ICBC Bank may partake in Russia’s yuan bond issues

MOSCOW, Dec 1 (PRIME) -- ICBC Bank, a Russian unit of Industrial and Commercial Bank of China Limited, may participate in the issues of yuan–denominated Russian state bonds and bonds of local companies, ICBC Bank President Li Wencong told PRIME on Thursday.

“We also have projects on Russian yuan-denominated bonds issues. This is about issues of government bonds and bonds of Russian companies,” he said.

The bank is working together with the Finance Ministry and the central bank on an issue of yuan-denominated bonds on the Moscow Exchange, whose volume is not yet clear. “We have received a securities license specifically for the project. We have also created a group to work with securities specifically for the project.”

“Speaking of placements – in China or on the Moscow Exchange – the second option is more difficult, as under this option Chinese investors should definitely know Russian rules, legislation and the Russian language,” he said.

ICBC Bank also plans to offer help to Russian companies in placement of shares on the Chinese market in the long run. But right now, the most comfortable option for Russian companies is issuing of Panda bonds in China, as the country has many investors and cost of placement is low.

“Right now, we have many Russian companies asking us questions about placing yuan bonds in China. We are helping them with setting contacts with Chinese regulators,” he said.

Previously, the bank was approved as the yuan clearing center in Russia, making promotion of the yuan on the Russian market its obligation. ICBC Bank has plans to develop and promote banking products for settlements in national currencies between the bank’s partners and China with Russia, which will help minimize ruble volatility risks, like a ruble–yuan swap, he said.

ICBC Bank also plans to boost its equity by almost fivefold to about 11 billion rubles, and it is already undergoing approval procedures. The bank has already received preliminary approval of the central bank, he added.

(65.2382 rubles – U.S. $1)

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