China's banking regulator has approved the Industrial and Commercial Bank of China's (ICBC) plan to set up a financial leasing company, the bank said on Thursday.

The leasing company will be solely funded by ICBC, the country's largest commercial bank, with a registered capital of two billion yuan (US$265.96 million).

The company will be registered in the Binhai New Area of Tianjin, another frontier of the country's pioneer financial practices, to become the largest financial institution established there since Binhai was confirmed as a national strategic development zone, the bank said.

The leasing company will be mainly engaged in international leasing of large equipment such as ships and aircraft, and it also aims to provide leasing products, assets management service and industrial investment counseling for customers, said an ICBC official.

The bank is currently the country's largest aircraft financing bank and one of the largest ship financing banks, according to the official.

Bank of Communications, China Minsheng Banking Corp and China Merchants Bank have applied to establish their own aircraft leasing companies as well, and ICBC is the first to announce the regulator's approval.

Earlier this month, a financial leasing company jointly set up by China Construction Bank and Bank of America was approved, while Bank of China, the nation's second largest bank, bought Singapore Aircraft Leasing in 2006.

The China Banking Regulatory Commission lifted a decade-long ban on commercial banks investing in financial leasing companies earlier in March.