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City commercial banks turn to domestic investors
By Xu Shenglan (chinadaily.com.cn)
Updated: 2008-09-03 16:13 City commercial banks are turning to domestic investors as overseas banks struggle with the subprime mortgage crisis, the National Business Daily reported yesterday.
Bank of Lanzhou is planning to invite strategic investors to raise 500 million yuan ($72.89 million) in capital in 2008. According to board chairman Li Zhiwen, the bank is contacting Bank of Beijing, Bank of Chongqing, and Baotou-based Baoshang Bank on the issue. He noted that the lender had given up inviting overseas investors. Shanghai Pudong Development Bank plans to acquire an 18 percent stake in Laishang Bank and is in talks about a price. The transaction was approved by the board of directors in July, but stake percentage of the deal remained unknown. Industrial Bank plans to invest about 291.14 million yuan to buy a 20 percent stake in Jiangxi-based Jiujiang City Commercial Bank. Upon the completion of the transaction, Industrial Bank will become the second largest shareholder of the lender after the Jiujiang municipal government. The newly listed banks have also expanded their capital strategy into unlisted lenders. It is reported that Bank of Nanjing bought an 18 percent stake in Rizhao City Commercial Bank, and Bank of Beijing acquired a 19.99 percent stake in Langfang City Commercial Bank. Unlisted local commercial banks, like Zhanjiang Commercial Bank, are planning to introduce strategic investors. Domestic listed banks' acquisition of small-scale city commercial banks may because of their consideration of expansion. Meanwhile, larger banks are keen on the high return ratio expansion brings, while municipal commercial banks are expecting more capital, according to a Beijing banking expert. (For more biz stories, please visit Industries)
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