China Construction Bank (CCB), the country's second largest lender by market value, will set up overseas branches to boost its fledgling business in foreign markets.

The bank, also the nation's largest mortgage lender, plans to open branches in cities including London and Dubai. It said it has also applied to open a branch in Doha.

The Beijing-based bank announced the plans in a statement to the Shanghai Stock Exchange on Friday, but it didn't reveal detailed information about timing and possible costs.

It said the plans are subject to approval from the China Banking Regulatory Commission.

CCB will extend its global reach both by setting up branches and through acquisition, said Zhang Jianguo, the bank's president.

"My colleges and I are watching closely to determine opportunities for overseas expansion," he said.

He denied earlier reports that the bank plans to take over some investment banks, saying it will develop its investment bank business step-by-step.

He said commercial banks will be the main takeover targets, but would not elaborate.

CCB plans to offer a wider range of services while diversifying its financial products for overseas expansion. It is preparing internally for expansion, especially in terms of corporate management and talent reserves. The bank's board approved a 2008 budget for capital expenditure of 31.5 billion yuan, it said yesterday.

Backed by its massive domestic initial public offering, the lender has a strengthened capital base and improved management, which has helped fuel global expansion.

It bought Bank of America (Asia), the world's second largest bank's Hong Kong and Macao operations, for $1.24 billion last year, giving the CCB a shortcut to enter Hong Kong's competitive banking sector.

CCB also seeks to expand into insurance and private equity once the regulator allows banks to operate in the areas.

Mainland lenders have resorted to acquisitions and opening new branches to enter overseas markets, with the Industrial and Communication Bank of China (ICBC), the mainland's largest lender, planning to open branches in cities including New York, Moscow, Sydney, Dubai and Doha. The ICBC acquired Fortis Bank Asia HK through its Hong Kong-listed subsidiary in 2004.

(China Daily December 22, 2007)