ANZ to buy stake in Shanghai-based bank

Australian bank ANZ is to invest US$250 million in a 19.9% stake in Shanghai Rural Commercial Bank, the <i>Financial Times</i> reported. The equity purchase, the maximum permitted under Chinese banking regulations, is another step in a three-year strategic partnership between the two institutions. ANZ started providing Shanghai Rural with technical and risk management support when the domestic lender was still a group of 200 or so local credit cooperatives. It has since won a banking license and has developed away from its rural roots to serve a broader client base in the Shanghai area. ANZ first entered the China market through the US$120 million purchase of a 19.9% stake in Tianjin City Commercial Bank last December. Meanwhile, HSBC said it expects to maintain a 19.9% stake in Bank of Communications after the Chinese bank issues 4.5 billion new shares. It could cost HSBC around US$800 million to stop its stake being diluted.