CMB spurns Japanese investment

China Merchants Bank has backed out of a US$300 million investment deal with Japan's Bank of Tokyo-Mitsubishi due to business and political concerns, the South China Morning Post reported. The Shenzen-based bank, which has 400 outlets in 30 cities, may also forgo other strategic investors as it plans a US$2 billion Hong Kong initial public offering in September, in which it will offer 15% of its share capital. Sources familiar with the bank said political concerns over a Japanese investment had influenced events. Given the troubled lending history of Japanese banks, doubts were also raised as to how much help Bank of Tokyo-Mitsubishi could provide in tightening risk management systems as CMB tried to expand key businesses such as credit card lending.