Bank of America seeks to launch China card venture soon; considers incorporation

Bank of America seeks to launch China card venture soon; considers incorporation

	Published : Thu, 18 Jan 2007 12:21 By : Agencies Print this Story

SHANGHAI (XFN-ASIA) - Bank of America Corp (BoA) is expecting to soon launch its joint venture credit card business with partner China Construction Bank (CCB), BoA managing director for China Ian Wong said.

He said the US banking group is also considering incorporating on the mainland pending a review.

'We have been continuing discussions on the credit card venture and we hope to finalize that soon,' Wong told reporters.

He would not provide an exact timeframe for the plan.

Wong said that BoA will consider local incorporation within China, but as it is seeing its partnership with CCB as its retail strategy, local incorporation will only be pursued based on whether it is judged as beneficial to its corporate banking business.

'According to CBRC regulations you can choose to incorporate at any time, so in that sense, there is no real urgency,' Wong said.

'Obviously, local incorporation does present benefits in terms of retail banking -- what would drive us to build further, or invest or locally incorporate is really depending on our clients... the multinationals that we deal with and the trading counterparties that we deal with.'

Wong said BoA is gathering feedback from its clients and regulators and could come to a decision 'fairly soon.'

BoA has close to a 10 pct stake in CCB.

The Hong Kong-listed bank also recently acquired Bank of America (Asia) Ltd, which operated BoA's retail operations in Hong Kong and Macau.

Wong said that CCB's mainland branch network will be promoted to BoA clients doing business throughout China, while BoA will assist CCB clients to tap the capital markets, which should help drive mainland growth at double-digit levels.

'The China business may not contribute significantly to the business as a whole globally, but from a country perspective we offer the best growth rates for the global franchise,' Wong said.

'In the last three years we have grown our revenues by five times in China and our headcount has increased by four times in the last three years.'

'We continue to expect very favorable (revenue) growth rates in China of about 40-50 pct per year,' Wong said, referring to the bank's mainland commercial banking business for the coming three-year period.

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