BIZCHINA / Top Biz News
French bank eyes local acquisitions
By Hui Ching-hoo and Joy Lu (China Daily)
Updated: 2006-12-21 13:28
France-based bank Credit Industriel et Commercial (CIC) plans to enter
the mainland's banking sector through acquiring local players and
targeting the high-end market, according to company executives.
Timothy Lo, Managing Director of CIC Investor Services Ltd, the bank's
Hong Kong subsidiary, revealed the strategy as the mainland opened the
renminbi business to foreign banks in line with its World Trade
Organization commitment on December 12.
"We prefer acquisitions to incorporation," Lo said. "The former is more
cost-effective since the application process (of incorporating locally)
is cumbersome and time-consuming."
Lo did not give a timeframe for acquisitions.
"We are not in a rush to enter the market at the current stage," he said.
Lo said he did not find the mainland's restrictions on
overseas-incorporated banks over-protective.
"It is understandable that the market has to be opened in phases," he
said. "Otherwise, reform will be on the skids."
The China Banking Regulatory Committee (CBRC) has already accepted eight
applications from overseas-funded banks to incorporate their mainland
branches.
They are HSBC, Citigroup, Standard Chartered Bank, Bank of East Asia,
Hang Seng Bank, Mizuho Corporate Bank, DBS Bank and ABN AMRO.
Lo, a Hong Kong private banking expert who joined CIC in 2004, said the
bank will target high-net-worth customers on the mainland, as in Hong
Kong.
"We are eyeing the high-end segment," he said. "The strategy is
consistent with the high-end orientated market position of our Hong Kong
arm."
The first mainland office of CIC was set up in Beijing in the early 1990s.
CIC now has two representative offices in Beijing and Shanghai
respectively.
"We will press to expand our market coverage, though the location for the
next representative office is yet to be identified," he said.
CIC's Hong Kong subsidiary changed its focus from serving French
corporates and expatriates in local private banking in 2000, when CIC
acquired the Asian private banking business of Bank Austria.
Currently, 95 per cent of customers of CIC Investor Services are Hong
Kong residents and 2 to 3 per cent are mainlanders with offshore assets,
Lo said.
(For more biz stories, please visit Industry Updates)
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