HSBC to take stake in Chinese bank
(23 July 2004 – China) HSBC is set to take a 19.9 percent stake in China’s Bank of Communications, the country’s fifth largest lender.
The two banks are putting the finishing touches to the deal with the agreement expected to be inked shortly.
Individual foreign banks are currently allowed to own 20 percent of a Chinese bank with total foreign investment in a single bank limited to 25 percent.
China recently relaxed its foreign ownership rules in the run up to fully opening the banking sector to foreign ownership in 2006 – part of the requirements of joining the World Trade Organisation.
HSBC’s stake in Bank of Communications will allow the bank to prepare for an IPO, with the intention being to list domestically and possibly in Hong Kong and the US.
The bank’s first half profits grew 36 percent while its total assets jumped 10 percent.
Individual foreign banks are currently allowed to own 20 percent of a Chinese bank with total foreign investment in a single bank limited to 25 percent.
China recently relaxed its foreign ownership rules in the run up to fully opening the banking sector to foreign ownership in 2006 – part of the requirements of joining the World Trade Organisation.
HSBC’s stake in Bank of Communications will allow the bank to prepare for an IPO, with the intention being to list domestically and possibly in Hong Kong and the US.
The bank’s first half profits grew 36 percent while its total assets jumped 10 percent.
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