Four foreign banks will provide retail yuan services
to people across China from today.
HSBC, Citigroup, Standard Chartered Bank and Bank of East Asia
passed the regulator's audit last Thursday and now have unlimited
access to the country's US$2-trillion domestic household
savings.
The banks, however, have said they mainly intend to promote
wealth management services and target China's wealthier
customers.
Domestic lenders, trying to fend off competition in the retail
market, are also stepping up their efforts to court higher-end
customers with services such as private banking.
The regulator said Chinese institutions should provide
personalized products and services, and added that the banking
sector in Shanghai is benefiting from a great climate of innovation
and development, attributed partly to anticipated competition from
the foreign banks.
The four overseas institutions have more than 100 outlets across
China. They said over the weekend that their Shanghai branches
would offer full yuan services from today while others are expected
to do so shortly.
"It's an important milestone in our bank's development and a
significant beginning for us to provide full banking service to
large numbers of domestic residents," said Yu Xueqiang, head of
Bank of East Asia's China business.
In addition to wealth management, the four banks can now provide
a wide range of services, including mortgage loans.
They could also expand their funding sources for corporate
banking business by gaining access to personal savings and
inter-bank borrowing.
The four banks, however, have fewer branches than their
established domestic rivals. As such, they plan to highlight their
wealth management services and target high-end customers by
requiring high minimums.
Standard Chartered said it would roll out various renminbi
products for customers under two retail brands -- Priority Banking
and Excel Banking.
HSBC will concentrate on its Premier Wealth Management service
for its retail banking business and charge 300 yuan
(US$38.8)?a month to handle accounts with less than 500,000
yuan (US$64,717.4).
Last week, Citigroup became the first foreign bank in China to
offer a yuan-denominated investment-linked insurance product.
The bank, the largest in the US, is providing the service with
the United MetLife Insurance Company.
Domestic banks are foraying into the super high-end sector.
Bank of China, the nation's second largest lender, launched a
private banking service for millionaires in Beijing and Shanghai
last month.
China Banking Regulatory Commission's Shanghai bureau said some
domestic institutions need to move faster to enhance their
services.
(China Daily April 23, 2007)