Banking News
- Ningbo Bank to buy into rival Laiwu
Date: 16-Oct-2007 Sources: (Shenzhen Daily)
BANK of Ningbo (Ningbo Bank), partly owned by Oversea-Chinese Banking Corp., is in advanced talks to buy into a smaller domestic rival, sources close to the situation said yesterday.
Bank of Ningbo, based in the eastern Chinese city of Ningbo, near Shanghai, wants to buy a stake of 10 to 20 percent in Laiwu City Commercial Bank in the eastern Chinese province of Shandong, the sources said.
Laiwu bank, the most profitable city bank in Shandong, also wants to secure Bank of Ningbo as a strategic investor although no agreement has been inked yet, the sources said, adding that the talks began in late August.
If the talks are successful, Laiwu bank would become the first acquisition by Bank of Ningbo since it listed on the Shenzhen bourse in July.
'Ningbo Bank is well known for its banking services for small and medium-sized enterprises and wealthy private customers in its home base in Ningbo,'said one of the sources.
'These areas are also what Laiwu bank is keen to develop,'he added.
Ningbo Bank is unlikely to become a controlling shareholder but is expected to appoint representatives to Laiwu bank's board, the sources said.
Laiwu bank's major clients are State-owned companies such as Laiwu Steel Corp., but it is aiming to diversify its client portfolio to reduce loan risks, the sources said.
Earlier last week, Industrial Bank, partly owned by Hong Kong's Hang Seng Bank, announced it had agreed to acquire a small bank in the northern city of Harbin and establish its own branch there.
Last month, Bank of Communications, partly owned by HSBC Holdings Plc., said it would buy into Changshu Rural Commercial Bank in eastern China to expand its business outside its base in Shanghai.
'Banking industry consolidation is definitely accelerating these days,'said another of the sources.
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