ICBC aims to grow assets managed by Hong Kong unit in global expansion push

The asset manager has signed cooperation agreements peers including BlackRock and Goldman Sachs Asset Management Asia

PUBLISHED : Thursday, 19 October, 2017, 9:36pm
UPDATED : Thursday, 19 October, 2017, 11:07pm

ICBC, the world’s largest lender by assets, aims to expand the scale of assets managed by its Hong Kong asset management unit to HK$300 billion (US$38.45 billion) in three years, tapping the strong demand of overseas asset allocation from China.

The unit, renamed on Thursday as ICBC Asset Management (Global) from ICBC (Asia) Investment Management, would be built as an “integrated global asset management operational platform”, with assets under management to reach HK$100 billion by the end of this year.

“As China’s economy expands, Chinese firms and high-net-worth individuals have a strong demand for global asset allocation,” said Li Dong, assistant chief executive of ICBC Asia, the lender’s Hong Kong-listed subsidiary that owns the asset management unit.

“At the same time, the growth in Chinese enterprises also provides investment opportunities to overseas capital,” said Li.

China’s household financial assets soared 18 per cent last year, making it the world’s second fastest growing country in terms of percentage gains in financial assets, according to a survey by German insurer Allianz.

As China’s economy expands, Chinese firms and high-net-worth individuals have a strong demand for global asset allocation
Li Dong, ICBC Asia

The unit aimed to become the third biggest mainland Chinese asset manager based in Hong Kong in two to three years, said Li. It also plans to double to triple its staff – currently at 30 – in the same period.

But competition is rising, as Hong Kong has seen a surge in mainland Chinese fund managers over the past few years.

The number of mainland-related licensed corporations and registered institutions rose 15 per cent annually over the past two years to 313 by the end of March, a survey by the Securities and Futures Commission published in July showed.

Huge investment and financing opportunities were contained in China’s supply-side reform, the Belt and Road Initiative, and the opening up policy on cross-border finance, said Tan Jiong, senior executive vice-president of ICBC.

The renamed unit would become the product, sales, investment, development and risk management centre of the bank’s global asset management business, Tan said.

The firm intends to lure investors from overseas, and expand existing customer base in mainland China and Hong Kong.

It also plans to develop investment products linked to the Stock Connect and Bond Connect, as well as the Belt and Road Initiative.

The firm on Thursday signed strategic cooperation agreements with domestic and international peers including BlackRock, Goldman Sachs Asset Management Asia, and China Asset Management (Hong Kong).

ICBC has around 400 branches in more than 40 countries. Its Hong Kong-traded shares have climbed 23 per cent since a year ago.