A Case Study of Industrial and Commercial Bank of China(ICBC) Overseas Business Development and Cross-border Mergers and Acquisitions

Abstract

By market value, Industrial and Commercial Bank of China(ICBC) is the largest commercial bank and possesses the largest client base. ICBC has gone through 21 years of development. In terms of many core metrics such as total property, total capital, core capital, and, business profits, ICBC is a leader in the domestic market. ICBC is incomparably superior to other internationalized banks in China. Over the years, owing to ICBC’s ability to adapt to economic globalization and financial integration, it has actively promoted the international development strategy. ICBC overseas branches provide a full range of trade finance services, personal pre-settlement remittances for foreign institutions and IPO customer service. These services provide convenience to not only Chinese enterprises overseas and at home but also foreign enterprises and individuals that have trade contacts with China. Branches actively cooperate with local well-known enterprises, mutually profiting and creating common progress and development. Every branch adapts to the business characteristics of each country. By the end of June 2012, ICBCs overseas business network extended to 34 countries and regions, with a total of 252 overseas branches, but the property and profit of ICBC’s overseas organization accounted for 5% of the banks total assets and gross profits. In the initial stages of the M&A activities, ICBC was very active in the Hong Kong market. ICBC’s two large M&A initiatives in the Hong Kong market and the M&A activities involving the Bank of East Asia (America) are very representative of the bank’s M&A efforts. Because ICBC has many customers and focuses on several business areas, ICBC can take advantage of its position as the largest commercial bank in China to become a global market leader by conducting cross-border mergers and acquisitions to expand overseas operations.