With a unique and comprehensive financial service platform, Bank of China offers commercial banking, investment banking, insurance, asset management, aircraft leasing and other financial services in line with the complex demands of different customers.
Commercial Banking Business
As the traditional major business line of Bank of China, commercial banking business includes corporate banking, personal banking and financial market business (mainly treasury business).
Corporate Banking
Corporate banking business is Bank of China's main source of profit. In 2007, Bank of China set up the corporate banking unit to strengthen business line management with constant focus on completion of customer service system, promotion of business interaction, enhancement of product innovation and implementation of management transition. Along with a strategy of focusing on long-term partnership with key major corporate customers, the bank defines business with small and medium-sized enterprises as an important part of its corporate banking business and is committed to becoming an efficient and professional partner satisfying the various needs of SMEs.
- Deposits
Bank of China makes the best effort to reinforce RMB corporate deposits business in response to the impact from the fast growing capital market.
- Loans
Bank of China continues adjusting its loan structure by increasing investment in key industries so as to realize optimal allocation of credit resources.
- Cooperation with financial institutions
Bank of China values cooperation with financial institutions. It provides customers with more complete services by sharing customers, resources and co-developing new products with these partners.
Bank of China also offers clearing service in USD, EUR and JPY via its New York Branch, Frankfurt Branch and Tokyo Branch, which, along with Singapore Branch, are all level-one local clearing banks.
- International settlement and trade financing
International settlement is an edge of Bank of China. The international settlement and trade financing have been growing rapidly with enhanced interaction between domestic and overseas branches.
- Other corporate banking services
Bank of China also provides payment and settlement services including bank draft, promissory note, check, remittance, bank acceptance, entrusted collection of payment, collection with acceptance, centralized payment, check loading and bill custody.
Product and Service Innovation
Bank of China combines and innovates corporate banking products to cater for corporate customers' changing business needs. It expands cooperation with financial institution counterparts in product development and inter-bank transfer of corporate credit assets. Meanwhile, the bank launches a series trade financing products including Rong Yi Da (a financing service based on accounts receivable), Tong Yi Da (pledge L/C issuing for accounts receivable), Rong Xin Da (a financing service based on accounts receivable for export credit insurance) and Rong Huo Da (cargo pledge financing). The bank also introduces some new products including undisclosed export factoring and forfeiting under D/A bank guaranteed bill. In addition, to keep up with the change of mainstream settlement methods in global trade, Bank of China is among the first banks in China's mainland to join SWIFT's Trade Services Utility (TSU) and the first to complete a real TSU transaction in China.
Bank of China endeavors to improve the business models for SMEs by learning the successful practices of domestic and overseas counterparts and the experience of strategic investors. It revises the credit policies for SMEs and simplifies the operating process of SME loans. Based on the features of SME financing, the bank launches "Kuai Fu Yi", a tailored short-term financing product.
By integrating its clearing resources, Bank of China becomes the first bank in China's mainland to introduce a series of payment products combining the services provided by overseas branches and correspondent banks, which include "full payment without deduction", "Taiwan remittance", " priority remittance" and "special remittance service". The hand-in-hand development of overseas branch business and correspondent bank business has expanded the product coverage to the utmost extent and filled the market gap. Among these products, "Taiwan remittance" has broken the monopoly of correspondent banks in this field and helped the bank expand business.
Personal Banking
Personal banking business is one of the strategic priorities of Bank of China. The bank makes continuous effort to meliorate the management system and operating mechanism of personal banking business by setting up a personal banking unit for strengthened product line management. It pays high attention to transformation of outlet operating mode, development of tiered customer service system and reform of marketing approach and approval process of individual loans. Through enhanced product and service innovation and optimized business structure and revenue structure, it has explored profit sources to the maximum.
- Deposits
To maintain and add the value of personal financial assets, Bank of China takes the initiative to adjust its operating strategy aimed at balanced development of deposit and wealth management business.
- Personal loans
Bank of China strives to popularize the "direct-to-customer" marketing service by promoting and improving the centralized online approving system.
