HSBC Holdings Plc, Citigroup Inc and seven other foreign banks won approval to prepare for local incorporation in China.
The lenders control 34 percent of the branches set up by foreign banks in the country, the China Banking Regulatory Commission said in a statement on its Web site yesterday.
The others are: Standard Chartered Bank, Bank of East Asia Ltd, Hang Seng Bank Ltd, Mizuho Corporate Bank Ltd, Bank of Tokyo-Mitsubishi UFJ Ltd, DBS Bank Ltd and ABN Amro Bank NV.
Standard Chartered issued a statement saying that it would now proceed with preparatory work.
China is removing restrictions on overseas banks to meet commitments to the WTO and is requiring foreign lenders to incorporate locally to gain increased access to the nation's US$2 trillion of household savings.
Banks that incorporate in China can, in theory at least, do business in yuan with local customers. But local incorporation also entails disadvantages as it forces banks to conform with rules applying to local players, such as a rule that requires their total outstanding local-currency loans to be pegged below 75 percent of deposits.
Further approval is needed for the banks to incorporate, the commission said.
The nine lenders' assets made up 55 percent of the total for foreign banks in China as of Sept. 30, while their profits accounted for 58 percent, the statement said.
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