Saturday, November 1, 2003
China plans to raise foreign bank ownership cap
Reuters Hong Kong, November 1
China plans to allow foreign banks to raise their holdings in Chinese banks to 24 per cent from an unofficial cap on individual shareholdings of 15 per cent, Hong Kong's South China Morning Post reported on Saturday.
The move, planned for later this year, would give overseas banks greater control of their mainland investments, the paper quoted an official from the China Banking Regulatory Commission (CBRC) as saying.
Total foreign ownership of Chinese banks would remain capped at 24 per cent. Liu Mingkang, the head of the CBRC, said in August that Beijing planned to raise foreign ownership limits for banks but did not give a timetable. China has encouraged its commercial banks to forge strategic or capital alliances to boost competitiveness in the face of foreign competition.
The country's WTO entry in late 2001 set a five-year timeframe for the full opening of its banking sector.
Foreign banks have been keen to tap China's fast-growing economy and $1.2 trillion in personal savings.
Global banking giant HSBC Holdings bought eight per cent of the Bank of Shanghai in late 2001, becoming the first foreign commercial bank to invest in a mainland lender.
Citigroup is paying about $72.5 million for a 4.62 per cent stake in China's Pudong Development Bank.
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