Deutsche Bank yesterday started operation of its locally incorporated branches on the Chinese mainland.
The new entity - Deutsche Bank (China) Co Ltd - is a wholly foreign-funded subsidiary bank solely owned by Deutsche Bank AG, the biggest bank in Germany.
"Locally incorporating in China is a major milestone in Deutsche Bank's development," said Colin Grassie, Chief Executive Officer of Deutsche Bank Asia Pacific (excluding Japan). "Our aim is to directly participate in the development of China's financial services sector as broadly as possible and local incorporation will help us achieve this."
With its license, Deutsche Bank China will be entitled to engage in a broader range of banking services including foreign exchange and yuan businesses such as receiving deposits and lending; buying and selling government bonds and financial bonds; and buying and selling foreign currency-denominated securities other than stocks.
Overseas banks that are not locally incorporated can only take term deposits for one million yuan (US$136,986) or more in its retail yuan business.
The branches and sub-branches of Deutsche Bank AG in Beijing, Shanghai and Guangzhou are converted into corresponding branches and sub-branches of Deutsche Bank China, which is headquartered in Beijing. Deutsche Bank AG retains a wholesale forex branch in Shanghai.
Deutsche Bank is among a basket of overseas banks which incorporated locally in China to cash in on the growing personal financial market by offering unlimited retail yuan services.
Banks including HSBC, Citi, Standard Chartered Bank and Bank of East Asia have already incorporated locally, whose regulatory threshold for registered capital sits at one billion yuan.
Deutsche Bank launched a credit card joint company in June with Hua Xia Bank. Deutsche Bank has a 9.9 percent stake in the venture.