China Construction Bank acquires commercial banking license in Malaysia

View of a?stand of China Construction Bank at a financial expo in Beijing, Sep 8, 2016. [Photo/VCG]

KUALA LUMPUR - State-owned China Construction Bank (CCB) had acquired a commercial bank license from the Malaysian Ministry of Finance, the country's central bank Bank Negara Malaysia said in a statement on Tuesday.

The newly-established bank, called China Construction Bank (Malaysia) Berhad, or CCB Malaysia, will be operated as a wholly-owned subsidiary of CCB Corporation Ltd, said the statement.

The grant of the license is based on CCB's prudential strength and ability to bring in propositions that are in the best interests of Malaysia, the central bank said.

Bank Negara also praised CCB Malaysia's "predominant focus in infrastructure project financing", saying its presence is expected to further strengthen the economic and financial linkages between China and Malaysia and contribute to Malaysia's financial sector.

CCB will become the third Chinese state-owned bank to open branches in Malaysia after the Bank of China and the Industrial and Commercial Bank of China.

CCB has been expanding its presence in Malaysia in recent years. In August, CIMB Group Holdings, Malaysia's second largest lender by assets, appointed CCB as its sub-custodian bank in Chinese mainland to clear, settle and safekeep securities, bonds and other investment products.

The two banks also signed a memorandum of understanding to appoint CIMB as the settlement agent for CCB's customers' investment portfolios in Malaysia.