小树 在 上 海 种 树

By GEORGE CHEN in London

* Aims to launch China insurance JV in July or August
* May take 3-5 years for the JV to make a profit
* In talks with Bank of Communications on pension business

LONDON, May 1 (Reuters) - HSBC aims to launch its first life insurance joint venture in China in July or August and plans to offer pension services with a local partnership in the world's fastest growing major economy, a senior HSBC executive said on Thursday.

Europe's biggest bank is in the final stage of seeking approval from Chinese insurance regulators to launch its Beijing-based life insurance venture in which HSBC hopes to take a 50 percent stake, said Clive Bannister, head of the bank's insurance business.

However, it may take 3 to 5 years for the insurance venture to make a profit, he said.

"We hope to complete the joint venture in China and it's natural to expect the earnings (of HSBC's insurance business) will continue to be very strong in Asia Pacific after that," said Bannister in an interview at HSBC's offices in London.

If approved, the joint venture would have a nationwide business licence, allowing it to sell insurance products to Chinese clients through the branch networks of HSBC and its local partner, Bank of Communications , China's fifth biggest lender by assets.

Bannister said cooperation between branches of HSBC and Bank of Communications, would be also subject to Chinese regulatory approval.

HSBC would target high-end customers in China, focusing on HSBC's existing high-end banking clients at the initial stage of its insurance venture, said Bannister.

"We are positioning the company very differently and what we will be doing is a value proposition, not a volume proposition," he said. "Our clients (in China) will be owners of businesses and business entrepreneurs who are seeking significant life cover and protection."

HSBC makes about $2 billion in annual profit from its existing insurance business, or 10 percent of the group total.

In Britain, HSBC plans to expand its insurance business through organic growth, especially through its own bancassurance channel, telephone and online sales, Bannister said. He dismissed speculation that HSBC may grow its British insurance business through takeovers.

NEXT MOVE: PENSIONS

HSBC, which is a leading player of pension services in Hong Kong, where the bank was founded, is also in discussions with Bank of Communications -- of which HSBC owns nearly 20 percent -- on pension business cooperation.

However, it is not clear whether the two banks would eventually set up a joint venture or undertake some other form of cooperation to tap China's infant but fast growing pension market. That is partly because Beijing is still finalising the rules to allow banks to offer pension management services, Bannister said.

"We think we understand how to look after pensions, pension assets and administrations, but how we can do this in China depends on the final legislation and we have had discussions with Bank of Communications on this," he said.

China's nascent voluntary corporate pension scheme, known as enterprise annuities, is similar to the 401(k) plans that dominate corporate retirement planning in the United States.

Analysts have estimated that within a few years, enterprise annuities could surpass China's $25 billion National Social Security Fund as a source of new money to manage -- and therefore as a source of fees.

HSBC also has a 25 percent stake in an insurance brokerage in China. The Beijing-based venture focuses on Chinese companies that are expanding abroad, where HSBC can offer its international expertise on insurance advisory services, said Bannister.

Last year, HSBC became aggressive in the insurance business in Asia through several newly established joint ventures in India, South Korea, Vietnam and Taiwan.

Bannister said HSBC had done fairly well in Asia but now had to focus on making the new ventures make money. "The growth prospect in Asia is still very high." (Editing by Tim Dobbyn)

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By GEORGE CHEN in Shanghai
STAFF WRITER OF TreeBar.net

SHANGHAI, Jan 16 (Reuters) - China's fifth-biggest lender, Bank of Communications , plans to buy a stake in a local securities house as part of its drive to be a full-service financial conglomerate, two sources close to the situation said on Wednesday.

Bank of Communications Trust and Investment Co, in which Bank of Communications has an 85 percent stake, is in talks to buy as much as 33 percent of Fortune Securities Co, said the sources, who declined to be identified as they were not authorised to speak to the media before a deal was reached.

Hunan-based Fortune, known as Caifu Securities in Chinese, is not related to Shanghai-based Huaxin Securities, whose company name is also Fortune Securities in English.

Wall Street bank Morgan Stanley signed a strategic cooperation pact late last year with Shanghai-based China Fortune Securities, which is controlled by several Shanghai firms.

