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ICBC, CITIC Bank Form Partnership
China's largest State-owned commercial bank and a major shareholding bank signed an agreement yesterday to form an all-round business co-operation in a bid to sharpen the competitive edge in the white-hot financial market.
According to the agreement signed by the Industrial and Commercial Bank of China (ICBC) and the CITIC Industrial Bank, the two banks will share each other's resources in all fields, including capital settlement, financing, fund clearing, agent and bank cards.
The pact will help CITIC bank, who has formed a set of advanced management and operation mechanisms, to expand business at a low cost, said Jiang Jianqing, ICBC president.
For example, holders of CITIC cards can now use them at any of ICBC's outlets. This has greatly compensated CITIC's weakness in network resources. Meanwhile, ICBC can also use CITIC's resources to bolster its weaknesses.
"This is the first time that China's domestic banks have become each other's agent bank and conducted all-around co-operation," commented Dou Jianzhong, CITIC bank president, yesterday. "We now have changed from competitors to partners." He added that this has already become international practice.
The co-operation had been planned for a number of months by the top officials of the two banks. ICBC's Jiang said that the co-operation will boost mutual development of the two banks under fierce competition.
The move by the two banks shows that China's financial sector is no longer self-closed, remarked Zhang Xiao, former ICBC president and now the vice-board chairman of CITIC.
"I can see that China's financial institutions have opened their doors to each other as the country's entry to the World Trade Organization (WTO) is impending, so as to be better prepared for the new challenges," Zhang commented yesterday at the signing ceremony.
The ICBC has launched an all-out battle to form alliances with both domestic and international financial institutions.
In the last fortnight, it had chalked down co-operation agreements with the United States-based Bank of America and State Street Bank, China's largest policy bank State Development Bank, and a major insurance company, the Ping An Insurance Co of China.
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