Zheng Haiquan (L), President of HSBC Bank (China) Co Ltd and China CEO of HSBC Richard Yorke (R) unveil HSBC Bank (China) Company Limited in Shanghai on April 2, 2007. [newsphoto]

Mainland-incorporated units of four overseas banks start operation on Monday, in an important step towards taking a bigger slice of the nation's $2 trillion of household savings.

The four oversea lenders, namely HSBC Bank (China) Co Ltd, Standard Chartered Bank (China) Ltd, Bank of East Asia (China) Ltd, and Citibank (China) Co Ltd, today opened over 100 outlets for retail yuan-denominated services to Mainland clients.

Citibank opens its businesses as locally incorporated banks in Shanghai April 2,2007. [newsphoto]
 
In March, these four were the first batch of foreign banks who got final approval from China's banking regulator to incorporate locally. They were granted local registration and operation certification last week.

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. These rules removed all geographic and business restrictions on overseas banks, in line with China's WTO commitments.

Currenly, HSBC's China entity has 35 outlets in China, while Standard Chartered Bank has 23, Citibank has 16, and Bank of East Asia has 32.

The outlets of the four lenders can not offer retail business, such as RMB deposit and loan, to ordinary Chinese citizens yet. They are still waiting for the review of China's Banking Regulatory Commission. However, industry insiders expect the business to be completely approved by mid-April.

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

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