Bank of China to Expand Overseas Business by Tapping into Profitable Fields
The Bank of China is planning to further expand their overseas business by tapping into profitable fields such as corporate financing and commodities hedging that are dominated by the financial institutions in Wall Street. In the last three years the bank’s overseas assets increased by 54percent which is 27 percent of the total assets. Profits before taxes in the bank’s overseas business increased by 5.05 percentage points or 23.64 percent of the total. Furthermore nonperforming loan ratio in overseas branches remains low in the 0.17 percent.
Rapid development in the overseas business and diversified platforms is effectively counterbalancing the pressure of domestic economic downturn, while releasing the bank’s annual 2015 results. Being the fourth largest commercial bank in assets, the Bank of China stepped up their strategy of internationalization together with an increasing number of Chinese companies who are going global. The speeding up of the interest rate liberalization and with the internationalization of the renminbi plus the slowing down of the economy spurred the rapid growth overseas.
The US branch director of Bank of China stated that the bank might create a new sub branch in Houston since a majority of Chinese petroleum companies operates their businesses there and BOC might be employing 100 workers in the west coast this year. The bank will also be moving its New York branch to the center of Manhattan from the east side of the city since its old office is no longer big enough for its employees due to the huge growth in the business.
Compared with other banks, Bank of China has a higher percentage of overseas assets which also give it the advantage of facing challenges that are bought by the interest rate liberalization. The bank already expanded to 46 countries and regions while adding five more countries in 2015. Its layout now includes 18 countries along the Belt and Road Initiative.