Bank of China (Hong Kong)
| Company type | Subsidiary |
|---|---|
| Industry | Banking, financial services |
| Predecessor | Twelve Bank of China subsidiaries in Hong Kong |
| Founded | 1 October 2001 |
| Headquarters | Central, Hong Kong , Hong Kong |
Area served | Hong Kong, Mainland China, Southeast Asia |
| Products | Commercial banking, retail banking, wealth management, RMB clearing services |
| Owner | Bank of China (via BOC Hong Kong Holdings) |
| Parent | BOC Hong Kong Holdings |
Bank of China (Hong Kong) Limited (), commonly known as BOCHK (), operates as a subsidiary of Bank of China through the publicly traded holding entity BOC Hong Kong Holdings, listed on the Hong Kong Stock Exchange. As of 2008, BOCHK ranked as the second-largest commercial banking group in Hong Kong based on asset size and customer deposit volumes, with a network exceeding 190 branches by 2019.[1] It is among the trio of banks authorized by the Hong Kong Monetary Authority to issue Hong Kong dollar banknotes.
While BOCHK functions as a legally independent entity from its parent company, it maintains close cooperation with Bank of China in areas such as management and the integrated promotion of insurance and securities products. It holds the position of largest founding member within the JETCO ATM and payment network and acts as Hong Kong’s designated clearing bank for transactions involving the Renminbi.
Established on 1 October 2001 through the consolidation of twelve Bank of China subsidiaries operating in Hong Kong, BOCHK was subsequently listed on the Hong Kong Stock Exchange in October 2002.[2] By the close of 2019, the bank reported total assets amounting to HKD3,026 billion alongside an operating profit of HKD39.8 billion.[1] Its corporate headquarters are situated in the prominent Bank of China Tower located in Central, Hong Kong. This landmark building, shared with other Hong Kong units of its parent company, is distinguished for being the first structure outside North America to surpass 1,000 feet in height.
Bank of China Group
The establishment of Bank of China's branch in Hong Kong in 1917 marked the initial presence of state-owned Chinese banks within the colony’s financial sector. By 1949, a total of fifteen branches belonging to state-owned Chinese banks alongside nine public-private joint venture banks were operating in Hong Kong. In addition, the Chinese government founded Po Sang Bank (1949) and Nanyang Commercial Bank (1950), both incorporated locally under Hong Kong jurisdiction.
In 1952, nine public-private banks—including Sin Hua Bank, China & South Sea Bank, and Yien Yieh Commercial Bank—were consolidated under a collective management entity known as the Joint Office of Joint Public-Private Banks. Following closures in 1954, control over six remaining banks was transferred to the Bank of China's Hong Kong and Macau Regional Office by 1958. Subsequently, management responsibilities for Kwangtung Provincial Bank, Hua Chiao Commercial Bank, and branches of Bank of Communications were also assumed by Bank of China.
Capital injections by Bank of China into these institutions occurred in 1975, substantially diminishing private ownership stakes. Throughout the 1980s, these fourteen banks underwent rebranding collectively as the Bank of China Group after integrating IT systems and centralizing treasury and foreign exchange functions. Despite this operational consolidation, each bank continued to retain its own management structure. Today, this group stands as Hong Kong's second-largest banking conglomerate.
Restructuring and listing
In 1998, the Hong Kong branch of Bank of Communications was separated from the Bank of China Group. Beginning in 1999, ahead of an anticipated initial public offering, the group initiated restructuring efforts that included acquiring all minority interests except for Chiyu Banking Corporation. With authorization from the People's Bank of China, this restructuring process commenced in January 2001.
All operations incorporated on mainland China within the group were merged into Po Sang Bank, which was subsequently renamed to Bank of China (Hong Kong) Limited. Nanyang Commercial Bank along with Chiyu Banking Corporation became subsidiaries under this new structure. Due to Hong Kong’s legal restrictions against mergers through pooling-of-interests methods, special legislation—the Bank of China (Hong Kong) Limited (Merger) Ordinance—was enacted by the Legislative Council of Hong Kong on 12 July 2001 to facilitate this process. The merger was finalized on 1 October 2001.
Corporate framework and BOC Hong Kong Holdings
Bank of China (Hong Kong) is publicly traded on the Stock Exchange of Hong Kong through its parent entity, BOC Hong Kong (Holdings) Limited (BOCHK Holdings), which holds full ownership of the bank. Shares of BOCHK Holdings are also available as American depositary receipts on the OTC Market.
