More foreign lenders apply to join RMB retail bandwagon

By Wang Zhenghua (China Daily)
Updated: 2006-12-28 09:13

SHANGHAI: Less than one week after the first group of nine foreign lenders was approved to set up local corporations, another six have applied to incorporate locally, allowing them to jump into the lucrative renminbi retail business.

Sources from the local banking regulator said that the second group of overseas banks, including the French Societe Generale and Japan's Sumitomo Mitsui Banking Corp (SMBC), had sent applications for incorporation.

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Eyeing the market that brought an average annual growth of more than 30 per cent over the past five years, foreign lenders are contending to extend their products and services to more individual customers. The city sees the influx of foreign lenders as a boost in its bid to become an international financial centre and China's banking hub by 2010.

Last weekend, the watchdog China Banking Regulatory Commission (CBRC), approved players including Standard Chartered Bank, Bank of East Asia and HSBC to begin preparatory work for setting up local corporations in China.

Once the banks complete this process, the CBRC will approve the official establishment of their local corporations.

"The foreign lenders have been lured by the prospect of getting a piece of the huge slice of the Chinese market," said Li Hong, an analyst with Shanghai University of Finance and Economics.

Statistics suggest that since China's entry into the World Trade Organization five years ago, the combined assets of foreign financial institutions jumped 31.3 per cent each year to more than US$60 billion at the end of this October.

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