BOC opens new UK outlet
Updated: 2007-11-21 23:40
BEIJING - The Bank of China on Wednesday held an opening ceremony for its new outlet in London which provides retail services to local individuals and companies.
With registered capital of 200 million pounds, the new outlet will focus on services including bank card and consumption loans, targeting middle-class and high-end locals as well as Chinese people living in London.
On the heels of the new launch, a lending center covering the European market will soon be set up in London, said Zhang Yanling, vice president of the BOC.
The second biggest Chinese lender's expansion was part of the ongoing "go-out" move of major Chinese banks. With abundant capital raised from share offering, the banks started to eye the international market.
Within merely one year, the BOC launched a string of new branches and other outlets in Indonesia, Vietnam, Canada, Brazil and Russia.
As China opens its financial market to overseas investors, local banks have to face heatening competition against their foreign rivals domestically.
A new choice for Chinese banks was to develop outwards.
"Reform in recent years has resulted in improved corporate governance and risk control at Chinese banks, enabling them to go out," said Guo Tianyong, a professor of banking industry with the Central University of Finance and Economics.
Excess liquidity and tightening monetary policy in China also pushed them to seek for new profit sources, he said.
The Chinese banks have already accomplished a lot on their way of overseas expansion.
The BOC now has 669 overseas branches in 28 countries and regions, which contribute 40 percent of its net profits. The Industrial and Commercial Bank of China (ICBC), the world's No. 1 lender by market value, has become an international player with more than 100 branches in 13 countries and regions.
"Overseas business is of vital importance against the background of globalization," said Zhang Jianguo, president of the China Construction Bank (CCB), but adding the Chinese banks are still "at the preliminary stage."
The ICBC said it aims to increase the contribution of its overseas business from the current 3 percent to 10 percent of its total profit.
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