La Caixa's first international move is China

When Spain's third-largest banking group la Caixa chose to internationalize its business, it was not further into Europe or to Spanish-speaking South America.

Instead it was to China.

As growth remains stagnant in Europe, moving into countries like China is a chance to expand la Caixa's business and motivate its workforce with new challenges, according to Juan Maria Nin, CEO of la Caixa.

The bank, the largest in Spain for consumer business, handles funds for up to 10 percent of Sino-Spanish trade and 15 percent of bilateral project financing. It began its move into China by acquiring a 9.9 percent stake in Bank of East Asia (BEA) in 2007.

BEA has more than 70 branch offices on the Chinese mainland, with plans to increase the number to 110 by 2010.

To Nin, entering China is a means of diversification - in currency, country risk and capital.

It is also a way to increase and improve the relationship with its customers who are increasing their international presence.

According to Nin, la Caixa has some 80,000 Chinese customers in Spain, about 70 of the total living in the nation.

La Caixa has just signed an agreement with China UnionPay (CUP) to make its 8,000 ATMs accept CUP cards, 1.8 billion of which are now in use globally. The move will be especially useful for the 130,000 Chinese living in Spain, who compose 2.5 percent of the foreign population

"The final goal of our internationalization strategy is to give the best service to the maximum number of clients. In order to achieve this, we are opting for an international expansion hand in hand with one strong local partner in each region to develop our business together with them," Nin told China Business Weekly.

"In 2006 la Caixa opened a representative office in Beijing and in a few weeks we will open another one in Shanghai."

But the CEO said there is no plan to open new branches and incorporate locally in China. He said la Caixa would instead expand it presence in China through cooperating with BEA.

La Caixa's willingness for a long-term relationship with BEA is reflected in the appointment of chairman of BEA David Li to the Supervisory Board of Criteria, la Caixa's subsidiary responsible for executing its internationalization strategy.

In addition, la Caixa and Criteria President Isidro Fain has been appointed a non-executive director of BEA effective from June 1, becoming the only director from outside Asia.

With the aim of diversifying income and helping develop companies that offer basic services to society, la Caixa has for many years backed a strategy of investing in company holdings.

"The la Caixa Group currently has a large portfolio of industrial holdings in companies involved in the infrastructure, energy and communications sectors, among others," Nin said.

The la Caixa Group, founded in 1990, had total banking revenues of more than 396 billion euros by March 2008. Its clients have total resources of more than 231 billion euros.

Since its beginnings, la Caixa was primarily dedicated to family saving and to offering its clients insurance for old agewhen that type of welfare service did not yet exist in Spain.

(China Daily 06/29/2009 page4)