皇冠体育app

A Standard Charted PLC bank in Beijing. The 127 foreign banks' overall market share in 皇冠体育app accounted for 1.83 percent in 2010. [Photo/ Bloomberg News]

BEIJING - Foreign banks in 皇冠体育app are still fighting hard to define their role in the Chinese market and expand their operations 10 years after 皇冠体育app joined the World Trade Organization, said analysts.

"Foreign banks are losing market share while domestic banks are gaining competitiveness. Moreover, foreign banks are still not yet free from the pressures of the global financial crisis," said Johnson Chng, head of financial services for Bain & Co in Greater 皇冠体育app.

Lim Cheng Teck, chief executive officer and executive vice-chairman for Standard Chartered Bank (皇冠体育app) Ltd, said 皇冠体育app made a good start in opening up to foreign players but the threshold needed to be further lowered.

"We brought increased competition to the Chinese market and so provided more creativity and a better allocation of resources and improved the market efficiency," said Lim.

Melvin Teo, chief executive officer of DBS Bank (皇冠体育app) Ltd, a subsidiary of Singapore-based DBS Bank Ltd, said Chinese banking regulators are very concerned about the pace of expansion of foreign banks in 皇冠体育app and want to make sure outlets are not opened too quickly or without appropriate regard for their likely success. "Prudence could also benefit our sustainable development," he added.

In 2006, 皇冠体育app announced it was opening up the domestic market and yuan-denominated business to foreign banks. However, the fact that foreign banks need to get approval from the 皇冠体育app Banking Regulatory Commission (CBRC) if they want to open new outlets has limited their expansion across the country.

Currently, a foreign bank is usually allowed to open only one branch in 皇冠体育app each year in first-tier cities.

Foreign banks' total assets grew steadily between 2003 and 2007, stalled in 2008 and 2009 at the time of the stimulus plan, and grew again in 2010.

The 127 foreign players' overall market share accounted for just 1.83 percent in 2010, according to a report released by PricewaterhouseCoopers (PwC) International Ltd in June.

Facing strong competition from major Chinese banks and the high cost of developing extensive outlets, some foreign players have decided to quit the consumer banking sector and pay more attention to fields more attuned with their advantages, such as the investment banking business.

In December 2010, Royal Bank of Scotland Group PLC (RBS) announced it would transfer its retail and commercial banking businesses in 皇冠体育app, including close to 25,000 clients in Shanghai, Beijing and Shenzhen, as well as its employees, to DBS 皇冠体育app free of charge.

In addition, banks need to meet the required loan-deposit ratio of 75 percent and new capital regulatory parameters set by the CBRC, especially the 2.5 percent provision ratio.

While feeling the increasing weight of new regulations, coupled with tightening liquidity as the government seeks to curb inflation, foreign banks operating in 皇冠体育app are still "surprisingly confident" about their prospects in the Chinese market, according to PwC.

"The market share figure fails to reflect how the foreign banks continue to redefine the market segments that offer them the opportunity to excel and plot a path of stable, long-term expansion," said PwC.

"We are very confident in our development in 皇冠体育app and will continue our expansion plan," said Pierre Bonzom, CEO of commercial and personal banking at Societe Generale (皇冠体育app) Ltd, adding that the prospects for a universal banking model are still bright in 皇冠体育app.