Hang Seng in talks for mainland jvs, wants to raise QFII quota

Hang Seng in talks for mainland jvs, wants to raise QFII quota

	Published : Fri, 01 Jun 2007 12:26 By : Agencies Print this Story

SHANGHAI (XFN-ASIA) - Hang Seng Bank (China) Ltd is in talks with local companies to expand its financial services and is also applying to widen its Qualified Foreign Institutional Investor (QFII) quota, bank executives said.

Patrick K W Chan, executive director and chief financial officer told reporters at a briefing, the bank is looking to widen its scope in insurance, fund management and retail brokerages in China through local joint ventures.

'We are in talks, just like anybody else,' Chan said, without giving any other details.

The company is also trying to get approval for another 100 mln usd quota under its QFII program, since it has already used up its existing 100 mln quota, Chan said.

Hang Seng chairman Michael Smith meanwhile told the same briefing that the bank is in a wait and see mode over the possibility of increasing its 12.78 pct holding in China's Industrial Bank Co Ltd after the stake was recently diluted during Industrial Bank's initial public offering on the A-share market.

He added that the bank was interested in raising capital by issuing yuan bonds on the mainland but this would obviously need government approval.

Following its first board meeting in Shanghai as a locally-incorporated bank in China, the bank said in a press release that it plans to expand its staff in mainland China to more than 2,000 and its outlets to 50 by 2010.

The bank said it would focus on China's Pearl River Delta, Yangtze River Delta and Bohai Economic Rim regions.

Hang Seng China currently has more 800 staff and capital of 4.5 bln yuan, the statement said.

The overall pretax profit from the bank's mainland China business, including contributions from the bank's strategic partner, Industrial Bank, was 897 mln hkd, representing 6.1 pct of the group's total pretax profit, the statement said.

The bank has a mainland business pretax profit contribution target of 10 pct by 2010, it added.

Hang Seng China commenced business on 28 May and is headquartered in Shanghai.

Local incorporation is required for foreign banks seeking to offer a full range of yuan-denominated services in China.

randall.jensen@afxasia.com