Banking News
- Bank of East Asia to expand on mainland
Date: 13-Feb-2007 Sources: (Shenzhen Daily)
BANK of East Asia Ltd., which last week said its 2006 net income rose to a record, will increase headcount on the mainland by a quarter this year in a bid to boost profit from the mainland by more than 25 percent, chairman David Li said.
The Hong Kong-based bank, whose shares have doubled in the past year, will add at least 500 people on the mainland in 2007, Li said in an interview. It will add four outlets in Shanghai, bringing the number of branches and sub-branches there to more than 10.
Hong Kong banks are stepping up mainland expansion after the Central Government in December allowed them to begin competing for the nation's US$4.3 trillion in deposits. Bank of East Asia's profit on the mainland almost doubled in 2006 as demand for loans soared in the world's fastest-growing major economy.
'We'll definitely be investing substantially on the mainland,'Li said, declining to give a figure. 'We're targeting cities in the western part of the mainland.'
Bank of East Asia employs about 2,000 people in 31 outlets on the mainland, including branches and sub-branches in 12 cities, as well as five representative offices. The bank said last week it plans to relocate its back-office operations to the mainland to cut costs.
It was one of the first nine foreign financial institutions, along with HSBC Holdings Plc., Citigroup Inc., and Standard Chartered Bank, to win regulatory approval in December to incorporate locally on the mainland. Doing so will allow the bank to take yuan deposits from all mainland citizens.
Foreign banks have set up 195 branches on the mainland, Wang Zhaoxing, assistant chairman of the China Banking Regulatory Commission, said in December. Their combined assets topped US$100 billion, about 2 percent of the total, he said.
Hang Seng Bank Ltd., one of the banks that won a permit, plans to invest HK$1 billion (US$128 million) on the mainland by the end of 2008, Xinhua reported Dec. 12, citing vice chairman Raymond Or.
London-based HSBC, which has the biggest distribution network among overseas banks on the mainland, in May announced plans to add about 1,000 employees there.
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