Bank of Communications yesterday teamed up with Jinrui Futures
Co to help investors tap gold futures which debut today.
The Shanghai-based lender signed a cooperation deal with
Shenzhen-based Jinrui. The bank's holders of the Pacific debit
cards can apply for the gold futures at Jinrui. The two partners
will also cooperate in e-business, futures deposit settlement and
sharing clients resources.
Jinrui has a network in five cities - Shanghai, Shenzhen,
Nanchang, Dalian and Zhengzhou.
Shanghai-based BoCom is banking on the gold futures to boost its
fee-based income to complement its traditional interest income.
Interest income at BoCom jumped 31.69 percent year on year to
37.74 billion yuan (US$5.19 billion) in the first three quarters of
last year, while the lender's commission fees soared 150.15 percent
on year to 5.12 billion yuan during the period.
About 70 percent of Chinese banks' profits are generated from
interest spread while for overseas banks it sits at about 50
The gold futures will debut on the Shanghai Futures Exchange
today as China's first futures contracts for a precious metal.
Chinese have a traditional frenzy for gold as a hedge against
inflation. The current high gold prices are also a draw for
investors. Gold prices rose 31 percent last year and topped a
three-decade high this year.
However, some analysts and traders also cautioned that futures
may not be an easy investment for individuals not familiar with the
The Shanghai Futures Exchange has already moved to drive out
individuals with a low capacity to take risks, including raising
the trading margin requirement and the contract size.
(Shanghai Daily January 9, 2008)