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, Read more…

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banking, BEA, China, crisis, economy, market

The world’s finest banking system is in Canada, tightly followed by Sweden, Luxemburg and Australia. This was revealed by a survey of the World Economic Forum as the world market was bewildered by financial crisis.

But Britain, which used to be included in the top five, has declined to 44th behind EI Salvador and Peru, after its government pledged 50 billion pound into the market to inspire bank balance sheets.

While some of the biggest financial names on Wall Street have Read more…

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banking, Canada, China, finest, system

While many foreign banks are vigorously cutting jobs worldwide amid the US subprime mortgage crisis, they have largely held back the ax in the Chinese market.

UBS, one of Europe’s biggest banking groups who announced 5,500 job cuts worldwide last week, said that the process of reviewing and reallocating resources “will result in a minimal number of redundancies in the region (including China)”.

Posting a $3.6 billion fourth-quarter loss and planning to reduce its workforce by as much as 5% globally over the next few month, Morgan Stanley, the second-largest US investment bank, has not yet laid off anyone in China.

JP Morgan Securities Asia-Pacific, unlike its parent who has trimmed about 10% of its headcount worldwide, is expanding its workforce by hiring more people in the country.

And Citibank China, reporting a 99% increase in operating income, said they “will continue to invest, expand, network, and hire and train people here, because China remains one of Citi’s top-priority markets anywhere in the world”.

There are two major reasons behind the optimism foreign banks have about the Chinese market.

Firstly, China’s capital market is expanding. As China International Capital Corp Ltd’s Chief Economist Ha Jiming has said, “China’s capital market has great potential in several sectors, including investment banking services, wealth management services and innovative product creation, because China still largely needs to develop the stock market and the private equity market.”

Secondly, the derivatives market shrinking in the US is to take off in the country. As Fudan University professor Sun Lijian put it, “dwindling overseas investment opportunities for foreign banks and security firms may cause them to look more closely at China.”

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banking, capital market, China, Citibank, derivatives market, foreign banks, JP Morgan Securities, Morgan Stanley, UBS