Hang Seng Bank yesterday said that it has completed an 800-million-yuan (US$117 million) deal that makes it the largest shareholder of Yantai City Commercial Bank.
Hang Seng now holds a 20-percent stake in the bank, based in Shandong Province. Hang Seng will have the right to nominate directors and make personnel recommendations for various senior management positions.
Hong Kong-based Hang Seng will also provide technical support in various areas including corporate governance, risk management and personal financial services for the bank through the secondment of executives and training.
Before the deal, Hang Seng's total investment on the Chinese mainland exceeded 7.4 billion yuan, including the capital injected into its wholly owned subsidiary, Hang Seng Bank (China) Ltd, in May 2007.
Hang Seng Bank (China) has 33 branches across China but plans to boost that to between 45 and 48 by the end of this year.
Founded in 1997, Yantai City Commercial Bank has 70 outlets and more than 1,200 staff.
Hong Kong-based Wing Lung Bank also bought a 4.99-percent stake in the Yantai bank.
The 110-plus commercial city banks on the mainland have been keen to attract overseas investors in order to expand capital and pick up more advanced business practices.
The Bank of Ningbo and the Bank of Beijing went public after attracting overseas investors.
(Shanghai Daily February 18, 2009)
