Bank of China Seeks Further Expansion in Region, CEO Says

Interview

Li Kexin, CEO of Bank of China (CEE) Limited and general manager of Bank of China Limited Hungarian Branch

The Bank of China Hungary, with its two combined units, is ranked among the top 10 biggest banks by total assets in Hungary. In 2021, it will continue to benefit from the advantages of Bank of China’s global services and maintain its position as a leading foreign bank in Hungary. The CEO of Bank of China (CEE) Limited Li Kexin talked to the Budapest Business Journal about the bank’s plans to further expand in Central and Eastern Europe and about its products in the pipeline.

“To reach our goals, we need to step up our efforts in the entire CEE region, while we continue to be based in Hungary,” says Kexin, who is also the general manager of Bank of China Limited Hungarian Branch. “We seek to expand the corporate and institutional banking business and also provide personal financial services, thus contributing to the long-term economic development of Hungary and China,” he added.

“We believe that the development of cross-border RMB international settlement business is facing an unprecedented opportunity,” Kexin says. The implementation of the China-EU Investment Agreement will accelerate trade cooperation between China and CEE countries. Moreover, China has launched a series of facilitation measures on RMB cross-border usage, which are conducive to boosting the international settlement and cross-border RMB business.

As the only RMB clearing bank in CEE, the bank will make full use of its advantage in international settlement, explore potential cross-border RMB business opportunities, actively expand the RMB correspondence bank business, and continue to improve its market position in the international settlement and cross-border RMB business, Kexin says.

The bank says it has plans to grow green finance, too. In 2020, it provided a HUF project financing loan equivalent of EUR 70 million to Hungary’s largest photovoltaic power station, as a first step. BoC is exploring the possibility of issuing local currency green bonds to boost green finance innovation in the region and get funding through the local market.

CEE is favored by what the bank calls “new energy vehicles” and relevant upstream and downstream enterprises due to its geographical location and labor cost advantages, and BoC says it will continue to work with its global network to seize business opportunities in this field.

Expand Services

This year, the bank aims to further expand financial services to local SMEs. Bank of China has held several China-CEE SME Matchmaking Events during the China-CEEC Leaders’ Summit in February, thus promoting the cooperation and development of SMEs in China and the region.

The BoC’s main customers now include many of the biggest companies in the CEE region as well as the Chinese “go global” customer group. Besides existing customers, the bank says it aims to serve top-quality companies with Chinese elements in the region, especially those with a market leading position or with headquarters in region.

Over the past few years, China’s trade and investment cooperation with CEE countries, particularly with Hungary has developed vigorously and the people-to-people and cultural exchanges have also become deeper.

“Thus, we have several reasons to believe that the region has huge and promising business growth prospects,” Kexin says.

Kexin argues that China and CEE countries have always enjoyed a traditional friendship. CEE states were among the first to acknowledge and establish diplomatic ties with the People’s Republic of China, providing a solid public support for cooperation. The establishment of the China-CEEC cooperation mechanism has opened a new stage in the relations between China and the region. BoC says it strives to be the bank of choice for financial services under the mechanism.

Transport Hub

The CEE region has outstanding geographical advantages as a transit point to both Western and Northern Europe. As a transport hub, the region also plays an important role in the integration of China’s “Belt and Road” initiative into the European economic circle, according to Kexin.

CEE countries, most of which are emerging markets, have great potential in infrastructure and energy investment.

“We believe that China and CEE countries can build on each other’s strengths and work together to advance social and economic development,” Kexin says.

Since the outbreak of the pandemic, the bank has been focusing on business continuity by reviewing and improving its business continuity plan.

“At the same time, we continue to adjust and update the bank’s financial services and operations in line with the latest developments to ensure the stability of our daily operation,” Kexin says. “So far, our business has not been affected.”

Bank of China Timeline

Bank of China (CEE) Limited, formerly known as Bank of China Hungary Limited, was established in Budapest in February 2003 as the first commercial financial institution set up by a Chinese bank in Central and Eastern Europe. In December 2014, another entity, the Bank of China Hungarian Branch was officially opened as a direct branch of its Beijing head office. In 2015, the Hungarian branch was officially authorized as the RMB clearing bank. This is the first (and thus far only) RMB clearing bank in the region. In 2020, Bank of China Hungary Limited changed its official name to Bank of China (CEE) Limited, to emphasize its CEE regional headquarter status. The bank now has four sub-branches in Prague, Vienna, Belgrade and Bucharest.

This article was first published in the Budapest Business Journal print issue of  March 12, 2021.

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