- Personal fee-based business
Bank of China provides the following personal fee-based business: RMB and foreign currency remittance, personal foreign exchange settlement and sale, foreign exchange conversion, agency insurance and fund, agency collection and payment.
Personal foreign exchange settlement and sale and personal international remittance are the traditional advantageous services of Bank of China. It increases its foreign exchange sources by expanding the handling outlets for exchange settlement and sale and enhancing the cooperation with international remittance companies. Besides, it builds the brand of "Bank of China Remittance" by further segmenting the personal foreign exchange market and integrating numerous foreign exchange products into "one-stop" service.
Bank of China has realized a leapfrog growth in the agency service revenue as a result of enhancement of such services as fund distribution and insurance agent with the favorable opportunity brought by the rapidly expanding capital market and emerging investment products.
- Bank of China Wealth Management
Bank of China is devoted to expansion of personal wealth management business via its "Bank of China Wealth Management" brand. A widespread multi-level wealth management service network has been formed with 366 standardized wealth management centers, over 1,000 wealth management offices and numerous wealth management counters arranged in its outlets. A professional wealth management team composed of over 200 wealth management advisors and more than 2,500 wealth managers is established to provide customers with full range of professional services such as investment and wealth management plans and series products. In addition, the exclusive VIP access for "Bank of China Wealth Management" customers in the airports of major domestic cities makes the "Bank of China Wealth Management" value-added customer service system more appealing.
- Private banking
Bank of China provides private, exclusive, wealth-creating and premium services for high-net-worth individual customers whose personal financial assets are above USD 1 million. With fast growing customer base and managed assets, this has become a new growth platform for the bank's personal banking business, creating a distinct pioneering advantage.
- Bank cards
Bank of China keeps enhancing the research and development, marketing, service and system construction of bank card products.
- Network development
The 10,145 outlets in China's mainland is an important strategic resource of Bank of China. The bank has rolled out an outlet transformation program by conferring core functions on different categories of outlets, optimizing business process and implementing key performance indicator assessment.
Bank of China continues investing in ATMs and other self-service facilities, and keeps optimizing the layout and functions of facilities.
Product and Service Innovation
Resting on its global service network and multi-level service platform, Bank of China provides customers with all-round financial services including newly introduced RMB and foreign currency denominated wealth management products. By promoting wealth management counters in overseas outlets, it facilitates cross-border assets allocation for customers.
Bank of China has enhanced the influence of "Ideal Home", a retail loan brand, by introducing fee-based services related to retail loans such as "An Xin Bao", a kind of entrusted escrow business for second-hand house transaction funds, and "An Yi Bao", a kind of entrusted management business for second-hand house transaction funds, based on further segmenting customers' financing demands in consumption and investment.
As an effort to promote bank cards, Bank of China has released some feature products including UnionPay Single Currency Great Wall Business Credit Card, Bank of China Phoenix Miles VISA Olympic Credit Card, Bank of China Ctrip Credit Card, Bank of China Amway Credit Card, and so on, catering to such market demands as business expenditure of domestic enterprises and public institutions, frequent travel, business travel and business procurement. It has also released market segmentation co-branded cards such as Bank of China-Dazhong Co-Branded Card, Great Wall-Ideal Home Co-Branded Card and Great Wall-China Life Co-Branded Card. It keeps improving the core functions of credit cards, for example, the auto payment from Great Wall RMB Card to Bank of China Credit Card and the EMV standard upgrading of Great Wall International Card.
Financial Market Business
Bank of China's financial market business activities include: proprietary trading and custodian trading of RMB and foreign currency financial instruments, all kinds of RMB and foreign currency securities and stock index investment, debt capital market, custodian wealth management and asset management, financial agency and custody. Bank of China operates financial market business mainly via its five major trading centers in Beijing, Shanghai, Hong Kong, London and New York.
- Global investment
Bank of China global investment consists of foreign currency investment and RMB investment.
Foreign currency investment mainly includes government bond, agency bond, debenture bond, mortgage-backed securities (MBS), asset-backed securities (ABS) and money market fund lending.
- Global trading
Bank of China's trading activities are divided into proprietary trading, market-making trading and related custodian trading.
