FOREIGN banks say they are keen to anchor themselves deeper in Singapore, as they see more growth opportunities and would like to expand their presence here.

Local banks, meanwhile, say they are not worried about the increased competition this might bring to the banking scene.

Their comments were made in response to Deputy Prime Minister Tharman Shanmugaratnam's call last night for foreign banks to deepen their roots in Singapore.

Speaking at the annual dinner of the Association of Banks of Singapore, he announced a slate of refinements to the Qualifying Full Bank (QFB) programme aimed at making foreign banks more committed to Singapore.

For example, banks with QFB status are required to locally incorporate their retail operations if they have a substantial share of domestic deposits deemed to be important to the market.

A QFB licence allows a foreign bank to set up branches and off-site ATMs at 25 locations across Singapore. Eight banks have this status now, including Citibank, HSBC, Maybank and Standard Chartered.

Under the enhanced programme, a few QFBs may be granted an additional 25 places of business, of which up to 10 may be branches.

For some foreign banks that are already entrenched here, these changes signalled a greater opportunity for further expansion.

Standard Chartered chief executive Ray Ferguson said: 'Now foreign banks like ourselves who have shown that we're committed to and are significantly and deeply rooted in Singapore will potentially have the flexibility to enhance our physical presence and ability to reach out to and serve our customers.'

'This is a win-win situation for banks and most importantly, for customers,' he added.

Stanchart announced in February its intention to locally incorporate its consumer banking and small and medium enterprise banking business.

The bank, which has been in Singapore for about 150 years, also runs its global wholesale banking and private bank businesses from the Republic.

Citibank too has a big local presence. It was in fact the first foreign bank to incorporate its local and offshore consumer banking business into Citibank Singapore.

'In the current uncertain economic environment, there is value in foreign financial institutions sinking their roots here to mitigate risk and ensure greater stability,' said Citi Singapore country officer Michael Zink.

'The changes to the QFB programme... define what Citi has set out to do in Singapore. Singapore is a key market for Citi and is a regional and global hub for its business operations.'

Foreign banks that have not yet locally incorporated their businesses are keen to do so.

A spokesman for HSBC said the bank is looking forward to consulting with the Monetary Authority of Singapore (MAS) on the criteria for the local incorporation of its retail operations.

'We're committed to growing our retail banking and wealth management business in Singapore and would welcome the opportunity to establish additional places of business,' he said.

Maybank Singapore chief executive Pollie Sim said the bank has in fact considered locally incorporating its retail operations.

'With this latest announcement, we will engage our head office and MAS to evaluate this further. The potential of expanding our footprint is an attractive proposition.'

For those foreign banks that have not yet been granted QFB status, yesterday's announcement was an encouraging sign from the Government.

Among them is CIMB Singapore, whose chief executive Mak Lye Mun said: 'We have always stated that we would like to be a QFB in Singapore. We are encouraged that MAS will continue to award more of such licences under the free trade agreement.'

Mr Tharman said MAS will continue to award new QFBs only under FTA negotiations.

These moves to encourage foreign banks to anchor themselves here would likely mean greater competition for Singapore's local players, but they are not fretting.

'Increasing the number of strong anchor banks... is a positive move, as it will cement Singapore's position as a key financial hub in Asia,' said DBS Group Holdings CEO Piyush Gupta.

United Overseas Bank CEO Wee Ee Cheong said: 'Given the shifting global banking landscape, this is a timely move which enhances the protection of depositors domestically.'

OCBC CEO Samuel Tsien noted: 'We always welcome healthy competition. We will ensure that we will be at the forefront of providing innovative products and services to serve our customers and grow our business.'