Bank harnesses Nanyang Commercial to carry out yuan retail banking business
Bank of China (Hong Kong), whose Nanyang Commercial Bank subsidiary has applied to be incorporated in the mainland, might be adopting a China expansion plan that was less effective than it expected, analysts said.
BOCHK, the local unit of Bank of China, is to use Nanyang Commercial Bank to enter the mainland's yuan retail banking sector, while BOCHK itself will continue to operate as a foreign-funded bank in the country with a focus on corporate banking and foreign exchange business.
He Guangbei, vice-chairman and chief executive of BOCHK, said that a new rule on foreign-funded banks implemented by the China Banking Regulatory Commission offered an opportunity for his bank to integrate and further enhance its mainland business model and strategies.
The rule would also allow the bank to offer more comprehensive services under the group's three brands, Chiyu Banking Corp being the third.
BOCHK has 14 branches and sub-branches in the mainland under its three Hong Kong-incorporated banking units. The lender and Nanyang Commercial have six each while Chiyu Bank has two.
'The scope for business development in the mainland market is therefore greatly expanded, which will naturally translate into higher value for the group's shareholders,' Mr He said.