Sumitomo Mitsui Banking Corporation (SMBC) has expanded its treasury offering in China with the addition of collections services through its partner the Industrial and Commercial Bank of China's (ICBC) domestic branch network.
Under the new service targeting Japanese corporates, account holders at SMBC China, the bank's local subsidiary, can collect account receivables at ICBC's 16,232 branches nationwide. The bank expects the service to be popular with leasing, instalment services, insurance, wholesale and auto-related companies. It was officially launched on April 1.
"Japanese companies that do business in mainland China in RMB [renminbi] will be able to improve the efficiency of their accounts receivable collection and management," SMBC said in a statement on the new service. The bank added that a number of construction equipment sellers had already begun to use the service.
China is a popular market for Japanese corporates. According to Japan's Ministry of Finance, trade flows between the two countries totalled ¥21.7 billion ($232.7 million) last year, making China the country's largest trading partner in Asia. In addition, companies from the country invested $6.9 billion in China last year, pushing total investment for the decade to more than $45 billion according to the Japan External Trade Organisation.
Other Japanese banks have also recently stepped up their cash and trade services in China. A year ago, the Bank of Tokyo Mitsubishi UFJ (BTMU) signed a direct connection with the Bank of China over Swift's trade services utility that should allow customers to eliminate paper processing of trade transactions between the two banks. Later in 2009, BTMU signed a similar agreement with China Construction Bank.
SMBC said it plans to expand the collections service beyond ICBC to other local banks in China, but did not disclose a timeline.
