Hi Jay, HSBC ... the shopping begins, crustacean like ...
biz.scmp.com
Tuesday, October 29, 2002
Beijing City confirms sale talks with HSBC
CHRISTINE CHAN
Beijing City Commercial Bank has confirmed it is in talks to sell HSBC a stake.
"We are actively pursuing talks with both HSBC and International Finance Corporation (IFC)," a company official said yesterday in Beijing.
News broke in March that IFC, the World Bank's financing arm, had tentatively signed up to take a 5 per cent to 8 per cent stake in Beijing City Commercial Bank, the mainland bank said.
It also said that HSBC wanted a 15 per cent stake, although no deals had been announced.
While there are no mainland rules capping foreign ownership in Chinese banks, the ceiling is believed to be 15 per cent.
Beijing City Commercial's remarks came in the wake of HSBC chairman David Eldon reportedly saying on the sidelines of the Asia Pacific Economic Co-operation meeting in Mexico that it was interested in taking a stake.
But HSBC was not sure whether mainland government policy would allow it to do so, Mr Eldon said.
HSBC has already taken a minority 8 per cent stake in unlisted Bank of Shanghai, one of China's smaller banks, and recently a 10 per cent stake in Ping An Insurance, China's second-largest insurer.
Beijing City Commercial Bank - the result of a merger of Beijing city's urban credit co-operatives - with about 100 branches, is a relatively small, commercial bank with its reach confined to the capital city.
Yet it has assets of 94 billion yuan (about HK$88 billion) and accumulated profits of 5.3 billion yuan as of the end of last year, putting it among the 10 most profitable banks in China, thanks to a very low rate of non-performing loans.
Beijing City Commercial Bank's main focus is on private and small- to medium-sized enterprises.
Arthur Lau, China analyst of ratings' agency Fitch, said he believed HSBC's China strategy was as a venture capitalist with a portfolio investment in regions that were more affluent and developed, such as Shanghai and Beijing.
HSBC could choose to take a profit several years later by cashing in its non-tradeable shares issued by mainland banks, according to Mr Lau. |
