China Merchant Bank gets US nod to open NY branch
Saturday, November 10, 2007
THE US Federal Reserve on Thursday approved an application by China Merchants Bank to open a branch in New York.
The bank, based in the southern export boomtown of Shenzhen, has total assets of about US$145.6 billion and is the sixth-largest bank in China. It is indirectly controlled by the government through other companies.
The approval marked the second in as many months for a foreign bank seeking to open a branch in the United States.
In October, the Fed approved an application by ICICI Bank Ltd, the second-largest bank in India with US$91.5 billion, to open a New York branch.
China Merchants Bank's planned New York branch would engage in wholesale deposit-taking, lending, trade finance, and other banking services, the Fed said.
Chinese government and private sector officials have repeatedly pointed out that while a dozen or so US banks operate in China, there is limited involvement of Chinese banks in the United States.
The US approval also comes after a recent trip to the Asian country by a private US trade group, which said that China may soon announce moves toward liberalising rules for foreign credit card issuers seeking to expand their businesses.
The China Banking Regulatory Commission also may issue a report early next year on whether limits on foreign ownership of domestic Chinese banks should be lifted, according to the Financial Services Forum.
The forum, an industry group made up of chief executives of 20 of the world's largest financial institutions, welcomed the Fed action.
The approval "resolves an issue frequently cited by Chinese officials as rationale for resisting greater access for US banks and other financial services firms to the Chinese market", a forum spokesman said.
The Fed said the China Banking Regulatory Commission has enhanced its supervision programmes and developed new procedures aimed at creating a framework for the supervision of banks in China.Reuters
The bank, based in the southern export boomtown of Shenzhen, has total assets of about US$145.6 billion and is the sixth-largest bank in China. It is indirectly controlled by the government through other companies.
The approval marked the second in as many months for a foreign bank seeking to open a branch in the United States.
In October, the Fed approved an application by ICICI Bank Ltd, the second-largest bank in India with US$91.5 billion, to open a New York branch.
China Merchants Bank's planned New York branch would engage in wholesale deposit-taking, lending, trade finance, and other banking services, the Fed said.
Chinese government and private sector officials have repeatedly pointed out that while a dozen or so US banks operate in China, there is limited involvement of Chinese banks in the United States.
The US approval also comes after a recent trip to the Asian country by a private US trade group, which said that China may soon announce moves toward liberalising rules for foreign credit card issuers seeking to expand their businesses.
The China Banking Regulatory Commission also may issue a report early next year on whether limits on foreign ownership of domestic Chinese banks should be lifted, according to the Financial Services Forum.
The forum, an industry group made up of chief executives of 20 of the world's largest financial institutions, welcomed the Fed action.
The approval "resolves an issue frequently cited by Chinese officials as rationale for resisting greater access for US banks and other financial services firms to the Chinese market", a forum spokesman said.
The Fed said the China Banking Regulatory Commission has enhanced its supervision programmes and developed new procedures aimed at creating a framework for the supervision of banks in China.Reuters
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