Banking News
- Everbright Bank stillawaiting capital, suitor
Date: 7-Jun-2007 Sources: (Shenzhen Daily)
MID-SIZED lender Everbright Bank is still awaiting a capital injection from the State, a prerequisite for potentially taking on a foreign investor, sources close to the bank said Tuesday.
The South China Morning Post reported that the government had already handed Everbright Bank 20 billion yuan (US$2.62 billion) to recapitalize its balance sheet.
As a result, Central Huijin, the investment arm of the central bank, now owned over 51 percent of Everbright Bank and would eventually let Standard Chartered Bank take a 20 percent stake, the paper said, quoting unidentified sources.
A source close to Beijing-based Everbright Bank said the bank's financial restructuring plan was still a work in progress and that the capital injection had yet to be completed. 'Everbright is still talking to a number of banks, and a decision has yet to be made,'the source said.
A second industry source said an external audit of the bank would be completed this month and Everbright Bank would probably get fresh capital in July.
Foreign bankers keeping close tabs on Everbright Bank's restructuring also said they had not heard if the government had completed its capital injection.
Standard Chartered has been in talks with Everbright Bank for more than three years over possibly taking an equity stake, according to banking sources.
Everbright Bank is saddled with debts partly because of its takeover of the troubled China Investment Bank in the late 1990s.
But other overseas lenders, keen to get a toehold in China, have been circling Everbright Bank because of its size and geographical reach in a nation where many high-profile domestic banks have already teamed up with foreign financial institutions.
Everbright Bank is 21 percent-owned by Hong Kong-listed China Everbright Ltd., an Everbright Group unit. The Asian Development Bank is the only foreign stakeholder, with 2 percent.
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