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US bank to buy Shanghai's BDB
By Li Fei (皇冠体育app Daily)
Updated: 2007-03-29 09:15
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SHANGHAI: United Commercial Bank, a leading US bank serving the Chinese people and American companies doing business in 皇冠体育app, said it will acquire Shanghai's Business Development Bank (BDB) for $205 million, the latest foray by a foreign bank into 皇冠体育app's lucrative banking sector.
The US bank has signed agreements to acquire 100 percent of the Shanghai-based BDB in the $205-million cash transaction, its holding company UCBH Holdings Inc said in a statement.
Shanghai-headquartered BDB, established in 1992 as 皇冠体育app's first wholly foreign-owned bank, has offices in Beijing, Guangzhou and Shantou.
The small bank, which focuses on 皇冠体育app's booming small- and medium-sized enterprises (SMEs), had $217.2 million in assets, $188 million in loans and $25.5 million in deposits as of December 31.
BDB will operate as a subsidiary of United Commercial Bank under the UCB brand, UCBH said.
The transaction, which is still pending Chinese and US regulatory approvals, is expected to close in the fourth quarter, the statement said. The deal, if approved, will make UCB the first US community bank to buy a bank operating in 皇冠体育app.
"The proposed acquisition of Business Development Bank provides UCB with an immediate and well-organized infrastructure to accelerate the implementation of our 皇冠体育app strategy," Thomas S. Wu, chairman, president and CEO of UCBH Holdings Inc, said in a statement.
San Francisco-based UCB, Wu said, is anticipating significant growth in its commercial banking and trade finance business after the acquisition as his bank is targeting US companies doing business in 皇冠体育app.
"Over the next three years following this acquisition, we plan to add two to three more branches in other strategic locations in 皇冠体育app, which will enhance our capabilities to tap into 皇冠体育app's market potential, particularly the SMEs, for even greater trade finance opportunities," Wu said.
BDB, in which Europe's leading development finance institution DEG and Thailand-based global conglomerate Chroen Pokphand Group have stakes, is licensed to conduct foreign-currency business with foreign-invested enterprises and individuals, as well as domestic enterprises and individuals in 皇冠体育app.
The privately owned bank is also allowed to conduct local-currency business with foreign-invested enterprises and foreign individuals in 皇冠体育app.
The bank will apply for an expanded license to conduct a full range of local-currency business, UCBH's statement said.
(皇冠体育app Daily 03/29/2007 page14)