Sydney-based Commonwealth Bank of Australia (ASX: CBA) saw three village banks run into operation in Hebei Province, China recently.
The three institutions spread in Xinji City and Handan City, each, with small- and medium-sized county-level firms, industrialized agriculture and individual economy as major targets. They were the first batch of foreign village banks that run into operation in the province and prior to this, the Australian lender had opened five such institutions in the Chinese market since 2011, with the latter spreading in Henan Province.
Established in 1911, CBA served as the central bank of Australia for 50 years and is one of the top four commercial lenders in Australia. It entered the Chinese mainland at the start of 1994 and has had business in 12 countries and territories around the globe. And currently, it controls a 37.5 percent stake in Bomcommlife Insurance Co., Ltd., a 20 percent stake in Qilu Bank and a 20 percent stake in Bank of Hangzhou there. It expanded slowly in the market in terms of outlet network and till March 2010, it saw the branch in Shanghai start formal operation. Currently, it is busy making preparations for the establishment of a branch in Beijing.
People in the know disclosed that in order to fuel expansion there, it cast eye on village banks and triggered the strategy in Henan. It said in 2010 that based in Henan, it would invest in village banks in the market in a large scale. It opened its first China-based village bank in Jiyuan City, Henan in February 2011 and in the CNY 80 million-registered village bank, it and Bank of Hangzhou each held an 80 percent and 20 percent stake. About half a year later, it opened such an institution in Lankao City and Dengfeng City, Henan each and registered capital of them was CNY 30 million and CNY 50 million, respectively. In the year, the village bank in Jiyuan saw operating revenue and net profit each stand at about CNY 5.2 million and 586,000. And the operating revenue reaped by those in Lankao and Dengfeng reached about CNY 1.48 million and CNY 867,000, respectively.
He reiterated that it opened a village bank in Yichuan County and Mianchi County, Henan in succession last year and in them, Bank of Hangzhou controlled a 20 percent stake, each. It inked a Mou with Bank of Hangzhou over village banks on June 30, 2010 and under terms of the MoU, the latter will take a 20 percent stake in all village banks it opens in Henan.
