XIANGYANG GAO

Turkey 2020 | FINANCE | INTERVIEW

The largest bank in the world, ICBC is looking at channeling funding into projects and companies in Turkey that will create the highest value addition.

Xiangyang Gao
BIOGRAPHY

Xiangyang Gao has been the chairman of the board of directors of ICBC Turkey since 2018 and also serves as chairman of the board of directors of ICBC Yatırım Menkul Değerler A.Ş. He previously served as ICBC Turkey's general manager. Gao has also worked in various positions for ICBC in its Fujian and Ningbe branches. He holds an undergraduate degree and a master's degree in business administration from Beijing University.

What initiatives in Turkey has ICBC Turkey funded, and looking forward, what are the bank's goals in Turkey in relation to Belt and Road Initiative (BRI) projects?
BRI upholds the principles of extensive consultation, joint contribution, and shared benefits. To build the “Belt and Road," ICBC Turkey provided funds to key projects and companies especially in port management such as Kumport (shares are held by Chinese companies), Arkas, and Ceynak. Our bank also provided funds to Turkish Airlines for its operations at the new Istanbul Airport. Moreover, China has become Turkey's third-largest trade partner and second-largest importing country. Turkey is an important market for foreign investments of Chinese public contracting companies. According to the long-term commercial target between the two countries, total trade volume is targeted to exceed USD100 billion in 2020. The integration of the systemic infrastructure between China and Turkey will accelerate trade. The use of cash management products commonly used in ICBC China will also be realized in Turkey.

Can you break down the bank's lending strategy by sector?
As of 3Q2019, ICBC Turkey has TRY9.3 billion cash and non-cash loans in total. Financial institutions—mainly banks but also leasing, factoring, and consumer finance institutions—have the biggest share. They are followed by the energy and real estate sectors. Outside of domestically disbursed loans, ICBC Turkey also became the arranger of about USD2.3 billion in loans from other ICBC subsidiaries to Turkish financial institutions and corporates operating in different sectors such as real estate, construction, aviation, and port management. Moving forward, ICBC Turkey will continue to contribute the development of the Turkish economy by supporting long-term domestic investments through project finance. ICBC Turkey's main strategy is to provide a wide range of services mainly in energy, infrastructure and transportation, real estate, public-private partnership projects, and acquisition financing in order to contribute to the Turkish economy whilst becoming the premier business partner for our customers.

Why is ICBC Turkey's NPL ratio—around 1.5%—considerably lower than the sector average, and how will this benefit ICBC Turkey moving forward?
ICBC is the largest bank in the world and has been operating in Turkey since May 2015 under the name of ICBC Turkey Bank A.Ş. Since its entry to the market, a prudent approach to lending and achieving high asset quality has been ICBC Turkey's priority. In newly established loans, this approach has been instrumental in decision-making. Our teams constantly provide analysis on a macro, sector, and company level. This detailed approach enables us to channel funding into projects and companies that will create the highest value addition.

Over the next 12 months, what are ICBC Turkey's most important strategic plans?
Under BRI, China is committed to promoting open, inclusive, pragmatic, and effective cooperation in third-party markets, so as to help Chinese and foreign enterprises utilize their complementary strengths and achieve a “1+1+1>3" all-win results in which the benefits of three-party cooperation are greater than what the parties can produce separately. Based on consolidating the Turkish market, we will also focus on other credit areas such as Greece, Israel, Azerbaijan, Georgia, and Macedonia, focusing on the BRI project, local major financial institutions clients, and Chinese and Turkish companies operating locally. We welcome other Turkish enterprises to develop those markets jointly with us. On the financial side, our bank will employ the following development plan: steady development and continuous improvement of assets, continuous enhancement of profitability and profit structure optimization, and continue to improve asset quality and increase the risk resilience.