Richard Yorke, HSBC Chief Executive Officer China, said that the bank is currently looking at the draft of the document from the China Banking Regulatory Commission.

It proposes that foreign players locally incorporate their business worth at least 1 billion yuan (US$125 million) in order to secure a license to offer RMB services to local residents.

"We received the draft of the document and are proactively reviewing it," Yorke said yesterday at a press conference.

Yorke added that the bank, Europe's biggest lender, has an ambitious expansion plan in China for the next two years.

The Chinese mainland will fully open its banking sector to foreign competition in December to comply with its commitments to the World Trade Organization, a move that will allow overseas lenders to offer RMB currency services to ordinary customers.

Yorke said he believed the CBRC's latest initiative was part of a series of measures taken to ensure the positive development of the Chinese market.

He added that in a number of countries, such as Malaysia, HSBC is locally incorporated.

"We certainly have every intention" to be able to provide RMB services to Chinese individuals, he stressed.

Earlier, HSBC Chairman Stephen Green said the lender would expand faster in the Americas and Asia than in Europe over the coming 10 years. In China, the bank has witnessed very encouraging progress in the first six months of this year in terms of its organic growth and co-operation with strategic partners - the two prongs of its China strategy.

It recently got the go ahead to open a private bank representative office in Shanghai, and will tap further into China's securities business.

According to its 2006 interim results, the net operating income of HSBC's branch operations in the Chinese mainland including Hang Seng Bank jumped 45.1 per cent year-on-year to HK$1.16 billion (US$149 million), while the income from the group's investments rose 44 per cent to HK$1.28 billion (US$165 million).

"This reflects that our two-pronged China strategy is working very well," Yorke said.

Looking forward to the full opening of the mainland's banking sector at the end of this year, the bank has made further investments in staffing and its network.

"We now have 24 outlets, including 12 branches and 12 sub-branches in mainland China, and have obtained approval to open branches in Hangzhou and Xi'an within this year. By the end of this year, we expect to have over 30 outlets, including new branches and sub-branches," Yorke said.

The bank also plans to recruit around 2,000 over the next two years to support its expansion, which includes corporate and private banking services.

"2007 will be an important year for HSBC's retail banking business, as foreign players will be permitted to expand RMB services to domestic individuals," Yorke said. "We are paving the way for this to be an important area of HSBC's business in China.

"We shall be focusing on four cities Shenzhen, Guangzhou, Shanghai and Beijing as our main retail banking markets," he said. "And we are seeking to bring diversified products and services to mainland China to meet the growing banking needs of our retail customers."

(China Daily 08/15/2006 page10)

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