On November 8, 2007 The US Federal Reserve Board approved the application by China Merchants Bank(CMB) to establish a branch in New York. CMB would be a qualifying foreign banking organization under Regulation K. The proposed branch would engage in wholesale deposit-taking, lending, trade finance, and other banking services.

China Merchants Bank will become the first Chinese bank to open a branch in the United States since the country enacted the Foreign Bank Supervision Enhancement Act in 1991. CMB, a foreign bank within the meaning of the International Banking Act (IBA), has applied under section 7(d) of the IBA to establish a branch in New York. The Foreign Bank Supervision Enhancement Act of 1991, which amended the IBA, provides that a foreign bank must obtain the approval of the Board to establish a branch in the United States.

CMB, with total assets of approximately $145.6 billion, is the sixth largest bank in China. CMB is indirectly controlled by the Government of China through a number of wholly owned companies. One of these companies, China Merchants Group, Limited, Shenzhen, People’s Republic of China, indirectly owns approximately 17.6 percent of CMB’s total outstanding shares. Two other government-owned companies, China Ocean Shipping (Group) Company and China Shipping (Group) Company, own 6.4 percent and 5.4 percent, respectively, of the shares of CMB. No other shareholder owns more than 5 percent of the shares of CMB.

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