Bank Leumi And The Chinese Banking Giant ‘Bank Of China’ Have Signed An Agreement To Extend Credit To Israeli Companies Operating In China
Good news for Israeli companies operating in China: A cooperation agreement was recently signed between Bank Leumi and Bank of China, one of the four largest banks in China, which is expected to make it easier for Israeli companies to receive financing for their operations in China.
As part of the agreement, which was signed by Leumi Group Chairman, David Brodet, and Bank of China Vice President, Gao Yingxin, Israeli companies operating in China will be able to receive credit in local currency (Yuan), with the credit being granted in two ways: directly by Bank of China and with the guarantee of Bank Leumi, or by means of a credit line to be established jointly by the two banks.
Up to now, foreign companies operating in the Chinese market have had difficulty obtaining credit from local banks, which has made it harder for them to penetrate the local market or to increase the volume of their business.
David Brodet, Chairman of the Leumi Group, noted at the signing ceremony: "The agreement signed today is another significant step in the relations between Bank of China and Bank Leumi. The two banks have had business relations for many years, and these ties have been strengthened due to the opening of our Shanghai representative office five years ago. With this agreement, I believe that our relationship will undergo a significant leap forward".
The Chinese market is undergoing major changes: the Chinese government has formulated and begun to implement a program designed to change the Chinese economy's orientation, from an export-based economy to an economy based on local consumption. This change of direction allows foreign companies, including Israeli companies, to penetrate the Chinese economy and market their goods in it. In fact, we at Leumi see more and more Israeli companies seeking to enter the Chinese market. In this context, the agreement we signed with Bank of China is good news for all those companies, as it will make it easier for them to obtain local financing for their activity and growth".
Gao Yingxin, Vice President of Bank of China, said: "The cooperation agreement signed today with Leumi is another beneficial addition to the longstanding relationship between the two institutions. We are pleased to assist Israeli companies operating in the Chinese market - through the agreement with Leumi - and look forward to continuing expanding our cooperation in the future".
Leumi is currently the only Israeli bank to operate a banking representative office in China. The rep office, which is located in Shanghai and is managed by Eyal Shimoni, provides a a wide spectrum of financing tools and assistance to Israeli companies that are operating or are interested in penetrating the Chinese market. This includes, among others, assistance in obtaining domestic credit in China, financing international trade activities, financing transactions within the 'China-Israel Financial Protocol', financing M&A transactions, assisting Israeli hi-tech companies in entering the Chinese market, and more.
About Bank of China
Bank of China is one of China's four largest banks. The bank was founded in 1912 by the Republican government to replace the Imperial Bank of China, and is today the oldest bank operating in mainland China. The Bank, which operates in 51 countries around the world, is the second largest lender in China overall, and the 5th largest bank in the world by market capitalization value. As of the third quarter of 2017, Bank of China's total assets were estimated at 20 trillion yuan (about 3 trillion USD).