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Deutsche Bank China has acquired an inter-bank bond settlement agent license from People’s Bank of China, which allows the bank to expand its bond service coverage to a wider range of clients.
With the license, Deutsche Bank will now be able to offer onshore settlement services on the Over-the-Counter (OTC) market, in addition to the on-exchange services.
Inter-bank trading activities accounted for about 97% of the bond market in China (repo excluded) last week, according to data from domestic agency China Chengxin International Credit Rating.
The bank will provide services, including bond trading and bond settlement services, for a wider scope of clients, including renminbi trade settlement banks, insurance companies, QFIIs and RQFIIs.
Taking advantage of combining its global business exposure with the onshore bond market, the bank can boost its renminbi business as well.
As of May, 45 banking institutions are able to run inter-bank bond services in China, among which HSBC China and Standard Chartered Bank China are the only two foreign banks, according to the website of China’s National Association of Financial Market Institutional Investors.
