Hong Kong's biggest bank, HSBC, has beaten off global rivals to win a licence to expand its services in Singapore's retail banking sector. The award of two additional Qualifying Full Bank (QFB) licences was announced yesterday by the Monetary Authority of Singapore. The second licence on offer went to Malayan Banking. The exact number of banks that had applied for QFBs in the second round was not disclosed by the authority, but Bank of China and American Express are known to have been among the applicants to have lost out, just as HSBC did in the first round of licences awarded by the authority in October 1999. On that occasion, disgruntled HSBC managers were among more than a dozen applicants to leave empty-handed when the authority awarded four QFB licences - to Standard Chartered Bank, ABN Amro, Banque Nationale de Paris and Citibank. Last night, HSBC general manager and chief executive in Singapore, Eric Gill, was a happier man. He said the bank was 'delighted' by the news. Bank analysts, however, cautioned that it would have little impact on Singapore's profit contribution to the group, and in early trade on the London market HSBC shares were up 1.2 per cent at 843.05 pence. Responding to the news, Lehman Brothers banking analyst in Hong Kong, Grant Chan, said: 'Obviously, it will allow them to expand into the retail sector, but I do not think the impact will be huge.' That view was endorsed by a Singapore-based bank analyst who said building a retail deposit base was an expensive undertaking. 'Also, I believe that the [authority] is considering a provision that once you get to a certain market share of deposits you will have to locally incorporate - which will mean complying with more stringent capital and provisioning rules, which is another disincentive,' he said. Mr Gill, however, said the new status would position the bank better to serve customer needs and initial areas of focus would be to make it more convenient for customers to access their accounts through an expanded ATM network and debit cards. 'We will be looking at a number of potential off-site locations, and exploring the possibility of a shared ATM network with other QFB banks,' Mr Gill said. 'We also have plans to become a CPF agent [the Central Provident Fund is the Singapore equivalent of Hong Kong's MPF], to complement the full range of financial planning and wealth management services that we already offer to clients,' he said. HSBC operates from 11 branches in Singapore, but its lending activity is skewed towards lower-yielding corporate loans and financing international trade, and comprises a small share of the group's pan-Asian loan book. Loans made by the Group in Asia outside of Hong Kong, totalled US$30.4 billion last year, or about 9 per cent of its global lending activity. At the last count just US$4.8 billion in loans were advanced by its Singapore office, or 16 per cent of the Asia-Pacific business outside of Hong Kong. Commercial loans and loans made to finance international trade accounted for 55 per cent of the Singapore loan book. QFB licensees in Singapore may at present operate from 15 locations, of which 10 can be branches. HSBC, through a legacy which pre-dated these regulations, already operates from 11 branches, so it will not be able to increase its branch network. However, the 15 locations may also include off-site ATMs, and this presents one area of expansion for HSBC. More important, under a second phase of banking liberalisation, the authority has announced that QFB banks may from July next year provide 'cash-back' debit services through the point-of-sale networks operated in retail stores and may provide CPF investment accounts and accept CPF fixed deposits from the same date. The authority yesterday also hinted at further liberalisation of the retail banking sector.