Bloomberg: ICBC seeks to expand investments overseas

Business Times - 26 Nov 2007

ICBC seeks to expand investments overseas

Chief denies bank plans to buy stake in Standard Chartered

(BEIJING) Industrial and Commercial Bank of China Ltd has 'insufficient' assets overseas and seeks more investments abroad, president Yang Kaisheng 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,' Mr Yang said on Saturday 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. ICBC's 36.7 billion rand (S$7.7 billion) purchase of a 20 per cent 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, citing ICBC's forays in Indonesia and Macau.

Mr Yang joined China Construction Bank Corp deputy president Luo Zhefu in denying a newspaper report that their banks planned to acquire a stake in Standard Chartered from Temasek Holdings.

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

The Financial Times reported earlier that China's three largest banks - ICBC, Construction Bank and Bank of China - had approached Temasek about buying its 17.2 per cent stake in the UK company. Temasek has declined to comment on the FT report.

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 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 per cent of PT Bank Halim Indonesia for 90 billion rupiah (S$13.8 million) with an option to purchase the remaining shares after three years.

-- Bloomberg