Japanese banks interested in ICBC
(China Daily)
Updated: 2005-06-06 10:04

Japan's three largest banks have expressed interest in taking a small stake in Industrial & Commercial Bank of China (ICBC), the mainland's largest lender, a Hong Kong newspaper reported yesterday.

Mizuho Financial Group, Mitsubishi Tokyo Financial Group (MTFG) and Sumitomo Mitsui Financial Group (SMFG) have held preliminary talks with ICBC, according to the newspaper, which cited investment banking sources.

However, an MTFG official denied the report, saying "we're not thinking of such a thing at all." SMFG declined to comment, and officials at Mizuho were not immediately available.

The mainland's banking sector is gearing up for fully open international competition by 2007 and Beijing is encouraging lenders to link up with global banks for capital and operating expertise in a developing market with US$1.5 trillion in savings.

The newspaper said Mizuho and MTFG had also held talks with the mainland's largest foreign exchange lender, Bank of China (BOC), which is targeting an IPO in 2006.

A strategic purchase in either would mark the first significant investment in the mainland's banking sector by a Japanese bank.

Japan's fourth biggest bank, UFJ Holdings, had taken a look at ICBC prior to its US$41.4-billion merger with Mitsubishi Tokyo, announced in February, the paper said.

Credit Suisse First Boston, American International Group and Royal Bank of Scotland are also exploring an investment in ICBC, the paper said.

Beijing is cleaning up its banking sector and has given ICBC a US$15-billion capital injection to improve its balance sheet.

On Tuesday, officials said the bank will offload US$30 billion of bad assets to a state debt clearer to further improve its fiscal health ahead of a planned IPO before 2007.