Industrial and Commercial Bank of China (ICBC) to provide banking services in New Zealand

The bank will operate under ICBC and ICBC (New Zealand) Limited.
The bank will operate under ICBC and ICBC (New Zealand) Limited. Photo credit: Getty.

The Industrial and Commercial Bank of China Limited ('ICBC') is now registered to provide banking services in New Zealand.

A New Zealand subsidiary of ICBC was registered to provide banking services in November 2013. 

The Reserve Bank on Monday said ICBC will operate in New Zealand as a branch. Under its dual registration policy, it expects ICBC to operate under both the branch and the subsidiary, but there will be limits on the type and volume of business conducted through the branch.

"The branch is expected to expand and complement banking services provided in New Zealand by the subsidiary, including facilitation of wholesale banking services," Reserve Bank spokesperson Brendan Manning said.

There are currently 27 banks registered in New Zealand.

Banks operating as branches of overseas-incorporated banks include: Australia and New Zealand Banking Group Limited, Bank of China Limited, China Construction Bank Corporation, Citibank N A, Commonwealth Bank of Australia, JPMorgan Chase Bank NA, Kookmin Bank, MUFG Bank, Ltd, Coöperatieve Rabobank U.A. trading as Rabobank Nederland, The Hongkong and Shanghai Banking Corporation Limited and Westpac Banking Corporation.

Both ICBC and ICBC (New Zealand) Limited are rated 'A' by credit rating agency Standard & Poor's. 

A credit rating is a independent opinion on a financial institution's relative strength, including capability and willingness to repay its debts. A higher rating, e.g. 'AAA' is superior (having a lower chance of default) to a lower rating e.g. 'C' (a higher risk of default).

According to the Reserve Bank's website, 22 out of 27 New Zealand-registered banks have a rating of 'A' (strong) or AA (very strong) across the three main ratings agencies: Standard & Poor's, Moody's and Fitch.

As at May 2020, New Zealand-registered banks with a Standard & Poor's rating  of 'AA-' are: ANZ Bank New Zealand Limited, ASB Bank Limited, Australia and New Zealand Banking Group Limited, Bank of New Zealand, Commonwealth Bank of Australia, The Hongkong and Shanghai Banking Corporation Limited, Westpac Banking Corporation and Westpac New Zealand Limited.

Savers are advised to check a financial provider's credit rating before depositing money or making investment decisions. Registered banks are required to publish their credit rating in quarterly disclosure statements. This information is also available on the bank or financial provider's website.

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