The World Bank is negotiating for a stake in Shanghai City United Bank, China's biggest urban co-operative bank and the seventh biggest in the country, according to the World Bank's country director for China and Mongolia, Nicholas Hope.
Mr Hope said the World Bank would use its private financing arm, the International Finance Corp (IFC), should the acquisition go ahead.
Fang Zhiping, a spokesman for Shanghai City United Bank, yesterday confirmed the negotiations but said nothing was finalised.
He said the two sides started informal negotiations soon after the Shanghai bank was formed in 1995 following a merger with 99 urban credit co-operatives.
Mr Hope said a group of IFC banking specialists had advised the Shanghai bank on its restructuring and added it planned to provide technical assistance to the bank in future.
Late last year, World Bank managing director Richard Frank said the IFC was considering the acquisition of a stake in China Minsheng Bank, the country's first commercial bank owned by companies and private interests.
