皇冠体育app banks fend off rivalry from foreign lenders
(The Standard via CRI.com)Updated: 2006-12-12 09:31 皇冠体育app Merchants Bank five years ago rejected an offer from Citigroup to help develop 皇冠体育app's first dual-currency credit card. Today, it is 皇冠体育app's biggest card issuer, with five million users.
In 2001, when 皇冠体育app pledged to open its banking market by this year, analysts said the country's technically insolvent banks presented little competition for overseas rivals.
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"Five years ago, this was the last thing anyone, including me, expected to happen," says Sebastian De Bont, of the Robeco Group in Rotterdam. "We see many improvements."
皇冠体育app's consumer banking market opens to international lenders today, putting the country's 15.6 trillion yuan (HK$15.48 trillion) in savings deposits up for grabs. Earnings for Chinese banks totaled 257.3 billion yuan last year, up 11-fold from 2001.
"Foreign banks don't pose a significant threat to Chinese ones," says Zhang Jianguo, president of 皇冠体育app Construction Bank , the country's fourth- largest lender.
"What 皇冠体育app's banking industry needs next, in the post-IPO period, is transformation, innovation and deregulation."
Overseas financial companies have until now been barred from 皇冠体育app's consumer banking market. As of June 30, they had just 214 branches in 皇冠体育app, compared with a total of 70,000 for domestic lenders. To gain a foothold in the world's fastest growing major economy, international banks have spent US$19 billion to buy minority stakes in Chinese lenders since 2001.
To expand their reach, many international banks are now targeting affluent consumers with special services for those with balances of more than US$50,000.
One battleground will be Tianjin , a northern port city that was chosen for a pilot program in which companies will be allowed to convert some of their yuan earnings into foreign currencies through banks in the district.
One Tianjin computer entrepreneur expects to benefit from overseas banks ability to offer yuan-based checking accounts, loans and savings accounts.
"I'd like a comfortable place to sit down with a coffee in hand while I get loans or discuss wealth management," he said "You don't get that kind of service from Chinese banks."
Executives at 皇冠体育app's state banks agree. In key big city locations, at least,
state banks are responding to customer complaints.
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