China Construction Bank Corp, the world's second-largest by market value, will accelerate overseas expansion this year to keep pace with increasing outbound investment by mainland companies.

Mao Yumin, the chief investment officer of the lender, said yesterday that the expansion would include a new branch in Ho Chi Minh City and a bigger presence in the Middle East, Australia, Russia and Latin America.

He said the lender was also interested in acquiring a bank in Hong Kong to expand its assets when the price was attractive. However, Mao did not expect any big merger and acquisition deals to occur this year.

In a bid to follow its corporate customers who have been setting up plants and tapping into foreign markets, the bank has been actively looking at setting up offices, branches and subsidiaries in foreign countries as well as examining acquisition targets over the past few years.

The nation's outbound direct investment last year totalled US$43.3 billion by firms other than financial institutions, up 6.5 per cent year on year, the Ministry of Commerce said.

Beijing's concerns that mainland companies risked overextending themselves during the financial crisis held back the lender from aggressively expanding overseas in the past two years, the executive said.

He said with the impact of the crisis fading, the bank had decided it was time to go ahead.

"We are very interested in setting up a subsidiary in Dubai and acquisitions cannot be ruled out," he said. "Despite [the emirate's] debt crisis, we are still optimistic about its business environment."

Overseas assets deteriorated in the fourth quarter last year, hit by the Dubai debt crisis, bank president Zhang Jianguo said last month.

CCB's Hong Kong branch has marked about US$1 billion in loans as non-performing and booked one-third of that amount as a bad debt allowance since November.

Mao said its loans in the Middle East had no realised losses. Provisions have been booked, and it has no outstanding loans to companies in Dubai.

After due diligence investigations in various locations, the bank plans to set up a representative office in Moscow, a branch in Sydney and look into opportunities in Brazil as soon as possible.

"We basically provide remittance, deposits and loans and financing arrangement services to clients in the overseas outlets. We will stick to the pattern of a traditional commercial bank," Mao said.

The bank currently has branches in Hong Kong, Singapore, Frankfurt, Johannesburg, Tokyo, Seoul and New York, two subsidiaries in Hong Kong and one subsidiary in London and an office in Sydney.

The network establishment in major financial centres was almost complete with the establishment of the London subsidiary last year. He said the next step was increasing its presence in regional financial hubs.

"We always attach ultimate importance to Hong Kong. The Hong Kong operations are a cradle for overseas business talent," he said.

The bank's overseas assets stood at US$33.8 billion at the end of last year, accounting for about 2.3 per cent of its total assets. Its overseas presence is much smaller than Bank of China, the nation's biggest foreign exchange lender and Industrial and Commercial Bank of China, the world's largest bank by market value.

The overseas assets rose 22.3 per cent from a year ago in 2009.