“The largest bank in terms of capital in the world”

ICBC Luxembourg S.A (« Luxembourg Branch »), established in 1999 is the second subsidiary of ICBC in Europe. Luxembourg Branch moves ahead progressively and sustains steady growth. The internal management continues to improve. Luxembourg Branch makes numerous milestones in business performance.Interview with Ms. Qinyi Qu, General Administration Department of ICBC (Europe) S.A. & ICBC Luxembourg Branch.
 
Can you introduce us ICBC Europe?
ICBC, the largest bank in terms of capital in the world, established its Luxembourg Branch in 1999 and ICBC (Luxembourg) S.A in 2006, which afterwards on January 1st 2011 changed its name to ICBC (Europe) S.A., and has expanded its presence steadily and sure-footedly ever since.
With Luxembourg as its hub, ICBC (Europe) S.A. has drawn on the company’s global resources to reach out across the continent. In 2011 alone, ICBC (Europe) S.A. made clear its intention to expand progressively and strategically, building upon its strong start in the European market by opening six branches simultaneously in Paris, Amsterdam, Brussels, Milan and Madrid. Together with its latter establishment of branches in Barcelona, Warsaw, and Roma, ICBC (Europe) S.A. is currently operating in major markets in Europe.
 
What are your activities?
ICBC (Europe) S.A. values the diversification of businesses and seeks innovation via delicacy management, localized innovation and standardized services, and has launched the full business lines of ICBC including retail banking, bankcard, e-Banking, clearing, specialized financing, global cash management, investment banking, asset management and trade finance. After the establishment of Private Banking Center (Europe), ICBC (Europe) Investment Banking Center and ICBC Europe Cash Management Center, our diversified service system has been further strengthened, aiming to emphasize on low capital utilization and high capital return business, which would play an increasingly important role in contributing to our profit in the future.
 
Was it strategically important to choose Luxembourg as the European level first place for investment funds?
First of all, Luxembourg has historically played a role as entry gate into European market for Chinese players. Luxembourg is the largest recipient of Chinese Foreign Direct Investment flows to Europe with a share of approximately 28% in 2014. Some of this investment is re-invested in other EU countries through EU single passport regime, which is the model adopted by ICBC to tap the EU market through its Luxembourg hub.
Secondly, Luxembourg offers an attractive legal framework and business environment with political and social stability, a well-regulated financial industry and friendly regulatory environment, a skilled multilingual and multicultural workforce together with the favourable tax regime and convenient geographic location. Further, Luxembourg is one of the few remaining European countries with an AAA sovereign debt rating from all the major rating agencies.
Last but not least, Chinese banks could develop their asset management business by leveraging Luxembourg’s dominant role in the European investment fund industry and UCITS brand name around world. Luxembourg is the European investment fund centre and many market players who are present in Luxembourg for cross-border fund distribution use their Luxembourg platform also to launch RMB denominated investment vehicle when the international investor community shows particular hunger for RMB products. Luxembourg also has the largest pool of RMB in the Eurozone and the RMB denominated assets held by Luxembourg domiciled investment fund exceeds RMB 250bn which greatly facilitates Chinese bank in leveraging its RMB strength with local market competitiveness including, inter alia, UCITS brand recognition with aim of global distribution. In October 2014, ICBC (Europe) launched its first RQFII UCITS in Luxembourg which was also distributed through its branches in France, Belgium, the Netherlands, Italy and Spain through UCITS passporting regime, which further strengthened Luxembourg’s role to be the RMB investment fund hub in Europe. In 2015, ICBC (Europe) launched the first sub-fund under its SIF platform, which entitles itself to become the first Chinese bank involved in both UCITS and AIF world.
After moved into the first group of RQFII holders in Luxembourg in November, ICBC (Europe) commits itself to be more actively involved into Luxembourg investment fund industry and further promote the role of Luxembourg as one of the most important offshore RMB centers in the world.
 
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