Recruiting in China

THE first four overseas banks to incorporate domestically held symbolic opening ceremonies yesterday to release details on the retail yuan-denominated products they will soon offer in Shanghai.

"Today we opened a new chapter in the bank's 142-year history in China," Vincent Cheng, chairman of HSBC Bank (China) Co, said in Shanghai yesterday. The new entity was set up with eight billion yuan (US$1.01 billion) in registered capital.

The others that will get a headstart in taking advantage of the full opening of China's banking industry are Citigroup Inc, Standard Chartered Bank and Bank of East Asia.

Completing the domestic incorporation process is the gateway for overseas banks to be able to provide the same retail services as their domestic competitors. Overseas banks were previously allowed to offer retail yuan services only to expatriates and retail foreign exchange services to Chinese.

Eight other overseas banks are awaiting approval of their incorporation applications.

The first four banks, which began operating under their new names yesterday, will all offer yuan-denominated mortgages, wealth management products, deposits and loans, starting in about two weeks. All but Citigroup said they may launch their own brand of credit card.

Citigroup plans to issue its own debit cards and will continue to offer credit cards with local partners Shanghai Pudong Development Bank Co and Guangdong Development Bank.

The American financial-services company also wants to underwrite domestic bond sales, according to Richard Stanley, chairman of Citibank (China).

BEA and HSBC also said they will tap fund products in the future.

BEA has promised to waive its account management fees as an promotional incentive when it kicks off its retail yuan business in mid-April. The lender may impose fees later in response to market conditions.

The other three banks will charge management fees on small accounts.

HSBC will charge 300 yuan a month for value-added, premium-services to customers whose daily average balance is less than 500,000 yuan. There will be no fees for balances above that amount.

The bank will charge 150 yuan a month to its non-premium clients if the average daily balance is less than 100,000 yuan.

Citigroup and Standard Chartered Bank will disclose their charges later this month.

The four banks also indicated yesterday that they have big expansion plans for the Chinese mainland.

HSBC Bank (China) will open around 30 new outlets this year, up from its current 35.

BEA is scheduled to triple to 100 outlets by 2010 from its current 34.

Citibank (China), with four billion yuan in registered capital, plans to boost its outlet number to 30 at the end of this year from 16 at present, and Standard Chartered Bank will expand to 40 from the current 23 in the same period.

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