Bank shelves stake due to curbs
By Xie Heng |
October 15, 2009, Thursday
|
Print Edition
Print Edition
CHINA Minsheng Banking Corp, the country's first listed non-state lender, cannot take a controlling stake in United States bank UCBH Holdings Inc, because of regulatory limitations, a source said yesterday.
"The United States regulatory authorities have restrictions; it is impossible for us to buy a controlling stake in a US bank," said the source, who requested anonymity due to the sensitive nature of any possible investment.
The bank's board was also split over whether it would raise its 9.9 percent stake in the troubled US bank, the source said.
China has encountered difficulties making big acquisitions overseas because of regulatory hurdles.
Shares of UCBH Holdings jumped 64 percent earlier this month following a media report of a possible investment by Minsheng Bank.
Analysts have said an investment by the Chinese bank would be beneficial for UCBH, which mainly caters to the Chinese-American community.
Minsheng Chairman Dong Wenbiao said in March that Shanghai-listed Minsheng Bank planned to lift its stake in California-based UCBH Holdings, the parent of United Commercial Bank, to 19 percent.
UCBH, operating under an enforcement order from the Federal Deposit Insurance Corp and the California Department of Financial Institutions, said last month two top executives had quit.
"The United States regulatory authorities have restrictions; it is impossible for us to buy a controlling stake in a US bank," said the source, who requested anonymity due to the sensitive nature of any possible investment.
The bank's board was also split over whether it would raise its 9.9 percent stake in the troubled US bank, the source said.
China has encountered difficulties making big acquisitions overseas because of regulatory hurdles.
Shares of UCBH Holdings jumped 64 percent earlier this month following a media report of a possible investment by Minsheng Bank.
Analysts have said an investment by the Chinese bank would be beneficial for UCBH, which mainly caters to the Chinese-American community.
Minsheng Chairman Dong Wenbiao said in March that Shanghai-listed Minsheng Bank planned to lift its stake in California-based UCBH Holdings, the parent of United Commercial Bank, to 19 percent.
UCBH, operating under an enforcement order from the Federal Deposit Insurance Corp and the California Department of Financial Institutions, said last month two top executives had quit.
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