/ 4 February 2008

China approves ICBC stake in Standard Bank

Chinese regulators have given permission for Industrial and Commercial Bank of China, the nation’s largest lender, to buy a 20% stake in Standard Bank, ICBC said.

The largest Chinese acquisition in the financial field, at $5,5-billion, won approval from the China Banking Regulatory Commission, ICBC said in a statement posted on its website.

The planned purchase was originally announced in October.

”With the approval of the banking regulator, we have obtained all Chinese regulatory approvals needed for the deal,” the statement said.

Shareholders of Standard Bank and South African regulators have already approved the deal, ICBC added.

China’s largest bank said it was now awaiting for approval from regulators in countries where Standard Bank has overseas branches.

The Beijing-based bank’s shares soared 0,50 yuan or 7,43% to close on Monday at 7,23, approaching the gains on the key Shanghai Composite index of 8,13%.

The rise in price came despite a state press report that said the bank had set aside about $360-million for possible write-downs of United States subprime mortgage-related assets in the fourth quarter.

The amount was more than six times the 429-million yuan ($58,8-million) disclosed in its three months to September financial results.

ICBC has made recent headlines with a series of overseas acquisitions.

It entered into agreements to acquire a controlling stake in Indonesia’s Halim Bank in December 2006 and Macao’s Seng Heng Bank in August 2007.

State press reported in January that ICBC was eyeing more foreign targets, including troubled US banks, and could make the acquisitions some time later this year. – Sapa-AFP