The partners are seeking Beijing's support to set up an investment banking joint venture, Reuters reported on Dec. 7. [ID:nSHA89513]

Chinese commercial banks are not allowed to invest in the domestic brokerage sector, according to local banking rules, but trust firms can, and many have already become partners of Chinese brokerages.

"This is a very smart route for Bank of Communications to invest in the brokerage sector," said one of the two sources close to the bank. "Under current rules, there is no other choice for Bank of Communications, and you may see more similar arrangements between banks and brokerages soon."

FIRST WINNER?

Many Chinese banks including Bank of Communications' smaller rival Minsheng Banking Corp have announced recent acquisitions or investments in the trust sector, once in deep financial trouble.

If the deal is successful, it would make Bank of Communications the first domestic commercial bank to invest in a Chinese brokerage, albeit indirectly.

Bank of Communications would also become the second single largest shareholder of Hunan-based Fortune Securities, which already has a securities venture with CLSA, the Asian investment banking arm of French bank Credit Agricole .

The proposed partnership between Bank of Communications and Fortune Securities will be subject to regulatory approval, which the sources said may be the deal's biggest challenge.

No agreement has yet been signed between Bank of Communications and Fortune Securities as they are still negotiating financial details, the sources said.

Fortune Securities holds a 67 percent stake in Shanghai-based China Euro Securities Ltd., one of China's oldest Sino-foreign investment banks, in which CLSA holds the remaining 33 percent.

HSBC Holdings Plc holds a roughly 19 percent stake of Bank of Communications, and has repeatedly said it is interested in China's brokerage sector.

A Bank of Communications spokeswoman declined to comment while Hunan-based Fortune Securities could not immediately be reached for comment.

On Tuesday, Reuters reported Bank of Communications was also in talks to buy a stake in a Shanghai-based life insurance firm as Beijing will soon allow Chinese banks to invest in insurers and Bank of Communications wants to be the first to win approval for such a move. [ID:nSHA368452]

By SOPHIE TAYLOR in Shanghai

SHANGHAI, Aug 31 (Reuters) - The Chinese worker driving the export-led boom in the world's fourth-largest economy is fast becoming the Chinese spender.

Foreign and local firms -- from HSBC Holdings to Wal-Mart Stores Inc and China Yurun Food Group -- are thinking local as they tap rising spending power from a 1.3 billion-strong potential consumer market.

Overseas banks, now able to gain access to China's retail market as Beijing opens up the sector under WTO obligations, are queuing up to incorporate locally. Sino-foreign fund management joint ventures, meanwhile, are mushrooming.

"As Chinese people become richer and richer, the demand for professional wealth management services is also becoming higher," said Chen Yikang, deputy CEO of AXA SPDB Investment Managers, a fund venture between Shanghai Pudong Development Bank Co and French insurer AXA .

Nearly five years of roaring economic growth of 10 percent or more a year has put China on track to overtake Germany as the world's third-biggest economy.

That has fed China's booming domestic stock market -- up more than 90 percent this year after gains of 130 percent last year -- which, in turn, has minted a growing class of millionaires and helped China's middle class balloon.

Urban disposable incomes in China have risen 87 percent since 2000, to 11,759 yuan (US$1,559) per person last year. Insurance premiums over the same period have risen more than threefold, to 564.1 billion yuan.

At the luxury end of the consumer market, China -- now the world's third-largest consumer of luxury goods after Japan and the United States -- is expected to grow 10 percent annually between 2008 and 2015, when sales will exceed US$11.5 billion, a recent KPMG survey estimated.

Executives speaking at the Reuters China Century Summit, from Sept. 4-6, will outline the potential opportunities and pitfalls in expanding their services to win the business of China's burgeoning consumer class.

Beijing is also eager for China to rely less on exports and investment for growth to defuse trade tensions with the United States and Europe.

The Reuters Summit will feature about 20 exclusive interviews with executives from companies including HSBC's local fund management joint venture and private Swedish home furnishings retailer IKEA as well as officials from the European Union Chamber of Commerce in China.

Executives will discuss their strategies for carving out profits across a range of sectors in China, and the legal and regulatory changes that are transforming China's economy.