In terms of market-making trading, Bank of China emphasizes the balance between business growth and risk control of market liquidity, hence the leading position in settlement and sale of foreign exchange, precious metal trading, RMB bond trading and RMB swap in the interbank market.
As for custodian trading, Bank of China takes the market opportunity brought by the rising RMB interest rate and fluctuating exchange rate to intensify the promotion of value-maintaining instruments such as forward settlement and sale of foreign exchange and RMB structured interest rate swap, thus spurring the rise of non-interest income.
- Asset management
Bank of China issues 331 structured RMB and foreign currency wealth management products and eight RMB asset management products for 16 periods.
- Debt capital market
Bank of China keeps optimizing customer service and will launch financing consulting service within the year.
- Distribution and custody of funds
Bank of China holds tight the favorable opportunity brought by the rapidly growing capital market to expand asset custody business such as fund distribution and custody, annuity, social security fund, insurance, QDII, QFII, trust, wealth management of special account and direct investment funds. In particular, through enhanced risk management and internal control, and improved IT standard and service quality, it realizes sustainable and rapid growth of fund distribution and custody business.
- Corporate annuity management
Bank of China's qualification as a certified corporate annuity account manager and custodian in 2007 created favorable conditions for its corporate annuity business.
Product and Service Innovation
New product design and quotation capacity is a main competitive advantage of Bank of China in the financial market. Always adhering to the innovative idea oriented by customers' demand, the bank is dedicated to attracting customers with self-developed innovative and tailored treasury products and services based on its extensive foreign exchange experience and strategic investor expertise.
Business of Bank of China (Hong Kong) Limited
Bank of China conducts commercial banking business in Hong Kong via its subsidiary Bank of China (Hong Kong) Limited (Bank of China Hong Kong). As one of the major commercial banking groups in Hong Kong, Bank of China Hong Kong provides retail customers and corporate customers with full range of financial products and services via over 280 branches, more than 450 ATMs and other distribution channels in Hong Kong. As one of the three note-issuing banks in Hong Kong, Bank of China Hong Kong has 15 branches and sub-branches in China's mainland and one branch overseas, providing cross-border banking services for customers in Hong Kong, China's mainland and other countries. On July 25, 2002, Bank of China (Hong Kong) Holdings Limited, the 100% shareholder of Bank of China Hong Kong, was listed on the main board of Hong Kong Stock Exchange. Bank of China now holds 65.77% equity of Bank of China Hong Kong.
The year 2007 marked the 90th anniversary of Bank of China Hong Kong serving in Hong Kong. Over these years, it has been bonding and prospering with Hong Kong and has become a significant force in Hong Kong's financial industry with wide support and trust gained from the local society. The year 2007 was also the second year of Bank of China Hong Kong implementing the 2006-2011 strategic plan. Based on its solid foundation in Hong Kong, it aims to be the best regional financial service group by consolidating its position in China's mainland and establishing strategic bases in the regional market.
- Agency business
As Bank of China Hong Kong keeps optimizing the stock service platform and service standard, its agency stock trading business performs very well, and the newly introduced private allotment service is popular among customers.
- RMB business in Hong Kong
Authorized by People's Bank of China to continue acting as the clearing bank of RMB business in Hong Kong, Bank of China Hong Kong will keep expanding its service coverage and promoting RMB wealth management services. In 2007 when Hong Kong acquired the qualification to issue RMB bonds, Bank of China Hong Kong consolidated its market position by acting as one of the joint lead managers, book runners and placing banks for RMB bonds issued by China Development Bank, the Export-Import Bank of China, and Bank of China in succession.
- Treasury products
Treasury products include structured bills and stock derivative warrants as well as qualified domestic institutional investor (QDII) products. The new products gained high popularity and good sales result. In 2007, Bank of China Hong Kong further expanded the service platform for cash management to provide tailored cash management services for key customers.
- Business in China's mainland
In China's mainland, Bank of China Hong Kong continues interaction with Bank of China while developing its own business, thus achieving a win-win result from business exchange and sharing.
