Goldman Sachs loans expertise to China Bank
(China) - In a move expected to pave the way for similar ventures, investment giant Goldman Sachs has reached an agreement with China’s largest commercial bank to dispose of up to US$1.2 billion of the Chinese bank’s bad loans.
The deal, which has yet to receive the green light from China’s regulators, is the first time a foreign bank has joined forces with one of China’s state banks. However, other US investment banks, notably Lehman Brothers and Morgan Stanley, have been working on similar agreements with China’s four main state banks.
Goldman’s joint venture with the Industrial and Commercial Bank of China comes as China attempts to rid itself of billions of dollars in unpaid loans, most of which has been poured into poorly-performing state industries. As part of China joining the World Trade Organisation, the country was obliged to remove the "keep out" signs and allow entry to foreign banks.
In a statement, Goldman chief executive Henry Paulson said China was a very "important market for Goldman Sachs" and the bank was "more committed than ever" to that country.
"We hope this is the beginning of a long-term relationship between our two firms," he said.
Goldman’s joint venture with the Industrial and Commercial Bank of China comes as China attempts to rid itself of billions of dollars in unpaid loans, most of which has been poured into poorly-performing state industries. As part of China joining the World Trade Organisation, the country was obliged to remove the "keep out" signs and allow entry to foreign banks.
In a statement, Goldman chief executive Henry Paulson said China was a very "important market for Goldman Sachs" and the bank was "more committed than ever" to that country.
"We hope this is the beginning of a long-term relationship between our two firms," he said.
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