appConfigEntityId

bodyType

customContents

entityId

entityUuid

isVideo

articlePageQuery

article

articleSchemaContent

content

hooksArticlePageAdvertisementConfigArticle

appConfig

filter

json

liveArticle

Raymond Ma

Japan's Mizuho Financial Group has put its Hong Kong subsidiary Chekiang First Bank up for sale through a limited auction.

A source said Mizuho - Japan's largest lender by assets - had received a number of bids for its wholly owned subsidiary through investment adviser Merrill Lynch in the first round of an auction.

Five regional and local banks have been contacted as potential bidders.

Amid rising personal bankruptcies and shrinking income from loans, Hong Kong's second-tier banks have faced pressure to consolidate and reduce costs through greater economies of scale.

In December last year, the foreign owner of International Bank of Asia said it was divesting its Hong Kong banking assets.

Mizuho is understood to be looking to sell Chekiang First Bank to focus on its corporate banking activities.

'[Mizuho] is probably looking to dispose of its overseas assets,' Fox, Pitt and Kelton analyst Terence Law said.

The source said Chekiang First Bank was expected to be auctioned off swiftly.

The Apple Daily  reported yesterday that Bank of East Asia and one other bank had submitted bids for Chekiang First Bank. It also said one of the mainland's top banks had considered the tender.

A Bank of East Asia spokesman and Mizuho's joint general manager in Hong Kong, Yasuo Hirose, declined to comment.

Chekiang First Bank had assets of HK$27.8 billion and debts of HK$23.8 billion last year. This would give it a book value price tag of HK$3.9 billion.

DBS Vickers analyst Tony Liu said: 'Chekiang First Bank has just a small franchise, so it will be quite difficult to ask for a big premium to book.'

Chekiang First Bank was founded in 1950 by the Kung family. In 1962, Japan's Dai-Ichi Kangyo Bank - which eventually merged with five other financial companies in 1999 to form the Mizuho Financial Group - bought a minor stake. Family ownership of the bank ended in 1989 when Dai-Ichi Kangyo bought the remaining shares of Chekiang First Bank it did not own, although family members continued to manage the business.



Mizuho seeks buyer for its Chekiang First Bank