Bank of America is setting its sights on China. After adding both staff and profit in its initial efforts there, it sees more opportunity in the huge Chinese economy than it does in other areas, where it is slashing staff and shuttering branches.
Bloomberg reported Thursday that Bank of America is not the only one. JPMorgan Chase & Co., HSBC, and Citigroup are among the institutions boosting their presence in China, which has become the third largest banking market in the world.
Citigroup has recently won approval from Beijing to become the second foreign bank permitted to issue its credit cards there. HSBC intends to expand its branch network nearly eight times to 800, or else to take a bigger stake in its partner Bank of Communications Co. as soon as loosened regulations allow it to do so. And profit racked up by foreign banks in China over the past 10 years, according to the China Banking Regulatory Commission, has amounted to a significant average of 26%.
Bank of America has booked considerably more than 26%. Its profit doubled in 2011, and it has recruited bankers from its competition to further build on existing business–a strong contrast with the 30,000 job cuts it plans elsewhere in the world. According to Huang Xiaoguang, president of Bank of America NA China, the bank plans to add additional branches as well as possibly entering into a securities venture with a local partner.
“We want to become a top player among China’s foreign wholesale banks in terms of all metrics,” Huang was quoted saying. “We need to grow faster than our competitors to grab market share and stay ahead of them. What we achieved last year was significant, but we want to take it up a notch.”
In fact, according to Huang, the country could become the bank’s biggest factor in revenue and profits in the Asia Pacific region within two years. He did not specify where the country currently ranks in those areas.