BoCom approved to take 10% share in Changshu rural bank

Bank of Communications (BoCom)<601328><3328>, China's fifth largest bank, has got the approval from the China Banking Regulatory Commission (CBRC) to acquire 10% stake in Changshu Rural Commercial Bank, a Jiangsu-based lender.

According to earlier report, BoCom planned to pay up to RMB 380 million for 57.56 million shares of Changshu Rural Commercial Bank, to become the largest shareholder of the local lender. The transaction was translated into RMB 6.6 per share, much higher than RMB 3.27 net assets per share at the end of 2006.

The deal will raise the local bank's registered capital from RMB 518 million to RMB 575.6 million. It will also help pave the way for the local lender's domestic listing.

Changshu Rural Commercial Bank was established in November 2001 in east China's Jiangsu province, one of the country's richest regions. Its capital adequacy ratio stood 11.11% at the end of 2006, whereas the regulatory minimum is 8.0%.