Following its June US$1.5bn investment in China Construction Bank, Temasek Holdings, the investment arm of Singapore's government, is now negotiating to buy a US$1bn stake in BoC. If the deal goes through, Temasek would have an unprecedented foothold in two of China's "Big Four" state lenders.
Alongside Temasek, Royal Bank of Scotland, could also take a 9.9% stake in BoC, while UBS and the Asian Development Bank would hold a collective 5% stake, according to Caijing magazine. All told, BoC's strategic investors could spend up to US$6bn for a nearly 25% stake in the state lender. BoC could list its shares in Hong Kong as early as this year if conditions are favorable, according to a BoC executive.
Meanwhile, RBS took some heat for entering China's opaque and debt-saddled banking sector in which it has limited experience; it saw its share price drop in August and some analysts downgraded the stock after reports surfaced that RBS could spend up to US$2.5bn for a BoC stake.
In an apparent attempt to allay foreign concerns, Beijing in August handed the former chief of BoC's Hong Kong unit, Liu Jinbao, a suspended death sentence for embezzling more than US$3m.
While BoC talks with its suitors, Guangdong Development Bank, southern China's biggest lender, hired Deutsche Bank to help find a foreign buyer for a stake in the company before its US$700m IPO next year. A potential buyer of a stake in Guangdong Development could be Hong Kong-traded Ping An Insurance Co, China's second-largest insurer.
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