* China Constrution Bank to open London unit Monday
* Meets growing demands from Chinese clients going global
By Daisy Ku
LONDON, May 29 (Reuters) - China Construction Bank (CCB) (0939.HK), the world’s second biggest bank, will ramp up its international presence and aims to tap into the rising overseas ambitions of Chinese firms when it opens a London unit next week.
Since its 2005 initial public stock offering, CCB’s market capitalisation has more than doubled to $152 billion to leapfrog global rivals such as JPMorgan Chase (JPM.N) and give it a similar value to HSBC Holdings Plc (HSBA.L)(0005.HK).
But CCB’s international business is nowhere near its global peers. Over 95 percent of its assets are based in China and Hong Kong and 99 percent of its profits are generated in its domestic markets.
“We are no HSBC or Citi (C.N). But we are following our clients as they go global,” Shaolin Xiao, head of China Construction Bank (London), told Reuters in an interview.
Over the past decade, overseas investments by Chinese enterprises have ballooned from less than $1 billion to $47.8 billion at the end of 2008. Over 5,000 firms have set up 12,000 overseas units across 172 countries.
The trend has accelerated despite the global crisis and overseas investments reached $21.8 billion in the first two months of this year.
China Merchants Bank (600036.SS)(3968.HK), the country’s sixth biggest lender, will also shortly open a London office and Agricultural Bank of China plans to upgrade its representative office, according to industry sources. [ID:HKG24542]
“A fast-growing Chinese economy means that Chinese banks have to go global. London is an ideal springboard for their global aspiration,” said Jeff Cao, head of China at UK promotional body Think London.
London is now home to 250 Chinese companies, with 13 percent of Chinese investment into Europe going to London since 2004.
“China companies’ needs of international financial services are growing, and our London unit can develop tailor-made products to suit their needs,” said Xiao.
CCB received its approval from the Financial Services Authority to upgrade its office to a subsidiary in March.
Apart from the more traditional corporate banking business, the unit is also looking at metals and crude oil hedging as well as interest rates and foreign currency risk hedging for its customers.
(Editing by David Holmes)
((firstname.lastname@example.org; +44 207 542 5106; Reuters Messaging: email@example.com)) Keywords: CCB/LONDON Keywords: CCB/LONDON
C Reuters 2009. All rights reserved. Republication or redistribution ofReuters content, including by caching, framing or similar means, is expresslyprohibited without the prior written consent of Reuters. Reuters and the Reuterssphere logo are registered trademarks and trademarks of the Reuters group ofcompanies around the world.nLT1016311