Bank of China Grooms Unit Into Southeast Asian Flagship

Bank of China Ltd. is grooming its Hong Kong-listed unit to become the lender’s flagship for Southeast Asian business.

China’s fourth-largest lender by assets said in a statement Monday that it plans to inject the banking businesses of both its Hochiminh City and Manila branches into its Hong Kong-listed unit, Bank of China (Hong Kong) Ltd.

Since 2016, Bank of China has moved banking assets in Malaysia, Thailand, Indonesia and Cambodia into its Hong Kong subsidiary.

Bank of China said Southeast Asian markets have “notable strategic significance” in China’s One Belt One Road initiative and “going-out strategy.”

The move aims to “enhance the bank’s regional customer service capabilities, boost product innovation and market competitiveness, and foster the accelerated growth of the bank in the (Southeast Asia) region,” Bank of China said.

The bank did not provide additional information about the proposed asset injection.

Bank of China’s third-quarter net profit rose 0.1% to 41.82 billion yuan ($6.3 billion) from a year ago, and its nonperforming loan ratio stood at 1.41% as of the end of September.

Contact reporter Leng Cheng (chengleng@caixin.com)