The regional head of HSBC says that China’s loosening of the entry requirements for foreign banks will bring major benefits to the country’s financial consumers.
China has just adopted bold measures to expand its banking sector to foreign players, after the head of the central bank and the banking regulator flagged the need for further opening up in 2017.
The “Decision Concerning the Amendment of the ‘CBRC Foreign-invested Bank Licensing Item Implementation Measures’” (中国银监会关于修订<中国银监会外资银行行政许可事项实施办法>的决定) was unveiled by the banking regulator just after Chinese New Year, and seeks to make entry requirements for foreign banks more consistent with those applied to domestic players by dialling down licensing requirements.
Foreign banks now only need to obtain one approval for new branches instead of two, as well as make reference to a clear set of benchmarks and requirements when they invest in Chinese financial institutions via domestic subsidiaries.
Peter Wong Tung-shun, deputy chairman and chief executive of HSBC Asia-Pacific, said to the South China Morning Post that “the opening up is a good thing.”
According to Wong the move will make better financial products and services available to Chinese customers by increasing domestic competition.
Despite his sanguine take on Beijing’s loosening of the banking sector, Wong said that HSBC does not yet intend to make further investment in any of its domestic peers.
HSBC, the biggest lender in Hong Kong and a bank with a storied history in the Asia-Pacific, was one of the first foreign lenders to set up a domestic subsidiary in China, alongside Bank of East Asia, Citibank and Standard Chartered.
HSBC currently enjoys close ties with the Shanghai-headquartered Bank of Communications, holding an 18.7% stake in what is now China’s fifth biggest lender.