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Earnings growth triples for foreign banks in China

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Profit growth for foreign banks in China has tripled during the first five months of this year, according to a central bank report.

The granting of licences to allow Citigroup, ABN Amro and a number of other foreign banks to offer local currency services saw profits grow by 43 per cent compared with an average of 14 per cent over the past half-decade.

Total profit for the foreign banks for the period to May 31 this year stood at $401 million, according to the findings from the People's Bank of China, which were published by China Securities Journal.

However, despite the improved returns foreign banks occupy a relatively small sector of the Chinese domestic market.

This is especially evident when compared with Industrial & Commerical Bank of China, which recorded earnings of $2.62 billion in the first quarter of 2007.

Foreign banks have earmarked significant sums to finance expansion in China, with research from PricewaterhouseCoopers showing that they anticipate that their workforce will double in size to around the 36,000-mark by 2010.

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