Other topics will also highlight the risks associated with operating in an emerging economy where evolving legal and financial structures race to keep pace with GDP.

"We see huge market potential, but there are also many things for us to do, as the market is not mature enough," said Cartier Lam, executive vice president of Bank of East Asia (China) Ltd.

One example of this is rampant speculation in the stock market, which the government is trying to tame, he added. (US$=7.5445 yuan)

(Additional reporting by George Chen in Shanghai)

By GEORGE CHEN in Shanghai
STAFF WRITER OF TreeBar.net

SHANGHAI, June 15 (Reuters) - British bank HSBC expects China's stock market to continue to gain, with strong economic growth carrying the bull run into 2008, when Beijing will host the Olympic Games.

"We have been seeing some very strong growth in the last few months and I think this reflects the underlying optimism and a very strong fundamental growth story," Mark McCombe, chief executive of HSBC Group Investment, said on Friday.

"I think this is likely to continue ... Our economic research has shown that the fundamental growth is strong enough to carry into 2008," he told Reuters in an interview during his trip to its Chinese fund management joint venture HSBC Jintrust.

In March, HSBC appointed McCombe as its head of Group Investment Business, which had $328 billion in funds under management at the end of last year.

McCombe also warned that the Chinese stock market tended to be volatile in the short-term, and said investors should focus on a long-term investment strategy instead of quick profit-taking in the short-term.

"The market has shown some very strong growth, and clearly we always advise investors to be careful and to be conservative in their investment strategy because I think the market is experiencing some volatility in the short-term," he said.

China's stock market has risen more than 50 percent so far this year despite government "cooling" measures, including an investigation into insider trading and a recent stamp tax hike on stock trading. It gained 130 percent in 2006.

As a result, China's fund industry ended 2006 with 855 billion yuan ($112.1 billion) in assets under management, a 83 percent rise from 2005, according to official data.

"The rapid development in China has been accompanied with a very strong focus on the regulatory environment and operating infrastructure of the business," he said.

"The market itself is still relatively in the early stages of development but we can actually see that it is catching up to some of the western markets very quickly," he added.

He declined to specify any China stock or sector investment he may prefer.

Shanghai-based HSBC Jintrust is 49 percent owned by HSBC, with the remainder held by government-backed Shanxi Trust and Investment Corp. It had about 4.8 billion yuan in assets under management at the end of 2006.

"Of course its contribution is relatively small compared to the rest of the emerging markets business, which has been under development for many years," said McCombe when asked for comments on the performance of HSBC Jintrust.

"But we believe that the Chinese business is the fastest growing and will become a great contributor to HSBC," he added.

The company is also considering launching new products under China's Qualified Domestic Institutional Investors (QDII) scheme, which allows banks, insurers and fund houses to help clients to invest in overseas capital markets.

Dozens of Chinese and foreign banks have won approval for QDII fund products, while only one domestic fund house, Hua An Fund Management Co., was picked as pilot in fund industry.

"HSBC places great importance on QDII. We believe that with the relaxed investment scope of QDII products, QDII products will attract a significant portion of common investors," McCombe said without elaborating. ($1=7.63 Yuan)

By GEORGE CHEN in Shanghai
STAFF WRITER OF TreeBar.net

SHANGHAI, June 7 (Reuters) - Chinese regulators expect Citigroup, HSBC Holdings and two others to become the first foreign banks to issue local-currency debit cards to consumers in the world's fourth-largest economy, a senior banking regulator said on Thursday.

Citigroup, HSBC and Bank of East Asia confirmed on Thursday that they had applied to the Shanghai branch of the China Banking Regulatory Commission for approval to issue debit cards, while Wang Huaqing, assistant to the chairman of the CBRC, said Standard Chartered was expected to apply soon.

This follows a commitment by China in late May, as part of its "strategic economic dialogue" with the United States, to allow foreign-invested banks to offer yuan-denominated credit and debit cards under their own brands.

Foreign banks are initially likely to get approval for local-currency debit cards, with permission for dual-currency credit cards expected to come soon after that, analysts said.

