Joint Venture Company amongst the First Batch of Approved Companies to start consumer finance operationsKuala Lumpur, 1 March 2010 - Hong Leong Bank Berhad ("HLB" or "Bank") together with the Bank of Chengdu Co., Ltd ("BOCD"), obtained operation approval from China Banking Regulatory Commission (CBRC) for Sichuan Jincheng Consumer Finance Limited Company ("JV Co")., a joint venture company that is part of the first batch of approved companies, to start consumer finance operations in Central and Western China.
This JV Co which has a registered capital of 320 million yuan will be focusing primarily in the consumer financing business with HLB having a 49% equity interest and BOCD having a 51% equity interest in the JV Co. This strategic alliance between HLB and BOCD to tap the promising and growing financial services sector in China further cements the Bank's strategic partnership in BOCD and affirms the Bank's vision and belief in the huge potential of China.
HLB which possesses a wealth of experience in consumer finance accumulated over the years together with BOCD that has a ready wealth of knowledge about the local culture and the consumer market in Chengdu , will provide a strong foundation for the development of the JV Co.
"We are delighted and honoured that through this JV Co, we have the opportunity to further build on our strategic partnership and future options with BOCD. Strategically, it will allow us to expand and diversify our consumer banking capabilities into a new market. We will ride on BOCD's embedded presence and established brand in the Chengdu community to quickly expand the JV Co's reach and customer relationships. It is a win-win partnership," said Ms. Yvonne Chia, Group Managing Director / Chief Executive of HLB.
As a start, the JV Co will develop business alliances with major electrical appliance chain stores, reputable consumer electronic and computer stores to offer financing to consumers for the purchase of consumer durables. Loan applications are carried out at the site of purchase, with an application procedure that is simple and convenient, including a fast turnaround time. In the next stage, the JV Co will expand the business scope to furniture and will also offer general purpose loans to consumers for travel, wedding and education.
"Last year, the Bank partnered with the Industrial and Commercial Bank of China Ltd. (Singapore) to launch and offer trade settlement services in Yuan for our trade customers and with the China Development Bank to develop cross-border financing and funding opportunities and just recently, we have obtained operation approval for a joint venture with BOCD to launch the first batch of approved companies to start consumer finance operations in Central and Western China. As you can see, at HLB, we are moving to position ourselves in the China growth story," she said.
"The Bank is serious about China and we are convinced of the huge potential upside. We have the right partners in China and we want to grow with them. We are very excited, and if we get our act right, in 3 to 5 years, we will have transformed the Bank's profile into one that is embedded in the Region," Ms. Chia concluded.
HLB has a 20% equity interest in BOCD, a commercial bank with 31 branches and 116 outlets in Chengdu , Sichuan .
-END-Press Release - 01/03/2010