BANK of Communications Co. (BoCom), China’s fifth-biggest lender by market value, plans to expand in Brazil and Canada, according to a source familiar with the matter.

    BoCom will start with a representative office in Brazil and then seek a banking license, said the source, who asked not to be identified. The Shanghai-based bank also plans to begin operating in Toronto and Luxembourg, the source said, without giving more details.

    Chinese lenders, including Industrial & Commercial Bank of China Ltd. (ICBC), have accelerated overseas expansions in the past three years, lending money for infrastructure projects in locations from Venezuela to South Africa and helping finance Chinese companies’ growth. China became Brazil’s biggest trade partner in April 2009, surpassing the United States, according to the South American nation’s Trade Ministry.

    “Internationalization is the right step for Chinese banks as their customers go abroad,” said Rainy Yuan, a Shanghai-based analyst at Masterlink Securities Corp. “They will face a lot more competition in global markets, but they will also learn a lot on how to boost fee-based services.”

    A representative office in Brazil would allow BoCom to develop client relationships there and arrange international loans. The company plans to seek a banking license that would enable it to take deposits and make loans, the source said.

    A Shanghai-based press officer for BoCom declined to comment on expansion plans.

    ICBC, China’s largest bank, has South American operations in Brazil, Argentina and Peru. The Beijing-based bank bought 80 percent of Standard Bank Group Ltd.’s Argentine division in 2012 and received a banking license to open a unit in Brazil in December of that year.

    China Construction Bank Corp., the nation’s second-largest behind ICBC, paid 1.62 billion reais (US$671 million) for a majority stake in Brazil’s Banco Industrial & Comercial SA earlier this year and plans to purchase the remainder. Acquiring a lender was easier than trying to start from scratch in Brazil, a source with knowledge of the transaction said in November. Construction Bank added operations in locations including Russia, Dubai and Japan last year. (SD-Agencies)