Citigroup Inc’s plans to join an exodus of global banks from stakes in Chinese lenders leaves the focus on HSBC Holdings PLC, the only one with a major holding in a big bank after earlier exits by the likes of Bank of America Merrill Lynch and Goldman Sachs Group Inc.
Citigroup is seeking buyers for its 20 percent stake in China Guangfa Bank Co (中國廣發銀行) after the Chinese lender scrapped plans to list in Hong Kong, people familiar with the matter said yesterday.
In 2006, New York-based Citigroup led a consortium of five companies to purchase an 85.6 percent stake and operational control in Guangfa, a provincial bank formerly called Guangdong Development Bank (廣東發展銀行), for 24.27 billion yuan (US$3.82 billion at the current exchange rate).
Two of the investors — China Life Insurance Co (中國人壽) and Citic Trust Co (中信信託) — are among the companies in negotiations to buy Citigroup’s minority stake, the Wall Street Journal reported on Thursday, citing people familiar with the matter.
Other investors included IBM Corp and Yangpu Puhua Investment & Development Co (洋浦普華投資發展), the report said.
Earlier this month, Deutsche Bank AG signaled it might sell a US$3.5 billion stake in Huaxia Bank Co (華夏銀行) after saying it “no longer considers this stake to be strategic.”
While requirements to hold extra capital against such investments have encouraged foreign lenders to sell their stakes, HSBC is yet to give any signal that it is planning any similar move for its 19 percent stake in Bank of Communications Co (Bocom, 交通銀行).
The UK-based lender is instead boosting its bets on China, saying that it would add 4,000 jobs in the Pearl River Delta region over the next three to four years.
“HSBC is different because its focus is in Asia and China is a big part of its global strategy,” Shenzhen-based Guotai Junan Securities Co (國泰君安證券) analyst Richard Cao (曹柱) said. “HSBC’s tie-up with Bocom has brought it decent dividend income, a client base and improved brand awareness.”
While HSBC’s own operation in China faces restrictions as a foreign bank, Bocom does not because it is local, Cao added.
HSBC bought its stake in Bocom, the nation’s fifth-biggest lender, for US$1.75 billion in 2004. It is now worth almost US$13 billion.
Bocom is forecast to report a decline in profit for this year in a cooling economy where bad loans are rising.
HSBC chief executive Stuart Gulliver this month said that he remains optimistic about the Chinese economy and will increase the bank’s investment in the nation.
Shanghai-based Bocom plans to let HSBC name a vice chairman to its board as part of a plan to restructure its ownership, people with knowledge of the matter said in August.
HSBC in Hong Kong declined to comment on the outlook for its Bocom stake.
China caps foreign ownership of a Chinese bank at 25 percent, with a single foreign investor to have no more than 20 percent, making it harder for foreign investors to have any meaningful influence on operations.
Earlier this month, Shanghai-based Sinolink Securities Co (國金證券) analyst Ma Kunpeng (馬鯤鵬) said that the tie-up between HSBC and Bocom was unusual because of the depth of cooperation and was a link that seemed to be “unbreakable.”
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained