(22 August 2005 – China) Royal Bank of Scotland has finally acquired a 10 percent stake in Bank of China following months of dialogue between the two parties.RBS paid US$1.6 billion for the stake and said it is committed to its investment for at least three years.
RBS had been tipped to take a larger stake in China’s second largest bank with stories doing the rounds in April that the bank was looking to take a 15 to 20 percent stake for as much as US$3 to 4 billion.
The Scottish bank has a direct stake of slightly more than five percent but it will take control of the share owned by Merrill Lynch and Hong Kong entrepreneur Li Ka-shing, pushing the total stake to 10 percent.
China’s regulatory body has yet to rubber stamp the deal but is expected to do so before the fourth quarter.
RBC chairman George Mathewson said the bank believed the size and growth of China represented an important opportunity.
He said the bank had been impressed by the strengths of BOC’s business and its compatibility with RBS.