Hong Kong yuan business lures non-local banks
Instead of taking OCBC's acquisition approach, Industrial Bank first sets up a branch in the city
An increasing number of non-local banks are entering the Hong Kong market to grab a slice of the growing yuan-related business.
But while some aggressive players have paid billions of dollars to secure a well-established network in the city, others have preferred to test the water before making such huge investments.
Industrial Bank set up a branch in the city last month, becoming the fourth mainland lender to do so over the past three years, after applying for a Hong Kong banking licence.
Such joint-stock banks are among the second batch of mainland lenders to venture overseas on the back of increasing money flows between the mainland and offshore markets, following the Big Four state-owned banks.
The Big Four lenders expanded overseas after the central government tasked them with learning from international practice and building the infrastructure for the internationalisation of the yuan.
"Mainland banks in the second tier, [apart from the state-owned ones,] have set up offshore operations based on their own commercial decisions," said Raymond Yeung Yue-ting, a senior economist at ANZ Banking in Hong Kong.
