BMO 1st Canadian bank to incorporate in China
Last Updated: Thursday, October 14, 2010 | 11:42 AM ET
CBC News
The Bank of Montreal took a major step forward in its international operations Thursday by becoming the first Canadian bank to incorporate in China.
Bank of Montreal has become the first Canadian bank to incorporate in China. (Canadian Press) CEO Bill Downe was on hand to officially open the first branch of Bank of Montreal (China) Co. Ltd. in Beijing."The opening of BMO ChinaCo gives us the flexibility we want to expand our product and service offerings for Canadian and Chinese clients — including the possibility of new initiatives in wealth management and retail banking," Downe said.
The new operations in China will provide a base to expand BMO's presence in the area, even though it will initially mainly work in partnership with some local banks.
The new status will allow BMO to cut through a lot of Chinese red tape and, eventually, allow the bank to offer services to Chinese citizens in their own currency.
It also makes it easier for Chinese and Canadian firms wishing to do business in the country.
"Principally, we serve the commercial marketplace and that's because of the growing demand of Canadian companies to do business in China, and Chinese businesses to do business in North America, so it's a bridge on the commercial side," Downe said.
The designation also allows BMO to start underwriting Chinese bonds, as Beijing hand selects what financial firms have access its bond market, worth in the hundreds of billions of dollars.
Downe also mused about opening a wealth management business and selling mutual funds in China, which has a rapidly expanding middle class.
Growing market
Foreign banks are rushing to establish a beachhead in the world's second-largest — and one of the fastest-growing — economies.Canadian banks have been making inroads into China over the past few years, although none have outright incorporated as independent entities there.
Bank of Nova Scotia boosted its stake in local bank Xi'an City Commercial Bank to 14.8 per cent last December and CIBC and Royal Bank have similar relationships in China.
Manulife Financial, Canada's largest insurance company, has a joint venture operation in the city of Jinhua and licences for five satellite offices in three provinces. It is also licensed in 39 Chinese cities, and has a 49 per cent interest in China-based ABN AMRO TEDA Fund Management Co.
With files from the CBC's Anthony Germain
About BMO China
http://www.bmo.com/asia/about_BMO_China.html
BMO Bank of Montreal has been building relationships in China, almost as long as the bank has been in business. Merely three months after its opening in 1817, the bank undertook its first foreign exchange transaction in support of trade with China in 1818.
BMO, Canada’s first bank, was a pioneer in establishing Canada’s financial system. In its early days, the bank provided Canadians with their first currency, and laid the foundations of the branch banking system, which brought domestic and international financial services to widely scattered communities.
It led the way in extending financing services across the Pacific Ocean, supporting trade and business ventures in a region that had proven to be vibrant and of vital importance in the world economy.
Today BMO Bank of Montreal branches in Beijing, Guangzhou, Shanghai and Hong Kong work diligently to establish relationships and provide financing solutions in trade finance, corporate lending, treasury products, foreign exchange, and immigration banking.
BMO in China Timeline
BMO Accomplishments in China:
BMO Accomplishments in China:
- In 1982, BMO Opens a Rep office in Beijing
- In 1995, BMO gains branch license in Guangzhou
- In 1996, BMO gains branch license in Beijing
- In 2003, BMO obtained an equity interest in Fullgoal Fund Management Co., one of China’s leading funds management companies.
- In 2004, BMO became the first Canadian bank to be granted a license by the China Banking Regulatory Commission to sell derivative instruments in China.
- In 2005, BMO was the only Canadian bank selected as a marketmaker for foreign exchange trading in China through the interbank China Foreign Exchange Trade System (CFETS).
- In 2005, BMO’s Guangzhou branch became the first Canadian bank location to be granted a license to provide RMB local currency service such as deposits and loans to both foreign and local companies in China, providing greater access to financial services in the country.
- In 2005, Fullgoal received a license to manage corporate pension plan assets in China. Only three other foreign financial institution joint ventures received licenses.
- In 2006, BMO's investment banking arm was one of six financial institutions, and the only Canadian financial institutions, to act as co-lead Manager of Bank of China's IPO in Hong Kong.
- In 2006, BMO Beijing branch became the first Canadian Bank in Beijing to be authorized to conduct RMB business.
- In January 2007, BMO Board of Directors meeting held in Shanghai
- In 2008, BMO gains branch license in Shanghai
- BMO is also:
- The first Canadian Bank to establish an investment bank representative office in China
- The first and only Canadian bank chosen as market maker for FX trading in China
- The first foreign bank permitted to invest in a Chinese mutual fund company
- Branches in China today in Beijing, Guangzhou, Shanghai and Hong Kong
- The first Canadian bank and one of a handful of foreign banks to participate as a marketmaker in China’s foreign exchange market starting in 2002.
- The first Canadian bank in China to price and trade foreign exchange forwards.
- A pioneer in the Chinese foreign exchange market that has consistently ranked among the top 10 banks in China (domestic and foreign) for the past 10 years.
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