BOCHK Holdings is included in the Hang Seng Index. Its initial public offering in July 2002 was a landmark event, representing the first overseas listing by a mainland China bank, preceding the subsequent domestic "A-share" listings by other mainland Chinese banks.
For the fiscal year ending 31 December 2019, BOCHK Holdings recorded operating income of HKD58.4 billion and net profit amounting to HKD34.1 billion. By the close of 2019, 65.65% of BOCHK Holdings was owned by the Bank of China Group, which itself is 69.265% controlled by Central Huijin Investment, a state-owned investment firm wholly owned by the Government of the People's Republic of China.
Business operations
BOCHK offers an extensive array of financial products and services targeting both retail and corporate clients, emphasizing interest-based activities such as deposit-taking and corporate lending. The bank has also been broadening its revenue streams into non-interest areas including personal lending and wealth management solutions. As of 2019, BOCHK operated Hong Kong’s most extensive branch network with about 190 branches, 280 automated banking centers, and over 1,000 ATMs.
Alongside HSBC and Hang Seng Bank, BOCHK ranks among Hong Kong’s top mortgage providers. It also runs 14 branches on the mainland (as of 2005), functioning independently from its parent company. Although incorporated in Hong Kong, BOCHK is classified as a foreign bank in mainland China and transferred its mainland operations to Nanyang Commercial Bank in 2007 to delineate business scopes clearly.
Renminbi clearing bank
Since February 2004, BOCHK has acted as the designated clearing bank for Renminbi (RMB) transactions within Hong Kong, serving as the settlement agent for RMB banknotes and funds while acting as an intermediary between Hong Kong banks and the People's Bank of China, China’s central bank. For RMB deposits repatriated to mainland China, BOCHK earns a fee of 0.125%.
This role marked a pioneering moment as it was the first authorization for RMB clearing outside mainland China, enabling services such as deposit-taking, currency exchange, remittances, and RMB card transactions in Hong Kong. The People's Bank of China appointed BOCHK as the clearing bank for an initial term of three years.
The Hong Kong Monetary Authority outlines BOCHK’s principal duties as follows:
- Establishing RMB settlement accounts for participating banks
- Managing a settlement account with PBOC’s Shenzhen sub-branch
- Handling collection and distribution of RMB banknotes
- Processing RMB remittance clearances and RMB card transactions
- Supporting participating banks in settling RMB positions arising from currency exchanges
Nanyang Commercial Bank
Established in 1950 in Hong Kong, Nanyang Commercial Bank is a fully owned subsidiary of BOCHK with a network of 42 branches. It focuses mainly on corporate customers, particularly small to medium-sized enterprises engaged in trading and manufacturing sectors, and enjoys strong patronage from overseas Chinese communities across Southeast Asia. The bank relies on BOCHK for back-office operations and IT infrastructure support. In 2007, it incorporated all mainland operations previously managed by BOCHK for both corporate and retail clients.
Chiyu Banking Corporation
Established in 1947 by the overseas Chinese entrepreneur Tan Kah Kee, Chiyu Banking Corporation Limited operates 23 branches across Hong Kong, primarily serving the Fujianese community. The bank was founded with the purpose of generating profits to support educational development in Xiamen and the broader Fujian province. To date, Chiyu has allocated more than HK$1 billion towards education projects, with a significant portion directed to Jimei University and its associated institutions.
In 2017, ownership of Chiyu Bank was transferred following a divestment by BOC (HK).
JETCO
JETCO () (Joint Electronic Teller Services Limited) manages the most extensive network of automatic teller machines in both Hong Kong and Macau, boasting close to 3,000 ATMs. Established in 1982 by BOCHK in collaboration with the Bank of East Asia, Chekiang First Bank, Shanghai Commercial Bank, and Wing Lung Bank, JETCO encompasses all licensed commercial banks within Hong Kong and Macau except for HSBC and Hang Seng Bank, which operate their own proprietary systems. The alliance between JETCO and UnionPay ended , requiring Hong Kong users to either utilize UnionPay cards on the mainland or access mainland services via Bank of East Asia ATMs connected to JETCO’s infrastructure.
Other operations
BOCHK also owns BOC Travel Services, a travel agency acquired through its takeover of Nanyang Commercial Bank, primarily serving clients from Southeast Asia.
Brunei
In 2016, BOCHK made history as the first Chinese bank to open a branch in Brunei, marking a notable step in its Southeast Asian expansion strategy.
