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BOC (HK) Leads Preparation for Post-WTO Banking Competition
The newly-restructured Bank of China (Hong Kong) began operation Wednesday, yet another signal that Chinese banks are readying for WTO entry.
The new entity has merged the businesses of ten Hong Kong-based banks under the former Bank of China (BOC) Group in Hong Kong, and another three remain as independent subsidiaries.
BOC chairman and president Liu Mingkang said that the restructuring of the former BOC Group in Hong Kong provided valuable experience for the whole BOC, including branches in Chinese Mainland and over 500 overseas counterparts in 23 countries and regions.
"China's banking will face severe challenges after the country enters the WTO," he said, "We have studied how to get over them. The merging case in Hong Kong is part of our plan."
China's domestic banks are considered weaker in the quality of bank assets and services as well as efficiency and marketing, compared with foreign counterparts that are eager for a share of the pie in China.
According to the agreements China signed with the WTO members, overseas-funded banks will receive equal treatment with domestic banks in China five years after it enters the WTO.
The new BOC (HK) divided its departments into three parts, one in charge of banking services' contacting with clients, another to develop new services and reduce risks, and the third to provide backup services, such as updating equipment and computer networks.
The new division of work, quite different from the traditional way of parceling responsibilities, will help rearrange the internal resources of the bank so as to improve the efficiency and cut costs, said Liu.
The two-year cooperation with world-known consulting companies and investment banks have also helped BOC distinguish its advantages from disadvantages, he added.
The merged company is Hong Kong's second largest banking group with a total asset of 820 billion HK dollars (105 billion U.S. dollars), and total deposits of 620 billion HK dollars and loans of 332 billion HK dollars.
The company will continue to be one of the note-issuing banks in Hong Kong.
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