Temasek Holdings Pte, the largest overseas investor in Chinese banks, said it has spent more than S$8 billion ($5.1 billion) buying assets in the country and plans to add more to capitalize on the nation's growth.

The Singapore state-owned company is seeking investments that will benefit from the burgeoning middle class in the nation of 1.3 billion people, Frank Tang, managing director and head of Temasek's investments in China said.

China is at the forefront of Temasek's efforts to boost returns by diversifying its $65 billion portfolio away from Singapore, where it's the main shareholder in the city's biggest bank, airline and telephone company. It has invested in at least a dozen Chinese companies, buying 4.65 percent of Bank of China, the nation's No. 2 lender, and 5.9 percent of China Construction Bank, the third-biggest.

“We are interested in growth, we are interested in urbanization trends and we are interested in finding proxies to ride the economic growth,'' Tang said. “We are increasing our investment in China.”

Since 2005, Temasek has spent more than S$7 billion on stakes in Chinese lenders, or about 90 percent of its spending in the country. That includes a 3.9 percent stake in China Minsheng Banking Corp., the country's biggest privately controlled lender.

There is a good reason why global financial investors such as Temasek are flocking to buy Chinese banking assets, given China's booming economy, high lending margins that are regulated by the state. Still, the flip side is their bad loan problem and corruption, which is a rising risk.

Source:佚名