Risk concerns stall CCB's overseas buys -paper

China Construction Bank (CCB) <0939.HK> has not made any overseas acquisitions since it's 2006 purchase of Bank of America Corp's Hong Kong and Macau operations due to risk concerns, its president was quoted on Monday as saying.

CCB, one of China's "Big Four" state-run banks, examined 26 possible acquisitions over the past year but did not follow through on them due to worries about various risks, the Shanghai Securities News cited Guo Shuqing as saying at a weekend seminar in Beijing.

"The risks are either exchange rate risks, interest rate risks or integration risks. And of course some countries where the acquisition targets are located were not friendly and did not want to provide any support to us," Guo said.

But he said the potential for Chinese banks' overseas expansion was huge given that China had a total of nearly 2 trillion dollars in foreign exchange assets.

Guo called on foreign governments, particularly those in developed countries, to adopt a more positive, or "at least neutral", stance towards overseas acquisitions by Chinese banks, the Shanghai Securities News said.

Chinese financial institutions have made a series of overseas acquisitions in the past few years.

In the latest foreign acquisition by a Chinese firm, Ping An Insurance Co Ltd <2318.HK> <601318.SS>, China's second largest life insurer, bought half of Belgian-Dutch financial group Fortis' asset management business for 2.15 billion euros ($3.4 billion). It also lifted its stake in Fortis to 4.99 percent from 4.18 percent.

Last year, Industrial and Commercial Bank of China (ICBC) <1398.HK><601398.SS> paid $5.6 billion to buy 20 percent of South Africa's Standard Bank in the biggest foreign acquisition by a Chinese commercial bank.

ICBC Chairman Jiang Jianqing told the same Beijing seminar that overseas acquisitions by Chinese banks would remain a key industry trend over the next few decades, according to the Shanghai Securities News.