BANK of China Ltd said yesterday it acquired 83.5 percent stakes of BOC International Investment Managers, becoming a Chinese lender holding the highest proportion of shares in a fund management firm.
The fund firm was then renamed Bank of China Investment Management Co Ltd.
Bank of China bought 67 percent stakes from BOC International (China) Ltd and 16.5 percent from BOC International Holdings Ltd.
"The move enables BOC to become the direct biggest shareholder of the BOCIM and makes BOC a financial conglomerate that is involved in banking, insurance, brokerage and fund management," said Wang Zhaowen, BOC's spokesman in a statement.
"The direct leadership of BOC can enhance sales of the fund products run by the firm, among other advantages, with a bank at the backstage providing various resources," said Zhang Qi, an analyst with Haitong Securities Co.
But the move might also sap the professional management of BOCIM, Zhang noted, as BOC is a large group with limited experience in directly managing fund firms.
"Also, banks might implement their conservative management style into product development and sales," added Zhang.
There have emerged a batch of bank-controlled or bank-involved fund firms, including ICBC Credit Suisse Asset Management, Bank of Communications Schroder Fund Management and CCB Principal Asset Management, to cash in China's fast expanding capital market.
BOC reported its earnings before tax rose 46 percent to 55.66 billion yuan in the first half of last year.
Dual-listed in Shanghai Stock Exchange and Hong Kong Stock Exchange, shares of BOC closed at 6.59 yuan yesterday, down 2.66 percent from a day earlier, when the benchmark Shanghai Composite Index plummeted 2.81 percent.