Four Chinese banks plan to set up aircraft leasing companies - report

The move is aimed at getting a slice of a huge and growing business which so far has largely been dominated by foreigners, the People's Daily reported on its website.

"In the Chinese airline sector, about 70 pct of aircraft are leased and 90 pct of them are leased through overseas companies," Yang Boqin, an official with Shanghai Ronglian Finance Leasing Share, was quoted as saying.

"Given the numbers, you can understand why the banks want to set up their companies," he said.

The other three banks include Bank of Communications, Minsheng Banking Corp and China Merchants Bank, according to the report.

Minsheng Bank is expected to invest 3.2 bln yuan in the new venture while the others are thought to be investing 2 bln yuan each, the report said.

"China is expected to approve the four leasing companies by year end or early next year," Yang said according to the report.

"More banks and financial institutions will join if they prove successful."

The business has been opened to the banks since Measures for the Administration of Finance Leasing Companies took effect on March 1, allowing them to hold stakes in finance leasing companies.

European aircraft maker Airbus said earlier this month it expected China to order 100 to 150 planes per year from the company over the next five years to meet heavy demand from its booming aviation market.