CHINA Development Bank has set up its 7.5-billion-yuan (US$1.08-billion) financial leasing arm after bailing out Shenzhen Financial Leasing Co and the new entity is the biggest financial leasing company on China's mainland in terms of registered capital.

The bank spent 7 billion yuan to bail out the Shenzhen Financial Leasing Co, which was then the sole financial leasing firm in south China.

Shenzhen Financial, strong in aircraft leasing and telecommunications equipment leasing, lacked capital which curbed its development.

China's fledging financial leasing business is set to help meet strong demand for equipment including ships and aircraft as the country's economy continues to boom.

China Development Bank itself is restructuring from a policy bank into a commercial bank. The bank got a bailout of US$20 billion from Central Huijin, a state asset management firm, in December.

Banks including Industrial & Commercial Bank of China, China Construction Bank, Bank of Communications, China Minsheng Banking Corp and China Merchants Bank have also set up their leasing arm.