Related Event: Bank of China
SHANGHAI - Bank of China, one of China's four big state commercial lenders, is considering selling stakes that would total nearly a quarter, or $6 billion, of its equity, a major Chinese financial magazine reported Monday.
Royal Bank of Scotland Group PLC and Singapore's Temasek Holdings will each take a 9.9 percent stake, Caijing magazine reported. It did not identify the source of its information.
The magazine said UBS AG and the Asian Development Bank will together hold a 5 percent stake.
Combined, the stakes would be close to the maximum total of 25 percent allowed to foreign investors in any single state bank.
Asked about the report, Bank of China spokesman Wang Zhaowen refused comment.
UBS also refused comment. In June, it said it might invest about $500 million in a strategic stake in Bank of China.
The Caijing report said the four foreign banks, who earlier had been reported to be in talks with Bank of China, would buy some shares out of existing stock in Bank of China. The rest might come in the form of new shares in an additional share issue, it said.
Like other state banks, Bank of China has been seeking foreign partners to help restructure and improve its competitiveness as it prepares for an overseas share listing.
Royal Bank of Scotland hasn't ruled out any options in China, Chief Executive Fred Goodwin told analysts Friday. However, he described the bank's appetite for a minority stake in a mainland Chinese bank as "extremely limited."
Foreign lenders have been eager to gain footholds in the Chinese market as they gear up for a full opening of the country's banking industry in 2006.
(Photo source: Reuters)