Ofn 22 December 2014, the UK’s Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) officially approved the establishment of China Construction Bank Corporation, London Branch. It is the second Chinese bank to have obtained such approval since 2013, when the British government announced that it would consider Chinese bank applications to set up wholesale banking branches in the UK. Concurrently, the application for a Whole-firm Liquidity Modification waiver for the branch has been approved.
China Construction Bank (CCB) attaches great importance to the UK market: its first representative office was set up in London in 1991, and a wholly owned subsidiary – CCB London - was set up in 2009, and was appointed as the first official RMB clearing bank outside Asia in 2014.
CCB London’s business has developed rapidly since its inception and currently ranks as the second largest Chinese bank in the UK, with USD 450 million of capital and total assets of almost USD 7 billion. In December 2012, CCB London successfully issued a RMB 1 billion bond, becoming the first Chinese bank to issue a RMB bond in the UK and marking a significant milestone in the Sino-British economic and financial dialogue. In 2013, CCB London received a RMB 1.5 billion capital injection from CCB, making it the first financial institution to hold RMB capital in the UK. In December 2013, CCB London held the QFII / RQFII International Investment Forums in London, actively supporting the two governments’ agreement on the RMB investment quota for the UK, and received an enthusiastic response from more than 200 European institutional investors. Since its appointment as the UK RMB Clearing Bank six months ago, CCB London has cleared more than RMB 600 billion, with a daily average of nearly RMB 6 billion and a straight-through processing rate of 94%. In 2014, CCB London acquired and relocated to a new 11,000 square metre office building occupancy in the heart of the City of London.
The establishment of the London branch will allow CCB to extend its global comprehensive financial service capabilities and to take full advantage of the exceptional opportunities provided by London’s position as an international financial centre, and of CCB’s role as the authorised RMB Clearing Bank in London. It will deepen CCB’s corporate development strategy - "comprehensive, versatile, intensification": to better service Chinese enterprises “going abroad” and UK and European clients looking to develop their business in China; to promote the development of Sino-British and Sino-EU economic and trade co-operation; and to promote the development of the offshore Renminbi market.
After 60 years of business development, China Construction Bank is at the forefront of global banks in terms of assets and business profit. By the end of the third quarter of 2014, the total assets of China Construction Bank Group reached almost USD 275 billion, while the RoA was 1.6% and the RoE was 22%. The capital adequacy ratio and the core tier one capital adequacy ratio were 14.5% and 11.7%, respectively. Out of the world’s top 1000 banks (by tier one capital), China Construction Bank was ranked in second place by the Banker in 2014.
In recent years, China Construction Bank has adhered to a robust development strategy for internationalisation of its business: to steadily expand its overseas institutional network; to constantly broaden its service channels and products and improve its services to its global customers; and to fully participate in international markets. The new London branch joins a global network of 21 tier one institutional offices in 18 countries spanning 5 continents.
