As more Chinese companies enter Brazil to seek golden opportunities in the distant land, Chinese banks are also exploring the market through providing financial services to local and international companies.

Bank of China, China’s third-largest bank, signed a strategic agreement with Sao Paulo Investment Promotion Agency on Jan 15 to strengthen its financial cooperation with Sao Paulo State, the industrial and economic center of Brazil.

"Sao Paulo State is the most developed area in Brazil and the whole of Latin America, with important economic and social influence … a better cooperation between Sao Paulo State’s government and the Bank of China can help to advance the economic development between the two countries," said Zhang Dongxiang, president of the Bank of China’s Brazil unit, at the signing ceremony.

The Bank of China set up a representative office in Sao Paulo 13 years ago and launched a Brazil branch office in 2009.

As the first Chinese financial institution to enter Latin America, it has developed clients in various industries, including heavy machinery maker Sany Brazil, China’s telecom equipment manufacturers ZTE and Huawei, as well as Brazil’s largest companies Petrobras and Vale.

Not only the BOC, but other major Chines banks have also entered the Brazilian market.

The Industrial and Commercial Bank of China launched its Brazil unit last September to provide financial services to Chinese companies in the country and to support local projects in energy and infrastructure.

Also in 2013, the China Construction Bank spent $726 million to acquire 72 percent shares of Brazil’s Banco Industrial e Commercial as a way to enter the local market.

Experts said the wave of Chinese banks entering Brazilian market results from closer China-Brazil economic cooperation.

"Chinese banks used to mainly focus on developed countries such as the United States and Britain. But with more Chinese companies entering the Latin American market, these banks need to go also to provide financial services to their traditional clients," said Chai Yu, chair of the economics division and assistant director of the Institute of Latin America Studies of the Chinese Academy of Social Sciences.

Between 2003 and 2011, Chinese companies invested in 86 projects in Brazil, valued at up to $31.7 billion. From 2009 to 2012, China’s foreign direct investment to Brazil through mergers and acquisitions reached $21.5 billion, surpassing the United States as the country with the most foreign acquisitions in Brazil, according to data from Credit Suisse.

Chai said those companies prefer banks from their own country with which they have long-term relationships. Those companies will require Chinese banks to provide wider services in Latin America, she added.

"So the trend of Chinese banks exploring Brazil and other Latin American countries is synchronized with the trend of Chinese companies entering this region," Chai said.

Economic cooperation between China and Brazil witnessed a sharp increase in the past five years, with China surpassing the United States to become Brazil’s largest trading partner in 2009 and continuing to be Brazil’s largest import and export partner in 2013.

Under such circumstances, both governments are encouraging more cooperation in financial sectors.

Three China-Brazil Capital Market Forums had been held by the end of 2012 to promote the interchange of knowledge among major stakeholders from the two markets.

The Chinese and Brazilian governments also signed a $30 billion currency swap agreement in 2013 during the fifth BRICS summit in Durban, South Africa. The deal allows the two countries’ central banks to swap local currencies to smooth bilateral trade.

"It shows that financial cooperation is becoming an important area for China and Brazil. Though the bilateral trade increased significantly, there is still a large space to improve their financial cooperation," Chai said.

"Such cooperation will not only help the development of Chinese banks but also help to explore the potential for more comprehensive economic relations between China and Brazil," she added.

Ye Hailin, a researcher of international relations at the Chinese Academy of Social Sciences, said the currency swap agreement is of great importance to China and Latin American countries.

"The agreement shows the possibility of using other currencies besides the dollar in trade between China and Brazil. It will lead a trend if the agreement can expand to other BRICS countries or G20 member states," Ye said.

Niu Haibin, a Latin American studies researcher with the Shanghai Institute for International Studies, said Chinese banks becoming more involved in the international capital market can help improve their competitiveness.

"But the Brazilian market is different from the market in China and other countries. Chinese banks should carefully evaluate the risks and digest local policies and regulations to avoid unnecessary loss," Niu said.