Bank of China and the Industrial and Commercial Bank of China (ICBC), two major financiers and lenders to shipping, have obtained licences to set up branches in Greece.
Bank of China, one of the world’s biggest shipping lenders, already launched its Athens operation on 1 November, the Greek central bank said in a statement on Monday. It will reside in Greece’s tallest building at 2 Mesogeion Ave.
ICBC, a force in ship leasing, obtained a Greek operating license on 25 October, the Greek central bank added.
“Shipping has probably been a top driver of their decision to set up shop here,” a local ship finance player told TradeWinds.
With a maritime portfolio of $16bn, Bank of China was the world’s fourth-biggest shipping lender last year, according to estimates published last month by Athens-based Petrofin Research.
ICBC is the market leader in ship finance leasing with a portfolio of $12bn. Chinese leasing has become ever more popular with Greek and Turkish owners, such as Evangelos Pistiolis, Evangelos Marinakis and Lucien Arkas, who have already clinched such deals.
“Having a local presence will help the Chinese pursue even more business here,” the ship finance player said.
The announcement of Bank of China’s and ICBC’s new Greek branches comes as part of intense, top-level diplomatic activity between the two countries. Earlier on 4 November, Greek prime minister Kyriakos Mitsotakis met Bank of China president Liu Lange during an official visit to Shanghai. China’s president Xi Jinping, whom Mitsotakis also met on the same day, will return the Greek prime minister’s visit with a trip to Athens on 10-12 November.
In exchange for Greek owners' fat newbuilding orderbook in Chinese yards, Mitsotakis tries to convince Xi to fork out some part of the ships' equipping business to Greek firms. The Greek government also counts on state-controlled shipping giant Cosco, which controls Piraeus Port, Greece’s biggest, to provide jobs in the area.
Shipping, however, is only part of Greek-Chinese business ties. Chinese firms are active in Greece’s privatisation programme and real estate market. Chinese firms have snapped up control of the country’s power distribution company and are interested in buying its biggest insurer.
The Athens property market has been heating up as Chinese buyers flood in to buy real estate, probably as part of efforts to circumvent capital controls imposed by Beijing and to qualify for a European Union passport under Greece’s citizenship program.
Bank of China's and ICBC's Greek branches are therefore expected to also engage in such business areas. According to a Greek government briefing released on Monday, Bank of China’s Athens unit will help finance renewable energy projects in particular.
