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  • Oct 22, 2014
  • Updated: 1:25pm

ICBC

Founded in 1984, Industrial and Commercial Bank of China (ICBC) is the largest bank in the world by profit and market capitalisation as of 2012. It is one of China's 'Big Four' state-owned commercial banks -- the other three are Bank of China, Agricultural Bank of China, and China Construction Bank.

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FOREIGN EXCHANGE

ICBC to start clearing yuan in Singapore from Monday

PUBLISHED : Saturday, 25 May, 2013, 12:00am
UPDATED : Saturday, 25 May, 2013, 2:53am

Industrial and Commercial Bank of China will provide yuan clearing in Singapore to financial institutions from Monday.

ICBC's Singapore branch said it would start yuan clearing bank services for participating banks.

That might divert some yuan flows from Hong Kong because another yuan clearing bank in addition to Bank of China (Hong Kong) can now provide the service, said Woody Chan, Citic Bank International's executive vice president and treasurer.

"Users of yuan will look for a participating bank that can meet their demands, rather than just having a clearing bank nearby," Chan said.

He added banks in Hong Kong have much experience dealing with yuan.

Guy Harvey-Samuel, chief executive of HSBC in Singapore, a participating bank in the city state, said it had already received requests from customers in Singapore to conduct yuan transactions with China via the new clearing facility.

"The use of yuan will increasingly become part of day-to-day business for anyone trading with or investing in China," he said.

With the availability of competitive yuan clearing, the increase in volume of yuan-denominated trades through Singapore would deepen the overall pool of yuan liquidity outside China, which would in turn accelerate the development of new offshore yuan products and services, Harvey-Samuel said.

Live clearing in Singapore represents a major milestone in the development of the yuan as Singapore is widely expected to serve as a gateway for the use of yuan in Southeast Asia, as it is the primary financial, commodities, and currency trading hub in the region.

"As trade flows between China and Southeast Asia continue to grow, it is natural that more companies will consider using the yuan as their currency of choice for bilateral trade," Deutsche Bank's head of global transaction banking in Asia Pacific Lisa Robins said.

Deutsche Bank said that it had executed the first Singapore dollar/offshore yuan spot trade cleared in Singapore, on behalf of a commodities company.

The People's Bank of China said in February that ICBC, the world's biggest bank, would be the clearing bank for the offshore yuan business in Singapore.

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