Belgian financial services provider KBC Groep NV will set up a locally incorporated banking unit in China, reports Reuters. The move is designed to capture demand for wealth management services in the world's fastest-growing major economy.

KBC intends to increase its reach in China, growing its branches significantly. Currently, it has only three, which are situated in Shanghai, Shenzhen and Nanjing.

The memo did not disclose financial details of KBC's proposed investments in China however a source familiar with the situation said the registered capital of KBC's China incorporation would be similar to that of other foreign banks which have already set up their locally incorporated units.

HSBC Holdings Plc's China incorporation has a registered capital of 8 billion yuan ($1.14 billion), the same as Hong Kong's Bank of East Asia, versus 4 billion yuan for Citigroup

At present, KBC offers corporate and commercial banking services through its three local branches in China with client focus on Belgian companies and Chinese firms that have ambition to expand business in European markets.

After incorporating locally, KBC plans to offer retail banking services to Chinese individuals, according to the memo. These would include regular deposit and loan services as well as fee income-based wealth management services, which are increasingly popular among the rapidly growing Chinese middle class.

Chinese banking regulators began to approval local incorporations of foreign banks including HSBC and Citigroup early last year. Local incorporation