BOC approved to set up local branch in Brunei

BANDAR SERI BEGAWAN - Brunei's central bank, the Autoriti Monetari Brunei Darussalam (AMBD) said Tuesday that approval has been granted for Bank of China (Hong Kong) Limited (BOCHK) to establish a branch in Brunei.

In a press release on its website, AMBD said that the BOCHK is incorporated in Hong Kong and is owned by the Bank of China Group (BOC). It further explained that the BOC Group has been listed as the fourth largest bank worldwide in terms of Tier 1 Capital and the seventh largest bank in terms of assets, according to The Banker in 2015.

The press release also said that the BOCHK is a leading and reputable commercial banking group in Hong Kong in terms of assets and customers deposits. BOCHK and its subsidiaries offer a comprehensive range of financial products and services to personal, corporate and institutional customers. BOCHK is one of the three note issuing banks and the Clearing Bank for Renminbi business in Hong Kong, said AMBD in the press release.

The BOCHK has been accorded credit ratings of A, A+ and Aa3 respectively by Fitch IBCA, Moody's and Standard & Poors. Based on its audited financial statements for 2015, BOCHK's total assets amounted to HK$2.4 trillion while its total capital funds stood at HK$198 billion.

AMDB views the establishment of a banking presence by BOCHK in Brunei as a positive boost for the local economy, in line with AMBD's strategic plan to welcome reputable financial institutions to operate in Brunei, according to the press release.

It would also help to spur vibrant and healthy competition among the market players in the country's banking industry, said AMDB.

The approval of BOCHK is seen as one of Brunei's urgent measures to anchor expectations of foreign investors, who have been increasingly concerned about the economic and investment environment after two global banking giants closing or cutting their banking business in Brunei.

Early this month, the London-based HSBC announced that it decided to wind down its operations in Brunei.

Local analysts said the winding down means the bank will gradually shut down its operations in the sultanate and exit Brunei market in the end, which will make HSBC the second international bank to close its banking business after Citibank in 2014.