Foreign banks seek incorporation
Six foreign banks, including three based in South Korea, have applied to the mainland regulatory authorities for local incorporation, according to Xinhua, a move that would help the lenders expand rapidly in the mainland market.
JP Morgan, Hana Bank, Shinhan Bank, Woori Bank, Deutsche Bank and Societe Generale have filed applications and will set up their mainland headquarters in Beijing, Xinhua reported.
The China Banking Regulatory Commission is due to issue some approvals this week, the report said.
Foreign banks must be incorporated in the mainland to run yuan-denominated services there. The status will also make it easier for them to open new branches.
HSBC, Standard Chartered Bank, Bank of East Asia and Citigroup early this year became the first foreign lenders to win approval for local incorporation. Five overseas banks including Hang Seng Bank and DBS were given the green light in May.
'Local incorporation is an important step in further developing the bank's franchise in China,' said Lee Zhang, Deutsche Bank's chairman in the mainland and head of global banking in Asia-Pacific. 'It allows us to offer local currency products and services to corporate and individual clients according to mainland laws and regulations.'
People familiar with the situation said JP Morgan Chase and Deutsche Bank have applied and are expecting approval. Deutsche Bank expects to be operational by the first months of next year and will be based in Beijing.
Societe Generale filed its application at the end of May. It expects the first stage approval will come early next month.
'We're going through the motions and are expecting approval,' one source said.
Shinhan Bank, South Korea's second-biggest lender, is owned by Shinhan Financial Group. Hana Bank is the banking arm of Hana Financial Group, the No4 banking group, while Woori Bank belongs to the No3, Woori Financial Group.