The locally incorporated entities of the world's two largest
banks were ushered in with traditional lion dance performances and
drums at their official launches in China yesterday.
And as HSBC and Citigroup opened their local operations, two
other foreign banks Standard Chartered and Bank of East Asia (BEA)
launched their own local entities with slightly less fanfare at
their headquarters in Shanghai yesterday.
Beyond the pomp and ceremony and publicity campaigns, the four
foreign financial institutions granted business licenses to
incorporate locally last week have been preparing to make a splash
in the lucrative renminbi retail banking business.
Although the banks must still get final approval from the China
Banking Regulatory Commission (CBRC) to begin offering local
currency deposit and loan services to individual Chinese customers,
local incorporation is seen as a milestone in their business
development in China.
"This is an historic milestone for the bank and will allow us to
continue to expand both our geographic reach and the product range
we can offer our customers," Richard Yorke, president and chief
executive officer of HSBC Bank (China) Co Ltd, said yesterday.
HSBC, which has 14 branches and 21 sub-branches in China, plans
to add 30 outlets and employ about 1,000 new staff this year, and
1,000 more in 2008.
"Given the limited outlets and resources in China, we will
mainly focus on our premier wealth management service for our
retail banking," said Vincent Cheng, chairman of HSBC Bank (China)
Co Ltd and its parent firm. The service mainly targets high-end
customers by charging hundreds of yuan each month for those with
less than a certain amount in their accounts.
BEA plans to triple its outlets in China by 2010, when its
Chinese operations are expected to contribute more than 35 percent
to its net profit globally, rising from 15.5 percent now, Chan
Kay-cheung, vice-chairman of BEA's China subsidiary, said
yesterday.
BEA is also in talks to acquire a stake in several domestic
banks, said Chan, without providing further details.
Now that the four foreign banks are on equal footing with their
local rivals, they plan to offer a wider range of renminbi services
such as mortgages and credit cards.
Richard Stanley, chairman of Citibank (China) Co Ltd, said
yesterday the bank was seeking to underwrite renminbi bonds as soon
as possible. He said it would issue renminbi debit cards when the
regulations allowed, but would not issue credit cards only at the
moment.
Citigroup and its strategic partner Shanghai Pudong Development
Bank have issued co-branded credit cards.
Standard Chartered said its new entity was ready to provide a
whole range of banking services that it would be entitled to pursue
under the mandate of the CBRC including renminbi banking services
to local residents.
(China Daily April 3, 2007)