Sale of Nanyang Commercial Bank could garner US$6b
Print Edition
LENDER BOC Hong Kong Holdings Ltd is considering a sale of subsidiary Nanyang Commercial Bank that could fetch about US$6 billion, in a bid to stop cannibalizing the China business of its parent, people familiar with the matter said.
BOC Hong Kong is a unit of the Bank of China, the fourth-biggest lender by assets on the Chinese mainland, and a sale of NCB will help streamline the group’s operations in the country, the people said. As of June, half of NCB’s total loans were to customers in China, according to Moody’s.
An elimination of overlapping businesses could boost state-owned Bank of China which has seen a slowdown in profit growth and an increase in bad loans as China’s economic growth weakens.
At US$6 billion, any sale would be Asia-Pacific’s No. 3 bank deal of all time, according to Thomson Reuters data, behind Australia’s Westpac Banking Corp’s US$17.9 billion purchase of St George Bank and Bank of America Corp’s US$7 billion buying of a stake in China Construction Bank, both in 2008.
One potential buyer keen on NCB is China Cinda Asset Management Co, the nation’s No. 2 bad debt manager that listed in Hong Kong in December 2013, the people said.
China Cinda has been keen to buy a bank, as unlike its biggest rival Huarong Asset Management, Cinda does not own a bank, one of the people said. Having a bank will help China Cinda to tap cheap sources of funds to buy soured loans.
“We don’t comment on market speculation,” a BOC Hong Kong spokeswoman said in an e-mailed statement.
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