Its seems that western banks' love affair with China continues to rage. La Caixa, Spain's third largest bank, has applied to set up an office in Shanghai.
Previously, the Barcelona-based bank only had a token representative office in Beijing and that had only been running since 2006. It has belatedly woken up to the fact that Shanghai not Beijing is the place to be.
According to Spanish financial daily Cinco Dias, the Shanghai office has been set up principally to serve the needs of La Caixa's 80,000 Chinese clients living in Spain, rather than to compete head on in the mainstream Chinese retail banking market.
The Catalans are know for their business flair so it somewhat surprising that La Caixa was so late to enter the Chinese market.
La Caixa is Spain's biggest Caja de Ahorros — literally savings bank. Unlike Spain's better known conventional banks Banco Santander or BBVA, the cajas are not-for-profit institutions that were originally set up when Spain was a desperately poor country to help people save for their old age. Today, they spend a large chunk of their earnings on charitable and social causes.
The distinction between the cajas and mainstream banks has blurred considerably over the years — the latter also spend heavily on charitable causes. But given that the Chinese banking market is pretty crowded with western contenders these days, La Caixa maybe should try to stand out from the crowds by emphasise its social origins and charitable programmes a bit more.
In a country where the social security system is rudimentary and many old people live in fear of poverty, those worthy ideals on which La Caixa was founded would surely strike a chord in modern China.