In a news report today, Industrial & Commercial Bank of China (ICBC) has agreed to a deal to buy US branches of Bank of East Asia of Hong Kong.
ICBC is 70% owned by the government of China and is number 13 in The Global 5000 banking sector with approximately $70 billion in revenue. Bank of East Asia is a much smaller bank with just over $1 billion in revenue and is number 128 in the banking sector in The Global 5000.
While the transaction is interesting to note when Global 5000 companies make moves, this one is more about “watch this space”. Large, Chinese state controlled corporations have been making a lot more global moves recently including recent activity by State Grid in both the Philippines and Brazil. An initial entry by ICBC via acquisition will provide them a platform to learn, grow and expand their business over time in the US market.
I am sure large, US based banks will be watching — Bank of America, Chase, Citibank, Wells Fargo, US Bancorp, PNC are probably all listening.
And those who sell products and services to the financial community would be well served by making sure their prospect lists and business relationships have cast a wide enough net to take advantage of a moving, changing landscape that is sure to accelerate in the not too distant future.