HSBC opened its second rural bank in China yesterday, and pledged to launch up to four such banks a year to tap the need for agricultural finance in the world's fastest-growing major economy.
Dazu HSBC Rural Bank will provide services such as deposits and supply-chain finance to farming businesses and individuals in Dazu County, which is 80km north-west of the city of Chongqing. HSBC said the launch marked the first entry by an international bank into the rural market in western China.
China's transformation has largely been in the industrialised east of the country and big rural conurbations. But the government wants to combat inequalities between rural and urban dwellers and attract finance to boost output of staple foods whose prices have soared.
Richard Yorke, HSBC's chief executive in China, said: "The rural economy in China is home to about 750-800 million people. It is a very fast-growing part of the economy and it is quite under-banked."
HSBC opened the first rural bank run by an international lender in Suizhou in the central Hubein province at the end of last year. Britain's biggest bank wants to build its network to tap into agricultural businesses' need for capital to grow.
"We would expect to open by the end of this year at least another two more [rural] banks and we would expect to open three to four banks a year going forward," Mr Yorke said.
HSBC, the biggest international bank in China,has 74 outlets in 17 cities and plans to open between 25 and 30 a year to capit-alise on the country's fast-growing economy, which is increasingly fuelled by domestic consumption.
That trend is attracting foreign companies looking to sell goods to Chinese consumers and not just to source cheap manufacturing, Mr Yorke said.
Dazu HSBC Rural Bank, which is fully owned by HSBC, has 20 staff and RMB40m (£3.26m) of paid-up capital.Reuse content