The lender plans to add three branches and will compete with Wing Lung and Dah Sing Bank for market share Wing Hang Bank is planning to launch an ambitious strategy to expand its retail business in Shenzhen, as Hong Kong's crowded banks take their fight across the border. The bank's chairman and chief executive, Patrick Fung Yuk-bun, said the mid-tier lender would seek to boost its retail network in Shenzhen to four before 2007, with the Closer Economic Partnership Arrangement (Cepa) fast-tracking Hong Kong banks' entry into the mainland. Wing Hang, which has assets of HK$85 billion, already has one sub-branch in Shenzhen. Due to come into effect in January, the trade agreement has lowered the asset requirement for Hong Kong banks to US$6 billion, allowing a handful of local lenders to expand their branch networks in the mainland. 'Shenzhen is our next city of focus,' Mr Fung said yesterday. However, Wing Hang will not be alone. Eyeing increasing economic integration with the Pearl River Delta, both Wing Lung and Dah Sing Bank - the other mid-tier lenders with newly granted mainland access under Cepa - are also seeking to set up full banking branches in Shenzhen. While foreign banks will only be able to conduct yuan banking for foreign individuals for the time being, Mr Fung said Wing Hang's plan was to become just another 'local bank' in Shenzhen by 2007, when China's financial sector would be fully liberalised. The mainland must open up its banking sector to foreign players under its obligations to enter the World Trade Organisation. 'In three years we will be able to deal with renminbi with local individuals. At that time we would like to be like a local bank,' he said, adding he envisioned a network of wealth management centres servicing high net-worth individuals and selling insurance products in Shenzhen. Retail expansion is usually fraught with great risk in the mainland, where draconian regulations have so far prevented the establishment of meaningful networks for foreign banks. Dao Heng Securities banking analyst Joanna Ng said smaller banks were making the next logical move geographically by extending their local operations into Shenzhen, where their customers have also migrated. 'The worst of the economic slump seems to be over, but banks still need to look for long-term growth.' However, Wing Hang Bank's rivals may take a different approach. Wing Lung Bank - which has applied to the China Banking Regulatory Commission to open its new branch - plans to target a select clientele of corporate customers in Shenzhen, according to assistant general manager Howard Wu Li-chien. 'We would look at both [retail and commercial customers], but given we are a foreign bank with only one branch, we can't expect to be successful in retail banking,' Mr Wu said. To fulfil Wing Hang's long-term goals, he said the bank was continuing to transfer its equipment and car leasing business into Shenzhen. He said the bank was already granting more working capital loans for Hong Kong businesses operating in the Pearl River Delta. He added he remained unfazed by the prospect of facing other local banks in Shenzhen. 'It's a big enough market and we have also built up 10 years of experience,' he said.