China's SAFE subsidiary takes stake in Australian banks

SAFE Investment Company, a Hong Kong-based subsidiary of China State Administration of Foreign Exchange (SAFE) recently bought stakes in three of Australia's largest banks, the Financial Times reported.

Australia and New Zealand Bank and Commonwealth Bank of Australia claimed that Hong Kong registered SAFE Investment Company has already purchased less than 1% stake in the two banks. National Australia Bank also believed that the same company has bought 0.33% of its stake. The total investment amounted to US$176 million.

A banker who is familiar with SAFE's activities reckoned that the SAFE investment arm has been considering similar investment opportunities in London. However, the news was denied by SAFE.

Being a wholly-owned subsidiary of SAFE, SAFE Investment Company is established in 1997 before Hong Kong's handover.

SAFE manages the world's largest foreign exchange reserves, which is more than US$1.43 trillion.