BOC plans to set up more sub-branches in Europe

Bank of China (BOC) is planning to set up more branches in Europe to facilitate the business of Chinese investors on the debt-stricken continent, BOC chairman Xiao Gang has said.

The bank's European headquarters, established in Luxembourg in 1991, will open new branches in Poland and Stockholm this year, after previously opening offices in Rotterdam and Brussels.

Xiao said on Wednesday the bank is also planning to open branches in Madrid, Lisbon and Vienna in 2013, when it will have "more than 30 offices across 13 European countries".

"The network of financial service will be greatly improved by then," he said.

BOC's Luxembourg branch, its first wholly owned subsidiary in Europe, has a total asset of 5.4 billion euros ($6.8 billion). Its after-tax profits reached 35 million euro in 2011, a sixfold increase over 2006. In the first four months of this year, its after-tax profits already stood at 16.6 million euro.

Xiao said the bank has maintained good growth momentum and it is able to expand the range of its services in the EU countries with a full banking license.

"The European company, offering both personal and corporate banking service, is mainly committed to developing offshore finance and investment," he said.

Xiao was speaking during a visit of top Chinese legislator Wu Bangguo, who paid an inspection visit to the office during a two-day tour to the financial center of the EU.

During the visit, Wu urged BOC to act as a go-between for Chinese companies to explore the European market.

Wu said overseas branches of China's banks should steadily push forward cross-border RMB trade settlement and act as a training basis for financial talents.

By the end of March, BOC had opened 590 overseas branches with nearly 290,000 employees. Its overseas assets account for 23 percent its total property.

Jeannot Krecke, Luxembourg's minister of economy and foreign trade, told Xinhua News Agency that many major Chinese banks have already opened branches in Luxembourg.

"We have many banks here. We have really a lot of know-how in this area," he said.

He said economic ties between China and Luxembourg are becoming "even stronger because the Chinese have discovered Luxembourg as their possible hub and possible gateway to the internal market in the EU".

Luxembourg has become a major hub for Chinese goods entering Europe by air freight. Each week, about 40 flights from the Chinese mainland, Taiwan and Hong Kong reach Luxembourg, Krecke said. From there, the goods are sent to their European destination.

Besides transit trade, Luxembourg, a leading financial center of Europe, is also searching for cooperation opportunities with Chinese companies in some new areas, notably financial services.

Xiao said Luxembourg, the financial center of the European Union, is guided by the rules of the EU and also being adaptable in bank management to meet specific needs of each company.

"Its flexibility has made the country a perfect choice of offshore finance market for global investors," he said.

For instance, he said, the Luxembourg branch has taken part in financing projects of multinationals such as Volkswagen and Mercedes-Benz and merger and acquisition projects for companies including Sinopec and China National Petroleum Corp.