HKMA Grants Two New Banking Licenses

by Mary Swire, for LawAndTax-News.com, Hong Kong

04 August 2006

The Hong Kong Monetary Authority announced on Wednesday that it has granted a banking licence to East West Bank and a restricted banking licence to Shinhan Bank, bringing the numbers of licensed banks and restricted-licence banks in Hong Kong to 136 and 32.

East West Bank is a state-chartered commercial bank established in Los Angeles and a wholly-owned subsidiary of East West Bancorp, Inc. According to the July issue of The Banker, Bancorp was the 536th largest banking group in the world in terms of tier-1 capital.

Shinhan Bank was incorporated in South Korea in 1897 and was the second largest bank in the country in terms of total assets.

Hong Kong has one of the largest representation of international banks in the world: more than 60 of the world's 100 largest banks have a presence there. Hong Kong is the world's 9th largest international banking centre in terms of the volume of external transactions, and the second largest in Asia after Japan.

The banking system in Hong Kong is characterized by its 3-tier system, which is formed by 3 types of banking institutions, namely licensed banks, restricted licensed banks and deposit-taking companies, which are authorised to take deposits from the general public. The 3rd tier of deposit-taking institutions operate under different restrictions. Only licensed banks and restricted licensed banks can be called banks.

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