"Currently, we are receiving applications only for debit card issuance instead of credit card issuance, due to current Chinese banking rules," the CBRC's Wang told reporters on the sidelines of a banking summit in Shanghai, China's financial hub.

Wang declined to indicate when foreign banks would begin issuing debit cards, saying only that the approval process was going very smoothly so far and that a final decision would be up to CBRC's Beijing headquarters.

REGULATORY APPROVAL

The four were also the first foreign banks to win Beijing's approval for local incorporation earlier this year, and all four launched business operations at their wholly owned China units in April.

Foreign banks not incorporated domestically are not allowed to issue any type of bank cards independently, while those with domestically incorporated Chinese units must still apply to regulators for approval.

Debit cards in China allow the user to withdraw cash from automatic teller machines (ATMs) or to make payments directly to merchants that are bank partners, within the amount deposited in the account.

Citigroup and Bank of East Asia have said they were in talks with China Unionpay for a partnership in debit card services.

China Unionpay, the sole operator of China's interbank transaction network, which is backed by the central bank, controls the country's bank payment system and ATMs.

Foreign banks including HSBC and Citigroup have issued joint cards with local partners in China over the past few years.

The number of co-branded credit cards carrying the logos of HSBC and its partner Bank of Communications has surpassed 2.4 million, an HSBC spokeswoman said on Thursday.

China's domestic banks, such as China CITIC Bank and Industrial and Commercial Bank of China, have been aggressively expanding their credit card operations as a platform for boosting their retail banking business.

(Additional reporting by Jason Subler in Beijing)

By GEORGE CHEN in Shanghai
STAFF WRITER OF TreeBar.net

SHANGHAI, April 23 (Reuters) - For those Chinese rich enough to open an 80,000 yuan ($10,350) account, Citigroup Inc. and Standard Chartered are now promising an alternative to the long queues at China's big state lenders.

The two foreign banks, along with HSBC Holdings Plc. and Bank of East Asia, also hope that free tea, an array of insurance and other products, and a focus on wealthy clients will help them to carve out a lucrative retail banking niche in the world's fourth-largest economy.

"I want better and more professional banking services, so I want to give Citibank a try today," said Lu Lugang, 35, a manager at a foreign firm who opened an account on Monday at Citigroup's branch in Shanghai's financial district.

"If the service at Citibank is really good, I will deposit more and probably try more products at the bank," said Lu, the top U.S. lender's first yuan-banking retail client in China, as he held a complimentary glass of champagne.

The four banks opened their doors for local-currency retail business on Monday after launching domestically incorporated Chinese units in early April.

As locally registered banks, they can offer the same services as the likes of Industrial and Commercial Bank of China, China's largest bank by assets.

Chinese media have been criticising ICBC and other domestic banks in recent weeks for inefficient service, including average waits of 30 minutes to two hours before reaching a teller's window.

MINIMUM BALANCE

Although the four banks are free to take individual deposits as small as 1 yuan, all have set preferred minimum amounts, from 5,000 yuan at Bank of East Asia to 80,000 yuan at Citigroup and Standard Chartered, to 100,000 yuan at HSBC.

"We don't want our customers to queue for a long time. We want to offer them the best service and that's the reason why we have the minimum balance requirement," said Anand Selvakesari, managing director for retail banking at Citigroup China.

"Free tea and coffee anytime," he added. "If we have 1,000 customers every day, we will be very happy."

None has set ambitious targets to match the network of ICBC, which has more than 300 outlets in Shanghai alone, but instead will aim for business from upper-income clients.

Citigroup now operates 18 outlets in six major Chinese cities including Shanghai and Beijing, while Standard Chartered has 19 outlets in 11 cities.

Christine Ip, China country head for consumer banking at Standard Chartered, said the bank expected to have 40 outlets and to nearly double its staff to 4,000 by the end of this year.

"We plan to rely on our telephone and Internet banking platforms to boost our business," she added.

Partnerships with insurers to sell products at bank counters will also be part of the initial strategy to attract retail customers, senior executives at the four foreign banks said.

Standard Chartered has agreed to team up with British insurer Prudential Plc. and Germany's Allianz AG, and expects to sell yuan-denominated insurance products to Chinese clients from next month, said Mike DeNoma, visiting group executive director for consumer banking of Standard Chartered.

