Bank of China seeks to ‘Brexit-proof’ new Dublin unit
Dublin branch of Chinese bank has meeting with Central Bank over Brexit ‘uncertainties’
Taoiseach Leo Varadkar and Bank of China chairman Tian Guoli in Dublin for the new unit’s launch
Bank of China is considering ways to “Brexit-proof” its new Irish business which it launched on Tuesday as a branch of the state-controlled lender’s UK subsidiary.
The 105-year old Beijing-based bank received authorisation this year to set up in Dublin as a branch of Bank of China (UK) Limited under European Union rules that allow firms in one member state to offer services in other areas of the union.
However, with UK-based firms likely to lose the right to passport financial services under Brexit, the Chinese firm may have to seek to set up a fully-fledged subsidiary in Ireland.
“We notice that there are uncertainties with the Brexit issue, so we are having frequent and close contacts with the regulators both in the UK and Ireland,” Tian Jun, general manger of the bank’s new Dublin branch in Hatch Street, told reporters on Wednesday. “Yesterday afternoon we had a very high-level meeting with the Central Bank of Ireland. Because there are uncertainties, we will have necessary plans.”
Bank of China’s decision to set up a base in Ireland pre-dates the UK’s decision in June of last year to leave the EU. The lender is seeking to benefit from the growing importance of economic relations between the Republic and the world’s second largest economy.
The branch, which aims to have 15 employees by the end of next year, will focus on corporate lending, targeting Chinese companies operating in Ireland, Irish groups with interests in China and multinationals with large offices in the State.
“As the most active Chinese bank in the international markets, the opening of our Dublin branch will support the vision and determination of the Irish people,” said Tian Guoli, chairman of Bank of China, who attended the launch in Dublin alongside Taoiseach Leo Varadkar and Tánaiste and Minster for Enterprise and Innovation Frances Fitzgerald.
Bank of China already has a presence in Ireland through its aircraft leasing operation, BOC Aviation (Ireland), which will continue to operate as a separate business.
Business links between Ireland and China have expanded in the past five years following a visit from then-Chinese vice-president, Xi Jinping to Ireland in February 2012, just a year before he became the country’s president.
Bord Bia predicts that China, currently Ireland’s second largest market for pork and dairy products, will become the Republic’s first billion-euro market for Irish food and drink exports outside of the UK by the end of the decade. Ireland exported €845 million worth of food and drink products to China last year, with the figure having grown six-fold over six years.
Meanwhile, in December China General Nuclear Power acquired a portfolio of Irish wind farms, valued at €400 million, from renewable energy specialist Gaelectric.
“I can predict more Chinese investments coming [to Ireland],” said Mr Tian, adding that the bank was also keen to work with domestic Irish banks on lending transactions.