Foreign banks see lucrative opportunities in renminbi lending in China but are not allowed to take deposits from the public and may only lend Chinese currency to corporate ventures financed with foreign investment. - Foreign banks see lucrative opportunities in renminbi lending in China but are not allowed to take deposits from the public and may only lend Chinese currency to corporate ventures financed with foreign investment.
- The Chinese government agreed in August to allow foreign banks to raise large loans on fixed maturity terms direct from Chinese banks -- a very short term borrowing in the interbank market.
- But loans granted under the new rules have been much smaller than those now being made available to the British banks. For example, Bank of Tokyo-Mitsubishi raised only Rmb50m in one of the first such deals in August, 1999.
Privatization of Chinese Banks - Shenzhen Development Bank, a state-owned development, first bank to list shares (IPO) on Shenzhen Stock Exchange after winning approval from the SEZ’s government in early 1990s
- Shanghai Pudong Development Bank,
- established in 1993, focusing on project financing
- second state-owned bank to list shares (Shanghai’s stock Exchange) as 400 million (16.6% of its shareholding) A shares ($484 m) on Sept 23, 1999.
- First bank was approved with central government mandate to list shares
- for strengthening capital base and expansion
Privatization (continued) - Privatization (continued)
- China Minsheng Bank, another new regional bank, listed on Shanghai Exchange on December 2000. It is China's first and only private bank and the third bank listed on exchanges. The eight-branch Minsheng is a relatively small bank, with assets of Rmb43bn and 1,800 employees.
- Other banks such as, China Merchants Bank and Citic Industrial Bank have shown in interest to raise public funds
- A handful of Chinese banks (Bank of Shanghai and Xiamen International bank) has foreign financial institutions as minority stakeholders. Now, Bank of communication (5th largest bank) is inviting two foreign financial institutions to be its 15 % holding to bolster its capital and management skills to meet WTO challenges
- Shenzhen-based CMB has received approval from the China Securities Regulatory Commission (CSRC) to go public on the Shanghai stock exchange. CMB, the 4th bank to go public, is preparing for a road show to educate domestic investors about its A-share IPO (SCMP, 1/16/02)
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