Last week, Citigroup said it was cooperating with top U.S. life insurer MetLife on the sale of an investment-linked insurance products through Citigroup's network in China. ($1=7.726 Yuan)

By GEORGE CHEN in Shanghai
STAFF WRITER OF TreeBar.net

首批四家外资银行全面“本地化”之后——去外资银行理财，你准备好了吗？

2007年4月2日，包括美国花旗银行（Citigroup）、英国汇丰银行（HSBC）、渣打银行（Standard Chartered）以及香港东亚银行（Bank of East Asia）在内的首批四家外资银行正式启动了其各自在中国注册的本地法人银行。

如果一切顺利，再过几天这四家外资银行就将同我们平日里非常熟悉的中国工商银行（Industrial and Commercial Bank of China）、中国银行（Bank of China）等中资银行一样为本地居民提供包括人民币存款在内的各类金融业务。

面对几乎是在一夜间“翻牌”成功，获准为本地居民提供人民币业务的外资银行，您自己是否已经准备好让全球知名的外资银行经理为您奉上专业的理财服务呢？外资银行和中资银行真的不存在门槛差别吗？或者说，您成为外资银行客户的距离又还有多远呢？本文将为您逐一分析首批四家外资银行的在沪经营特色和服务重点。

首批四家外资银行目标客户：
汇丰银行：专注信用卡和理财业务，月存余额低于50万元人民币将按月收取帐户管理费。
花旗银行：近期将出台具体人民币服务细则，但已表示改行人民币业务不会面向小额客户。
东亚银行：“进门就是客”，人民币存款不设下限，不收管理费，希望成为真正的本土银行。
渣打银行：目标客户仍锁定是日均存款余额不低于1万美元的内地新兴“中产阶级”。

虽然始终标榜自己是“来自香港，服务全国”的东亚银行一再表示改行将竭力贯彻“进门就是客”，不设最低开户门槛的方针，但该行内部人士仍私下表示，东亚的目标客户群定位可能比其他三家同期开业的外资银行略低，但总体而言，还是希望为“万元户”服务。

“一元开户从法律上是可行的，但是对网点普遍较少的外资银行而言，多少都有一些压力。开始做一些宣传噱头还可以，长期下去肯定是吃不消的。”一位外资银行驻户高管坦言。

除东亚银行表示，开业“初级阶段”将不会对大额或小额帐户按月收取管理费，其他的三家外资银行均表示将按照客户每月帐户余额数多少收取100元至300元不等的管理费。

对此，业内人士支招：对一些年轻白领，手头存款不多，通常只会在银行存上四五万元，但是等到取款时却又特别不愿忍受平日里在中资银行不可避免的排队情况，也许每个月向外资银行支付100元至300元的管理费，以此换取不用排队服务的“优待”，可能对这一类在乎时间胜过在乎“小费”年轻客户而言还是不妨尝试一下外资银行服务的。

当然，这样的白领人群业显然不是外资银行的“重点对象”，笔者经过一番调查后得出的结论是，首批四家外资银行在中国正式转制开业后，“重点对象”几乎全都锁定了喜欢高端理财业务的“中产阶级”客户。

国内的个人理财业务是中外资银行的必争领域，其巨大的市场空间早就让徘徊在门外的外资银行觊觎不已。一些外资银行早就放言，要把他们在国外市场打磨多年的内容丰富的理财产品引进中国，“做高端业务，抢高端客户”是他们的主要目标。

汇丰银行（中国）有限公司董事长郑海泉在4月2日上海举行的媒体见面会上表示，汇丰的零售银行定位于以财富管理为主。“由于目前我们的网络和资源有限，我们将侧重提供卓越理财服务。”

以汇丰银行为例，“卓越理财”（Premium Service）正是汇丰全球的个人财富管理品牌，目前这一理财服务在世界37个国家和地区受到欢迎。2002年在中国内地推出之后，也受到高端“美元”客户的欢迎。而今，随着中国政府兑现当年加入世界贸易组织时的相关承诺，人民币业务向外资银行全面开放，无疑给汇丰“卓越理财”在中国内地提供了更加广阔的施展空间。

