ICBC ups stake in ICBC (Asia) by 8.23%

The Industrial and Commercial Bank of China announced yesterday in Beijing that it had reached an agreement on the purchase of an 8.23% stake and related warrants of ICBC (Asia) held by Fortis Bank for about HK$1.92 billion. Upon completion of the deal, ICBC will lift its stake in ICBC (Asia) to 71.21%.

This move marks the fourth overseas acquisition by the world biggest bank by market value, trailing its aggressive equity investments in the Indonesian Bank Halim, Macao's Seng Hang Bank, and the Standard Bank Group in South Africa.

ICBC (Asia) is a wholly controlled subsidiary of the Beijing-based bank and also a flagship for its overseas business. By the end of June 2007, ICBC (Asia) posted a total asset of HK$224.8 billion, ranked the 6th in HK. Its capital adequacy ratio, average ROA and ROE stand at 13%, 1.0% and 13.3% respectively, with NPL ratio and cost/revenue ratio at 0.7% and 35.9%. The bank realized a PTA of HK$719 million in the first half, up 28% year on year. All these financial indicators point to a healthy growth momentum.

ICBC (Asia) is of great importance to ICBC's strategic objective of becoming a world-ranking commercial bank, said Jiang Jianqing, chairman of ICBC. This deal further proves ICBC's confidence in its well-performing subsidiary and the banking market in HK, but it still awaits regulatory approval.