The Hongkong and Shanghai Banking Corporation Limited says it has received approval from the China Banking Regulatory Commission to establish a bank in rural China.
HSBC, the largest international bank in China, will operate in one of the designated rural areas in China's pilot program for rural banking through a new wholly-owned entity, HSBC Rural Bank Company Limited. It will be based in Central China in the Cengdu County of Suizhou City in Hubei Province. The area is about 6,900 square kilometres in size and has a population of 2 million people, with a significant agricultural sector and the Cengdu County of Suizhou City has a rapidly developing rural economy.
The initiative follows the announcement by the CBRC of new rules to further expand market access for financial institutions seeking to offer services in rural areas in order to expedite China's rural development.
Stephen Green, Group Chairman of HSBC Holdings plc, said, "We very much support China's policy priority to develop its rural economy and intend to play a full part in these ambitions. We also appreciate the opportunity to further extend HSBC's presence in China and capitalize on the new opportunities in the country's under-banked rural market. This presents an excellent opportunity for HSBC to connect our considerable experience in rural finance with a wide range of models developed in a number of our other markets including Brazil, India, Indonesia, the Philippines and Mexico."
HSBC Rural Bank will initially have up to 25 staff and will aim to be established by the end of the year.
The Hong Kong Monetary Authority, The Hongkong and Shanghai Banking Corporation's primary regulator, has also granted in-principle approval for this overseas expansion of the bank's operations.
Vincent Cheng, chairman of The Hongkong and Shanghai Banking Corporation Limited, said, "We are pleased to be the first foreign bank to enter China's rural areas, where we see great potential for economic development. Our rural bank will serve the needs of China's agricultural sector, which is undergoing rapid development, and will aim to provide tailored financial services to rural communities and enterprises."
