China Minsheng Banking Corp has received regulatory approval to set up a financial leasing joint venture in Tianjin, the bank said today.

The country's sole privately controlled bank received the go-ahead from the China Banking Regulatory Commission on October 11, the Beijing-based bank said yesterday in a filing to the Shanghai Stock Exchange.

Minsheng, together with its partners, will finish the preparation work for the planned four-billion-yuan (US$533 million) venture within six months of receiving approval, the lender said.

The bank said in an April statement that it will pay 2.04 billion yuan for the venture, Minsheng Financial & Leasing Co, for a 51 percent stake. Two partners will control the remaining 49 percent.

Industrial & Commercial Bank of China said in September it has won approval to set up a two-billion yuan financial leasing company in Tianjin, to focus on aviation and shipping and other big equipment leasing.

Shanghai-based Bank of Communications also said in late September it has gained approval from CBRC to set up a wholly owned financial leasing arm for two billion yuan.

China is encouraging more qualified banks to step into the financial leasing business, Cai Ersheng, vice chairman of the CBRC said in June.

The banking watchdog revised rules in February to allow domestic lenders to establish their own financial leasing firms. Chinese banks were forced to exit the business in 1997 amid the Asian Financial Crisis.

Financial leasing firms can undertake yuan and foreign currency-denominated leasing operations including offering term deposits of one year or more, transferring leasing receivables to commercial banks, and issuing financial bonds upon approval.

(Shanghai Daily October 15, 2007)