Bank of America (NYSE:BAC) plans to accelerate its expansion in China after the bank doubled its profits in the world’s fastest-growing economy last year. Bank of America NA China President Huang Xiaoguang said in an interview in Shanghai on Wednesday that he intends to build upon the bank’s strong performance in the previous year, when the company added branches in China and raised growth targets.
“We want to become a top player among China’s foreign wholesale banks in terms of all metrics,” said Huang, who joined the bank in October 2010. “We need to grow faster than our competitors to grab market share and stay ahead of them. What we achieved last year was significant, but we want to take it up a notch.”
The bank currently employs about 500 people in China and has three outlets. Last year, it poached bankers from rivals HSBC (NYSE:HBC) and Citigroup (NYSE:C) so as to boost its operations in China. Before joining Bank of America, Huang was President of Citibank China. He holds a bachelor’s degree from the Shanghai Institute and an MBA from the Netherlands School of Business.
The bank’s bullish outlook about its own prospects in China is at variance with the decision by its American parent to dispose of 10.4 billion shares of China Construction Corp. last November. Other foreign banks in China are also stepping on the pedal to take advantage of opportunities in the world’s third-largest banking market – HSBC plans to increase its branch network while Deutsche Bank (NYSE:DB) may increase its workforce by about 25 percent next year. Citigroup was granted permission on February 6 to issue credit cards in China. According to the China Banking Regulatory Commission, foreign banks in China have grown profits by an average 26 percent over the past decade.
Here’s how shares of BAC are reacting to the news:
Bank of America Corporation (NYSE:BAC): BAC shares recently traded at $8.00, up $0.05, or 0.63%. They have traded in a 52-week range of $4.92 to $14.70. Volume today was 55,728,730 shares versus a 3-month average volume of 286,168,000 shares. The company’s trailing P/E is 801.00, while trailing earnings are $0.01 per share.
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