BackHSBC, Citigroup incorporate in China to offer yuan services
HSBC, Citigroup incorporate in China to offer yuan services
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Bloomberg
Shanghai: HSBC Holdings Plc. and Citigroup Inc. became locally incorporated in China, paving the way for them to offer local-currency services and take a bigger slice of the nation’s $2 trillion of household savings.
Standard Chartered Plc. and Bank of East Asia Ltd also completed local incorporation. The four are the largest overseas banks in China and have more than 90 outlets there. They need approvals from the banking regulator to begin yuan- denominated services.
Foreign banks must incorporate in China to offer yuan-based bank cards and mass-market services, according to rules that took effect in December. As a part of a deal it struck when joining the World Trade Organization five years ago, the government is giving greater access to overseas financial institutions.
Earlier, Citigroup and other foreign banks were only allowed to open one or two branches a year and were restricted to services they could offer. Citigroup chief executive officer Charles Prince last week announced plans to almost double the U.S. bank’s number of China outlets this year, to 30.
Bank of East Asia, Hong Kong’s third-largest publicly traded bank, plans to boost its number of China branches to 100 by 2010 from 27 now, Chan Kay-cheung, an executive director, said on 2 April. He forecast that operations on the mainland will account for 35% of group profit by then, up from 15% now.
HSBC, Europe’s biggest bank by market value, said on 13 March that it plans to open as many as 40 outlets in China this year and hire 1,000 people a year in 2007 and 2008. It has 35 outlets on the mainland, the most of any foreign bank. London-based Standard Chartered aims to double its number of China outlets to 40 by the end of this year.
Overseas banks control about 1.8% of China’s $5.1 trillion of banking assets. As on 31 December, 74 foreign banks operated 279 outlets in 25 Chinese cities. They had $61.6 billion of outstanding loans and $39.7 billion of deposits. Their non- performing loan ratio was 0.7%.
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