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BIZCHINA> News
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CMB eyes financial leasing
(Shanghai Daily)
Updated: 2007-06-19 13:51 China Merchants Bank Co has applied to set up a financial leasing firm to diversify its business scope, its president said yesterday.
The Shenzhen-based lender is awaiting regulatory approval to set up a financial leasing entity and acquire China Merchants Fund as the lender steps up expansion as a universal financial services provider, President Ma Weihua told investors during an online meeting.
The China Banking Regulatory Commission revised rules in February to allow domestic lenders to establish their own financial leasing firms. Chinese banks were forced to exit the business in 1997 amid the Asian Financial Crisis. Financial leasing firms can undertake yuan and foreign currency-denominated leasing operations, including offering term deposits of one year or more, transferring leasing receivables to commercial banks and issuing financial bonds. The CBRC said last week that the State Council, China's Cabinet, authorized five commercial banks to set up financial leasing companies, without naming any. Also as part of its diversification, CMB has applied to acquire China Merchants Fund, which is now run by the group that owns China Merchants Bank.
Qin also said the bank has applied to US banking authorities to open a New York branch to expand into overseas markets. The bank will also add outlets in the Chinese mainland's coastal areas to meet demand. Lan Qi, board secretary, said the lender has no need to raise capital through shares sale in two to three years due to its current capital adequacy status. (For more biz stories, please visit Industries)
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"Diversification into a universal financial player is an inevitable trend for commercial lenders in China," Ma said. "The bank will explore all channels that are beneficial to the bank's development and within regulations."