CIMB acquires 20% stake in a Chinese bank

CIMB Group, Malaysia's second largest lender by assets, has agreed to buy 20% stake in China Yingkou Commercial Bank for RMB 348.8 million (US$49.2 million), to become the local lender's largest shareholder, reported Shanghai Daily.

Yingkou Commercial Bank, located in North China's Liaoning province, may have the option to go public later, said Nazir Razak, CEO of CIMB Group.

CIMB Group, headquartered in Kuala Lumpur, consists of 12 financial institutions. By the end of 2007, its assets amounted to US$55.5 billion. Yingkou Commercial Bank posted net profit of RMB 25 million in 2006 and its assets reached RMB 9.5 billion, with bad performing loan ratio of 4.93%.

China, one of the fast growing economies in the world, has attracted many overseas lenders. Goldman Sachs has made investment in Industrial and Commercial Bank of China (ICBC)<601398><1398>, the country's largest commercial bank, while Citigroup holds a stake in Shanghai Pudong Development Bank<600000>.