As an important step for Bank of China Hong Kong's "double-force advance" business strategy in China, Nanyang Commercial Bank (China) Limited (NCB China) was officially opened on December 24, 2007. Based in Shanghai, NCB China offers full range of banking services including RMB retail banking service. On the other hand, the branches of Bank of China Hong Kong and Chiyu Banking Corporation Ltd. in China's mainland will follow the existing operating mode as branches of foreign-funded banks with the focus on corporate banking and foreign exchange business.
Investment Banking
Bank of China conducts investment banking business via Bank of China International Holdings Limited (Bank of China International). Through its affiliates based in China's mainland, Hong Kong, the United States, the U.K. and Singapore, Bank of China International provides domestic and overseas customers with extensive investment banking products and services including IPO financing, merger and acquisition, financial consulting, securities sale, investment research, fixed-rate income, derivatives, structured products, asset management, direct investment, leveraged and structured financing and private wealth management.
- Business operation
Bank of China International makes a breakthrough by advancing the strategy of "merchant banking" characterized by expanded product lines and increased service varieties. With the successful strategic transformation close business interaction with the group and the increasing core competitiveness and the brand popularity, Bank of China International's performance has hit a record high since its establishment amid the intensively turbulent capital market and the increasingly fierce market competition.
- Underwriting and financial consulting
Bank of China International has accomplished the public offering of several IPO projects by acting as the global coordinator, book runner, sponsor, sponsor or lead manager. It ranked the third on the list of underwriting of IPOs in Hong Kong in 2007 for the second time by underwritten amount.
Bank of China International has established a global securities sale network for its institutional customers. Thanks to the rapid development of the capital markets both in Hong Kong and China's mainland, Bank of China International's maintains a blooming growth momentum in stock sales and trading. The cooperation with Bank of China Hong Kong has strengthened the business in this field via an extensive distribution network. It is expected to rank among the top 3 in terms of spot market trading volume for Hong Kong stocks within the year.
- Fixed-rate income
By acting as the arranging bank, joint global coordinator and book runner, Bank of China International issued bonds (including RMB bonds) for many enterprises and financial institutions in Hong Kong in 2007. It initiated the product structure of bonds linked to option in Neo-China Group's first overseas bond issuance, for which it was awarded the "Best High-Yield Bond Award 2007" by Asia Money.
- Asset management
BOCI-Prudential Asset Management Limited (BOCI-Prudential), a joint venture under Bank of China International, remains a leading provider of asset management solutions in the Hong Kong market. In 2007, the total assets under management increased to HKD 43.3 billion, with an increase of 51% compared with that of the previous year. It issued the first CSI 300 Index targeted fund product traded in overseas exchange on the main board of Hong Kong Stock Exchange with wide attention drawn from the market.
- Direct investment
In 2007, Bohai Industrial Investment Fund co-sponsored by Bank of China International accomplished equity participation in several large projects including Tianjin Pipe (Group) Corporation, remaining a leader in the field of RMB industrial investment funds. The fund was awarded "China's Most Innovative Product of the Year 2007" by Asia Asset Management.
- Leveraged and structured financing
Bank of China International is devoted to designing and providing high-quality financing plans for customers. Focuses on services such as financial consulting, bridge financing, leveraged finance and structured finance, it provides capital support for leveraged acquisition, enterprise restructuring, strategic merger and acquisition, project construction and other investment and financing activities.
- Private wealth management
Bank of China International keeps a keen eye on the development of Asian wealth management market. In 2007, it set up the private wealth management department in Hong Kong to provide qualified high-net-worth individuals with a series of exclusive products and services including investment consulting, securities trading and portfolio consulting.
- Business in China's mainland
Bank of China International operates its business in China's mainland via Bank of China International Securities Limited (Bank of China International Securities), which is mainly engaged in securities issuance, IPO sponsoring and underwriting, securities brokerage, bond self-operating, securities asset management and securities investment consulting (including financial consulting) via 20 business departments in 17 major cities in China's mainland. Bank of China International Securities as the underwriter of the sovereign bonds of China's mainland and bonds issued by Chinese enterprises and financial institutions, ranked first among domestic securities firms in 2007 in terms of underwritten shares of sovereign bonds and policy-oriented financial bonds.
