China’s largest banks: Modest moves
China’s largest banks’ moves overseas to date have been modest but they already provide some indications of future strategy.
The most high profile was China Construction Bank’s (CCB) acquisition of the Hong Kong and Macau operations of Bank of America in August 2006. The deal, valued at some $1.2 billion, is an extension of the strategic investment by Bank of America into CCB prior to its IPO and makes a lot of sense, say analysts.
"The Bank of America deal was a good one for CCB," says Keith Pogson, partner, global financial solutions at Ernst & Young. "It gives them a platform outside China to train and develop their staff, yet it’s not a huge cultural gap."
CCB remains keen to expand abroad, especially within Asia Pacific. It recently announced that it had received regulatory approvals to open branches in Vietnam and Australia.
Like CCB, ICBC is rumoured to be aggressive in its international expansion plans, but has achieved precious little so far. In 2004 ICBC acquired the Hong Kong retail and commercial operations of Dutch-Belgian lender Fortis Bank Asia, but these were minuscule.
Like CCB and several other Chinese banks, it was in the bidding for another small Hong Kong lender, Asia Commercial Bank, that was eventually acquired by Malaysia’s Public Bank in 2006.