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.

 

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Executives of major domestic lenders in Shanghai said yesterday that Chinese players would be compelled to engage in further reforms amid the pressure that comes with full-front competition with overseas rivals in attracting high-end customers, recruiting talent and offering products with high added value.

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 Shanghai, is expected to be set up in the first half of 2007," Johnson Fu, the bank's head of China business, said.

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 per cent stake in the Fujian-based Industrial Bank.

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