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Foreign banks are expanding aggressively in the lucrative Chinese market, knowing they will soon be able to deal in the renminbi retail business. The country's banking regulator approved over the weekend the first group of nine foreign lenders to incorporate locally, a sign that these overseas players will qualify for the business that is currently closed to them. Executives of major domestic lenders in At the same time, an equivalent competitive environment and supervisory framework would help domestic and overseas institutions carry out further partnership, they insisted. The Hong Kong-based Hang Seng Bank plans to expand its operation on the mainland to more than 2,000 staff working among a network of 50 outlets by 2010, the bank said yesterday. The lender, a principal member of the HSBC Group with 15 outlets on the Chinese mainland, has been approved to begin preparations for setting up a subsidiary bank. "Hang Seng's mainland subsidiary bank, with its headquarters in He said that it would incorporate locally with a registered capital of 5 billion (US$625 million) and, as of 2007, the total investment by the lender would reach 6.7 billion (US$838 million), together with its 1.7 billion (US$213 million) investment in a 15.98 percent stake in the Fujian-based Industrial Bank. Compared with domestic rivals, the biggest obstacle for foreign banks is the scarcity of outlets. To close the gap, the British Standard Chartered Bank has decided to open two additional sub-branches before the end of 2006 and double the number of existing outlets within the next 18 months. With one of the largest foreign bank networks in It also signed a framework agreement last week with In view of the fierce competition in the eastern regions, overseas players are advancing westward to explore the relatively less developed areas. HSBC, Europe's biggest lender, opened a new branch in "As an economic centre of western Vincent Cheng, HSBC chairman, said: "as long as there are customers, we will go there." Other players approved in the first group of nine to set up local corporations are also sparing no efforts to roll out new outlets. ABN AMRO and the Bank of East Asia plan to open 30 and 35 new outlets respectively in five years. Overseas lenders are working to boost other parts of their operation such as product development, service improvement and image building. Among imminent full-front competition, leaders of domestic lenders pointed to a wider prospect for co-operation in areas such as owner-management mechanisms, risk control, profit-making plans and product and service innovation. Chen Xin, president of Bank of Shanghai, said yesterday that lenders would compete more fiercely for high-end customers in the relatively developed regions. In order to best respond: "domestic banks should fully play on their advantages in geography, human resources and network, and enhance management, innovation ability and provide qualified services," Chen said. ( |
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