BoCom looks to the UK to seek acquisitions - ResearchInChina
Date:2007-11-26
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BANK of Communications Ltd (stock code: 601328), part-owned by HSBC Holdings Plc, plans to cooperate overseas with the UK bank, the Chinese lender's Chairman Jiang Chaoliang said.
BoCom, as the smallest of China's five major state-owned banks is known, seeks overseas acquisitions and branches, Jiang said at a conference in Beijing on Saturday.
The Shanghai-based lender is one of the Chinese banks that are flush with cash after raising US$63 billion in the past two years by tapping the nation's surging stock market, Bloomberg News reported. BoCom in April raised US$3.3 billion in a Shanghai share sale.
"It's a good time for Chinese banks to buy, with the yuan appreciating and the valuation of foreign banks being pushed down by subprime issues," said Ivan Li, an analyst with Kim Eng Securities in Hong Kong. He has a "buy" rating on BoCom shares.
HSBC, Europe's biggest bank by market value, raised its ownership in BoCom to 19 percent from 18.6 after buying 172.5 million shares on the open market for HK$2.16 billion (US$278 million) on October 23 and 24. The London-based bank has said it wants to return its holding in BoCom to 19.9 percent.
Both banks have agreed to set up a credit card joint venture and an annuity management firm once regulations permit, Jiang said last month.
China Merchants Bank Co (stock code: 600036), the nation's sixth largest, was earlier this month cleared by the US Federal Reserve Board to open a branch in New York, the first by a Chinese bank in more than 15 years.
BoCom last month said third-quarter profit almost doubled to 5.9 billion yuan (US$797 million) as the country's economic growth bolstered loan demand and fee income surged on the nation's stock market rally.
The bank's Shanghai-traded shares have almost doubled since being listed, climbing by 1.6 percent to 14.26 yuan on Friday.
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