The Chinese banking sector has grown strongly in recent years, with the likes of Bank of China and Agricultural Bank of China both expanding their operations to become leading players in the Asia-Pacific market. Having now established themselves domestically, these banks are now looking to branch out and open representative offices overseas.
In fact, if Chinese banks go on to become major forces internationally, 2012 may come to be seen as something of a watershed year for the country’s financial services industry as it has so far seen a flurry of expansion activity.
Last month, Agricultural Bank of China announced plans to open a representative office in Vancouver, Canada in response to increased Sino-Canadian bilateral trade. Although the bank already has financial relationships with 11 Canadian banks, the opening of an office in Vancouver represents the company’s first standalone operation in the country and will be its second office in the Americas following approval for aNew Yorkbranch granted in May of this year. This is the latest stage of a planned overseas expansion following the opening of a branch in Seoul, South Korea Banand the establishment of a UK trading arm.
Agricultural Bank of China is not the only Chinese bank to demonstrate such ambitions. Bank of China was this week given a licence by the Central Bank of Kenya to open a representative office inNairobi, a move which the bank describes as a likely first step towards a full East African operation. The bank already has an established presence in Zambia and South Africa, but an office in the Kenyan capital will give it the opportunity to serve customers in an area of Africa which is popular with Chinese companies looking to expand into the continent.
The Industrial and Commercial Bank of China is also looking to grow its footprint and in May of this year, it announced that the Polish Financial Supervision Authority had given it the green light to open a branch in Poland, meaning that it will not be left behind.
Such strategic plans of expansion from Chinese banks coincides with the increasing internationalisation of the country’s currency, RMB and show that China’s banks are no longer satisfied with being the main players in the domestic game. Can they truly rival the American and European behemoths? Time will tell.
Access our Banks in China industry profile to gain top-line qualitative and quantitative summary information including: market size (value 2007-11, and forecast to 2016). The profile also contains descriptions of the leading players including key financial metrics and analysis of competitive pressures within the industry group.