ICBC continues Middle East expansion

To open branches in Saudi Arabia and Kuwait, and invest in South Africa.

International and Commercial Bank of China, the country’s largest lender, said it has received approval to do business in in Saudi Arabia and Kuwait. It also said it has gotten local regulatory approval to buy a controlling stake in the Argentine unit of South Africa's Standard Bank, its longtime partner in Africa and Africa’s largest bank.

Opening branches in Saudi Arabia and Kuwait will allow ICBC to expand into those markets by offering renminbi settlement services for the huge amounts of oil that China buys from the region each year.

Most oil purchases are currently in US dollars, but both Saudi Arabia and Kuwait would almost certainly welcome some purchases using the renminbi to diversify their foreign currency holdings as the dollar steadily depreciates.

This Middle East expansion is just the latest move abroad for ICBC, following forays into Latin American and Asia. ICBC is also becoming a major player in Africa through its tie-up with Standard Bank.

Analysts believe the expansion could make ICBC China's first truly global player in the next 5 to 10 years as it leverages its leading position at home and experience in emerging markets and renminbi-related services.