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The size of China's retail banking is expected to exceed that of wholesale banking in five years, said a report from Celent, a research and consulting firm focused on the financial services industry.

Latest government figures showed that retail banking income of all mainland banks in 2007 increased by 46.9 percent from a year before to $84 billion, or 33 percent of total revenue and 27 percent of aggregate profits.

The rapid increase in per capita income and investment channels, continuous improvement of the payment system, and relaxation of regulations regarding separate operations all contributed to the rapid growth in retail banking business, said Zhang Hua, a Celent analyst.

According to the Celent report, the deposit and lending business trends will include: the RMB deposit-taking business maintaining a 10 percent growth rate; foreign currency deposits dropping; the proportion of demand deposits continuing to grow; mortgages experiencing slow growth; and credit card loans having rapid growth, reaching $200 billion in 2010 to become the second largest loan business after mortgages.