China encourages its banks to look for overseas targets

Section:

From Reuters
Sunday, October 28, 2007

http://www.reuters.com/article/fundsFundsNews/idUSPEK13985120071028

XIANGHE, China -- China will push its banks to forge deeper into overseas markets for acquisitions and a global profile, a top bank regulator said on Sunday.

"We will encourage Chinese banks to go abroad to participate in international competition and overseas acquisitions to improve global competitiveness," Wang Zhaoxing, assistant chairman of the China Banking Regulatory Commission, told a financial forum in Xianghe, Hebei province.

Flush with cash after blockbuster share flotations and their books cleaned up thanks to government-led billion-dollar rescue packages, Chinese banks are increasingly opening branches and buying into overseas banks.

Last week China's biggest lender ICBC agreed to buy a 20 percent stake in South Africa's Standard Bank for $5.6 billion, the biggest foreign acquisition by a Chinese commercial bank yet.

"It is now the trend for banks to carry out overseas mergers and acquisitions," Wang said.

However, Wang did not elaborate on how Beijing would support its lenders in going international.

Also last week, China's CITIC Securities agreed to invest $1 billion in Bear Stearns Cos., the U.S. investment bank affected by the mortgage market slump.

China Development Bank paid 2.2 billion euros in July for an initial stake of 3.1 percent in Barclays.

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