Three years after China Construction Bank launched its branch in Switzerland, the company is literally being inundated by demand from customers, Holger Demuth, its operating chief, told finews.com. The bank is acting as a bridge between businesses in the two countries.
Since the grand opening in 2015, the Swiss branch of China Construction Bank (CCB) has not been in the news much – in fact, it’s been pretty quiet given that the office in Zurich (see below) is the official representation of the world’s second-largest financial service provider.
And China has featured prominently in the business pages ever since U.S. President Donald Trump started his trade war against Beijing. The country caught the business pages in Switzerland, when Chinese officials recently stopped a UBS banker at the airport, a move that was received with a fair amount of alarm in Swiss private banking circles.
Trade War Doesn't Trouble Swiss Branch
«The trade conflict between China and the U.S. is hardly affecting our business in Switzerland,» said Holger Demuth, head of finance and operations in Zurich, in an interview with finews.com.
This must have come as a relief to the experienced banker, who previously was a manager both at Clariden Leu and Credit Suisse. After all, he’s got plenty on his hands dealing with the day-to-day task at CCB.
Renminbi Hub
Demand has been very brisk and Demuth is visibly proud of what the bank accomplished in the past three years, finding its place in the tightly contested Swiss financial market. CCB is the only company in Switzerland licensed to trade in renminbi and hence focuses on the 300 biggest Swiss companies that have business ties in China.
At the same time, the company is equally interested in doing business with the big Chinese corporations, which have ties to Switzerland and Europe.
Helping with the merger of chemicals giants Chemchina and Basel-based Syngenta, completed in 2017, was the first major deal for the Zurich office of CCB. Today, Demuth is a frequent visitor in the finance departments of the major Swiss companies. Most of these companies happily organize meetings with CCB representatives, Demuth said. Seven out of ten initial meetings have led to some sort of business ties, he added.
All Sorts of Services Made Available to the Swiss
Demuth is happy to serve Swiss industry. The 35 staff at the Zurich bureau are not only providing typical banking services, but also help with all sorts of requests, using their excellent access to the People’s Republic.
CCB Group has no fewer than 380,000 members of staff across the globe, most of which of course are based in China. The Swiss staff hence can easily find the right person to help with questions regarding the gigantic market that is not so simple to penetrate for a company based in Western Europe.
Beijing Proud of Zurich
The bank has been very successful with the clear positioning of the business and the concrete support that it can offer to Swiss businesses, said the former Credit Suisse banker. He also knows that the Chinese colleagues based in Beijing are proud about the Zurich branch: «We are growing at a faster pace than any other CCB branch in Europe and we will be profitable this year,» Demuth said.
CCB has built a strong position facilitating the cross-country business. But the bank also has an important role to play as the Swiss renminbi hub mandated by the Chinese central bank. With its central location at the heart of the Zurich financial market, CCB also has hosted several high-ranking delegations for their meetings in Switzerland.
However, the hopes that it harbored for the renminbi hub have not yet materialized. The demand for the Chinese currency is growing slowly as the currency isn’t a truly global commodity. The growth rates for the currency trading at the Zurich office are nevertheless double-digit.
Uncomplicated Working Relationship
Demuth hasn’t been quick to pick up Chinese – it would have been easier to learn when still young. He has however picked up some day-to-day expressions important for the day-to-day interaction with staff and management. It also helped him foster an easy relationship with his boss, David Gong, the head of the Swiss branch. Demuth says that the two have an uncomplicated working relationship, a privilege that would have been unlikely in a Chinese environment.
The staff of the Chinese bank in Switzerland seems well balanced as well, with 60 percent Swiss citizens. Half of them are of Chinese decent. It helps finding someone who’s familiar with both Swiss and Chinese customs.
Set to Create More Jobs
The cultural differences between Switzerland and China in the past have prevented the Chinese from settling in greater numbers. Bank of China for instance closed its office in Geneva in 2012 as business hadn’t really taken root. It is however interested in returnin. The Industrial and Commerical Bank of China (ICBC) has an office, while Agricultural Bank of China (ABC) wants to open a branch in Geneva.
Demuth is well aware that CCB has had a modicum of good fortune with the set up in Zurich and the fact that the team gelled fairly easily. He now plans to create more jobs in the city, in keeping with the rate of growth in Switzerland.
