The Shenzhen-based bank will become the first Chinese lender to open a branch in the United States since the country enacted the Foreign Bank Supervision Enhancement Act in 1991.

The branch will "engage in wholesale deposit-taking, lending, trade finance, and other banking services," the Fed said in a statement on Thursday.

China's sixth-biggest lender operates a representative office in New York and submitted the application to open a branch in March this year.

The bank, with assets valued around 145.6 billion U.S. dollars, engages primarily in corporate and retail banking and treasury operations throughout China and operates a branch and an investment adviser subsidiary in Hong Kong.

Meanwhile, China Merchants has agreed to buy 10 percent of Taizhou City Commercial Bank Co to expand its distribution network. China Merchants will pay 272.1 million yuan (36.7 million dollars) for the stake, the company said in a statement yesterday.