SHANGHAI, commanding the convergence of the golden river and the golden coast - as traders throughout history have described it - has again become the centre of immense financial attraction. Foreign banks have stampeded to snap up spheres of influence since the banking market re-opened to foreign institutions in 1991. It is now running on a ''first come, first served'' basis. Statistics from the People's Bank of China, Shanghai branch reveal that 22 banks and four financial institutions have branches in the city, with 44 representative offices lining up to be upgraded to branch status. Despite all this activity, bankers say the market is far from saturated. Those who made their first step have been aggressively carving out their market niche, cultivating guanxi (relationships) and pouring in human and material resources. Undoubtedly, trade finance is the most pursued business. Being restricted to operating foreign-currency business, banks can serve only foreign companies or joint ventures having investment in the vicinity. And it is generally accepted that this market offers many more golden opportunities. Global banks such as Citibank, which has just moved its China headquarters from Hong Kong to China, are serving more than just multi-nationals and joint ventures seeking their fortunes on the mainland. ''We target B-share companies too. They are companies with foreign currency income and exposure but lack the expertise in treasury and investment management,'' Citibank Shanghai branch manager Bell Chong said. The bank has a strong hold on securities activity, acting as the sole cash settlement bank for the Shanghai stock exchange and the only technical adviser to its new centre for clearing and registration. ''It is not a very profitable business, but in China, it is important to show your long-term commitment and willingness to see further growth,'' he said. Without these efforts, he said, the bank would not have obtained other securities-related business. Work has started to help a state-owned B-share company, Shanghai Tyre and Rubber, issue American Depositary Receipt in the US. However, there are others who think that trade finance is too competitive and does not offer wide enough profit margins. Credit Lyonnais has had the largest asset size among foreign banks in Shanghai for the past two months. Its strategy is to develop the more profitable real estate and infrastructure loan market. ''Construction projects are much needed to provide enough places for people to live. Existing accommodation will give way to larger and more spacious apartments. There is so much to do in Shanghai,'' Credit Lyonnais Shanghai branch assistant general manager Joel Edouard said. He said banks had to exercise caution and good judgment. ''Check what parties are involved in the project, the surrounding environment and whether relevant approval has been obtained,'' he said. Venturing into new areas, the bank set up a small private-banking section several months ago, serving the personal needs of the ever-increasing expatriate population in the city. Other banks have sought short-cuts to break into the forbidden local market. Banque Nationale de Paris has already sneaked into yuan business by teaming with a local partner, the Industrial and Commercial Bank of China (ICBC), to form a 50-50 joint venture bank called the International Bank of Paris and Shanghai (IBPS) in November last year. Through the ICBC partnership, IBPS can gain direct access to those giant state-owned enterprises, long regarded as ''untouchable'' by other foreign banks, by granting them loan facilities. ''Client referrals between the two banks is the biggest advantage of a joint-venture bank,'' IBPS general manager Henri Hunault said. Foreign banks not only face fierce competition from other foreign counterparts but also local banks, which frequently protect themselves by inserting terms in the yuan loan agreement so that the banks will secure the clients' foreign currency loans. Bankers still do not find the environment overcrowded. But with more branch applications in the pipeline, it may not be long before they start to see their share being chipped away by new-comers.