East India Company: Tata looks East for Finance
Eastern money now fuelling Asia's growth. Asian firms now looking within Asia to financial services.
Economic Times reports In the summer of 2013, Ratan Tata took along his successor Cyrus Mistry to Beijing to introduce him to senior bankers and government officials in the Chinese establishment. High on the agenda were one-on-one meetings with Hu Huaibang, chairman of China Development Bank, the country's largest offshore lender and the world's largest 'policy bank', and Jiang Jianqing, chairman of Industrial & Commercial Bank of China (ICBC), the world's largest lender by market capitalisation and assets. This was the first serious business engagement that Mistry had with Chinese banking heavyweights after taking over as Tata Group chairman. Nearly two-and-a-half years later, on Wednesday, Tata Sons and ICBC announced a long-term alliance.
Chinese lender will emerge as a strategic banking partner to the $108-billion salt-to-software conglomerate and help it further diversify its funding pool to fuel its future growth, especially in the backdrop of several European banks shrinking their balance sheet exposure in India and other emerging markets.
Under the omnibus agreement, ICBC will emerge as a strategic banking partner to Tata group companies in India, China, Singapore, Europe, the US and South America, offering the entire suit of financial products and services such as global cash management, consulting, international trade finance business, investment banking, foreign exchange and derivatives trading. ICBC will also create a global service team which will support Tata group's strategic development plans. On its part, the Tata group will consider proposals from ICBC and solicit its participation on bilateral transactions and tender offers, the Indian business house said in an announcement without divulging specific details. "We have been present in India since 2011 - the only mainland Chinese bank to have a branch presence here - adding value to Indian and Chinese corporates that are present here by offering the entire range of banking products.