ICBC opens its first branch in Montreal
The opening of a new branch in Montreal by the Industrial and Commercial Bank of China (ICBC), the country’s largest bank, will mean a strengthening of the trading partnership between Canada and China, said the bank’s chairman.
“As the only Chinese Central Bank designated an RMB clearing bank in North America, we look forward to supporting Montreal’s local businesses and adding value to existing financial parties,” Jiang Jianqing said in a May 29 statement announcing the opening of the new branch.
The bank’s expansion will also help Chinese businesses tap into the North American market, he said.
Denis Coderre, the mayor of Montreal, said the arrival of ICBC in Greater Montreal would “reinforce” the city’s financial prospects on the international front while also “strengthening” ties with the world’s largest economy.
China is Canada’s secondlargest trading partner, behind the United States, data from the Canadian government shows.
ICBC is the largest of the four Chinese state-owned commercial banks, ahead of the Bank of China, Agricultural Bank of China and the China Construction Bank. ICBC’s Canadian subsidiary already has nearly 10 branches in Canada.
ICBC provides financial services to over 4.6 million businesses and 400 million clients in 42 countries and regions across the world. As of March 2014, the bank had assets that exceeded $3.32 trillion.
In November, the People’s Bank of China authorized ICBC’s Canadian affiliate in Toronto to act as a clearing bank for the yuan, also known as the renminbi (RMB). The move took effect in March, signaling the first time that China’s central bank had ever designated an RMB clearing bank in North America.
Toronto joins London, Frankfurt, Luxembourg, Hong Kong, Singapore, Sydney and Taiwan as officially recognized trading hubs.
A trading hub minimizes the cost of transactions for Canadian firms doing business in China because it negates the need to transfer funds from dollars into yuan.
An October 2014 study by the Canadian Chamber of Commerce estimated that allowing direct trade in the yuan could save Canadian firms up to C$6.2 billion (US$4.96 billion) over 10 years.
The bank’s decision to open a branch in Montreal shows that “Quebec and China have strong economic ties,” said Carlos Leitão, Quebec’s finance minister.
“This special relationship is a key asset for Quebec businesses looking to enter the vast Asian market,” Leitão said. “The move also confirms Montreal’s status as a leading financial hub in North America and shows that Greater Montreal has a vibrant economy that draws the attention of top players. I am confident that it will only grow stronger.”
Dominique Anglade, president and CEO of Montreal International, the region’s leading investment promotion agency, said: “Greater Montreal is focusing increasingly on Asia as a strategic destination for business opportunities, so it is essential that we bolster investments and trade between our two countries.”