How ICBC Turkey Is Flourishing as an International Bank and Facilitating Stronger China-Turkey Relations

5.6K

By Gao Xiangyang, Chairman of Board of Directors, ICBC Turkey

 

August 4, 2021, marked the 50^th anniversary of the establishment of formal diplomatic ties between China and Turkey, thus highlighting the enduring strength of the relationship between the two countries. Spanning Southeast Europe and Western Asia, Turkey has long been a strategically important partner and market for China. Today, thanks to work being carried out by our bank, ICBC Turkey, we envisage a valuable opportunity to drive this partnership further into a prosperous era.

Indeed, the relationship between China and Turkey has never been more geopolitically, economically or culturally vital than it is today. Turkey’s strategy of becoming a regional hub for transportation and energy, as well as the integration it has already achieved with nearby countries, fully fits in with China’s vision for its important Belt and Road Initiative (BRI)—the global infrastructure-development strategy implemented by the Chinese government in 2013 that aims to invest in nearly 70 countries and international organisations stretching from East Asia to Europe.

In 2015, ICBC Turkey was the first Chinese bank to enter the Turkish market, and since then, we have strived to become a household name for Chinese elements in Turkey. And thanks to the exceptionally strong performance we have managed to register during this time, many Chinese investors and companies have been drawn to the Turkish market to boost their physical and financial presence within the country. Today, we are positioning ourselves as a bank that is not only deeply rooted in the local market but also radiates into neighbouring countries. Indeed, we are now transforming ourselves into an influential international bank as we continue to expand our presence in Turkey and the surrounding region.

We also seek to optimally leverage our advantageous geopolitical position as a crucial link between Europe and Asia. The last few years have seen us formally pursue a strategy focused on developing locally, expanding to neighbouring regions and connecting Europe and Asia. We are primarily choosing to do this by becoming a preferred bank in the Belt and Road Initiative. As a bank with Chinese capital—preferred for supporting Belt and Road Initiatives in terms of stability, innovation and adhering to best practices—we strive to be a model financial institution for Turkey-China financial cooperation and a crucial conduit for cultural integration between the two countries.

ICBC Turkey is firmly focused on increasing our influence in the region of which Turkey is the centre, growing shareholder value and benefitting all stakeholders. Thankfully, Turkey’s position at the juncture of Asia and Europe aptly suits the development of projects in transportation, infrastructure, energy, manufacturing and logistics, all of which fit succinctly with China’s aspirations for the BRI.

One of the main drivers of our growth has been the effective utilisation of the global power, know-how and experience of our parent company, the world’s largest bank: Industrial and Commercial Bank of China (ICBC). Having established an important line of communication with ICBC, we have closely followed up on customers’ appetites and financing needs for investments by conducting operations tapping the powerful influence of our parent’s vast global network. We have also focused on maintaining close cooperation with other ICBC subsidiaries and financial institutions to consistently expand our customer base whilst leveraging the group’s broad, unrivalled product diversity.

Again, Turkey’s highly critical position as a financial and strategic link between Europe and Asia has greatly helped us in this regard, allowing us to pay particular attention to potential business opportunities with at least some connection to China. Our investment-banking business, for instance, is able to effectively provide the most globally innovative investment-banking solutions to our client base of sovereign, corporate and financial institutions, thanks to the resilient partnerships we have formed with our sister ICBC units across the world, including in major financial centres in Asia, Europe, the Middle East and the United States, not to mention our head office in China. The solutions we provide—often involving money and capital markets—enable our clients to adequately satisfy their funding, risk hedging and other financing needs.

