Eight foreign banks submit China license applications

Eight foreign banks submit China license applications
Eight foreign banks submit China license applications

12/10/2006, 22:32     [The Standard]    


The China Banking Regulatory Commission said eight foreign lenders have already submitted applications to incorporate their businesses in the mainland, according to the statement the regulator posted late Sunday.  

Although the CBRC told reporters last week it had so far received 10 applications, only eight names had submitted the application physically.  

HSBC (0005), Citigroup, Standard Chartered Bank (2888), the Bank of East Asia (0023), Hang Seng Bank (0011), Mizuho Financial Group, DBS Bank and ABN Amro were on the list.  

Deutsche Bank, Sumitomo Bank, Bank of China (Hong Kong) (2388) and Credit Suisse are expected to submit their applications soon, said a market source.  

BEA chairman and chief executive David Li Kwok-po told the press earlier that the board of the bank had agreed to submit its application as soon as China gives an exact time when it is ready.  

Hongkong and Shanghai Banking Corporation said it would submit its application once ``details are clear.''  

``We set up a working committee two months ago for the preparations, and will tender our application [for domestic incorporation] when it is ready,'' Linda Wong, ABN Amro's country executive and head of retail banking in China, told The Standard Friday.  

``Consumer banking as well as the mortgage and credit card business will be our first goal once we get the license,'' said Wong, adding that the bank could easily develop such business on top of the existing database of forex deposit clients.  

According to ABN's own research, yuan household deposits in the mainland are about 30 times forex household savings, which shows a largely untapped market the bank could explore once their China business is incorporated.  

Its next stage will tap intermediary business such as agencies for yuan- denominated insurance and funds distributions, Wong said.  

Mizuho Financial Group, Japan's second-biggest financial firm, confirmed last week it will apply to incorporate its mainland business with the aim of winning more business from Japanese manufacturers, who have tripled investments in China.  

Masahiko Yano, Mizuho Corporate Bank's joint general manager for Asia, told Bloomberg the firm will seek domestic incorporation in the mainland, because a domestic charter may make it easier to get permission to expand market and investment-banking operations.  

Another Japanese bank, Sumitomo Bank, early this year moved its China business team to headquarters in Shanghai in preparation for domestic incorporation, sources said. The bank declined to comment.  

Today is the fifth anniversary of China's entry into the World Trade Organization, and it is also the deadline for China to open up its US$40 trillion (HK$312 trillion) banking industry.  

At present, foreign lenders are barely allowed to do business with domestic customers, but can only provide services to people who hold foreign passports in the mainland.  

A delegation of Hong Kong bankers led by Hong Kong Monetary Authority chief executive Joseph Yam Chi-kwong earlier met with top officials, including Vice Premier Huang Ju, to lobby for more concessions on starting their yuan-denominated businesses.  

Source : The Standard.