HSBC is to target more rural banks on the Chinese mainland to ride on China's rural development.
The bank plans to open its second rural bank in Chongqing in the third quarter as regulatory approval is gained, said Peter Wong, executive director of the Hongkong and Shanghai Banking Corp.
Another two applications are being processed, said Wong, declining to disclose the locations.
HSBC became the first overseas bank to tap into the market when it opened its first rural bank in central China's Hubei Province in mid-December.
"We see rural banking a profitable business, not only as a means to support China's economy," said Wong. "We eyes it a long-term business and the risk is limited."
He expect HSBC's first rural bank ?? the Hubei Suizhou Cengdu HSBC Rural Bank Co Ltd ?? to break even in three and a half years.
The subsidiary under the Hongkong and Shanghai Banking Corp, the Asian division of HSBC Holdings, has a registered capital of 10 million yuan (US$1.43 million).
HSBC has rural banking business in India and the South American markets.
The bank will gain more experience on the mainland and hopes to quicken the expansion next year.
Securities
HSBC is also seeking more cooperation with Bank of Communications in projects in the securities business, Wong said, declining to give more details.
HSBC holds about 19 percent of BoCom's stake and HSBC plans to boost its holding to 19.9 percent in the long run.
"The timetable can't be disclosed to avoid market volatility," he said.
Wong said the number of their co-branded credit cards is expected to exceed7 million from the current 5.5 million.
The two parties will expand the credit card business in a prudent way and has a target of 10 million cards, he said.
Shanghai-based BoCom, the country's fifth biggest lender, teamed up with HSBC in the credit card line and started issuing co-branded credit cards in 2005.
HSBC, Citigroup, Standard Chartered Bank and Bank of East Asia, locally incorporated in April 2007 as the first four overseas banks to do so as to be able to offer unlimited yuan services to mainland residents.