SPD Bank launches London office

Shanghai Pudong Development Bank launched a representative office in London on Wednesday, the first overseas office for the 20-year-old Chinese bank.

Currently, SPD Bank's presence is a representative office, which seeks to analyze Europe's financial environment and find a good location to establish a European subsidiary or branch.

"In finding a suitable location, we consider many factors, including legal environment, market barrier to entry, return on investment, room for future growth and proximity to global financial centers," said Gao Xia, SPD's chief representative in London.

Gao said the bank chose London in which to establish the office because the city's financial industry is relatively international, and its time difference to China is less than in New York.

"Although New York and London are big important financial centers, about 50 percent of the financial services transactions in New York serve its domestic market, whereas in London 90 percent of transactions are for international business," Gao said.

"We want to establish a presence in Europe first, to make the most of its time zone advantage, and then North America, so we can ultimately achieve 24-hour services," she said.

SPD Bank now has a total of 39 branches and about 900 Internet banking service points.

It also has developed a focus on innovation. For example, it joined with America's Silicon Valley Bank in 2012 to open the SPD Silicon Valley Bank, which is China's first bank for technological innovation.

Gao said her team wants to bring the same type of innovation to London and Europe, and believes this will be a unique advantage for SPD Bank in Europe.

SPD is the latest Chinese bank to establish a presence in London, following Bank of China, China Construction Bank, Bank of Communications, Agricultural Bank of China, and Industrial and Commercial Bank of China.

Roger Gifford, lord mayor of the City of London, said the concentration of Chinese banks there reflects the nation's financial opening-up. He believes it will help China's banking industry to catch up with international standards and processes.

"These banks learn a lot about international banking standards, which they can then bring back to China. This may relate to lending, credit cards, bond markets, foreign exchange or whatever. So this process is one of harmonizing standards," Gifford said.

At the same time, he said, Chinese banks also contribute much to London, through employment and tax revenue, as well as helping to facilitate bilateral trade and investment between China and the United Kingdom.

Mark Boleat, policy chairman for the City of London Corp, noted: "London is the leading global center for international finance and business, and also a leading offshore RMB center. Already, more than 400 Chinese enterprises have established a presence in Britain, including China's biggest five banks. We expect all of them to be expanding their business here and welcome more Chinese investment."