A yuan clearing bank will be officially appointed in the United Kingdom in June, said Mark Boleat, policy chairman for the City of London Corp, in an exclusive interview with China Daily.

"There will be a clearing bank in London. In due course, there will be an announcement," Boleat said on Friday.

The news will be an endorsement for London's efforts to become an offshore yuan center. Other European financial centers in the race to become a yuan center include Frankfurt, Paris, Switzerland and Luxembourg.

An official clearing bank facilitates efficient clearing of offshore renminbi transactions, achieved through the appointed bank's direct cooperation with the People's Bank of China, the country's central bank.

Boleat said having a clearing bank in London will act as a signal for London's growing yuan activities, although activities are already cleared through many commercial banks' own channels.

For example, in December Standard Chartered teamed up with Agricultural Bank of China to provide their own yuan clearing platform, making use of the two banks' expertise and client base in the UK and China.

Boleat's news follows a memorandum of understanding China and the UK signed in April to work together on a clearing bank for London.

A week before that agreement was reached, China also signed a memorandum with Germany to work on appointing a clearing bank in Frankfurt, highlighting the fierce competition between European financial centers for more yuan activities.

Boleat said his team has been working on the idea for some time with the People's Bank of China, Bank of England and many banks in London, and the PBOC has now decided to appoint the clearing bank.

"We assume it's going to be a Chinese bank, because that's the way the PBOC does things," Boleat said.

He said another key announcement is expected on Chinese banks opening new branches, after a long lobbying process to achieve this.

Previously, Chinese banks, as well as many other international banks, were only allowed to set up subsidiaries, which are subject to the strict capital requirements that apply to Britain's local banks, hence the lending and financing capacity is proportional to the balance sheet of the subsidiary itself.

Branches, in contrast, have a lending and financing capacity proportional to their parent company's balance sheet and are thus able to give Chinese companies significantly greater lending and financing services.

In a letter sent by the Association of Foreign Banks to Britain's Treasury in 2012, a group of Chinese banks expressed frustration at their inability to open branches in London.

"The pressure came from the Chinese banks, and that's perfectly proper. Without the pressure from the Chinese banks, it may not get looked at," Boleat said.

Last year, the Bank of England announced foreign banks would be allowed to apply for a branch license, although only for wholesale businesses. Retail businesses still needed to be conducted under subsidiary license, to protect individual depositors.

Although none of the Chinese banks have said they have applied for a branch license, Boleat said the assessment of their applications is already in progress.

"I have no doubt there will be branch licenses in due course," Boleat said.

cecily.liu@chinadaily.com.cn