PETALING JAYA: China Construction Bank Corp (CCB), ranked as the world’s second-largest bank, has been granted a Malaysian commercial bank licence by the Minister of Finance.
Bank Negara said the banking giant’s unit, China Construction Bank (Malaysia) Bhd (CCB Malaysia), was granted the licence based on its prudential strength and ability to “bring in propositions that are in the best interest of Malaysia”.
The central bank said the issuance of the licence was the first under the Financial Services Act 2013.
“CCB Malaysia’s predominant focus in infrastructure project financing will add value to Malaysia’s transformation into a high-income nation.
“The presence of CCB Malaysia is expected to further strengthen the economic and financial linkages between the People’s Republic of China and Malaysia, and contribute towards the development of an effective and dynamic financial sector in Malaysia,” it said in a statement yesterday.
CCB’s unit is the third Chinese bank to be granted a banking licence in Malaysia after Bank of China (Malaysia) Bhd and Industrial and Commercial Bank of China (Malaysia) Bhd (ICBC).
It had been speculated recently that CCB had applied for a banking licence in Malaysia and was awaiting a decision from the authorities.
CCB ranked second on Forbes’ list of the world’s biggest public companies in 2016. It presently has a market capitalisation of US$1.26 trillion.
In Malaysia, CCB is part of the consortium comprising four local banks and four international banks with a combined asset base exceeding US$13 trillion, which set up the Bandar Malaysia Fund.
The fund is to finance the development of the Bandar Malaysia project in the southern fringes of the capital’s central business district. Participating international banks also include the Bank of China, ICBC and Hong Kong and Shanghai Banking Corp.
In August, CIMB announced an agreement with CCB to facilitate cross-border investments in Malaysia and China.
Under the deal, CIMB said CCB would act as its sub-custodian bank in China to clear, settle and safekeep Chinese shares, bonds and other investment products on behalf of the Malaysian bank and its clients.
A memorandum of understanding was also inked, whereby CCB agreed to appoint CIMB as its sub-custodian bank to clear, settle and safekeep its customers’ investment portfolio in Malaysia.
The two organisations also committed to explore further collaborations to appoint each other as onshore settlement agents in respect of each party’s inter-bank bond market activities.