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CHINA / National |
Leasing stake to take China Development Bank toward commercial status(Xinhua)
Updated: 2008-02-22 20:00 BEIJING - China Development Bank (CDB) is to seek a 90 percent stake in Shenzhen Financial Leasing Co. (SFL), a significant step in CDB's conversion from a policy bank to a commercial lender. CDB will make a cash injection into SFL, the China Securities News reported on Friday. The amount had not been fixed but should exceed 6 billion yuan (about US$833.3 million), which would make the new company China's largest financial leasing unit, SFL sources said. The company will provide leasing of aircraft, ships, heavy equipment and high-tech items, as well as financing small and medium-sized companies. Yang Hua, spokeswoman for CDB, confirmed the plan to Xinhua on Friday but said that details couldn't be released until "certain investment procedures are gone through". The move would help CDB expand into financial leasing, diversify its businesses and broaden its sources of profit, market analysts said. CDB is one of China's three policy banks, the other two being the Eximbank and the Agricultural Development Bank. CDB's main activities are the funding of infrastructure and basic industry, as well as top-priority government projects. Earlier reports said that the State Council, China's cabinet, has decided to transform CDB into a fully commercial institution. CDB would be the first among the three policy lenders to make this transition. Yang confirmed to Xinhua that the plan had been approved by the State Council but declined to give further details. "We must wait for the central bank to publish the plan." China has lowered capital requirements for financial leasing companies to 100 million yuan from 500 million yuan and allowed domestic commercial banks to hold stakes in financial leasing companies. Major banks including China Construction Bank, the Industrial and Commercial Bank of China and the Bank of Communications have launched financial leasing units. |
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