The Bank of East Asia is making it easier for Japanese firms to enter markets in the Chinese mainland and elsewhere in the region

The partnership allows Daiwa to tap BEA's network and offer banking services to Japanese small and medium-sized enterprises (SMEs). More and more Japanese SMEs are expanding operations overseas and demand for local currency loans, especially in China, is increasing.

BEA's deputy executive director and deputy CEO Chan Kay Cheung said that a recently signed memorandum of understanding formalised existing co-operation. The focus was mainly on the mainland, but could also cover other areas where BEA operates including Hong Kong, the Asia-Pacific region and the United States.

The arrangement enables Daiwa Bank to provide its clients, who are mostly SMEs operating in Asia, with loans in local currencies through BEA. This is a "win-win" situation for the two sides, as BEA, which is unfamiliar with Japanese businesses, will be able to increase its client base while reducing its credit risk. Mr Chan said that without advice from Daiwa it was likely that good potential clients would be missed.

" We get on very well with Daiwa because of our shared Asian culture. Daiwa knows too that as a Hong Kong-based bank, BEA benefits from Hong Kong's strong legal system, advanced infrastructure and communications. We also have a lot of working experience in the mainland and an extensive network there," added Mr Chan.   

Under the terms of the agreement, Daiwa will recommend to BEA creditworthy customers in need of funds or banking services and act as guarantor for the loans issued by its partner, charging the borrowers for this.

Incorporated in Hong Kong in 1918, BEA is the largest independent local bank in Hong Kong. It has more than 80 years of experience in the mainland Recognising the enormous market potential of China, it set up its first branch in Shanghai as early as 1920.

Though treated as a foreign bank in the mainland, BEA is allowed to take deposits in renminbi and has the biggest business network among foreign financial institutions there.

Related links:
BEA www.hkbea.com
Daiwa Bank www.daiwabank.co.jp/index-e.html