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China Confidential - Premium Investment Insight
24 August 2012

Fierce competition for offshore renminbi (CNH) deposits is slowly eroding Bank of China’s market share in Hong Kong. The total amount of CNH deposits held at the bank’s offshore subsidiary fell by 17% to around Rmb130bn ($20bn, £13bn, €16bn) in the first half of this year, while its market share declined from 27% to 23%, according to estimates compiled by Barclays (see chart 1). In our view, Bank of China Hong Kong’s (2388:HKG) market share will remain under pressure if liquidity conditions in the CNH financial markets continue to deteriorate. 



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