Nine overseas banks got their way into the retail banking industry in China, that can incorporate in China under WTO (World Trade Organization) market opening pledges.
On December 24, 2006, nine overseas banks got their way into the retail banking industry in China, after they received permission of becoming the first global lenders that can incorporate in China under WTO (World Trade Organization) market opening pledges.
These nine banks for which registration will be done in Shanghai, include: Bank of East Asia, Standard Chartered Bank, Hong Kong & Shanghai Banking Corp., Mizuho Corporate Bank, the Hang Seng Bank, Bank of Tokyo-Mitsubishi UFJ, DBS Group, ABN Amro Bank, and Citibank.
Overseas banks are enthusiastic about breaking into the retail market in China. The industry is having 30 trillion Yuan (i.e. US$ 4 trillion) in domestic savings and continuing demand for credit cards & other financial services with rising incomes. Domestic banks in China are competing for the modernization in preparation for the arrival of competition.
These nine banks' Chinese branches made up 34% of overall branches run by Chinese banks that receive funding from overseas in September 2006.
According to the analysts at RNCOS, "Foreign institutions ought to be capable of capturing high-end retail & corporate business in major cities. Changes will likely slow for the next one-quarter since it's believed that it'll obtain some time for officially establishing the local subsidiaries of these banks and obtaining the required licenses."
As per the government, foreign banks need to commit minimum one billion Yuan (i.e. US$125 million) in registered capital for their units in China and for capitalizing each branch of these banks with 100 million Yuan (i.e. US$ 12 million).
Related Market Research Reports:
China Banking Sector Analysis (2006-2009)
South Korean Banking Industry Analysis (2007-2011)
Russia Banking Sector Analysis (2006-2009)
