The China units of HSBC Holdings and Citigroup have won initial approval by China’s National Association of Financial Market Institutional Investors (NAFMII) to underwrite corporate debt in China, paving the way for them to be the first foreign banks to win licenses. The two banks will still have to register with the People’s Bank of China (PBOC) before they can start operations. Analysts said the move marks a significant breakthrough for foreign banks in China. “The corporate debt market is one of the fastest-growing in China’s financial industry. It offers huge growth potential,” said Sheng Nan, Banking Analyst at UOB Kay Hian in Shanghai. Currently, only domestic banks in China are allowed to underwrite corporate debt such as short-term bills and medium-term notes on the interbank market. Regulators had previously allowed some foreign banks to underwrite government bonds as well as those issued by policy lenders, but the corporate debt market is potentially much more lucrative. The outstanding issuance of short-term bills and medium-term notes totaled CNY2.29 trillion as of the end of May, the China Daily reports.