BofA to Market Credit Cards in China
Bank of America Corp. will team with China Construction Bank Corp. to market credit cards in China.
Initially, China Construction will create a stand-alone credit-card division and form an advisory committee to develop the unit’s business structure. Later, the banks will convert the division into a Chinese-foreign credit-card joint venture that is registered in China.
BofA will own 37 percent of the joint venture and launch the co-branded cards. BofA will buy the stake after approval from the Chinese government, which plans to change how it regulates joint ventures.
“For Bank of America, this is a strategic collaboration in one of the fastest-growing economies in the world,” says Ken Lewis, chief executive of BofA. “It allows us to deepen our alliance with China Construction while also positioning Bank of America to participate in the market’s future growth once new regulations are enacted.”
According to BofA, credit-card volumes in China increased more than 70 percent in 2006. With a 20 percent market share, China Construction is the second-largest credit-card issuer in China. It has issued a total of 6.34 million credit cards, with 3.22 million cards issued in 2006.
Does anyone think that this is wrong? I mean they are Bank of AMERICA. I’d love to hear your thoughts…
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