The customer base and business network of Bank of China provides a broad platform for Bank of China International to expand its business in China's mainland. With successful performance as the lead underwriter of the IPOs of some large Chinese enterprises in 2007, Bank of China International Securities has made significant progress in underwriting and gained investors' widespread recognition. China Railway Group Limited, the fist project for issuing "H shares after A shares" in China with Bank of China International and Bank of China International Securities acting as the lead underwriters, created a brand new issuing mode in IPO on domestic and overseas capital markets and represented the advantage of investment banking cross-border business of Bank of China.
Bank of China Group Insurance Company Limited
Bank of China operates insurance business via Bank of China Group Insurance Company Limited (Bank of China Group Insurance), a wholly-owned subsidiary of Bank of China registered in Hong Kong. Bank of China Group Insurance mainly engages in general insurance business and deals with life insurance via Bank of China Group Life Assurance Co. (Bank of China Group Life) which is jointly held by Bank of China Group Insurance and Bank of China (Hong Kong) Holdings Limited. With six branches in Hong Kong, Bank of China Group Insurance plays a leading role in Hong Kong's property insurance market. In 2007, Standard and Poor's conferred "A-" credit rating on Bank of China Group Insurance as recognition for its financial strength.
- General insurance business in Hong Kong
In 2007, a fierce price war was started in the insurance market of Hong Kong. Under such circumstance, Bank of China Group Insurance tried to keep away from vicious competition on the one hand, and strengthened its competitiveness by developing and meliorating products, improving its product penetration and expanding its marketing network on the other hand. The newly developed and meliorated products include "healthy children hospitalization insurance plan", "aviation insurance" and "core comprehensive coverage". On the premise of maintaining the overall business, Bank of China Group Insurance adjusted the insurance structure by expanding low-risk business and narrowing the underwriting conditions of high-risk business. The optimized product portfolio features increased proportion of low-risk products like medical insurance and reduced proportion of high-risk ones like vehicle insurance and hull insurance.
- Life insurance business in Hong Kong
Bank of China (Hong Kong) Holdings Limited and Bank of China Group Insurance respectively hold 51% and 49% equity of Bank of China Group Life. Currently, Bank of China Group Life mainly deals with individual and group life insurance business in Hong Kong and has a representative office in Beijing.
In 2007, the consolidated partnership between Bank of China Group Life and Bank of China Hong Kong generated a synergy effect. To meet the demands of customers of Bank of China Hong Kong, Bank of China Group Life launched several new insurance products under optimized product structure and promoted insurance fee installment and investment-linked insurance products via the sales and marketing network of Bank of China Hong Kong.
- Business in China's mainland
In January 2005, Bank of China Group Insurance established Bank of China Insurance Company Limited (Bank of China Insurance), a wholly-owned subsidiary dealing with insurance business in China's mainland. In 2007, its registered capital increased to HKD 2 billion, which apparently strengthened its solvency.
Throughout the year 2007, Bank of China Insurance was seeking for development and breakthrough. It quickened the progress of organizational development and business expansion by setting up the Vehicle Insurance Department and thus forming four major business units, i.e., industrial and commercial insurance, individual insurance, marine insurance and vehicle insurance, based on improved organizational structure of the affiliates. The preparation for setting up 12 mainland branches was completed within that year as well. By the end of 2007, Bank of China Insurance had set branches in 16 provinces with its business covering most regions in the country.
Bank of China Insurance has established extensive partnership with world-famous insurance brokerage companies and reinsurance companies and cooperated with many domestic enterprises in large-scale projects.
Bank of China Group Investment Limited
Bank of China engages in direct investment and investment management business via its wholly-owned subsidiary Bank of China Group Investment Limited (Bank of China Investment). As an important carrier for outward direct investment and investment asset management of Bank of China, Bank of China Investment conducts various investment activities in Hong Kong, Macau, China's mainland and at abroad, including enterprise equity investment, real property investment, acquisition and disposal of non-performing assets and asset management.