无独有偶，渣打银行（中国）有限公司执行董事兼行政总裁曾景璇则表示，凭借在国际市场的竞争力以及对本地市场的深刻理解，“渣打中国将为在华企业及本地居民提供更好的服务和广泛的、具有世界一流水平的产品”。 据悉，渣打对“个人理财”的门槛设定为1万美元以上，这一标准已经比汇丰的50万元人民币低了很多。

香港第五大银行的东亚银行则明确“以产品找客户”的经营策略。据东亚银行上海分行副行长陶昌宇介绍，东亚银行的“合格境内机构投资者”（QDII）产品“销售一个比一个好”，原因就在于从第二款开始，该行就设置了规避人民币升值风险的机制。“关键在于产品的设计要贴近市场状况，必须要有符合客户需求的产品。 ”

据悉，东亚银行在完成转制工作以后，已将重点放在新型个人理财产品开发上，虽然因为目前中国存贷利率仍然受央行严格控制，但各家外资银行都希望通过理财产品的高收益率和低风险性来夺取客户的青睐。

与中资银行做对比，全球市场投资无疑是外资银行的强项，但是客户在选择适合自己的理财产品之前，还是得务必先了解具体产品的“入市门槛”。简而言之，去外资银行理财绝不等同去中资银行买国债那么随便，小心看上心仪的理财产品，却因为资金规模不够而空欢喜一场。

外资银行理财“门槛”简介：
汇丰卓越理财门槛50万元，这一类客户将是汇丰倾力服务的重点客户，对这一类客户，如月平均存款余额低于50万元则每月收服务费300元；对于非卓越理财客户，若低于10万元或等值，收取服务费用每月150元。
渣打优先理财门槛10万美元，如低于每季度收服务费250元；创智理财门槛1万美元，如低于则每月收取150元。
花旗CITIGOLD门槛5万美元，月均日账户余额不足，每月收100元管理费；1万美元，月均日账户余额不足，则每月收50元账户管理费。
东亚显卓理财门槛20万元，无管理费。

除了个人理财服务，如果想享受专业灵活的按揭服务，对一些贷款买“豪宅”，却又碍于事业发展不想一次性支付的中产阶级而言，去外资银行和按揭客户经理聊聊也许会别有一番收获。

在4月2日的新闻发布会上，各大外资行均表示了对于开展人民币零售业务的强烈期待，抢摊市场最大的重点就在于房贷按揭、信用卡市场及保险业，而房贷按揭原本就是中外银行尤其看重的利润来源，自然亦是外资行人民币业务计划的重中之重。

各大外资银行早就向外界表示将介入境内个人房贷业务，近期在北京举行的一个房展会上，东亚及渣打就已经开始宣传其房产抵押贷款产品了。虽然在今日的开业仪式上，汇丰、花旗及东亚均对其正在接受银监会验收中的人民币零售业务三缄其口，但几乎都在未来的计划提到了房贷按揭业务。

东亚（中国）副行长孙敏杰表示，东亚期待能尽快推出人民币房贷按揭业务，四月中旬或能如愿，且服务多样，按揭形式将根据高端客户的资金支取需求，灵活多变。

不过，有中资银行人士对此表示，外资银行在房贷争夺上应该不会打“价格战”，因为房贷利率是由中国人民银行统一规定的，外资银行将主要依靠其品牌信誉及灵活周到的人性化服务来赢得客户。

对此，孙敏杰表示，东亚银行人民币房贷按揭业务的细则仍在与监管机构积极沟通商讨中，验收通过后，东亚的房贷业务将会跟着国家对内地房产市场的重大政策导向开展，将会遵守国家的宏调方针，在房贷利率方面，东亚则计划将在央行规定的利率范围内，“引入东亚国际化理念，力争与中资银行有所不同”。

汇丰（中国）个人金融理财业务总监霍蔼玲也表示，汇丰将在近期推出人民币存、贷和住房按揭贷款业务，其房贷业务也将集中面向其“卓越理财”的客户（月存50万元余额门槛）。

