By Brian Kelleher, Asia financial services correspondent
BEIJING (Reuters) - China will dismantle barriers to foreign bank competition by the end of the year, but local lenders are confident their years of restructuring will prepare them to go head-to-head with overseas rivals.
Global giants including Citigroup Inc. (C.N: Quote, Profile, Research, Stock Buzz) and HSBC Holdings Plc. (HSBA.L: Quote, Profile, Research, Stock Buzz) (0005.HK: Quote, Profile, Research, Stock Buzz) will be allowed to offer yuan-denominated services to local customers starting in December, as part of China's obligations for entering the WTO.
Foreign competitors come armed with sophisticated investment products, international brands and efficient back office operations to target China's $2 trillion in personal savings.
But Chinese banks have cleaned up their balance sheets, upgraded their customer service and started acting like commercial ventures rather than the lending arm of local government offices.
"Before we competed with pistols. Now we have AK-47s and cannons," Zhu Min, executive assistant president at state-run Bank of China (3988.HK: Quote, Profile, Research, Stock Buzz) (601988.SS: Quote, Profile, Research, Stock Buzz), said in an interview this week during the Reuters China Century Summit.
The battlefield is tilted in the favor of Chinese banks.
The country's Big Four lenders -- Industrial and Commercial Bank of China (ICBC) ICBC.UL, Bank of China, Construction Bank (0939.HK: Quote, Profile, Research, Stock Buzz) and Agricultural Bank of China ABC.UL, in order of asset size -- have more than 75,000 nationwide branches.
HSBC, which has one of the largest foreign networks on the mainland, has only 23 outlets. Continued...
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