BEIJING, Aug. 7 (Xinhua) -- China Everbright Bank has become another Chinese bank to make Luxembourg its European headquarters, as the continent's financial centers vie to lure Chinese businesses, against the backdrop of uncertainty around Britain's exit from the European Union.
Beijing-based China Everbright Bank announced on Friday it has received approval from Luxembourg regulators to set up a subsidiary there.
"China Everbright Bank's Luxembourg expansion fits into the trend of Chinese banks trying to expand into European markets while mitigating themselves against potential Brexit-related risks," said Li Chengrong, a United Kingdom-based partner at Zhong Lun Law Firm.
Currently, Chinese banks issuing products through their UK subsidiaries can distribute them to investors in the European Union, through the "passporting" rule, but the UK may lose that right post-Brexit.
"Uncertainties with the passporting rule have prompted many Chinese banks to consider adding offices inside EU countries, so they may continue to distribute products among EU investors. Luxembourg, Dublin, Frankfurt, and Paris are all viable choices," said Li.
China Everbright Bank's Luxembourg expansion follows in the footsteps of six other Chinese banks- Agricultural Bank of China, Bank of China, Bank of Communications, China Construction Bank, China Merchants Bank, and Industrial and Commercial Bank of China, all of which have made Luxembourg a key location of their European operations. Bank of China was the first Chinese bank to set up in Luxembourg, in 1979.
China Everbright Bank was established in 1992 with operations in corporate, treasury, investment banking, wealth management and mortgage businesses.
Shanghai Pudong Development Bank has also made an application to open a subsidiary in Luxembourg. Its application is awaiting the approval of both Chinese and Luxembourg regulators. (chinadaily.com.cn)
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