Bank of China (BOC), one of the most global and diversified banks in China, has enjoyed tremendous growth, in the past few decades by building on its world-renowned reputation and exploring international networks.

The bank was awarded the “Year of China’s Bank” in 2011 by the magazine, Euromoney, this represents the ninth time BOC won the honor.

The bank has captured a leading position in the global banking sector, selected as a global systematically important financial institution by the Financial Stability Board. The BOC is the only bank that is based from an emerging market-country or region.

The honors indicate that the international business community acknowledges its achievements and progress that coincide with financial innovations developing in the country.

The century-old bank holds a special advantage to identify it as a unique brand against other top-notched competitors.

Background introduction

BOC was founded in 1912 under the approval of Dr Sun Yat-sen, one of the founding fathers of the Republic of China. In its first 40 years, the BOC acted as a central bank, a foreign exchange bank and a foreign trade bank.

After the founding of the People’s Republic of China, it functioned as an international trade bank that contributed to the development of the national economy and trade.

In the 1990s, after years of market-oriented reforms, the bank became a state-owned commercial bank.

In June 2006, the bank had become a publicly-listed company on the Hong Kong Exchange and then the Shanghai Stock Exchange a month later, to become the first commercial bank to be listed in the Chinese mainland and Hong Kong stock exchanges.

The bank provides a range of financial services in dozens of countries and regions. It focuses on the commercial banking business, such as personal banking, corporate banking and the financial markets.

Global recognition of the bank had risen significantly in the past few years, ranking 9th in core capital among the top 1,000 banks in the world in 2011.

In its website, the bank identifies itself as “a large transnational banking group focusing on the commercial banking business and providing diversified financial services that integrates with the domestic and overseas markets.

With help from the special financial services platform, the bank offers commercial banking, investment banking, insurance and asset management in line with the needs of its customers.

The bank is improving its long-term profit capacity to achieve sustainable development by utilizing multwiple efficient approaches, including optimizing internal processes and encouraging innovation.

Purposes of innovation

To explain its innovations in recent years, the BOC said in a public statement that the bank is facing a “capricious industrial environment”.

“Our bank sought to reform and improve mechanisms and create new product services to deal with various challenges,” the announcement said.

The bank concentrates on raising creative capacity and talents for more innovative ideas.

The bank quotes a regulation from the US that was issued in 2009, which represents the model for creative economic development as a key method to adapt to industrial trends this century. “Only innovation would facilitate sustainable development”.

Bank mechanisms

The bank set up a pilot-project program that converted private companies into shareholding companies and introduced outside investors for them. The endeavor was a success.

The bank probed into a new approach that provides an effective method to get banks to get publicly-listed on stock exchanges.

To accomplish its blueprint, the bank dedicated greater efforts to build a sound management mechanism.

The board introduced a system of independent directors that oversees the board’s decisions in a more professional and transparent way.

The bank works hard to organize its client groups and optimize its business structures. It targets mainly in the 10 most prosperous provinces and regions that include 40 metropolitan areas such as in Beijing, Shanghai and Shenzhen. The BOC strongly supports the financial development of China’s western regions and rural areas.

It introduced a system of risk management.

It has issued numerous regulations to emphasize controls for market risk management and daily operational risks.

In 2004, the bank transformed to meet international accounting standards, a process that took two years to accomplish by producing a financial report in accordance with global standards.

Services for businesses

Although the bank was established about a century ago, management anticipated tougher competition in the future.

Besides clients’ growing needs, such as changing cash flow and companies’ intangible asset’s increasing, the bank industry must cope with other challenges.

Increasing the nation’s productivity is necessary to improve people’s lives. The BOC should also help with rural area development and expanding international trade. Its innovations have helped the bank maintains a strong position.

Since 2004, BOC has worked with 340 universities and colleges while issuing 18 billion yuan ($2.85 billion) in student loans. The bank financially supports approximately 1.3 million college students.

From: China Daily  by HUANG MENGXIN