DBS, Deutsche Bank to buy GDB<\/p>\n
Agence France-Press, Beijing<\/p>\n
Singapore's DBS and Germany's Deutsche Bank are to buy 10
\nbillion shares in Guangdong Development Bank (GDB) for 17.7
\nbillion yuan (US$2.18 billion), state media reported on Thursday.<\/p>\n
The purchase, however, will not give them a controlling stake,
\nthe China Daily said citing the Guangdong bank's management.<\/p>\n
Earlier media reports said China planned to sell a majority
\nstake in GDB, which would have made it the first state-owned
\nmainland bank owned by foreigners.<\/p>\n
The China Daily said the percentage of shares the two banks
\nwill buy and their respective offers were not known, but it was
\nunlikely GDB would offload a 51 percent stake to a foreign
\ninvestor.<\/p>\n
Industry watchdog, the China Banking Regulatory Commission,
\nhas not relaxed its policy on the limit for shares held by
\nforeign investors.<\/p>\n
In 2003, the commission raised the limit from 15 percent to 20
\npercent for the stake a single foreign investor can hold in a
\ndomestic bank. It increased the limit further to 25 percent for
\nall foreign shareholders.<\/p>\n
\"Even though the commission changed the ratio limit, GDB is
\nnot likely to be chosen as a pilot bank due to its close relation
\nwith Guangdong provincial government,\" said the newspaper.<\/p>\n
According to China Business News, the Guangdong government
\nplans to inject 20 billion yuan ($2.47 billion) into GDB to
\nstrengthen its controlling stake.<\/p>\n
The People's Bank of China, the central bank, also intends to
\nreloan 10-20 billion yuan to the Guangdong bank, which plans to
\nlist within two years.<\/p>\n
GDB had 215.7 billion yuan in outstanding loans and 344.5
\nbillion yuan in assets at the end of 2004, according to the
\nbank's website.<\/p>\n
Several foreign banks have bought into Chinese banks including
\nBank of America Corp, the third-biggest U.S. banking group, and
\nBritain's HSBC Holdings Plc, Europe's largest bank.<\/p>\n
The government is keen to ensure the banks attract funds and
\nmake them more competitive before the financial sector opens the
\nsame lending services to foreign competition at the end of 2006.<\/p>",
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