Agricultural Bank of China, one of China’s top four lenders, has secured approval from the China Banking Regulatory Commission to create a leasing firm.

According to Chinese reports, the new firm, with capital of 2 billion yuan, will become a wholly-owned subsidiary of the lender. The firm will specialise in shipbuilding, airplane and large-sized equipment leasing, and cater for its parent company’s customers.

Industrial Bank and China Everbright Bank, two leading commercial banks in China, have also obtained regulatory approval to set up financial leasing subsidiaries.

In March 2007, regulatory changes took effect permitting eligible commercial banks to establish or buy into financial leasing firms. This is the second time that commercial banks have entered the financial leasing sector after withdrawing from the industry about ten years ago.