The locally incorporated entities of the world's two largest banks were ushered in with traditional lion dance performances and drums at their official launches in China yesterday.

And as HSBC and Citigroup opened their local operations, two other foreign banks Standard Chartered and Bank of East Asia (BEA) launched their own local entities with slightly less fanfare at their headquarters in Shanghai yesterday.

Beyond the pomp and ceremony and publicity campaigns, the four foreign financial institutions granted business licenses to incorporate locally last week have been preparing to make a splash in the lucrative renminbi retail banking business.

Although the banks must still get final approval from the China Banking Regulatory Commission (CBRC) to begin offering local currency deposit and loan services to individual Chinese customers, local incorporation is seen as a milestone in their business development in China.

"This is an historic milestone for the bank and will allow us to continue to expand both our geographic reach and the product range we can offer our customers," Richard Yorke, president and chief executive officer of HSBC Bank (China) Co Ltd, said yesterday.

HSBC, which has 14 branches and 21 sub-branches in China, plans to add 30 outlets and employ about 1,000 new staff this year, and 1,000 more in 2008.

"Given the limited outlets and resources in China, we will mainly focus on our premier wealth management service for our retail banking," said Vincent Cheng, chairman of HSBC Bank (China) Co Ltd and its parent firm. The service mainly targets high-end customers by charging hundreds of yuan each month for those with less than a certain amount in their accounts.

BEA plans to triple its outlets in China by 2010, when its Chinese operations are expected to contribute more than 35 percent to its net profit globally, rising from 15.5 percent now, Chan Kay-cheung, vice-chairman of BEA's China subsidiary, said yesterday.

BEA is also in talks to acquire a stake in several domestic banks, said Chan, without providing further details.

Now that the four foreign banks are on equal footing with their local rivals, they plan to offer a wider range of renminbi services such as mortgages and credit cards.

Richard Stanley, chairman of Citibank (China) Co Ltd, said yesterday the bank was seeking to underwrite renminbi bonds as soon as possible. He said it would issue renminbi debit cards when the regulations allowed, but would not issue credit cards only at the moment.

Citigroup and its strategic partner Shanghai Pudong Development Bank have issued co-branded credit cards.

Standard Chartered said its new entity was ready to provide a whole range of banking services that it would be entitled to pursue under the mandate of the CBRC including renminbi banking services to local residents.

(China Daily?April 3, 2007)