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UBS eyes BOC stake
(Shenzhen Daily/Agencies)
Updated: 2005-06-22 10:50

Swiss bank UBS is in talks to buy a stake in State-run Bank of China (BOC), according to the Financial Times, moving on the heels of Bank of America's recent US$3 billion deal with China Construction Bank.

UBS, which helped BOC list its Hong Kong arm in 2001, was in talks to make a multi-million dollar investment, the Financial Times said in its Tuesday Asian edition, without citing sources.

On Friday, Bank of America agreed to invest US$3 billion for 9.9 percent of Construction Bank, which is launching an initial public offering (IPO) later this year.

The newspaper said UBS would have to take a smaller stake because Royal Bank of Scotland was believed to have been in talks with BOC on an investment worth more than US$1 billion, which would crowd out other partners.

A UBS spokesman in Hong Kong declined to comment.

“We are holding talks with investors in Europe and the United States. But nothing has been decided and I can’t comment on details,” BOC president Li Lihui said on the sidelines of a conference in Seoul.

China has courted foreign investors for its banking sector, as a means of gaining global expertise and much-needed capital ahead of global stock listings.

Foreign banks such as UBS, Citigroup Inc., Deutsche Bank and J.P. Morgan have been interested in large Chinese investments.

Any investment by UBS would likely cement its role as a bookrunner on BOC's planned US$3-4 billion initial public offering IPO, which could bring in total underwriting fees of up to US$140 million, the newspaper said.

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