- Business operation
In 2007, in response to the strategy of Bank of China and focusing on improvement of core competitiveness, Bank of China Investment achieved overall business growth with strengthened internal mechanism, improved capability of independent management and market operation, diversified investment portfolios and expanded investment areas.
In 2007, Bank of China Investment secured a stable income thanks to a prudent investment manner to avoid the risk of price fluctuation. It realized value maintenance and increment by strengthening the value management of investment projects so as to increase returns. Meanwhile, it achieved satisfactory investment returns thanks to smart market judgment and proper exit at the right time. In 2007, Bank of China Investment completed several enterprise equity investment projects in cooperation with famous investment banks, professional funds, asset management companies, government departments in the mainland and strategic partners.
Bank of China Investment keeps extending value creating chain by trying out new business models as a foundation for business expansion. In 2007, based on the expansion of IPO investment, it achieved substantial results by exploring private equity investment, expanding the scale of fund investment and conducting surveys on overseas investment markets. Against the broader background of rapid economic growth and continuous improvement of asset quality, and based on the mature business models such as sole buyout, joint buyout and structured transactions, Bank of China Investment introduced new business models such as equity acquisition, repossessed assets acquisition and asset moving, playing a positive role as a platform in assisting assets disposal and pushing forward the progress of merger and acquisition.
BOC Aviation Pte. Ltd.
On December 15, 2006, Bank of China acquired Singapore Aircraft Leasing Enterprise (“SALE”), a leading aircraft leasing company based in Singapore. It was the first large scale overseas acquisition by Bank of China and signifies the successful move by the bank to become the first Chinese bank to enter the global aircraft leasing business. Following the acquisition, SALE changed its name to BOC Aviation Pte. Ltd. (“BOC Aviation”) in July 2007. In June 2012, BOC Aviation obtained its inaugural credit ratings of A- from Fitch and BBB from S&P.
Today, BOC Aviation is the world’s fifth largest aircraft leasing company based on the value of owned aircraft and is Asia’s largest. BOC Aviation has a fleet of over 200 modern aircraft flying with more than 50 airlines worldwide. The company provide a wide range of products and services for airlines and aircraft investors including direct operating lease, purchase and leaseback, structured finance, pre-delivery payment financing, aircraft remarketing and third party asset management. BOC Aviation has a multi-national team based in Singapore, Europe and America to provide round-the-clock service to its customers.
BOC Aviation work closely with overseas Bank of China branches to expand the Group’s aviation business. The Bank of China Group now has banking relationships with global airlines as well as aircraft and engine manufacturers; BOC Aviation has clearly created value for the Bank of China Group. By relying on the resources and financial strength of Bank of China, BOC Aviation is well placed to continue its ascend in the aircraft leasing industry and lift Bank of China’s position in the global aircraft financing market.
Bank of China Investment Management Co., Ltd.
Bank of China Investment Management Co., Ltd. (Bank of China Investment Management) is a joint venture co-invested by Bank of China and BlackRock Investment Management (UK) Limited after Bank of China's acquisition of the 67% and 16.5% equity held by Bank of China International Securities and Bank of China International Holdings respectively on January 8, 2008. Currently, Bank of China Investment Management is mainly engaged in issuance and management of fund products for domestic investors as well as investment management and consulting services provided for institutional and individual customers.
Bank of China attaches much importance to the development of asset management business. As an important part of Bank of China in the development of asset management in China's mainland, Bank of China Investment Management will make full use of the robust network and customer resources of Bank of China to expand distribution channels, expand business and improve overall competitiveness.
- Business operation
Four open-ended funds managed by Bank of China Investment Management, namely, BOC China, BOC Money, BOC Growth and BOC Income, all achieved favorable results in 2007 and thus recognized by investors. Of the four funds, BOC China and BOC Growth have won consecutive "Five-Star Fund" award by Securities Times, and BOC China was also awarded "China's Star Fund of 2007".
For BOC Money, safety and liquidity always comes first. In 2007 when most monetary market funds were faced with huge redemption pressure and liquidity risks, BOC Money's effective prevention against the liquidity risks was highly recognized by investors.
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