FIRST Union National Bank of the United States has become the first American regional bank to venture into a partnership with an Asian bank when it set up a joint-venture deposit-taking company (DTC) with the Hongkong Chinese Bank (HKCB).
The territory's banking sector has for a long time seen giant American global banks such as Citibank and Bank of America roaming the region, but American regional banks' presence is a rare sight.
This equal joint venture, with an initial paid-up capital of $25 million, is a cost-efficient way for this growing regional bank to expand its network to Asia and a conduit where HKCB's customers can enjoy swifter banking service in the Americas.
Located in the HKCB office premises in Lippo Centre, the new DTC will focus on trade finance.
HKCB has 65 per cent of its loan portfolio in trade finance and First Union Bank is also a predominately commercial bank, with a trade volume this year of about US$4 billion, up sharply from $1 billion two years ago.
'We have a large number of companies which will likely become importers and exporters and users of the capital market,' said Daniel Mathis, vice-chairman of the First Union National Bank.
