Bank of America (NYSE: BAC) plans to seek approval from China to expand its operations in the fastest growing country in the world, where the Charlotte, N.C. based bank is lagging behind many of its rivals in terms of assets.
Bank of America entered into China’s market in 2004 with a branch located in Shanghai and has since received approval to handle limited forms of lending and investment banking. Bank of America also has a minority stake in China Construction Bank, the second-largest bank in the country of China.
Executives at Bank of America are discussing the potential need to incorporate locally in China, according to several sources. Analysts are not sure how much capital the bank is seeking to inject into the unit, although China requires a minimum of one billion yuan, or about $150 million U.S. in registered capital.
“We want to expand our business but have no update on specific licenses,” a Bank of America spokesman said.
The move comes as the largest bank in the United States in terms of assets is trying to broaden its business around the world, under the leadership of freshman CEO Brian Moynihan.
Bank of America has pursued growth in China much less aggressive than Citigroup and HSBC holdings. Many banks have been reluctant to move into china because they do not believe they can compete for retail customers because of China’s network of state-owned banks and existing U.S. banks that are in the Chinese market already have a solid grip on the nation’s customer base.
