ChinaÆs bonsai banks say itÆs all about size

Municipal lender Bank of Shanghai''s attempt to expand into a neighbouring city challenges the bank sectorÆs status quo.

China's city commercial banks, nicknamed 'bonsai banks' for the government prohibition on setting up branches outside their native cities, are kicking up a fuss. They want to grow.

Bank of Shanghai is one of the most high-profile city commercial banks since HSBC, International Finance Corporation and Commercial Bank of Shanghai confusingly based in Hong Kong each acquired stakes over the past two years.

Its profile has risen even higher since it was reported that it had tried to break out of its metropolitan straitjacket and set up a branch in the port city of Ningbo in Zhejiang province, one of the top-three wealthiest provinces in China. The branch failed to...

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