China Merchants Bank, one of China’s leading commercial banking groups, has announced the opening of an office in London as the first step towards setting up a European subsidiary.
Ma Weihua, chief executive, told the Financial Times he hoped it would "not be too long" before CMB secured authorisation from the Financial Services Authority to set up the subsidiary. China Construction Bank, the world’s second largest bank by market capitalization, established its European headquarters in Canary Wharf in June.
Ma Weihua said Chinese banks had been relatively unaffected by the financial crisis, but now had to seize the opportunities it had created. He said, "It is very important for Chinese banks to go into the global market and connect themselves to the global market. If you are far removed from the water, there is less chance of drowning but one day you have to learn to swim."
Mr Ma said he was "cautious" about the idea of anything other than organic expansion in Western markets. "You have to remember that 75% of acquisitions fail. We acquired Wing Lung Bank in Hong Kong last year but there we are confident that we can consolidate the two banks culturally. The Hong Kong market is our introduction to international markets and rules."
To get an idea of the size of the bank you should know the last available figures show China Merchants Bank had 44 branches, 623 sub-branches (including offices), 1 representative office (in Beijing), 1 credit card center, 1 credit center for small-sized enterprises, 1,567 self-service banking centers and over 1,400 off-bank self-service machines (ATM & CDM) in Mainland China, and a wholly owned subsidiary CMB Financial Leasing Company Limited. It owns two subsidiaries, namely, Wing Lung Bank Limited and CMB International Capital Corporation Limited, and a branch in Hong Kong. China Merchants Bank has a branch and a representative office in New York. It has established business relationships with 1,756 overseas financial institutions in 93 countries and regions.
The Financial Times reported that Ma added that being in New York and London was an essential learning experience. "These are world financial centres. We know what they went through in the past is what China will go through in the future."