ICBC to be first Chinese bank awarded UK branch licence

ICBC currently has operations in London through a subsidiary, but a bank branch licence would allow it to significantly increase the amount of business it transacts, as well as allowing it to lend greater amounts due to different capital restrictions.

In its most recent annual report, ICBC said that it welcomed a number of initiatives announced by the British and Chinese governments last Autumn.

"The most welcome was the announcement in October by the Chancellor of the Exchequer that the Prudential Regulation Authority will allow our Chinese banks to establish branches in London as soon as the regulatory details have been agreed," read the report.

"This is something for which we have campaigned for some time. In ICBC (London) plc, as a locally constituted subsidiary, we are constrained in our lending by the amount of our local capital," it continued.

Mark Boleat, the chairman of the policy and resources committee of the City of London Corporation, said he is aware that ICBC "would like to operate through a bank branch licence".

He continued: "The Treasury consider it a priority, and are looking at this in some depth." Although he stressed that the granting of a licence "would be a very welcome development", Mr Boleat did say that he thought regulators would be very thorough in their approval process, just as with any other application.

Changes to the bank branch licensing were announced in October last year, when the Chancellor said that the UK would ease its banking rules for any non-European bank that wanted to set up investment banking operations in London.

Coming after a series of British ministerial visits to China, it was aimed at Chinese banks keen to expand their operations in the Square Mile. In addition to ICBC, China Construction Bank is also said to have begun the application process.

A PRA spokesman could not be reached for comment.

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