CHINA Minsheng Banking Corp has gained regulatory approval to set up a financial leasing joint venture in Tianjin, the bank said yesterday.
The country's sole privately controlled bank received the go-ahead from the China Banking Regulatory Commission on October 11, the Beijing-based bank said yesterday in a filing to the Shanghai Stock Exchange.
Minsheng, together with its partner Tianjin Free Trade Zone Investment Co, will finish the preparation work for the planned total investment of 3.2 billion yuan (US$425 million) within six months of the approval, the lender said.
The bank will hold 81.25 percent of the venture with a 2.6-billion-yuan investment, while its partner paid 600 million yuan.
The new venture will be called Minsheng Financial & Leasing Co.
Minsheng Bank branched out into the financial leasing business following bigger rivals like Industrial & Commercial Bank of China.
ICBC said in September it had won approval to set up a two-billion-yuan financial leasing company in Tianjin to focus on aviation, shipping and other leasing sectors.
Shanghai-based Bank of Communications also said in late last month it has gained approval from CBRC to set up a wholly owned financial leasing arm for two billion yuan.
China is encouraging more banks to step into the financial leasing business, Cai Esheng, vice chairman of the CBRC, said in June.
The banking watchdog revised rules in February to allow domestic lenders to establish their own financial leasing firms. Chinese banks were forced to quit the business in 1997 amid the Asian financial crisis.
Financial leasing firms can undertake yuan and foreign currency-denominated leasing operations, including offering term deposits.