BEIJING, Nov. 13 -- The recent entries of China Minsheng Bank and China Merchants Bank into the United States market indicates that overseas expansion by Chinese mainland banks may be entering a new phase, Moody's said yesterday in a report.

"The coincidence of improved market access and strong growth potential in the bilateral banking business will no doubt attract more Chinese mainland banks as well as encourage existing participants to expand operations," said Richard Lung, a Moody's senior analyst.

A stronger presence by Chinese banks in the U.S. will offer mainland entities the opportunity to increase the value of their franchises, diversify earnings and, just as importantly, gain experience in one of the world's most sophisticated financial systems, Lung said.

Strict risk control management will also need to be emphasized.

China Minsheng Banking Corp will buy up to a 20-percent stake of UCBH Holdings Inc in its first move to expand overseas, the Beijing-based bank said in October.

Minsheng will pay up to a combined 317 million U.S. dollars for the 9.9-percent stake.

Meanwhile Shenzhen-based China Merchants Bank has won approval to set up one branch outlet in New York City in the United States.

(Source: Shanghai Daily)