Banking News
- UOB closes in on Evergrowing stake
Date: 8-May-2007 Sources: (Shenzhen Daily)
SINGAPORE'S United Overseas Bank (UOB) is in final talks to buy a near-20 percent stake in a small domestic lender to kickstart its business in China, two sources familiar with the situation said May 1.
UOB, the second-largest of Singapore's three banks, is in exclusive negotiations with China Evergrowing Bank, based in the eastern coastal city of Yantai, the sources said.
'Currently, Evergrowing is talking to UOB only,'said one, adding Evergrowing would only open talks with anyone else if those talks failed.'The talks between Evergrowing and UOB are so far so good,'the source said.
UOB has signed a letter of intent to make a strategic investment in China Evergrowing.
UOB announced April 29 that Wee Ee Cheong would succeed his father Wee Cho Yaw as chief executive of the family-controlled bank, founded in 1935 by his grandfather Wee Kheng Chiang.
Wee Ee Cheong said UOB aimed to generate 40 percent of its profit outside Singapore by 2010, from 32 percent last year, one of its goals for overseas expansion.
The sources said UOB's move followed a visit to Singapore earlier last month by a group of senior Yantai officials, led by the city's mayor.
Evergrowing, also known as 'Hengfeng?in Chinese, was the result of an internal restructuring at Yantai Housing Savings Bank, a mortgage specialist established in 1987.
In 2003, Yantai Housing Savings was renamed Evergrowing and won a national banking license allowing it to run a wide range of businesses and to operate branches across the country.
Evergrowing, which has around 100 outlets, mostly in and around Yantai, plans to grow into other cities such as Shanghai this year, the sources said, adding it also plans to issue subordinated bonds to raise capital, pushing up its capital adequacy ratio to 10 percent by the year-end from just above the minimum requirement of 8 percent.
UOB declined further comment, while officials at Evergrowing Bank, which had end-2005 total assets of 37 billion yuan (US$4.8 billion), declined to comment.
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