HSBC agrees to buy 20pc stake in China bank
AFP, Shanghai
HSBC has agreed to buy a 19.9 percent stake in Bank of Communications, China's fifth largest bank, in a deal that would put the global banking giant firmly ahead of its rivals in the booming Chinese market, officials said Tuesday. The deal between HSBC and the Shanghai-based lender is reportedly worth 1.69 billion dollars, making it the single biggest purchase by a foreign investor in China's bad debt-plagued banking sector. Both sides have refused to confirm that figure. "The 19.9 percent of stake purchase (by HSBC) is for sure," said Song Feng, a spokesman at the Bank of Communications. Song and HSBC spokeswoman Zhang Dandan said that more details would be forthcoming at a joint press conference Friday in Beijing, with a signing ceremony to be conducted separately. HSBC, originally set up in Shanghai in 1865 as Britain led the Western powers in carving out trade and other concessions from the then Chinese imperial authorities, has been seeking to build its presence in the country as Beijing prepares to open up the banking sector under its World Trade Organisation obligations. The deal with state-owned Bank of Communications ensures HSBC a head start over rivals seeking access to China's more than one trillion dollars in household savings deposits ahead of the sector's deregulation in early 2007.
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