Deutsche Bank China head Zhang to join ICBC
Lee Zhang set to become ICBC’s vice president
* Zhang’s appointment subject to Beijing’s approval
* China wants influential Chinese to return to help SOEs
* Deutsche Bank shares up 0.3 pct in line with peers
(Adds sources’ quotes, more details, background)
By George Chen and Zhao Hongmei
SHANGHAI/BEIJING, March 19 (Reuters) – Lee Zhang, China head of Deutsche Bank AG (DBKGn.DE), Germany’s top lender, is set to take a senior role at Industrial & Commercial Bank of China (1398.HK), according to people familiar with the matter.
The sources said the appointment is expected to receive final government approval in the next few weeks, part of Beijing’s plan to attract influential Chinese away from leading Western firms to drive expansion inside major state-owned enterprises.
Zhang has been in talks for several months with senior Chinese government officials and the management of ICBC.
“There will be more to come back as Beijing is eager to push the trend,” said one of the sources.
“It does make sense for big enterprises like ICBC. You are already the No. 1 in the world (by market value) and of course you also need No. 1 talent to work for you,” he added.
The departure is a blow for the Frankfurt-based lender which in December unveiled ambitious profit targets to reach 10 billion euros in pretax profit by 2011, in part based on its ability to drive revenue growth in Asia.
Deutsche wants to raise revenues in Asia Pacific excluding Japan to around 4 billion euros by 2011 from around 2.1 billion euros in 2008, mainly by focusing on organic growth. [ID:nWEA5547] [ID:nWEA5552]
Deutsche already has a joint venture in China with Zhong De Securities, with plans to reach a market share of 5 to 8 percent within three to five years. It recently raised its stake in Hua Xia Bank (600015.SS). [ID:nSHA137769] [ID:nSHA199464]
The sources said Beijing-based ICBC (601398.SS) agreed to hire Zhang as its vice president, but the appointment must be approved by the Organization Department of the Communist Party of China (CPC) Central Committee, a process that could still take several weeks.
Sources at Deutsche Bank told Reuters that Zhang is still working in the bank this week. Spokesmen at ICBC and Deutsche Bank declined to comment on the matter. Zhang’s mobile phone went unanswered.
The sources declined to be identified because the hiring process is private and confidential.
WELCOME TO BEIJING
Zhang, a long-time banker for Western financial institutions, helped Deutsche Bank launch its investment banking joint venture in China, allowing the European lender to help Chinese clients underwrite shares and debt in fast-growing domestic markets.
Zhang, Group Chairman of Deutsche Bank China and Head of Global Banking Asia-Pacific excluding Japan, also helped Guangdong Development Bank, a mid-sized Chinese lender once in deep financial trouble, to strike a $3.1 billion deal with a Citigroup-led (C.N) consortium in a landmark foreign banking investment in China in 2006.
In Beijing, Zhang is already well known among top Chinese leaders since he is a delegate to the Chinese People’s Political Consultative Conference (CPPCC), China’s top political advisory body.
As a CPPCC delegate, an honoured political status very rarely offered to Chinese people working for Western firms, Zhang has opportunities to meet top government leaders and regulators annually and submit proposals on a variety of issues. If his appointment is approved, Zhang would be the highest profile executive to be lured to a state-owned company under Beijing’s plan to lure top talent from Western banks.
Many Western banks were badly hit during the global financial crisis, and even influential bankers whose compensation has come under public scrutiny may be more open than previously to outside offers.
Meanwhile, China’s fast economic growth has helped big banks such as ICBC grow even more and they are now ambitious for global expansion, providing opportunities for veterans such as Zhang.
Last week, Fred Hu, a high-profile Chinese dealmaker, stepped down as a partner of Goldman Sachs (GS.N) after 13 years with the firm to launch a new private equity fund with help from China Construction Bank (0939.HK) (601939.SS), another of the Big Four state lenders, and other parties. [ID:nTOE6290BD]