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Bank of East Asia to expand in China

(Bloomberg)
Updated: 2007-02-13 16:28

Bank of East Asia, which last week said 2006 net income rose to a record, will add employees in China this year in an effort to increase profit from the mainland by more than 25 percent, according to the bank's chairman, David Li.

TheHong Kong-based bank, whose shares have doubled in the past year, will employ at least another 500 people in China in 2007, Li said in an interview. It will add four outlets inShanghai, bringing the number of branches and sub-branches there to more than 10.

Hong Kong banks are stepping up mainland expansion after China in December allowed them to begin competing for the nation's $4.3 trillion of deposits. Bank of East Asia's profit in China almost doubled in 2006 as demand for loans soared in the world's fastest-growing major economy.

"We'll definitely be investing substantially in mainland China," Li said, declining to give a figure. "We're targeting cities in the western part of China."

Bank of East Asia employs about 2,000 people in 31 outlets on the mainland, including branches and sub- branches in 12 cities, as well as five representative offices. The bank said last week it plans to relocate its back-office operations to the mainland to cut costs.

It was one of the first nine foreign financial institutions, along with HSBC Holdings, Citigroup, and Standard Chartered Bank, to win regulatory approval in December to incorporate locally in China. Doing so will allow the bank to take yuan deposits from all mainland citizens.