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Lender plots road map to success in convergence era

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It is common for state-owned enterprises to have five-year plans, but it seems a bit unusual for China Minsheng Banking Corp, the nation's first private lender, to be taking a leaf out of the government's book by drawing up a road map for the current period to 2011.

Minsheng, which hopes to become a diversified financial holding firm, says the era of convergence of services is just around the corner and the next five years could determine its long-term future.

Its top priority is to reshape its business to add insurance, mutual funds, asset management and financial leasing to banking services.

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A study by IBM Research concludes that commercial banks, with their extensive branch networks and established expertise, are best-placed to profit in the mixed-operation era and maximise revenue based on their solid expertise and wide network.

The mixed-operation period may come sooner than expected. Minsheng is not the only enterprise to see the trend but is the first domestic lender to put it on the agenda.

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Insurers such as China Life Insurance and Ping An Insurance are leading the trend to invest in various financial services, while banks are yet to follow. Ping An had said banking and asset management would become two other important parts of its business beyond insurance in three to five years.

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