Overall: Best Chinese bank for BRI 2020
Bank of China
What does the coronavirus mean for the Belt and Road Initiative? The BRI scheme is defined by the global transfer of financial and physical capital, labour and increasingly deeper relationships between people from vastly different places. How can it survive at a time when global travel has been brought to a virtual standstill?
The performance of Bank of China this year should inspire confidence. The institution had provided more than $168 billion of funding to BRI countries by May, including $10 billion during the awards period.
The bank played key roles in several landmark transactions, including China Yangtze Power’s acquisition of Peru’s largest electricity distributor Luz del Sur and the development of a 950-megawatt solar park in Dubai. The former is a sign of the times – the whole process of share transfer was settled through multi-location video conference calls. The latter is set to bring about the largest single-site solar park in the world.
Under chairman Liu Liange, the bank has expanded its footprint worldwide, adding a presence in four more countries and one more BRI country during the awards period. Now it covers 40% of all BRI countries, more than any other Chinese bank.
But funding overseas infrastructure projects is not all Bank of China is good at. The bank continued to promote renminbi internationalization, one of the key objectives of the BRI. It ranked number one in terms of underwriting panda bonds. It acted as the lead underwriter on 16 deals totalling Rmb38.5 billion ($5.6 billion) during the awards period, or nearly half of the total of 33 deals sold in the same period.
The bank has an big advantage in renminbi clearing business, boasting 13 of the 27 offshore renminbi clearing banks designated by the Chinese central bank. Its leading position has given it both the ability and responsibility to persuade foreign enterprises to use renminbi to settle trades.
As the bank that invented Belt and Road bonds in 2015, Bank of China understands the soft power of the initiative. It has so far issued five BRI bonds across seven currencies, for a total of nearly Rmb15 billion.