Singapore's United Overseas Bank, losing ground at home as HSBC Holdings and Citigroup expand, is seeking growth in China. Its biggest competitors there: HSBC and Citigroup.
"I'm not sure what advantages Singapore banks have," said Ho Kok Hua, fund manager at APS Asset Management in Singapore. "The opportunities in China are overblown. Competition is going to be very intense, and profitability will be a problem for most."
Even as China gives foreign investors more market access after joining the World Trade Organisation last year, its 1.3 billion consumers and rising incomes do not guarantee quick profits for banks. HSBC, the largest foreign lender in China, has nine branches, compared with 28,000 for the No 1 domestic bank. United Overseas has five.
Singapore banks will have to fight bigger rivals for market share in China, where 181 foreign lenders already operate, according to the central bank.
