Temasek may buy stake in BoC<\/p>\n
Agence France-Presse, Beijing<\/p>\n
Temasek Holdings, the Singapore government's investment arm,
\nis in talks to buy a stake worth more than US$1 billion in Bank
\nof China (BoC), a report said on Tuesday.<\/p>\n
If confirmed it would be Temasek's second foray into China's
\nbanks after last month confirming it would purchase 1$ billion
\nworth of shares in China Construction Bank (CCB) during its
\npublic sale.<\/p>\n
The Financial Times, citing people close to the situation,
\nsaid Temasek could become one of BoC's \"strategic investors\"
\nalongside Royal Bank of Scotland and UBS ahead of next year's
\noverseas listing by the Chinese lender.<\/p>\n
BoC, China's second largest bank, refused to confirm the deal
\nbut said an announcement would be made in the coming weeks.<\/p>\n
\"I don't know where their information is coming from, we are
\nnot making any comment on this,\" spokesman Wang Zhaowen told AFP.<\/p>\n
\"What I can tell you is that talks are still going on and we
\nare going to make an announcement no sooner than the end of the
\nmonth.\"<\/p>\n
Temasek, set up in 1974 as one of the Singapore government's
\nmain investment firms, has been stepping up its foreign
\ninvestments in recent years especially in Asia.<\/p>\n
Last month, Hong Kong press reports said Royal Bank of
\nScotland, the second-biggest British bank, was on the verge of
\nbuying up to 15-percent of BoC for a maximum of $5.0 billion.<\/p>\n
Switzerland's largest banking group UBS is also believed to be
\nin talks for a stake, the Financial Times said, while Chinese
\nfinance magazine Caijing said the Asian Development Bank had also
\nshown an interest.<\/p>\n
The Chinese government selected BoC and CCB in 2003 to pilot
\nfinancial restructuring and corporate governance reforms at its
\nBig Four state banks, which also include Agricultural Bank of
\nChina and Industrial and Commercial Bank of China.<\/p>\n
Beijing is keen to ensure the big banks move ahead with
\nlisting plans in order to attract funds and make them more
\ncompetitive before the financial sector opens to foreign
\ncompetition at the end of 2006.<\/p>\n
Regulators also hope that pushing the state banks to go public
\nand to bring foreign strategic investors on board will bring
\ngreater transparency to the sector.<\/p>\n
This is considered sorely needed, as the banking sector has
\nbeen rocked by corruption scandals and struggles under a mountain
\nof bad debt accumulated over the years.<\/p>",
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