Belgian financial group KBC yesterday said it has shelved a plan to set up a locally incorporated subsidiary on the Chinese mainland due to the financial uncertainty.

The group had originally intended to submit a request for a license to incorporate locally, or convert its three existing branches on the mainland into a subsidiary, but the company decided to shelve the plan due to the turbulent and uncertain economic environment, its spokeswoman Viviane Huybrecht said in an e-mailed statement to Shanghai Daily yesterday.

KBC last year said it seeks to expand aggressively in China. Huybrecht added it would be premature to comment further on the bank's near and mid-term plan on the mainland.

KBC has three branches on the mainland in Shanghai, Shenzhen and Nanjing. Set up in 1935, KBC is the major bank and insurance company in Belgium. It runs more than 750 branches in about 30 countries and regions.

Overseas banks have been allowed to set up a locally incorporated subsidiary on the Chinese mainland since late 2007 so that they can serve more Chinese clients with yuan-backed products and a wider network.

(Shanghai Daily January 16, 2008)