First Bank of Nigeria Plc has opened its representative office in Beijing, China, making it the first Nigerian bank to establish an office offering financial services to Chinese, African and other customers in the Far East.
The bank’s Group Managing Director/CEO Bisi Onasanya said that the opening of the representative office is just the beginning of First Bank’s entry into the Chinese market, as it is in preliminary discussions with a local bank to take an equity stake in the Chinese bank.
Although, he declined to give details of the prospective merger and when it would take place, he said when it does happen, it would pave the way for FBN to offer the full array of banking services to customers in the country.
Giving some insight on why FBN has decided to open an office in China, Onasanya explained that the country is one of the world’s fastest growing economies and has become Nigeria’s major trading partner with several Chinese companies seeking to do business in Nigeria.
He said FBN is using this as a platform to grow its business in the fastest growing market in the world, as well as fostering economic and trade ties between China and Nigeria.
The representative office, he stated, would offer a one-stop shop for such companies wanting to enter the Nigerian market, adding that FBN had already established banking relations with Chinese institutions, including the signing of a memorandum of understanding with Yuemei Group Company Limited, a textile firm, with a value of $50 million.
Also, a partnership has been agreed with the Shenzhen Energy Investment Co. Limited (Shenzhen Energy Group) for the construction of 3,000MW gas turbine power plant in Nigeria worth $2.4 billion, as well as Memorandum of Understanding (MoU) with another Chinese firm, Guangdong Xinguang International China-Africa Limited for a $500 million investment in Ogun State.
In addition, Onasanya disclosed that FBN has signed an MOU with the China Construction Bank, in addition to being its correspondent bank, to cover global banking collaboration.
FBN, he said, established correspondent banking relationship with the Bank of China as far back as 1979, while its correspondent banking relationship with ICBC was established last year.
Under FBN’s partnership with Sinosure and related Chinese banks, the bank, Obasanya explained, has provided financing support to Chinese companies in Nigeria.
Also providing clarification on why FBN chose to locate its representative office in Beijing and not Shanghai, FBN’s Chief Representative Officer in Beijing, Mr. Wen Duanyu, noted that the largest banks in China that control between 60 and 70 per cent of banking transactions in the country are headquartered in Beijing and not Shanghai.
He said contrary to widely-held belief that Shanghai is the financial capital of China, it is actually in Beijing where most financial transactions originate.
He added that traditionally, all foreign banks that have started out with representative offices are given approval to start off in Beijing before they expand to Shanghai, Hong Kong and other commercial cities in China.
FBN has the distinction of being one of the first Nigerian banks to expand overseas when it opened the London branch of the bank 28 years ago. FBN UK was subsequently awarded a banking licence by the regulatory authorities in the United Kingdom to operate as a full banking subsidiary of FBN Plc in 2003.
In addition to the UK subsidiary, FBN has a branch in Paris, and a representative office in Johannesburg. The bank’s target is to set up another representative office in Dubai in the near future.
FBN Plc secured the approval of the China Banking Regulatory Commission to commence business of its representative office in Beijing in 2009, having satisfied the official requirements prescribed by the CRBC.