's central location facilitates the flow of financial services industry talent. Cecily Liu / China Daily

ICBC bullish on yuan business growth in land-locked nation

Industrial and Commercial Bank of China Ltd, the world's largest bank by market capitalization, is relying on the favorable investment climate in Luxembourg to provide the cushion for its expansion plans in Europe, a top bank official says.

"Luxembourg is an important financial center in Europe, with efficient regulations, obvious geographical advantage and a government that readily welcomes foreign investment into the country," says Gao Ming, chairwoman of ICBC Europe.

According to Gao, Luxembourg is not only the largest investment fund center in Europe, but also a leading destination for private banking in Europe. This was also the reason why the bank chose the grand duchy to be its European headquarters, she says, adding that it now also has a presence in seven other European cities.

"The advantage of Luxembourg being a small country is that we feel we are close to the government and close to the regulators. If the regulators require anything from us, they will tell us. If we have any questions for the regulators, they will answer fast," Gao says.

She says that Luxembourg's central location facilitates the flow of financial services industry talent and also improves the city's competitiveness. Through the speedy implementation of European Union directives, Luxembourg has also ensured that there is adequate investment protection.

Gao feels that the biggest draw for Chinese lenders is that being a part of the Schengen area of 26 European countries, the company employees based in Luxembourg can easily travel to other Schengen countries for business.

ICBC first had a presence in Luxembourg in 1998 as a representative office, which was quickly upgraded to a branch in 1999. In 2006, ICBC established a subsidiary in Luxembourg in order to prepare for the bank's expansion to other European countries using the EU's Single Passport policy.

In January 2011, ICBC established five European branches, in Paris, Amsterdam, Brussels, Milan and Madrid. At the same time, ICBC (Luxembourg) SA changed its name to ICBC (Europe) SA, to signify its position as the bank's European headquarters.

"At that time, Europe was still under the shadows of the financial crisis with a heavy atmosphere. The opening of the five ICBC branches really helped bring hope," Gao says.

The five branches quickly grew and all of them achieved profits in the first six months of their operation ending in June 2011. Having achieved success, ICBC then established its Warsaw and Barcelona branches in November 2012.

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