Germany’s Commerzbank and the Industrial and Commercial Bank of China (ICBC) have joined forces to explore investment opportunities in President Xi Jinping's Belt and Road Initiative (BRI).
Commerzbank said it aims to invest $5 billion worth of BRI related projects for the next five years, as it looks to guide clients in their investment ventures abroad.
Funding will include in the form of trading financing, asset management, corporate advisory, and transaction banking, to name a few.
Currently, Commerzbank is the only German bank that is in agreement with ICBC. The duo have a banking relationship spanning over 20 years, where they have worked on numerous deals together.
Most recently Commerzbank acted as bookrunner on ICBC term loan facility and bond issuance in 2018.
Commenting on the partnership, Nick Johnston, Asia regional board member of Commerzbank said: 'We are delighted to partner with ICBC to further support projects along the Belt and Road route.
‘Through this framework we are building on our international reach in more than 50 countries offering more flexible funding, investment and risk management opportunities for our clients across the Belt and Road route,’ he added.
China, for instance, is a big market for the German economy. Both countries are also long-term trading partners. In 2017, China topped Germany’s foreign trade rankings with total trading value of EUR 186.6 billion.
The BRI route, which expands maritime routes and land infrastructure networks connecting China with Asia, Africa and Europe, creates significant opportunities for the Germans.
It has also captured the attention of several other economies including private banks who have been recommending BRI for investment.
Commerzbank economists expect foreign direct investment from China to BRI countries to have doubled to $25 billion by 2020.
In China, Commerzbank operates in the corporate clients segment supporting Chinese and European corporates with an integrated set-up of capital markets business and corporate banking.
It opened its first representative office in mainland China in 1981, followed by other branches in Shanghai, Beijing, and Tianjin in subsequent years.