Strengthening the Turkey–China relationship is also a key factor underpinning our approach towards customer service. This year, for example, our corporate-banking division organised the first ICBC Global Business Matchmaking platform, which provided a venue for introductory meetings between ICBC staff, customers, trade unions based in Turkey and members of the Turkish Embassy in Beijing. The event facilitated beneficial and constructive ways for our customers and bank staff to cultivate important relationships with China, creating win-win scenarios for the parties involved and offering a new business model that minimises barriers across countries. The platform will not only improve trade and business relations with China, but it will also enable Turkish companies of all sizes to better integrate into global industrial landscapes and supply chains. The first stage of the platform was conducted on March 30 and proved to be hugely successful, with more than 250 participants in attendance.

Our corporate-banking department will also be instrumental in promoting potential companies to participate in the world’s largest import fair, China International Import Expo (CIIE), which will be held in Shanghai in November. The bank has meticulously searched for suitable participants for the Expo, and we will promote those companies operating in the fields of food and agriculture free of charge.

But our commitment towards strengthening relations between China and Turkey has been no more clearly demonstrated than it has been since the outbreak of the coronavirus pandemic. During this period, we have sought to increase our support for Turkey’s economy and its companies with more determination than ever. And by functioning as a bridge between China and Turkey, we have paid particular attention to those sectors that were not only impacted by the pandemic but could themselves affect that bridge as a result of the pandemic, such as aviation and tourism industries. Valuable work has also been carried out to strengthen our ability to access those customers with Chinese elements as well as develop cooperation with municipalities and provide services to Turkey’s leading companies.

Among our most important current targets is to develop ICBC Turkey into the premier financial institution in Turkey for dealing in renminbi (RMB), an objective that we have addressed over the last couple of years. The products and services we offer that are denominated in RMB have garnered much interest from individual and corporate customers as well as correspondent banks and financial markets. ICBC Turkey’s registration as a qualified investor in the China Interbank Bond Market (CIBM) also represents an important step in the bank’s mission to grow its RMB business, such as clearing and deposits, beyond traditional capabilities and supports the efforts we are making to expand RMB transactions.

Technology is also proving crucially important in helping to strengthen the bonds between Turkey and China. At ICBC Turkey, we use digital channels extensively to communicate with current and potential customers, maintaining close contact to inform them of potential business opportunities—especially related to China.

We are pleased to say that we have fully implemented the international strategies set out by our head office and built the preferred Chinese-capitalized pioneer bank of the Belt and Road Initiative. We have carried out our activities with a prudent approach and taken concrete steps towards strengthening financial cooperation between China and Turkey, standing as a leading figure in cultural integration between not only the two countries but those throughout the Eurasian region and beyond. And in less than six years, ICBC Turkey has transformed itself from a local boutique bank to a major international bank, one that has strong growth dynamics throughout Turkey and the surrounding region.

Looking forward, we remain resolute in our commitment to continue our methodical transformation into a fully fledged international financial institution. We are particularly focused on building stronger commercial, economic and cultural ties between China and Turkey. With that in mind, ICBC Turkey’s primary project-financing goal over the coming years will be to strengthen the two countries’ economic relations by building a permanent bridge between their populations. This means we will continue to support Turkey’s development whilst also satisfying the ongoing needs of the Belt and Road Initiative.

Our credentials as an international bank will also be bolstered through our wide range investment-banking activities. Our top priority in this regard will be to grow our project-finance portfolio, especially by supporting more renewable-energy transactions via green-sustainability funds and proactively diversifying our operations in the Turkish market. Additionally, we will be expanding our work in supporting economic development and welfare in neighbouring countries as well as continuing to boost our investment-banking footprint in the Middle East and North Africa (MENA). We intend to achieve this through more activity in mergers and acquisitions (M&As), initial public offerings (IPOs), debt capital markets (DCMs) with a particular focus on renminbi-denominated bond markets, syndicated lending and project finance.

Such activities will further help ICBC Turkey bolster trading volumes between China and Turkey, thus bringing the economic relationship to new, unprecedented heights. And as we continue to be well supported by ICBC’s vast global network over the coming years, we can expect the bonds between China and Turkey, as well as the surrounding geography, to grow stronger than ever.