Bank of China plans HQ in London

The Bank of China has decided to locate its new merchant bank headquarters in London, adding to the long list of international institutions which have opted recently to put their key decision-makers in the City, writes Peter Rodgers.

Investment bankers believe the decision has already been made in Peking but not confirmed in public because of the tension between China and Britain over the future of democracy in Hong Kong.

Haruko Fukuda, deputy chairman of the Japanese securities firm Nikko Europe, said she had been told of the decision to opt for a London headquarters by senior officials of the Bank of China.

She said: "The Chinese have recently decided to locate their merchant banking headquarters in London rather than in Hong Kong, or indeed New York. They told me that this is because London is the world's financial centre."

The emergence of London as the central location for Bank of China's new investment banking business is a surprise because the pounds 100bn group has a powerful presence already in Hong Kong, where it owns Bank of China Group Securities, a rapidly growing investment bank.

A spokesman for Bank of China described Ms Fukuda's statement as "premature," because the headquarters of the new merchant bank planned by the group was "not necessarily going to be in London".