目前，央行加息后五年期以上房贷利率为7.11%，各银行可在此基础上给予85折，即6.04%贷款优惠，而中外资银行应都会向客户提供最优利率，所以谁的服务出众，谁就能赢得客户。

外资银行在华网点分布：
汇丰银行：14家分行，21家支行
渣打银行：11家分行，8家支行，3家代表处
花旗银行：6家分行，10家支行，1家代表处
东亚银行：13家分行，14家支行，5家代表处

更多外资银行人民币业务资讯：
汇丰银行（中国）www.hsbc.com.cn
花旗银行（中国）www.citibank.com.cn
渣打银行（中国）www.standardchartered.com.cn
东亚银行（中国）www.hkbea.com.cn

（该文章已授权指定媒体，谢绝各类转载）

By GEORGE CHEN in Shanghai
STAFF WRITER OF TreeBar.net

SHANGHAI, April 2 (Reuters) - Four foreign banks, including Citigroup Inc. and HSBC Holdings Plc., kicked off domestically incorporated Chinese units on Monday, becoming the first foreign banks able to tap China's $2 trillion in personal savings.

The other two are Asia-focused Standard Chartered Plc. and Hong Kong's fifth-largest lender, Bank of East Asia, while more than 10 overseas lenders are still awaiting Beijing's approval to launch Chinese subsidiaries.

The four approved banks are free to take deposits of any size from any Chinese customers after local incorporation, although Citigroup, HSBC and Standard Chartered said they would continue to focus on large accounts, due mainly to the limited size of their branch networks in China.

But smaller Bank of East Asia said it would welcome new accounts with deposits as small as 1 yuan (13 U.S. cents).

Only foreign banks that are incorporated in China are allowed to operate accounts with less than 1 million yuan for Chinese individuals.

Bank of East Asia currently operates only 31 outlets in 13 cities, but it plans to expand its network to 100 outlets by 2010 and add 1,000 new employees this year.

"We don't have any specific requirement (for deposits) as we want to be a real local bank from now on," said Chan Kay-cheung, deputy chief executive of Bank of East Asia.

Chan expected the bank's business in China to contribute 35 percent of the group's net profit by 2010, up from 15 percent last year, as it takes on more customers.

Citibank (China) Co. Chairman Richard Stanley, however, said his bank still lacked enough staff and branches to offer services to small savers on a par with the big state-run banks.

Stanley didn't specify any minimum target for deposits, saying the bank was still working on final approval from Chinese regulators, but indicated that Citigroup would stick with its emphasis on wealthy clients.

HSBC took a similar stance.

PREMIUM SERVICES

"We will continue to focus on our premium services ... Our market positioning will be unchanged after local incorporation," said Catherine Fok, head of personal financial services at HSBC Bank (China) Co.

The minimum deposit for a premium customer at HSBC in China is 500,000 yuan.

HSBC also announced plans on Monday to nearly double the number of outlets in China to about 65 by the end of this year, although it would still be far smaller than a major state lender, which would operate around 200 outlets in a major city such as Shanghai.

Most major global banks have already made investments in China's banking sector, in part to tap their partners' huge branch networks.

Citigroup, the world's biggest financial services provider, bought a nearly 5 percent share of Shanghai Pudong Development Bank for $72 million in January 2003, making it the first foreign bank to become a strategic partner of a Chinese lender.

Last year, Citigroup led a consortium that bought control of China's Guangdong Development Bank for $3.1 billion.

HSBC bought a nearly 20 percent stake in China's Bank of Communications for $1.75 billion in August 2004, and has an 8 percent stake in city lender Bank of Shanghai.

"Local incorporation supports our two-pronged China strategy, increasing our ability to achieve organic expansion and creating greater opportunities for cooperation with our strategic partners," said HSBC's Asia chairman, Vincent Cheng.

HSBC is considering issuing its own credit card to premium customers while continuing to run a co-branded card business with Bank of Communications, said Richard Yorke, HSBC China's chief executive.

Citigroup's Stanley said his company had no plans to issue its own credit card in China in the near future, as it wanted to continue working with Pudong Bank in their co-branded credit card business. He added that Citigroup planned, however, to issue a cash card independently for account holders at its China unit. ($1=7.73 Yuan)