[photopress:Real_estate_John_Webster_NAB.jpg,full,alignright]National Australia Bank has gained its first cautious foothold in China, agreeing to take a 20% stake in a trust company that operates in the property market.
The move represents a significant step forward for NAB which has, up to this point, avoided taking minority shareholdings in businesses in Asia’s fastest growing economy.
NAB’s chief executive, John Stewart, seen here, has stated for the record his preference for expanding into Europe, South and North America.
He has previously indicated reluctance towards buying into the Chinese banking sector, arguing that the 20% limits placed on foreign investments by government regulators would restrict NAB’s ability to have a major say over the direction of the bank concerned.
While this is true its major domestic Australian rivals, ANZ and Commonwealth Bank, have both been active investors in the Chinese market.
Both groups have taken their maximum allowable shareholdings in two banks each, spending more than $650 million between them in the process.
John Stewart has said he believes that Chinese banks are overpriced. Nonetheless he given the go-ahead for the bank’s corporate finance and institutional banking arm, nabCapital, to enter the Chinese specialist property financing sector.
The deal to buy into Union Trust & Investment allows nabCapital the opportunity to expand the Chinese group’s focus on starting up and then managing property trusts.
John Stewart said, ‘Drawing on elements of its originate, warehouse and distribute model, nabCapital has the right blend of skills and capabilities to help develop UTI’s business.’
NAB probably paid $40 million for its share.
Source: Sydney Morning Herald