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CBA makes major China investment

CBA makes major China investment

(22 April 2005 – China) Commonwealth Bank of Australia has made its second significant incursion into China’s banking markets after buying a 19.9 percent stake in Hangzhou City Commercial Bank. CBA said it had paid approximately A$100 million for the stake, which is the maximum allowed shareholding by a single foreign company. The deal is subject to regulatory approval.

The stake in Hangzhou follows CBA’s purchase of 11 percent of Jinan City Commercial Bank last September.

Hangzhou is the fifth largest city commercial bank in China in terms of assets and is based in the city of the same name which has more than six million inhabitants. Forbes magazine rated it the top investment location in China.

CBA intends to develop a network across China that encompasses its banking, insurance and funds management businesses.

As part of this, the bank has also bought mortgage broking business, Macquarie Securitisation Shanghai, from Macquarie Bank.

The bank said the investment would enhance its skills and knowledge of mortgage origination and add value to the two bank acquisitions.

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