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Smaller banks may be up for grabs

The authorities may loosen their grip on banking by allowing investors to purchase controlling stakes in small and medium-sized banks, the Financial Times reported a senior official as saying. This could signal a greater acceptance of overseas investors' desires to hold majority holdings in the lenders they invest in. Tang Shuangning, a vice-chairman of the China Banking Regulatory Commission, said: "The principle of state control only applies to large banks and not to small and medium-sized lenders." There are more than 100 city commercial banks and some shareholding banks in China, aside from the Big Four. Overseas investors can hold up to 25% of Chinese banks, and only 20% may be owned by a single entity. Citigroup is leading a foreign consortium's bid for 85% of Guangdong Development Bank, which would require the central government to waive the investment cap.

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