Global ex­pan­sion

Chang­ing strate­gies pur­sue global ex­pan­sion amid in­ten­si­fied do­mes­tic com­pe­ti­tion

China Daily (USA) - - FRONT PAGE - By JIANG XUEQING jiangx­ue­qing@ chi­nadaily.com.cn

Bank of Com­mu­ni­ca­tions opens branches in Europe.

Bank of Com­mu­ni­ca­tions Co Ltd, China’s fifth largest com­mer­cial lender by as­sets, an­nounced on Thurs­day it will open three branches for busi­ness in Lux­em­bourg, Rome and Paris in Novem­ber, fol­low­ing the open­ing of a branch in London on Wed­nes­day.

The bank will also com­plete its ac­qui­si­tion of a con­trol­ling stake in the mid­size Brazil­ian bank Banco BBM SA this month, which is the first step for the bank to ex­pand its busi­ness in Latin Amer­ica.

When this ex­pan­sion is com­plete, the bank will have 20 over­seas branches in 16 coun­tries and re­gions. Cur­rently, it is wait­ing for Canada’s reg­u­la­tory ap­proval for the es­tab­lish­ment of a branch in Toronto, after get­ting the green light from China’s bank­ing reg­u­la­tor. The bank will fur­ther ac­cel­er­ate the con­struc­tion of its global net­work by launch­ing branches in the Czech Repub­lic, In­dia and South Africa.

“Over­seas branch de­vel­op­ment is an im­por­tant part of our bank’s trans­for­ma­tion, as net in­ter­est mar­gins keep shrink­ing,” said Wang Jiang, vice-pres­i­dent of Bank of Com­mu­ni­ca­tions. “We’re try­ing to pro­vide cross-bor­der, cross­sec­tor and cross-mar­ket com­pre­hen­sive ser­vices through the ex­pan­sion of our global net­work.”

As of the end of Septem­ber, to­tal as­sets of the bank’s over­seas in­sti­tu­tions reached 791.76 billion yuan ($116.2 billion), ac­count­ing for 9.78 per­cent of the to­tal as­sets of the bank and its sub­sidiaries. The net profit of its over­seas in­sti­tu­tions in­creased by 25.35 per­cent year-on-year to 4.09 billion yuan.

Large Chi­nese banks are speed­ing up their global ex­pan­sion amid in­ten­si­fied do­mes­tic com­pe­ti­tion and a tran­si­tion of the bank­ing sec­tor, along with in­creas­ing de­mands for over­seas merg­ers and ac­qui­si­tions by Chi­nese com­pa­nies.

The In­dus­trial and Com­mer­cial Bank of China Ltd, the na­tion’s largest com­mer­cial lender, opened a branch in Bris­bane in Septem­ber, which is the bank’s fourth branch in Aus­tralia. Dur­ing the same month, Bank of China Ltd be­came the first Chi­nese bank li­censed to con­duct bank­ing op­er­a­tions in Mau­ri­tius with the open­ing of a sub­sidiary in that coun­try.

Tian Guoli, chair­man of Bank of China, said at a global M&A sum­mit on Tues­day: “As the cross-bor­der M&A by Chi­nese com­pa­nies has en­tered a new stage, it is push­ing for­ward the trans­for­ma­tion and up­grad­ing of China’s financial sec­tor.”

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