The Industrial and Commercial Bank of China said the bank has decided to diversify away from Australia’s mining sector and instead focus more on the agricultural sector.
Han Ruixiang, head of local operations of Industrial and Commercial Bank of China (ICBC), said the bank has decided to diversify away from Australia's mining sector and instead focus more on the agricultural sector.
"We have anticipated there could be some troubling times ahead for the resources sector and we are starting to diversify into the agricultural sector," he said in The Australia.
"For us it's a strategy of development. We are a commercial bank and it is not appropriate to be focused on one sector only. We believe there's going to be a slowdown in mining projects."
Based in Beijing, ICBC is not only China's biggest bank but also the world's largest bank as well with a market capitalization placed at $US240 billion (A$227 billion).
"As a commercial bank we realized we need to diversify away from resources," Mr Han said, stressing financial backing for projects in the mining sector will be stalled amid the ongoing volatility of commodity prices in the world market.
"I don't think it will be a severe slowdown, I think existing projects will be managed," he said. "The slowdown I would anticipate would be in new projects in the resources sector.
Over the past years, ICBC has formed partnerships with the top four Australian banks as well as the Macquarie Group. It has given financial support for the development of the $5.7 billion desalination plant in Victoria as well as the $3.2 billion worth renovation of the Royal Adelaide Hospital. It likewise extended funding to Newcastle and Queensland-based coal loading projects which is included in a $15 billion worth of business that it has financed since 2008.
"ICBC is especially well-placed to know whether or not the Australian mining boom is on track to lose momentum, as it is a Chinese state-owned bank both privy and beholden to the decisions of the China's policy-making elite," www.mining.com noted.
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