1. Foreign Banks in China Pedro Coelho Suleiman Dyab Yi Lin Li
Hendrik-Jan Sunaert
Gabriela Thibaut
Foreign Banks in China

2. Outline Introduction Main reasons for entering Chinese market
Environment & Challenges
General performances of foreign banks in China
Case study : HSBC
Strategies to improve performance
Conclusion

3. Introduction

4. Main reasons for entering Chinese market
Customer following
Market development
Accession to WTO
First mover follower
Diversification

5. Foreign banks in China : the context
Opening Chinese Market
& Banking reforms 01
China’s access to WTO 02
Liberalisation of the financial market 03
Regulation of The Poeple’s Republic of China 04

6. Challenges Mobile Payments Competition Financial crisis Regulation 01
Pictures
Regulation
Record 01 02 03 04 05

7. Foreign banks weight on Chinese Financial Ecosystem
2680 billion yuan
1.38% of total assets
More than double total assets of foreign banks from 2007 to 2015
Decrease of more 40% from 2007 to 2015

8. Banks profitability EU USA China (Average between 2012-2015) 7 9 18.3
0.15 9
1.04
18.3
1.20
ROE(%)
ROA(%)

9. Foreign Banks profitability
15.3 billion yuan
Irregular behaviour the last years but with a slightly growing tendency
ROA on average of 0.5%:
Less profitable than chinese banks
More profitable than banks in europe but less than US
Some Concerns:
Europe banks were going through a financial crises
Generalization of foreign banks which include US, EU among others

10. Foreign banks
Insatisfaction with regulations, expected more market participation
Last years, many banks have been sold stakes in chinese banks, however with great profit
Shift focus to other areas
Investment (IPO, M&A, Bonds)
Chinese companies expansion abroad
Operation performance for the majority banks have not been successful

11. Case study: HSBC
British multinational banking and financial services holding company
Strategy : an international network to connect fast growing markets
comparison between the HSBC holding in France and the HSBC holding in Shanghai

12. The Four business lines of HSBC
Wealth management
Global Banking and Markets .
Commercial banking .
Global private banking

13. HSBC: Mainland China
HSBC Bank (China) Company Limited began operations on 2007
Strategy : capture growth opportunities arising from )fast-growing trade corridors )increasing wealth creation in our priority growth markets.

14. Share of the business line to the profit
Comparison HSBC France and Shanghai
Global private banking
Global banking and markets
Wealth management
Commercial banking
France:10,8%
Restrictions
China ::24,6%
Negligible business line
China:18,8%
Low interest margin
France:107%
Ieasing regulation
Restrictions on commercial banking
High concurrence
schengen pact

15. Improving foreign bank’s performances
Jimmy Leung, China Financial Services leader at Pricewaterhousecoopers
Future Directions:
Broad overseas network
Unique professional practices
Comprehensive experience in financial services
Experience in technology enablement

16. Thank you for your attention !
Any questions ?