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| BOC Hong Kong (Holdings) Ltd. Vice Chairman and
Chief Executive He Guangbei (C) gestures during a news conference in
Hong Kong August 18, 2005. (Reuters) |
The Royal Bank of Scotland (RBS), Europe's second largest and the
world's sixth largest banking group by market capitalization, is to spend
US$3.1 billion buying a 10 per cent stake in Bank of China (BOC).
BOC, which has signed a strategic investment and co-operation agreement
with RBS, said yesterday in a press release that the deal still needs to
be approved by relative government departments and regulators.
According to the strategic programme, the two banks will enter into
broad co-operation in areas including credit
cards, wealth
management, corporate
banking and personal lines of
insurance.
In addition, they intend to establish a close co-operative relationship
in major banking managerial areas, including corporate governance, risk management, financial management, human resources
management and information technology.
RBS will appoint a representative to serve on the BOC board of directors.
George Mathewson, chairman of RBS, said the bank's board believes the
size and growth of China represents an important opportunity.
"We have been developing our relationship with Bank of China over the
last 18 months, and have been impressed by the strengths of the business
and its compatibility with RBS," he said.
The combination of BOC's brand, distribution and customer base with
RBS's product and operational
strengths and experience will be powerful in the Chinese
market, he said.
BOC Chairman Xiao Gang said the co-operation with RBS is a key step in
his bank's joint stock reform.
"It is crucial to transforming our operational structure, enhancing the
internal management, improving the competitiveness and promoting
profitability," he said.
Wang Jianxi, vice-chairman of China SAFE Investments Ltd, the major
shareholder of BOC, said bringing
in international strategic investors is an important step
in the deepening of the reform of the State-owned commercial banks in
China.
Through strategic co-operation with RBS, BOC will be able to further
enhance its corporate governance and internal
control, he said.
BOC, which won a US$22.5 billion capital injection from the State in
late 2003, was chosen by the government as a pilot in banking reform. It
reorganized itself into Bank of China Limited, a joint-stock company, last August.
By the end of June, the bank's non-performing credit rate declined to 4.38
per cent, from 5.12 per cent at the end of last year.
(China Daily) | 
Updated: 2005-08-19 09:53
