The Commonwealth Bank (CBA) will open a new bank in China’s Hebei province – the largest steel-making region in the country – with a concentrated focus on small-business and agricultural lending.
This new branch, Handanxian County Bank, will be the CBA’s 15th bank opened in China in the last three years, continuing expansion plans to develop in regional areas where future growth is expected to be robust.
CBA has two sub branches in the provinces of Henan and Hebei, as well as two major branches in Beijing and Shanghai, The Australian reported.
Despite the Chinese government’s plans to radically reduce steel production in order to diminish pollution levels, CBA Head of international financial services Simon Blair believes the Hebei province is an area where the bank can grow business.
“If you take away the past year and look at the previous four years, both Hebei and Henan were very strong in terms of growth,” Blair said.
China’s banking system is state controlled and has been known to offer banks incentives to boost lending to specific sectors in order to cultivate economic growth, however, CBA remains adamant this has never been the case for their branches.
“The credit quality and the non-performing loan rates we see in China are very similar to Australia, especially for small-to-medium business. I can tell you no one has ever pressured us to lend to anyone.”
In the past 12 months lending growth in the county bank network increased 137 per cent, while deposit growth rose 97 per cent.
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