13 December 2007
***First international bank to enter rural market***
HSBC Rural Bank opened for business today in the Cengdu District of Suizhou City in Central China's Hubei Province, establishing HSBC as the first international bank to enter China's fast growing rural market (1).
The initial phase of operations will include deposit-taking from businesses and individuals and financing of agriculture-related businesses. With an initial staff of 22 and capital of RMB10 million, the bank will also provide trade finance and transactional banking services for export-oriented rural enterprises.
Cengdu District of Suizhou City covers an area of about 6,900 square kilometres, with a population of two million people, a significant export-oriented agricultural sector and a rapidly developing rural economy.
Vincent Cheng, Chairman of The Hongkong and Shanghai Banking Corporation Limited, said: "There is tremendous potential for economic development in the rural areas. HSBC's proven expertise in rural banking elsewhere will help us tap into a range of new opportunities for China's rural population of more than 600 million people in this fast-growing, but still largely under developed market."
Peter Wong, Executive Director of The Hongkong and Shanghai Banking Corporation Limited, will be Chairman of the Board of HSBC Rural Bank. Wong said: "People in China's rural areas are known for their hard work and tremendous entrepreneurial spirit. However, people's ambitions are often constrained because of the lack of formal financing channels. By building a viable, sustainable, and commercially profitable business, HSBC Rural Bank will help release the tremendous economic potential of rural China."
Media inquiries to Neil Brazil on 020 7992 1572 or at neilbrazil@hsbc.com
1. Rural China growth
The per capita banking deposit for Chinese urban residents was 89.8 yuan (about 12 U.S. dollars) in 1978, nearly 13 times as much as that for farmers. By the end of 2005, the disparity had been narrowed to 5.28 times, with per capita deposit for urban dwellers at 20,715 yuan and 3,301 yuan for farmers, according to the National Commission of Development and Reform, the country's top economic planner.
2. Rural China banking
In late 2006, The China Banking Regulatory Commission issued a series of new rules to expand access to the rural market by domestic and international financial institutions in order to expedite the country's rural economic development.
3. Hubei Suizhou Cengdu HSBC Rural Bank Company Limited (HSBC Rural Bank)
Hubei Suizhou Cengdu HSBC Rural Bank Company Limited (HSBC Rural Bank) is a wholly owned unit of The Hongkong and Shanghai Banking Corporation Limited. Established in December 2007 with an initial paid-up capital of RMB10 million, HSBC Rural Bank is the first wholly foreign-owned bank to serve the financial needs of rural China.
4. The Hongkong and Shanghai Banking Corporation Limited
Established in Hong Kong and Shanghai in 1865, The Hongkong and Shanghai Banking Corporation Limited is the founding and a principal member of the HSBC Group. Within mainland China, The Hongkong and Shanghai Banking Corporation Limited has a branch in Shanghai, which conducts foreign currency wholesale banking business as well as two wholly owned subsidiaries - HSBC Bank (China) Company Limited, which has 54 service outlets in 16 cities across the Mainland, and Hubei Suizhou Cengdu HSBC Rural Bank Company Limited, the first wholly foreign-owned bank to serve the financial needs of rural China. With around 10,000 offices in 83 countries and territories and assets of US$2,150 billion at 30 June 2007, the HSBC Group is one of the world's largest banking and financial services organisations.
