Scotiabank, Canada's second-largest lender by market value, upgraded its representative office in Shanghai to a full-service branch yesterday.
The move, taken in order to further tap the multinationals' financing needs, is part of the bank's two-pronged strategy to target both organic growth and acquisitions.
The branch will be the hub for Scotiabank foreign exchange and treasury services in China, as well as offering loans and deposit-taking services to Chinese and international companies, with a focus on trade finance.
"Establishing a branch in Shanghai is a demonstration of our organic growth and there's great organic growth potential for us in China," said Robert H. Pitfield, executive vice-president of International Banking at Scotiabank.
Pitfield was quick to add the bank would expand via acquisition or joint ventures as long as opportunities emerged and the lender was "absolutely interested in taking a stake in a second Chinese bank" besides the Xi'an City Commercial Bank, of which it owns a minority stake.
With more than 20 years of experience in China, Scotiabank has the largest presence on the Chinese mainland among all Canadian banks.
It currently has three branches in Guangzhou, Chongqing and Shanghai and a representative office in Beijing, employing 60 people and providing services including loans, deposits, trade finance and cash management for business banking and trade.
It is also said the lender is in talks with the Dalian City Commercial Bank in Northeast China's Liaoning Province to have a stake in the latter.
As the banking sector will soon fully open, China has seen quickening network expansion from foreign banks.
Glitnir Bank, headquartered in Iceland, will set up its first representative office on the mainland in Shanghai today.
The bank focuses on niche markets worldwide, specializing in seafood, sustainable energy and offshore supplies.
The most active foreign lenders in China will also enforce their presence.
Europe's biggest bank by assets, HSBC, had plans for more than 30 outlets by the end of this year and would recruit at least 1,000 employees a year over the next two years to support its expansion, which includes corporate and private banking services.
China's economy grew at a rate of almost 10.9 per cent in the first half of 2006, faster than last year's growth rate of 10.1 per cent in the same period, according to official figures. The savings pool in the country is estimated by some to be about US$1.7 trillion, with less than 1 per cent of that figure actively invested.
