The Chinese government is not going to allow the China Construction Bank (CCB) to fall under foreign control following its listing on the Hong Kong stockmarket last month, state press reported yesterday.
CCB president Guo Shuqing (郭樹清) said that even if Beijing were to sell more of China's third largest bank to foreigners, the government would not relinquish its `absolute control' over the lender, the Shanghai Securities News reported.
Although Bank of America and Singapore's Temasek Holdings have taken billion-dollar stakes in CCB, they have agreed to trading restrictions on their share holdings, including a lock-up period, to ensure the stability of CCB's share price.
The Chinese government currently holds a 74.25 percent stake in CCB, with overseas institutional investors and individual investors taking the remaining 25.75 percent stake, Guo said.
Bank of America, CCB's largest overseas shareholder, has also agreed to restrict its stake in the lender to a maximum of 19.9 percent, Guo added.
"Even if Bank of America buys an additional 10 percent stake [in CCB], the government will retain absolute control through its more than 60 percent stake, and will prevent foreign investors from controlling the bank," said Guo.
However Guo said the introduction of foreign strategic investors would help to enhance efficiency.
Guo was upbeat about the development of CCB, which has 14,000 outlets and a 12 percent share of the China market, and was confident that no foreign bank could beat it services in its own backyard.
CCB raised HK$2.2 billion Hong Kong dollars (US$7.9 billion) in its listing on Oct 27, the largest initial public offering this year worldwide that generally disappointed investors on its debut.
CCB was the first of China's big four state-owned banks to list outside of the mainland.
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