China has granted final approval for four overseas banks to incorporate locally, paving the way for them to offer renminbi retail business.

HSBC Bank (China) Co Ltd, Standard Chartered Bank (China) Ltd, Bank of East Asia (China) Ltd, and Citibank (China) Co Ltd, have secured the nod to commence operations as locally incorporated companies, the China Banking Regulatory Commission (CBRC) said. 
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The four lenders can officially launch renminbi as well as foreign exchange services after completing the commercial registration process, which they expect to do by next month.

Overseas banks operating in China must incorporate locally to offer the same services as local banks, according to rules that took effect on December 11, when the country removed all geographic and business restrictions on overseas banks in line with its WTO commitments.

"This is a brand new chapter for us and for the banking industry as a whole, and we are excited with all the emerging opportunities," said Peter Sands, group CEO of Standard Chartered Plc.

The other three lenders also said yesterday that they were delighted with the approval.

According to CBRC officials, in addition to the four lenders, eight overseas banks have been approved to start preparatory work for local incorporation.

Hang Seng Bank, Mizuho Corporate Bank, Bank of Tokyo-Mitsubishi UFJ Ltd, DBS Bank, ABN AMRO and Oversea-Chinese Banking Corp are preparing to register their local subsidiaries in Shanghai.

JPMorgan Chase Bank will be incorporated in Beijing and Wing Hang Bank in Shenzhen.

The CBRC is also reviewing the local incorporation applications of three other banks Nanyang Commercial Bank, CITIC Ka Wah Bank and United Overseas Bank.

Overseas banks have achieved rapid growth since China entered the WTO. They generated a combined before-tax profit of $350 million last year, an annual jump of 31.62 percent.

Editor: Yan