Chinese banks are eagerly looking to expand overseas at a time when their western counterparts are shrinking their businesses. Industrial and Commercial Bank of China (ICBC) is planning to purchase 70% of Bank of East Asia’s (BEA) Ontario-based Canadian unit for HK$567 million, to further its overseas expansion plans. The bank has a choice to raise its holding to 80% once the transaction is completed, and the rest will be held by Bank of East Asia.
The deal is just one of many major overseas purchases so far for ICBC. Its overseas expansion started in 2006 with the acquisition of 90% stake in PT Bank Halim Indonesia. After that it purchased 79.9% stake in Macau’s third-biggest bank. It had previously paid about $5.4 billion for a 20% stake in South Africa’s Standard Bank, which is considered as one of the largest overseas acquisition by a Chinese bank.
Jiang Jianqing, Chairman, said: “The purchase will enable ICBC to establish its banking business and customer base in Canada, which will provide a strong platform to further expand our businesses and network across North America.”
Samson Li, Deputy Chief Executive, Bank of East Asia, said: “We are selling the stake to ICBC because they have lots of customers, so this will enlarge the pie.”
