Bank of Beijing to buy in Lang Fang lender for RMB 127.5 mln

Bank of Beijing Co<601169>, China's biggest city bank by assets, is planning to invest as much as RMB 127.5 million to buy 7.5 million shares of Lang Fang City Commercial Bank, said the lender in a statement.

The acquisition of 7.5 million shares, which will be converted to a 19.99% stake in the Lang Fang, Hebei province-based bank, will be Bank of Beijing's first investment outside its headquarters. The two sides have signed legally binding documents on Apr. 3, 2008, but the deal is still subjected to the regulatory approval.

"RMB 127.5 million only accounts for 0.478% of the bank's unaudited 2007 net assets, so the acquisition will not bring big impacts on its future financial conditions," said the bank. It expects investment profitability above 20% in the coming three years.

Lang Fang City Commercial Bank is a local commercial lender with businesses mainly focusing on local citizens. Last year, its net profit soared to RMB 143.67 million, and operating revenue climbed to RMB 518.4 million. Total assets amounted to RMB 9.45 billion as of the end of 2007.