image

Bank of China

Bank of China Hong Kong to sell 70.5pc of its stake in Chiyu Banking

PUBLISHED : Wednesday, 26 October, 2016, 9:01pm
UPDATED : Wednesday, 26 October, 2016, 9:01pm

The Bank of China Hong Kong (BOCHK) has announced that it will dispose of some of its interest in its wholly-owned subsidiary Chiyu Banking Corp following a review of its operations.

BOCHK said it is looking to dispose of 70.49 per cent of its interest in the bank, according to a statement on the Hong Kong Stock Exchange website.

The statement said that “the potential disposal... would be consistent with the long term development strategy of the Group in the Hong Kong region which would enable a better allocation of resources of the Group.”

A number of financial media sites have reported that Fujian-based Xiamen International Bank is preparing a takeover of Chiyu, which already has branches in the Fujianese cities of Xiamen and Fuzhou.

On Monday BOCHK shares soared after the Hong Kong Commercial Daily reported that an agreement had been reached between Xiamen International Bank and BOCHK. However BOCHK later issued a statement saying that no legally binding agreement had been entered into in relation to the potential disposal.

In May, BOCHK sold its holdings in Nanyang Commercial Bank to Cinda China Asset Management, for which it booked a HK$30 million profit.

In a separate statement on Wednesday, BOCHK said its third quarter operating profit before impairment allowances totalled HK$7.4 billion, a drop of 10.5 per cent compared with the same period last year.