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| Hong Kong-based Bank of East Asia opens its 100th mainland outlet in Zhangjiang of Pudong, Shanghai, on December 8, 2011, and introduces a special commemorative credit card (Beijing Review/Chen Fei) |
China proves to be a promising land for overseas banks despite challenges limiting opportunities for growth
After struggling to find solid footing, overseas banks operating in China may finally be hitting their stride, according to the seventh PwC Overseas Banks in China survey released on July 17.
China's 181 overseas banks more than doubled their profits to 16.73 billion yuan ($2.66 billion) in 2011 from 7.78 billion yuan ($1.23 billion) in 2010. Growth was achieved as a result of strong demand for corporate credit from multinationals expanding within China and an increasing number of state-owned and private enterprise customers. Internationalization of the yuan with strong demand in derivative trading with financial institutions and corporate clients also helped drive results.
Despite China's subdued economic outlook and speculation of a soft landing, overseas banks are nonetheless predicting annual revenue growth of 20 percent or more until 2015.
Strong growth
Overseas banks experienced their most profitable year in China in 2011.
In addition to soaring profits, total assets increased 24 percent to 2.15 trillion yuan ($341.3 billion) at the end of 2011. The market share of overseas banks increased to 1.93 percent from 1.83 percent.
This strong result was achieved despite difficulties in their home markets and a less than favorable outlook for Chinese and global economies, said the report.
According to Beijing-based Securities Times, last year overseas banks performed noticeably well in retail business and wealth management via innovation in product lines and an increasing number of outlets.
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