Deutsche Bank taps into yuan's business potential
Deutsche Bank is keen to expand its yuan business globally to support its corporate and investment banking clients.
"We have seen significant growth in our yuan business over the last two years and continue to see growing interest from European and Middle Eastern issuers and corporates considering the yuan as a currency for both trade and financing," said Alan Cloete, Deutsche Bank's co-chief executive of Asia-Pacific.
The yuan is not fully convertible, but since mid-2009 Beijing has encouraged firms and investors to use the currency to settle trade or to invest. Many banks see this as an opportunity to generate business, and financial centres such as Hong Kong and London are racing to be the main centre for offshore yuan business.
"Our global universal banking model has huge advantages in being able to intermediate global trade flows and capital market activity across the board," Cloete said.
Europe is China's biggest trade partner. But yuan settlements were less than 2 per cent of Sino-European trade, compared with up to 12 per cent of total Chinese external trade, leaving wide scope to expand the yuan settlement business, he said.
Deutsche Bank is also active in the so-called dim sum bond market and part of a bank forum seeking ways to promote yuan business in Hong Kong and London. Others in the forum include Bank of China, HSBC, and Standard Chartered. The group will meet British and mainland officials in London this week.
"With strong support from the UK government, London can help raise visibility for the yuan globally and serve as a major offshore yuan intermediation hub for the world," Cloete said.