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Scotiabank makes China foray
Source: Agencies |
September 10, 2011, Saturday
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BANK of Nova Scotia, Canada's third-largest lender, yesterday said it will buy a near 20 percent stake in the Bank of Guangzhou for about C$719 million (US$735 million) to expand its footprint in China, the latest to invest in a Chinese bank before its initial public offering.
Scotiabank expects the deal to add to earnings next year and for the deal to close by December, it said in a statement yesterday.
"Asia is a region of strategic importance for Scotiabank, and enhancing our investment in China supports our long-term growth strategy," Scotiabank's President and Chief Executive Rick Waugh said.
The Bank of Guangzhou is not listed, but is primarily government owned. It has been looking to list in Shanghai and last year invited bids from foreign investors for a 20 percent stake.
Many other foreign banks own the maximum permissible 20 percent stake in second-tier Chinese lenders. For example, Citigroup owns about 20 percent of China Guangfa Bank, while ANZ owns 20 percent of the Bank of Tianjin and Shanghai Rural Commercial Bank.
Scotiabank's move into China is also the latest foray by a Canadian bank into the world's No. 2 economy. Rival Bank of Montreal became the first Canadian bank to incorporate in China in November.
Scotiabank expects the deal to add to earnings next year and for the deal to close by December, it said in a statement yesterday.
"Asia is a region of strategic importance for Scotiabank, and enhancing our investment in China supports our long-term growth strategy," Scotiabank's President and Chief Executive Rick Waugh said.
The Bank of Guangzhou is not listed, but is primarily government owned. It has been looking to list in Shanghai and last year invited bids from foreign investors for a 20 percent stake.
Many other foreign banks own the maximum permissible 20 percent stake in second-tier Chinese lenders. For example, Citigroup owns about 20 percent of China Guangfa Bank, while ANZ owns 20 percent of the Bank of Tianjin and Shanghai Rural Commercial Bank.
Scotiabank's move into China is also the latest foray by a Canadian bank into the world's No. 2 economy. Rival Bank of Montreal became the first Canadian bank to incorporate in China in November.
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