SWEDBANK opened its first Asian branch yesterday in Shanghai, joining other foreign banks to cash in on the booming Chinese banking market.

The Sweden-based lender plans to mainly provide full lending and deposit-taking services in foreign currencies. Target clients are Swedish, Nordic and Baltic companies doing or planning to do business in the mainland as well as Chinese firms doing business in Europe.

"We will see the profitability and consider to expand our business at the local level," said Carl Eric Stalberg, group chairman of Swedbank.

The bank in April obtained a financial license from China Banking Regulatory Commission and a business license from the State Administration of Industry and Commerce to open branches in the Chinese mainland. After three years of operations including two straight years of profit, the Swedish lender will be able to apply a license to offer yuan services.

Stalberg said the lender has plans to expand its branch number in the mainland and will look into the retail banking service after 2010 as it grows its business beyond the current corporate banking focus.

The Swedish bank is a bit late among foreign banks in entering China mainland. Many of the foreign banks are already in the process of applying for approval to be incorporated locally as a strategic move after China fully opened its mainland banking sector in December 2006 as part of its commitments to the World Trade Organization.

So far, seven lenders - Singapore's DBS, Hang Seng Bank of Hong Kong, Japan's Mizuho Corporate, HSBC, Citibank, Standard Chartered Bank and Bank of East Asia - have been approved to offer unlimited retail yuan products to Chinese mainland customers after being locally incorporated.