Hang Seng Bank, Hong Kong's second-largest by assets, plans to double its branches this year in China, where overseas rivals are also accelerating expansion after the banking market fully opened last year. Hang Seng Bank aims to have 30 branches in the country at year's end, from 16.

Larger competitors, such as the bank's majority owner, HSBC Holdings, and Standard Chartered also announced plans this week to bolster their branch networks in China. Overseas banks have been allowed to lend and take deposits in the local currency since December.

HSBC, Hong Kong's biggest lender, said Tuesday it might open as many as 30 to 40 branches and sub-branches this year and hire 1,000 more people in China. Standard Chartered said Tuesday it planed to double its China outlets to 40 this year.

Competition is not a concern because of China's growth potential and the size of the market, Poon said. Hang Seng Bank will focus on Guangzhou, Shenzhen, Shanghai and Beijing for the new branches, he said, and aims to have more than 50 new outlets in China by 2010.

Foreign banks are seeking to expand in a market where Chinese households had 16.2 trillion yuan, or $2.1 trillion, in yuan deposits as of February, according to central bank figures. China removed restrictions on the banking market in December to meet World Trade Organization obligations.

Foreign banks are seeking to expand in a market where Chinese households had 16.2 trillion yuan, or $2.1 trillion, in yuan deposits as of February, according to central bank figures. China removed restrictions on the banking market in December to meet World Trade Organization obligations.