BEA aims to cooperate with small Chinese banks
Bank of East Asia (BEA) opened a branch in Hefei, Anhui province last month, which is its 61st office on the mainland.
BEA, Hong Kong’s fifth largest lender by market value is now looking at cooperating with smaller Chinese banks to widen its deposit base and to fund its growing renminbi business on the mainland.
According to BEA’s chairman and chief executive David Li, they have planed to attract deposits through offering better services, rates and bonus points to people. That is why they have both debit cards and credit cards to widen the cash and fund channels.
BEA is one of the first locally incorporated foreign banks interested in buying into smaller Chinese banks. Other foreign banks that have a big presence on the mainland, including HSBC and Citibank, have also bought into Chinese lenders, said Li.
They have already looked at more than 20 city commercial banks and rural cooperatives on the mainland, and they would make sure that whatever they buy into will benefit both parties, Li added.
Although foreign banks are allowed to acquire only a 20% stake in a mainland bank, BEA would insist as a precondition that it should have a voice in important decisions.
The bank is also keen on the potential partner’s management and expects the partner to have its accounts audited by one of the big four international auditing firms, Li said, they are discussing with several potential targets. He added that many banks in the trouble of credit crunch are looking for partners.
BEA issued its yuan-denominated credit card on the mainland last month. It is also the first overseas bank to introduce its own debit cards on the mainland in the in 2007.
Li said banking is a business of trust, and they will tend to be more of a local bank rather than a foreign one as time goes by because most of their staffs are mainlanders.
Li also said currently the most important thing for banks is to keep sufficient reserves in uncertain times because of the unpredictability of the crisis.
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