INDUSTRIAL & Commercial Bank of China Ltd, the nation's largest, set up a two-billion-yuan (US$271 million) leasing unit to offer aircraft and ship financing as it seeks to broaden revenue sources.

ICBC Financial Leasing Ltd, based in the Tianjin Binhai District, is the first leasing firm in China wholly owned by a domestic bank, ICBC said in a statement yesterday. The amount represents the unit's initial capital.

China lowered the capital requirement for domestic financial leasing firms to 100 million yuan in February from 500 million yuan, seeking to nurture them in an industry that foreign investors dominate. Expansion into leasing will help make banks more competitive and enlarge their client base, the banking regulator said.

China opened its financial leasing industry to global competitors as part of its agreement to join the World Trade Organization in 2001.