Bank of China has developed in lockstep with the SAR since the founding of the People’s Republic of China and was a key pillar of stability around the 1999 resumption of Chinese rule. Its president, Li Guang, is looking forward to a new period of development opportunities as Macau celebrates 20 years as an SAR.
Founded in 1950, soon after the establishment of the People’s Republic of China, the Bank of China’s Macau branch (formerly known as “Nam Tung Bank” in Macau) has always stood tall amid the Special Administrative Region’s economy and society. It accounts for half of all banking business here, which may not sound surprising, yet perhaps less well-known is that it is also the most profitable overseas branch of the Bank of China Group, the country’s primary international bank.
Li Guang, president of the Bank of China Macau branch (BOC Macau), is proud to highlight what he sees as the bank’s clear and obvious advantage here. In an exclusive interview with Macau Inc., he says: “For BOC Macau, it is “one country, two systems”.
What is this means, Li elaborates, is that the bank has been able to cherish the opportunity to perform on a large stage, as the country’s Reform and Opening era has led to grand initiatives running through Macau, such as the Belt and Road Initiative and the Greater Bay Area, among others. “The implementation of the one country, two systems strategy has been, and is a significant opportunity,” he says, adding that he is looking forward to what comes next as Macau turns to its 20th year as an SAR.
Q: Can you please talk about the role of BOC Macau in the SAR’s economic and social development, specifically its support of local industry and commerce, as well as the livelihood of citizens?
A: Since its establishment in Macau, for the past 69 years, BOC Macau has unswervingly followed its mission of being “rooted Macau·serving Macau”. The bank has been dedicated to fostering economic development, supporting industry and commerce, as well as disadvantaged communities, promoting the construction of a “smart city”, and doing everything it can for the continued prosperity and stability of Macau. The result is that we are the preferred bank, the mainstream bank, as we have won the trust of society and citizens.
BOC Macau is not only a Macau Pataca currency-issuing bank; it is also the government’s public banking representative and a Renminbi clearing bank. Besides these formal roles, over the years, the bank has organized charity events, actively supported education initiatives, and been instrumental in the training of talent.
Our achievements are the result of joint efforts spanning several generations. The past decade in particular has seen leapfrog development. Compared with 10 years ago, For Bank of China Macau Branch, deposits have expanded by eight times (MOP71.2 billion to MOP555.3 billion); loans by eight times (MOP42 billion to MOP328.6 billion), and annual profits by five times (MOP1.1 billion to MOP5.68 billion in 2018).
Under the Belt and Road Initiative, BOC Macau has actively seized opportunities presented in providing overseas financing needs of “going out” enterprises, giving full play to the platform advantages of being operating in Macau. It offers all kinds of financial service for the Chinese companies which goes to Belt and Road Initiative related or Portuguese-speaking countries, and those companies from Belt and Road Initiative related area, especially these from Portuguese-speaking countries which enters the Chinese market.
Q: Can you please talk about the experience and business philosophy of BOC Macau in promoting “characteristic financial development”, especially in the financial development in Greater Bay Area?
A: The progress in this regard is very gratifying. Bank of China Macau Branch has issued the world’s first Macao patacas bond worth US $1.8 billion, the first Macao offshore RMB bond worth US $4 billion “lotus bond”, the first Macao “One Belt and One Road” offshore RMB bond worth US $4.5 billion and other themed bonds. As a global coordinator, we successfully implemented the plan of the Ministry of Finance to issue 2 billion government bonds in Macao for the first time. In the past two days, BOC Macau successfully issued the first green bond in Macau. This is also the first single linked dollar overnight guaranteed interest rate (SOFR) bond for commercial institutions in emerging markets and the Asia-Pacific region, which greatly enhanced the reputation of Macau financial institutions in the international bond market.
Moreover, as the SAR’s Renminbi clearing bank, BOC has led the way in opening the first RMB bank account for a Portuguese commercial bank, thereby accelerating the construction of a Sino-Lusophone RMB clearing platform. In May of this year, at the Portuguese-speaking Central Banks’ financiers summit forum, we actively coordinated the efforts of local banks to engage with five bank associations from Lusophone countries and pioneered the signing of the “Promoting Macao and Portugal” agreement. This resulted in uniting a wider range of participants in financial services industry to improve trade cooperation between China and Portuguese speaking countries.
At the same time, BOC Macau actively spread the geographical reach of the bank and diversified the wealth-management channels available to local residents. For instance, BOC Macau has obtained Class A international membership approved by Shanghai Gold Exchange and will promote the trading of precious metals in Macau with the construction of the Macau Gold Exchange. BOC Macau and China (Macau) Financial Assets Trading Company have signed a strategic cooperation agreement in this regard.
BOC Macau is focused on opportunities in the Greater Bay Area and is continuing to create innovate products and services. This is why we issued the world’s first Greater Bay Area bonds, denominated in MOP, worth US$1.8 billion, It is the world’s first “GuangDong-Hong Kong-Macau Greater Bay Area” themed bond, the world’s first Macau patacas bond issued in accordance with international rules, and the first bond listed by the newly established China (Macao) financial assets trading co., ltd. in Macau. And we launched the Greater Bay Area Theme Fund, which drew subscriptions of MOP 560 million, all from local residents.
In new areas, such as so-called “fintech”, the bank is also active. We took the lead in realizing an online payment channel that supports Alipay, WeChat, and UnionPay. By the end of September this year, 6,500 merchants had been signed up by BOC Pay.
Q: Please elaborate on the bank’s efforts to build an RMB clearing center for Portuguese-speaking countries and a financial service platform for China and Portuguese speaking countries.
A: BOC Macau has long established branches in Portugal, Brazil and Angola, initially creating a service network in Portuguese-speaking countries to provide opportunities for global and Portuguese-speaking countries to participate in Sino-Lusophone development opportunities. In the construction of the RMB clearing center for Lusophone countries, BOC Macau has joined the RMB Cross-border Payment System (CIPS) which covers these countries. At present, the bank has established an agency relationship with 17 Lusophone countries. In 2018, business in this network reached RMB 2.5 billion.
At the same time, BOC Macau is working on creating a “Sino-Lusophone Investment and Financing Service Platform”. This would provide a wealth of information on investment projects in Lusophone countries, promoting the integration of Sino-Lusophone projects and project matching. To give a few examples: BOC Macau successfully assisted the Portuguese central bank to issue panda bonds in China, becoming a model for foreign central Banks to issue panda bonds in the mainland. We supported an enterprise in Macau to purchase a Portuguese farm for 35 million euros to promote the development of China-Portugal agricultural and commercial cooperation. A euro 550m syndicate loan from banks backed a Chinese company’s takeover of Portugal’s biggest insurer.
Q: What is BOC Macau’s future development plan?
A: The bank will continue to support the development of Macau’s economy, society and help to improve people’s livelihoods in accordance with the new SAR government’s policy agenda. Second, we will continue to develop “characteristic finance” undertakings. Third, we will fully support the construction of the Greater Bay Area, thereby promoting the integration of Macau into the country’s overall development.
BOC Macau will continue to actively build a full-featured mainstream bank in the region and strive to become an important financial institution serving the Greater Bay Area, as well as serving the Belt and Road Initiative, especially among the Portuguese-speaking countries.