Overseas banks saw their business steadily expanding in China since last December when the country fully opened its banking sector to foreign competitors, a senior official with the China Banking Regulatory Commission (CBRC) said Tuesday.

Total assets of overseas banks in China hit 153.9 billion U.S. dollars by the end of October, up 41 percent from the same month last year, said Qi Jianming, deputy director of the CBRC's Banking Supervision Department III, which oversees foreign banks in China.

The figure takes a 2.24-percent share of all the financial institutions in the country.

Meanwhile, these overseas banks posted outstanding loans of 88.8 billion U.S. dollars, up 57.8 percent, while their deposits rose 38.4 percent to 50.9 billion U.S. dollars.

Qi said that China would continue to encourage overseas banks to extend their business to areas short of financial services and to take part in China's banking reforms "by various means".

The CBRC would "moderately" adjust its limitations on foreign investment in Chinese financial institutions "at a right time" and give preference for overseas banks that would set up branches in central and western China, he said.

By the end of October, more than 90 overseas banks had operations on the Chinese mainland, running about 230 branches. In addition, there were three joint venture banks.

Twenty one of these banks --including the Standard Chartered Bank, the Bank of East Asia and the Hong Kong and Shanghai Banking Corp.-- have been approved to transform their Chinese branches into locally incorporated banks registered on the mainland.

Among them, six have been allowed to provide Renminbi services and five will be able to issue bankcards.

Since foreign institutional investors were allowed to invest in Chinese banks in 1996, 35 overseas banks have acquired stakes in 23 Chinese banks, with investment worth 21 billion U.S. dollars.

Last week, China and the United States agreed upon specific steps for foreign companies to enter China's financial service industry following a two-day high-level economic meeting.

China would complete a study of foreign equity participation in the banking sector by the end of 2008 and then make relevant policy recommendations. Foreign companies including banks will also be allowed to issue RMB denominated stocks and bonds.