Bank of China to Issue Letters of Credit for DME Trading from Singapore

Press release
Published July 15th, 2015 - 09:02 GMT

Dubai Mercantile Exchange (DME) announced today that Bank of China - Singapore Branch - has been approved to issue Letters of Credit (LCs) for trading on DME directly from Singapore. The approval reflects DME and Bank of China’s joint commitment to facilitate the trading activities of their mutual customers in Asia. This latest initiative comes as a result of the MoU signed in Dubai back in October 2014 between DME and Bank of China to offer a more extensive range of finance solutions to mutual customers.

This latest development reflects DME’s ongoing efforts to create a more efficient and cost-effective trading environment around the Exchange by having a diverse roster of international banks that are authorized to issue LCs directly from Singapore to guarantee deliveries of Oman Blend crude oil through the DME.

 “Creating an efficient financing framework for our Asian customers is a major priority for the DME and this focus has been instrumental in driving our sustained growth in recent times,” said Owain Johnson, Managing Director, DME. “Signing the MoU with Bank of China was a landmark for the exchange and I am pleased‎ that it has translated into positive action so quickly.”

Ms Guo Ningning from Bank of China Singapore Branch said, “We are pleased to be participating in this new initiative to provide more convenience to our clients who will benefit from the direct issuance of LCs from Singapore. Our participation is in line with our efforts to deliver greater efficiencies for our clients to trade the successful DME Oman crude contract and take delivery in the global energy market while expanding the scope of our commodity finance services.”

Background Information

Bank of China

Bank of China was formally established in February 1912 following the approval of Dr. Sun Yat-sen. From 1912 to 1949, the Bank served consecutively as the country’s central bank, international exchange bank and specialised international trade bank. Fulfilling its commitment to serving the public and developing China’s financial services sector, the Bank rose to a leading position in the Chinese financial industry and developed a good standing in the international financial community, despite many hardships and setbacks. After 1949, drawing on its long history as the state-designated specialised foreign exchange and trade bank, the Bank became responsible for managing China’s foreign exchange operations and provided vital support to the nation’s foreign trade development and economic infrastructure by its offering of international trade settlement, overseas fund transfer and other non-trade foreign exchange services. During China’s reform and opening up period, the Bank seized the historic opportunity presented by the government’s strategy of capitalising on foreign funds and advanced technologies to boost economic development, and became the country’s key foreign financing channel by building up its competitive advantages in foreign exchange business. In 1994, the Bank was transformed into a wholly state-owned commercial bank. In August 2004, Bank of China Limited was incorporated. The Bank was listed on the Hong Kong Stock Exchange and the Shanghai Stock Exchange in June and July 2006 respectively, becoming the first Chinese commercial bank to launch an A-Share and H-Share initial public offering and achieve a dual listing in both markets. In 2016, Bank of China was again designated as a Global Systemically Important Bank, thus becoming the sole financial institution from emerging economies to be designated as a Global Systemically Important Bank for six consecutive years.

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