Malaysia, Thailand
BOCHK has further strengthened its footprint in Southeast Asia through operations established in Malaysia and Thailand, underscoring its focus on emerging regional markets.
Banknotes
While not functioning as a central bank, BOCHK is among three authorized commercial banks permitted to issue Hong Kong dollar banknotes, alongside HSBC and Standard Chartered Bank. The bank commenced issuing HKD notes on 1 May 1994 under the name "Bank of China Hong Kong Branch." Following the 2001 merger, new currency notes bearing the inscription "Bank of China (Hong Kong)" were introduced in 2004. Pre-merger notes remain valid legal tender under the provisions of the Bank of China (Hong Kong) Limited (Merger) Ordinance.
As a prominent institution within Hong Kong’s banking industry, BOCHK holds a rotating chairmanship at the Hong Kong Association of Banks, the leading organization representing commercial banks in the territory.
Bank of China Tower
The Bank of China Tower, located in Central, functions as the headquarters for Bank of China Hong Kong. Designed by architect Ieoh Ming Pei, this 70-storey skyscraper reaches a height of 315 metres, with two masts extending to 369 metres. Construction started in 1985 and concluded in 1989, with its official opening on 17 May 1990.
It was notable as the first building outside North America to surpass , recognized as the initial composite space frame high-rise structure, and held the title of tallest building in both Hong Kong and Asia from 1989 until 1992. The observation deck on the 43rd floor is accessible to visitors, while entry to the deck on the 70th floor requires prior arrangement.
Its design adopts structural expressionism resembling bamboo shoots, symbolizing growth and prosperity. Despite its iconic status, the tower generated debate due to its design process bypassing traditional feng shui consultations.
Corporate governance
A key objective in BOCHK's reorganization was to strengthen its corporate governance framework and improve risk management practices. In response to misconduct allegations during 2003-2004, thorough investigations led BOCHK to reinforce its internal control mechanisms and recruit new leadership through an international search.
Liu Jinbao
In May 2003, former CEO Liu Jinbao was reassigned to Beijing to serve as vice-chairman of Bank of China amid inquiries that uncovered his involvement in "economic crimes" related to his previous position in Shanghai. He was subsequently removed from his post following accusations that he and others had engaged in the "unauthorised distribution for personal purposes" of Bank of China funds prior to BOCHK's formation, with the amount reportedly reaching HK$30 million.
New Nongkai loan
An independent committee determined that a HK$1.77 billion bridge loan granted to Chau Ching-ngai (also known as Zhou Zhengyi) carried significant risks that were insufficiently mitigated and had been approved despite serious objections from BOCHK’s Risk Management Department. Liu Jinbao faced criticism for this issue, and deputy CEO Or Man-ah opted for early retirement as a result.
See also
- List of banks in Hong Kong
- Bank of China (Hong Kong) Bauhinia Bowl
- Macanese pataca
General
- Feng, Bangyan; (2002). A Century of Hong Kong Financial Development. Joint Publishing Hong Kong. .
- BOCHK 2003 Annual Report. March 2004.
- BOC (Hong Kong) Holdings IPO Prospectus. August 2002.
Corporate governance
- Chung, O. Liu probe began in 2000: magazine. The Standard. 10 March 2004.
- Suspect loans' at Shanghai firm. BBC News, 10 June 2003.
- Batchelor, M. BOC Hong Kong hires 3 executives Bloomberg via International Herald Tribune. 4 January 2005.
- Bank executives arrested over $30m fraud scandal, The Standard. 20 August 2004.
- Xinhua News Agency, Investigation not affecting BOCHK operating results: statement. Via People's Daily. 6 August 2004.
- Suspension from duty of Messrs Zhu Chi and Ding Yansheng, Deputy Chief Executives. BOCHK press release, 2 August 2004.
- Investigation of Liu Jinbao and Zhang Debao. BOCHK press release, 5 August 2004.
- Ling, H. Top Bankers Brought Down by NPLs. Caijing, 5 March 2004.
- BOC vice-chairman sacked for suspected corruption. People's Daily. 20 February 2004.
Renminbi business
- Hong Kong Monetary Authority press release, Hong Kong banks to conduct personal renminbi business on trial basis. 18 November 2003.
- Hong Kong Monetary Authority, HKMA Annual Report 2003.
- Hong Kong Monetary Authority press release, The People's Bank of China Appoints Clearing Bank for RMB Business in Hong Kong. 24 December 2003.
- Xinhua News Agency, Officials hail arrangements for conducting RMB business in HK. Via China Daily, 18 November 2003.