Chinese banks restart leasing business

Chinese banks are gearing up to kick-start leasing businesses after the lifting of a ten-year ban earlier in March this year. Officials from the Bank of Communications are predicting this could put an end to foreign dominance in the market within the next five years.

Chinese banks are gearing up to kick-start leasing businesses.(Photo: 365huodong.com)

The ban had been in place for a decade, after reckless investment and poor management in a leasing industry that was badly regulated in the 1980's and 90's. So far, five banks including China Construction Bank, China Minsheng, ICBC and China Merchants have obtained leasing licenses.

The Bank of Communications says local lenders are likely to use strong relationships with clients to win leasing contracts from sectors including airlines, shipping, engineering and construction.

Leasing currently accounts for just one percent of China's 250-billion-US-dollar equipment market, compared to 30 percent in the United States. This suggests there's still a great deal of potential for future growth.