China Minsheng
Banking Corporation, mainland China’s 9^th largest lender, has been
granted a banking license from Hong Kong’s Monetary Authority.

Beijing-based
CMBC’s new license took effect on 5 January 2012, said the HKMA in a statement.
The new license takes the number of licensed banks in Hong Kong to 153.

CMBC is
China’s largest privately-owned lender, founded by a lawyer in 1996. It has
two hundred banking outlets throughout China. Its distance from the state has
stood it in good stead compared to its peers, in its ability to provide small
loans to cash-strapped businesses in a tight monetary environment which has
pushed up interest rates. Larger state-owned peers have to follow China’s
strictly regulated interest rate regime. 

Shares of Hong Kong-listed Minsheng were up 1.2 per cent last year in
Hong Kong, compared to a drop of 20 per cent for the Industrial & Commercial Bank of China and a 22 per cent fall for China Construction Bank Corp.

The other
big differentiator between CMBC and other Chinese banks is its standalone private
banking business. Compared to Europe and the US, private banking
is at an early stage of development
among Chinese banks, with the exception of CMBC, believes Afzal
Tarrar, Shanghai-based Partner at accountant Pricewaterhouse Coopers.

“China Minsheng Banking Corporation seems to be the only
bank in China so far that lists private banking division as a separate business
unit. The rest of the banks have kept the private banking business as a 'tier one' department, at the same level as the retail banking
department (eg, ICBC), or as a 'tier two' department under the retail
banking department (eg, China Merchant Bank and ABC),” he said.

"We believe that these two models will inch toward
each other in several forms in coming few years, including M&As, JVs and
business collaboration.  Bringing the two
models together will help serve the needs of the China HNWIs better and make
the private banking business in China more mature and sustainable,” he told WealthBriefingAsia last year.