[China,Sees,a,Bigger,JP,Morgan]a bite of china

　　 JP Morgan’s corporate bank in China JP Morgan Bank Co., Ltd announced on May 28 that it had received additional capital of 2.5 billion yuan with the approval of the China Banking Regulatory Commission.
　　The additional capital injection increased the registered capital of JP Morgan Bank Co., Ltd by 60% to 6.5 billion yuan. Meanwhile, the Bank also got the approval to set up branches in Suzhou.
　　This is the second time that JP Morgan increased its registered capital in China since it established the corporate bank in China in 2007. The new capital will be used for building more business spots, employing more talents and developing more products in China.
　　After the start of the experimental project for foreign banks to increase their registered capital with RMB in August 2011, about six banks already finished or announced the plan of increasing registered capital. Presently, the registered capital of HSBC China and Standard Chartered China has already exceeded 10 billion yuan and HSBC, Bank of East Asia, Standard Chartered, Citibank and Bank of Tokyo-Mitsubishi UFJ respectively have the assets of over 100 billion yuan. Foreign banks are going on a more differentiated development path in China.
　　 Additional Investment for Business Expansion
　　It is known that the local corporate bank in China is the core platform of JP Morgan to develop its business in China. It is the core part of JP Morgan’s global client strategy that connects all of its wholesale business.
　　Shao Zili, chairman and CEO of JP Morgan China, said that this was an important milestone for JP Morgan’s corporate bank’s development in China. The will further improve the ability of JP Morgan to provide services for customers.
　　According to the regulatory stipulations, the amount of credit loans of a foreign bank for a single corporate client cannot account for over 10% of its registered capital and the amount of loans for a single group client cannot exceed 15% of its registered. However, large banks usually need multi-billion yuan for the credit loans and the registered capital impeded foreign banks’recruitment of big corporate clients in China. This is why so many banks are eager to increase their registered capital in China.
　　 When it gained the qualification as a corporate bank in China in 2007, JP Morgan’s registered capital in China amounted to 2 billion yuan and it had three branches in Beijing, Shanghai and Tianjin. The new branch in Suzhou, which was just approved, is the 7th affiliated institution of JP Morgan in China.
　　In China, JP Morgan positions itself as a comprehensive and all-round financial service institution. Presently it focuses on the development of banking business in China and it is to complete its business deployment in China according to the principles of separate regulation of the Chinese finance industry.
　　As the core platform in the local market, JP Morgan’s corporate bank provides clients with diversified financial solutions concerning cashes, fluidity management, trade financing, risk management, foreign exchange and corporate banking business. The development strategy of its corporate bank aims to further expand its branches and increase the credit loans to enlarge its business in China.
　　
　　 In addition, JP Morgan has a joint-venture futures company and a joint-venture assets management company in China. This March, JP Morgan proposed the plan of acquiring 19.9% shares of China-based Bridge Trust Co., Ltd and the offer has been given to the regulatory department for examination and approving. The approval is expected to be gained at the beginning of July, 2012.
　　 More Differentiated Development Situation
　　Though the 40 foreign banks only take less than 2% of the banking market in China, their affection of investing in China never wanes.
　　According to the incomplete statistics, Royal Bank of Scotland increased the registered capital from 4 billion yuan to 4.5 billion yuan last June. Standard Chartered was approved to increase its registered capital from 8.727 billion yuan to 10.727 billion yuan on September 28, 2011. HSBC China announced last November that it had increased its registered capital by 2.8 billion yuan to 10.8 billion yuan, making it the largest one in registered capital among all foreign banks in China.
　　There are also some banks still waiting for the approval of their plans of increasing registered capital. Nanyang Commercial Bank plans to increase its registered capital to 6.5 billion yuan and DBS announced this April that it would increase its registered capital in China to 6.3 billion yuan. ANZ Bank also plans to increase its registered capital in China to 4.5 billion yuan.
　　The assets of foreign banks in China are also different from each other. According to the data from the Shanghai Banking Regulatory Bureau, HSBC, Bank of East Asia, Citibank, Standard Chartered and Bank of TokyoMitsubishi UFJ have the assets amounting to over 100 billion yuan. Among them, HSBC China has the assets of 270 billion yuan, equal to the size of a middle state-owned commercial bank in China. This shows that foreign banks are more polarized in China.
　　The withdrawal of ABN Amro and Royal Bank of Scotland and the successful localization of HSBC and Bank of East reveals the significance of the Chinese market.
　　Lu Zhengwei, chief economist from the Industrial Bank, said that the frequent increase of foreign banks’ registered capital in China showed that foreign banks were bullish on the Chinese market. “The reform to the exchange rate and interest rate, and the acceleration of mixed operation provide foreign banks with more opportunities. The new policy that encourages private companies to join in the campaign of increasing commercial banks’ registered capital and restructuring urban commercial banks also inspire foreign banks to expand their business through registered capital increase,” said Lu Zhengwei.

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