India's Tata group has struck an agreement to buy loans and financial services from the Industrial and Commercial Bank of China (ICBC), a move that could allow the subcontinent's salt-to-steel conglomerate to push more aggressively into China.
The "long-term partnership," which the $109 billion Tata group announced on Wednesday after market hours, adds one more global client to ICBC's roster at a time of slowdown in China. The move also helps ICBC to take advantage of the space ceded by some European banks that are looking to tighten their businesses, India's Economic Times newspaper reported, citing various bankers.
The group joins other Indian businesses such as Bharti Airtel Ltd., India's largest wireless provider, in seeking money from Chinese banks to chase their global ambitions, the newspaper reported.
Under the partnership, "ICBC will become a strategic banking partner to the Tata group," the Indian conglomerate said in a statement. The alliance will cover geographies including India, China, Singapore, Europe and the Americas. ICBC will provide the Tata group with financing products, global cash management, consulting, international trade finance business, investment banking, foreign exchange, derivatives trading and other global financial services.
Tata group Chairman Cyrus P. Mistry wants the Indian group to be among the top 25 businesses worldwide, by market value, in the next 10 years, selling products and services to a quarter of the world's population. He met with Jiang Jianqing, chairman, ICBC, and his team to formalize the engagement.
Tata group, which includes Jaguar Land Rover, popular in China, derives more than two-thirds of its revenue from sales overseas, with about 610,000 employees operating in 150 countries, according to the group's website.