Business / Companies

Bank of China to raise yuan capital of Frankfurt branch

(Xinhua) Updated: 2014-05-08 10:21

BERLIN - Bank of China, one of China's biggest commercial banks, decided to raise yuan capital of its Frankfurt branch, in a move to strengthen its competitiveness in offshore business of the Chinese currency, said the bank on Wednesday.

Capital of Bank of China in Frankfurt would be boosted by one billion yuan (about $162.49 million), said the bank

Bank of China to raise yuan capital of Frankfurt branch

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in Berlin. This was the biggest capital increase in Chinese currency ever since by Chinese banks operating in the euro zone, according to the bank.

It said the capital increase aimed at increasing its Frankfurt branch's strength and ability for yuan business services.

"It is a key measure intended to follow the internationalization trend of yuan and to promote cross-border yuan business," said Li Guang, Managing Director of Bank of China Frankfurt Branch.

In March, China and Germany signed a memorandum of understating on establishing a yuan clearing and settlement mechanism in Frankfurt, moving the German city closer to becoming an offshore yuan center.

Bank of China, which opened its branch in Frankfurt in 1989 as the first Chinese bank in Germany, is competing with its Chinese peers for being the clearance bank for yuan in the German financial hub.

Offshore yuan payment in Europe is growing faster than in Asia, recent data from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) showed.

"Our business intelligence indicates that China's major trade partners in Europe are now embracing the yuan for trade settlement," said Patrick de Courcy, Deputy Chief Executive of SWIFT, in a statement in October last year.

According to SWIFT, yuan now ranks as the seventh most-used global payments currency. In March, yuan accounted for 1.63 percent of global payments.

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