BANK of Communications yesterday signed a strategic cooperation agreement with Changshu Rural Commercial Bank to buy 10 percent of the rural bank.
The two parties will also cooperate in business development and BoCom will offer technical support. BoCom becomes the first big state-owned bank to own a stake in a rural lender.
BoCom, the fifth biggest bank in China, will pay 380 million yuan (US$52.13 billion) to buy 10 percent stake of Changshu Bank.
BoCom will be Changshu Bank's biggest shareholder when the transaction is completed. Shanghai and Hong Kong listed BoCom will appoint management to Changshu Bank, which is located in nearby Jiangsu Province.
BoCom will not only bring capital to Changshu Bank, but will also bring products, technology and management improvements to the rural player.
The capital injection paves way for Changshu Bank's listing plan this year. The lender has hired China Securities Co to advise on the IPO, an unnamed source told Shanghai Daily earlier.