China Merchants Bank (CMB), labeled the best bank in China by
finance magazine Euromoney, announced on Wednesday that it
had been given the green light from the national banking regulator
to set up a financial leasing company.
The Shanghai-registered leasing company will be solely funded by
the CMB, with a registered capital of two billion yuan (US$266.89
million).
The main business of the company will cover procurement of
aircraft, ships and other large equipment, and financing for small
and medium-sized companies. The bank is now making final
preparations to open for business.
"The non-banking financial business of this new company will
complement the bank's traditional banking businesses," said the CMB
in a statement.
Other major banks including China Construction Bank, the
Industrial and Commercial Bank of China, the Bank of Communications
and the China Minsheng Banking Corp, have got the nod from the
China Banking Regulatory Commission (CBRC) to set up financial
leasing companies. The Bank of China, the country's second largest
lender, bought Singapore Aircraft Leasing in 2006.
The Rules Governing Financial Leasing Companies that took effect
this March have allowed domestic commercial banks to hold stakes in
financial leasing companies.
"In the United States, about 30 percent of large operating
equipments, including aircraft and ships, are leased compared with
only three percent in China, which indicates a huge potential
market," said Yang Boqin, a senior official with Shanghai Ronglian
Finance Leasing Share Co., Ltd.
Cai Esheng, deputy chairman of the CBRC, has said more qualified
banks would be allowed to set up financial leasing companies based
on actual needs.
(Xinhua News Agency October 25, 2007)
