English

By Xie Fang

As China proposes to scrap the limit on foreign ownership over Chinese banks, a growing number of foreign banks look forward to having a stake in their Chinese peers, the Beijing Business Today reported on Thursday.

According to the newspaper, at least 20 foreign banks have become the shareholders of Chinese banks so far, with the Singapore-based OCBC Bank and the Commonwealth Bank of Australia rising to be the largest shareholders of the Bank of Ningbo and the Bank of Hangzhou respectively.

In fact, foreign banks have entered China's banking sector as equity investors since the country's first round of financial opening-up took place in 2004.

Data from the International Financial Institution of the Bank of China reveals that the total assets owned by foreign banks in China had reached RMB 3.24 trillion by the end of 2017, which was ten times larger than that in 2002, with their total profit also growing tenfold over that period.

With a new round of financial opening-up currently unfolding in China, analysts expect foreign banks to step up their efforts to enter the Chinese market.

Zhang Tao, a researcher from the Shangdong-based Hengfeng Bank, believes that small and medium-sized banks are more likely to become the targets for the foreign banks which seek to acquire the controlling share of Chinese banks.

On the other hand, domestic banks will also benefit from the financial opening-up. As pointed out by Yang Yue, an economic analyst from the China Zheshang Bank, the competition with foreign banks will also dramatically raise the ability of Chinese banks in the areas of business expansion and risk control management among other things.