Sun, Nov 25, 2007 - Page 11 News List

ICBC would like to invest more abroad, bank president says

BLOOMBERG

Industrial and Commercial Bank of China Ltd (ICBC, 中國工商銀行) has "insufficient" assets overseas and seeks more investments abroad, president Yang Kaisheng (楊凱生) said, even as he denied the lender plans to buy a stake in Standard Chartered Plc.

"ICBC will pursue a combined strategy of acquisitions and new projects in expanding overseas," Yang said yesterday at a finance conference in Beijing. "Overseas diversification is an important way for Chinese banks to spread risks against cyclical economic downturns."

Having raised US$22 billion in the world's largest share sale a year ago, ICBC, the world's biggest bank by market value, is expanding more aggressively than peers such as Bank of China Ltd (中國銀行). ICBC's 36.7 billion rand (US$5.4 billion) purchase of a 20 percent stake in South Africa's Standard Bank Group Ltd. is the biggest overseas investment by a Chinese company.

"Overseas expansion is likely to continue as Chinese banks are seeking to build up their global presence," Bill Stacey, a Hong Kong-based analyst at Credit Suisse, said yesterday in a telephone interview, citing ICBC's forays in Indonesia and Macau.

Yang joined China Construction Bank Corp (中國建設銀行) deputy president Luo Zhefu (羅哲夫) in denying a newspaper report that their banks planned to acquire a stake in Standard Chartered Plc from Temasek Holdings Pte, the Singaporean government's investment company.

"We have no plans to buy a stake in Standard Chartered," Luo said at the Beijing conference, while Yang said the report was "just a rumor."

The Financial Times reported earlier that China's three largest banks -- ICBC, Construction Bank and Bank of China -- had approached Temasek about buying its 17 percent stake in the UK company.

The three Chinese banks had made "informal and discreet" contact with senior personnel at Temasek about the deal in recent months, the Financial Times said, citing unidentified people familiar with the matter. Temasek rejected the proposal, the newspaper said.

The Singapore state-owned investment company owns 17.2 percent of Standard Chartered, the London-based bank said on Sept. 13. Temasek has declined to comment on the Financial Times report, calling it "market speculation."

Standard Chartered's London-traded shares have gained 15 percent this year, while the Hong Kong-traded stock has risen 17 percent, lagging behind the benchmark Hang Seng Index's 33 percent gain.

Chinese banks, flush with cash after raising US$63 billion selling stock in the past two years, are seeking takeover targets. ICBC's agreement to buy a stake in Standard Bank, Africa's largest, is the company's third acquisition outside China in less than a year.

In December last year, ICBC announced its first acquisition of a foreign bank, buying 90 percent of PT Bank Halim Indonesia for 90 billion rupiah (US$9.6 billion) with an option to purchase the remaining shares after three years.

Last Month, Bangkok Bank Pcl, Thailand's biggest lender, said it may sell its stake in ACL Bank Pcl to ICBC.

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