First established in 1951, Agricultural Bank of China has evolved from a state-owned bank serving the agricultural sector to an international commercial banking group with stock market listings in Shanghai and Hong Kong.
We spoke to Ruishan Li, General Manager of Agricultural Bank of China’s London operations about the importance of London to its global business and why it is an exciting time for Asian firms considering moving to the City.
What does your company do?
“As our name suggests, we started out specialising in agricultural finance in China. Following the Chinese banking reforms, we went on to build the largest network of domestic branches (23,000 branches) serving private industry, corporates and public sector clients. Today, we employ over half a million people and are the third largest Chinese bank in terms of assets. Internationally, we have 21 branches serving 17 regulatory jurisdictions. Our London office focuses on wholesale banking, working with clients across the UK, Europe and China.”
What made Agricultural Bank of China move to London?
“We tend to work with corporate clients that have their business interests split across different jurisdictions. This might include Chinese businesses expanding in the UK, or UK businesses with commercial operations in China, for example. As such, a number of things attracted us to London.
Firstly, it is the preeminent financial centre for banks looking to expand internationally. One striking feature is that so many banks have bases here – meaning the infrastructure is strong. Plus, the UK is an outward looking nation that trades actively overseas and there is a genuine diversity of businesses here in London.
This is all supported by official policy. The UK and Chinese governments are working together to facilitate bilateral trade – evidenced by growth from $40bn to $80bn over the last 10 years. This speaks volumes of the opportunity for Chinese businesses moving to London. Foreign direct investment between the two nations is also rising fast, and landmark projects such as Chinese investment in UK property is just one obvious example - testament to this strong and growing bilateral relationship that Agricultural Bank of China is benefiting from.”
What support have you received since you’ve been in London?
The help from UK institutions, such as the Department of Trade and Industry and HM Treasury, has been extremely positive. We have a strong voice as an international company operating in the City. To demonstrate this, HM Treasury has been keen to engage our views on topics such as the UK’s exit from the EU, for example.
We have also had the opportunity to collaborate with local partners, which has helped us raise our profile outside of China. On top of this, the UK regulatory environment is supportive as it is renowned to be reasonable and sensible – an asset not to be undervalued.”
You mention the UK regulatory environment. How has it helped your company?
“It is widely acknowledged that UK financial regulation is world-leading. Being based in the City, our company has benefited from operating under an envied regulatory system that is ahead of most other jurisdictions. This has enabled us to take best practice and expand it into our other markets. To be more specific, regulators have been tightening banking regulations globally: operating under a tighter UK regulatory regime has helped us prepare for similar changes in our other markets as the UK leads the way.”
“It is widely acknowledged that UK financial regulation is world-leading... [this] has helped us prepare for similar changes in our other markets as the UK leads the way.”
Has your presence in London shaped your service offering in any way?
“Yes. Based around our own strengths, we have been shaping our products and services to appeal to our growing London market. As a Chinese bank, we bring clear benefits where foreign exchange services on the Renminbi are concerned. Therefore, we are working on fixed income opportunities for UK clients that want access to the Chinese Renminbi market. This type of development opens up opportunities for UK businesses to more actively trade in the Chinese currency, creating a win-win situation.”
Finally, what does your future in the City look like?
“Without doubt, we are here to stay. We view London as a financial centre in its own right, and this fact will not change irrespective of the political or economic landscape. The diversity of activities across London is already vast. But the opportunity set for businesses is constantly growing: increased interest from China’s banking sector alone should make London even more appealing to Chinese companies. Add this to the collaboration between the UK and Chinese government, and this all presents a big opportunity for Chinese businesses – or indeed any Asian businesses – moving to London.
“The UK and Chinese governments are working together to facilitate bilateral trade – evidenced by growth from $40bn to $80bn over the last 10 years. This speaks volumes of the opportunity for Chinese businesses moving to London.”