Chinese banks stretch out global in 2007
Updated: 2008-01-03 10:16
- ICBC acquires Seng Heng Bank
ICBC on August 29 paid US$586 million to buy a 79.93-percent stake of Seng Heng Bank, Macao's third largest commercial bank in terms of total assets. It has nine branches in the special administrative region and provides a variety of financial services including corporate and personal finance. Statistics showed that by the end of 2006, the Macao lender's assets totaled 25.39 billion patacas (US$3.17 billion).
ICBC would strengthen risk management of the lender and run the bank in strict accordance with both mainland and Macao's laws in order to promote local economic development. ICBC could tap into the Macao banking market through the purchase, the second after its buyout of PT Bank Halim Indonesia.
- Mingsheng purchases UCBH Holdings shares
China Minsheng Banking Corp announced on October 8 that it had reached an agreement with UCBH holdings to buy news shares of the American bank in three phases for between US$212 million and US$317 million. After the purchase, Minsheng held a 4.9-percent stake in UCBH Holdings.
Minsheng would purchase shares, acquiring 4.9 percent of UCBH by purchasing 5.4 million shares in the first phase. It will further increase its stake to 9.9 percent in 2008. Investment for the first two phases would cost Minsheng a total of US$2.5 billion. And finally, it may increase its holding to 20 percent by June 2009 to become UCBH's biggest single shareholder.
The deal marked the first strategic investment in a banking institution in the United States by a Chinese mainland bank. UCBH Holdings is the holding company of United Commercial Bank, a leading bank in the US serving Chinese communities and American companies doing business in China.
Founded in Los Angeles in 1998, UCBH Holdings is currently listed on NASDAQ exchange and has 51 branches and loan centers, mainly in California and other major US cities. It also has a branch in Hong Kong and representative offices in Shanghai, Shenzhen and Taiwan Province.
- ICBC buys Standard Bank stake
ICBC on October 25 said it would spend US$54.6 billion to take a 20 percent stake in Standard Bank Group Ltd, Africa's largest bank, and become its largest shareholder.
ICBC took new shares issued by Standard Bank, accounting for 10 percent of the enlarged share base at 104.58 rand, and another 10 percent shares from other shareholders at 136 rand apiece.
The deal is ICBC's third overseas investment in less than a year and the first in Africa. The two sides also planed to initiate a US$1 billion global resources fund to investment in resource-related sectors such as mining and natural gas.
Trade between China and the African continent swelled 40 percent last year to US$55.5 billion, making China Africa's third largest trading partner. South Africa-based Standard Bank has 951 branches in 18 African countries and over 100 units outside the continent. Over half of the bank's profits come from non-interest income as a result of diversified businesses, which would help the Chinese lender in expanding a comprehensive business other than retail banking.
Following the stake purchase, ICBC has the right to nominate two members to Standard Bank's board, with one of them becoming vice-chairman.
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