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ICBC Plans to Open First Branch in Brazil

Source: Bloomberg

Industrial & Commercial Bank of China Ltd (ICBC), the world’s biggest lender by market value, plans to open a bank in Brazil, extending its reach to Latin America’s largest economy after expanding in Europe and the US.

ICBC intends to set up a full-service bank, ICBC do Brasil Banco Multiplo SA, in Sao Paulo with an initial capital of US$100 million, Brazil’s central bank said in a statement. ICBC, based in Beijing, is seeking Banco Central do Brasil’s approval to become the second Chinese lender to establish operations after Bank of China Ltd received authorisation to open a branch in Brazil in February 2009.

The announcement came as Brazilian President Dilma Rousseff visited China, with plans to pressure government officials to buy more of the South American nation’s goods.

Chairman Jiang Jianqing has spent more than US$6 billion on acquisitions in regions spanning from Asia to South Africa and America over the past two years as he seeks to triple the share of profit coming from abroad to 10 per cent. Operating income from ICBC’s overseas businesses accounted for 3 per cent of its total at the end of last year, according to its annual report.

ICBC opened 12 overseas branches last year, taking the total to 203 and extending its reach to 28 countries and districts. These units had combined assets of US$75.7 billion as of December, an increase of 45 per cent from a year earlier, and their pre-tax profit rose 37 per cent to US$1.19 billion.

ICBC fell 1.8 per cent to HK$6.53 in Hong Kong at 9:47 am, trimming this year’s increase to 13 per cent. The shares were unchanged in Shanghai at RMB4.59.