Bank of America Set For Chinese Growth
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Bank of America Corp, the second largest bank in the US by assets, is planning to quicken the pace of its expansion in China, claimed Bloomberg BusinessWeek on Thursday, after the company doubled its profits last year.
Bank of America Corp, the second largest bank in the US by assets, is planning to quicken the pace of its expansion in China, claimed Bloomberg BusinessWeek on Thursday, after the company doubled its profits last year.
The US bank – which presently has only three branches in China located in Shanghai, Beijing and Guangzhou – will see up to five additional branches being built across China over the next two to three years, while the company is also looking to link up with a local partner for a securities venture that could further tap into the nation’s investment banking market.
“We want to become a top player among China’s foreign wholesale banks in terms of all metrics,” said Huang Xiaoguang, President of Bank of America NA China, during an interview with Bloomberg.
[quote]“We need to grow faster than our competitors to grab market share and stay ahead of them. What we achieved last year was significant, but we want to take it up a notch,” added Huang.[/quote]Bank of America’s China division has seen exponential growth in its profits since the country opened its banking industry to overseas companies in December 2006. According to the China Banking Regulatory Commission, the profit growth for foreign banks in China has averaged over 26 percent. Furthermore, the combined assets of non-Chinese banks in China has now exceeded 1 trillion yuan ($159 billion), almost double what it was from five years ago.
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According to Huang, China could soon become Bank of America’s largest revenue and profit contributor in Asia Pacific, given the industry’s growth trajectory.
Last November, the U.S. lender sold 10.4 billion shares it had in China Construction Bank Corp to receive a profit of over $1.8 billion. Shares in Bank of America have also risen by 42 percent this year, the best performance in the 30-company Dow Jones Industrial Average, thanks to its performance both locally in the US and overseas.
The company’s China division will now focus on multinational firms, financial institutions and Chinese enterprises seeking overseas expansion, for profits in the future.
