With special thanks to Mark Chang of New Jersey, United States, for allowing me to use his photo. You can see his photo stream via this link: http://www.flickr.com/photos/kramchang/
Bank of Communications (交通銀行)
Founded in 1908 during the final years of Imperial China’s Qing (Ching) dynasty, Bank of Communications quickly became one of Big Four banks in China. It was also one of the first local note-issuing banks in China (many foreign banks also issued banknotes at the time). The bank's original mandate was to manage payments for, and to finance the building of the country's shipping, railways, telegraph, postal service, mining and forestry industries.
Three years later in 1911, forces led by Dr. Sun Yat-Sen overthrew the Qing (Ching) dynasty, ending two thousand years of imperial rule in China but also plunging it into almost four decades of wars and instability. In 1934, Bank of Communications opened a Hong Kong branch to handle the massive amount of remittance business between the then British colony and China.
Following the devastating invasion from Japan, World War II and China’s own civil war between the Communists and the Kuomintang (Nationalists), the Republic of China government (founded in 1911) fled to the island of Taiwan in 1949 while the Communists took over mainland China, establishing the People’s Republic of China. Like China itself, Bank of Communications was also split, with the Communists taking over the mainland Chinese operations and the Kuomintang taking the senior management team and the bank's precious metals to Taiwan. Both parts of the bank were effectively nationalized, though Communist China's Bank of Communications continued operations until 1958, when it was dismantled and its assets divided up between the People's Bank of China and the People's Construction Bank (today's China Construction Bank). Interestingly, ownership of Bank of Communications Hong Kong Branch was transferred to Bank of China (Hong Kong), but maintained its own management and branding, becoming the only entity operating under the original banner for quite some years.
Meanwhile, Taiwan's Bank of Communications remained shut as Taiwan itself plunged into a decade of social unrest and terror. It was only in 1960 that the remnants of Bank of Communications resumed operations in Taiwan, adopting a new English name Chiao Tung Bank, which actually means "Bank of Communications" in Mandarin Chinese. Eventually Chiao Tung Bank and International Commercial Bank of China (the Taiwan descendant of the Bank of China) merged in 2006 to form today's Mega International Commercial Bank.
After decades of social turmoil, famines and terror under Chairman Mao Zedong's regime, China in 1979 launched its “economic reform and open-door policy” and the new Bank of Communications Co. Ltd. was re-established in Shanghai in 1987 as modern China’s first state-owned joint-stock bank. Despite this, under state-control, bureaucracy and corruption was common in all Chinese banks well into the 1990s, when regulatory and managerial reforms began to slowly transform them towards more market-driven and risk-conscious enterprises.
The new Bank of Communications became the first bank in China with a mandate to transform itself from the old, corrupt, backward and bureaucratic mode of operations that merely carried out official policies regardless of risk and profitability, or lack thereof, to one based on market forces.
In 1983, Bank of Communications Hong Kong was amalgamated into the Bank of China (Hong Kong) Group. However, in 1998, Bank of China (Hong Kong) Group returned Bank of Communications Hong Kong back to the Shanghai-based Bank of Communications Co. Ltd.
As of 2010, Bank of Communications had a nationwide network of over 2,600 branches in China and was the No. 5 bank in China. Overseas, the bank operates a network of branches in Hong Kong while maintaining offices in New York, Tokyo, Singapore, Seoul, Macao, Frankfurt and London.
- In 2004, with the banking reform now well under way with other state-owned banks like the Agricultural Bank of China, Bank of China, China Construction Bank and the Industrial & Commercial Bank of China, the State Council approved Bank of Communications' plan to partially float its share capital. To facilitate the modernization of the bank’s management, product lines and operations, Bank of Communications invited HSBC Holdings to take a 19.9% stake in itself for USD $1.75-billion.
- On 2005-06-23, the bank was listed in Hong Kong, becoming the very first Chinese bank to do so outside of mainland China.
- On 2007-05-15, Bank of Communications obtained a dual listing on the Shanghai Stock Exchange, becoming the first Chinese bank to float its stock domestically.
- In February 2010, Bank of Communications raised HKD $37.24-billion (CNY 32.77-billion, USD $4.79-billion) from a rights issue to improve its capital level after a surge in lending and an increase in capital requirement ratio by the People’s Bank of China, the country’s central bank. HSBC Holdings, which aimed to maintain its 19% stake in the Chinese lender, subscribed to CNY 6.29-billion (HKD $7.17-billion, USD $921-million) of the rights issue.
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