Newbridge Capital, a private equity fund from the United States,
has received approval from the Chinese Government to become a
strategic investor in the Shenzhen Development Bank, the bank said
in a statement yesterday.
The medium-sized lender, one of four domestically listed banks,
gave no further details of the deal.
"After obtaining approval by relevant departments, it is agreed
that Newbridge Capital will become a strategic investor in our
bank," the bank said.
It
said preparations for the deal were in full swing and both parties
would strive to complete it as soon as possible.
Many players in China's banking industry have been deep in talks
with potential foreign investors since China became a member of the
World Trade Organization last December and promised to open the
sector to global giants over the following five years.
By
introducing foreign financial institutions as equity owners,
Chinese banks are expected to obtain first-class management
expertise to help them survive the mounting competition, said Zhang
Liqun, a senior researcher with the Development Research Center
under the State Council.
The foreign shareholders, in turn, will gain first-hand knowledge
of China's banks, enterprises and the economy, which are crucial
for their operations in a foreign country, Zhang said.
Foreign banks have already sped up their entry into China's banking
industry since last year, he said.
Earlier this month, the International Finance Corporation, the
World Bank's private-sector financing arm, and Canada's Bank of
Nova Scotia signed a framework deal to invest in the small Xi'an
City Commercial Bank of Northwest China's Shaanxi Province.
Other banks with foreign shareholders holding a minority stake of
up to 15 percent include the Bank of Shanghai, Nanjing City
Commercial Bank and China Everbright Bank.
The Bank of Communications, China's fifth-largest commercial bank,
is also talking with a few foreign financial conglomerates to forge
a strategic alliance through a stake transfer.
Song Feng, an official with the bank, said the People's Bank of
China, the central bank, has already approved the commercial bank's
plan to sell a 15 percent stake to foreign partners.
But Song said his bank had yet to audit its assets and choose a
suitable partner or partners.
According to the central bank, foreign investors are now allowed to
take up to 15 percent of a domestic lender's registered
capital.
(China Daily September
29, 2002)