Chekiang First Bank yesterday confirmed that its Japanese parent, Mizuho Financial Group, is planning to sell the small unlisted Hong Kong lender.
Bank spokeswoman Miranda Tse said Mizuho, the world's largest bank with US$1.1 trillion in assets, was seeking to sell its wholly owned Hong Kong subsidiary through investment bank Merrill Lynch.
Mizuho, formed from the merger of Dai-Ichi Kangyo Bank, Fuji Bank and Industrial Bank of Japan, was selling Chekiang First Bank due to a strategy shift as it emerged from the consolidation process, she said.
Mizuho wanted to reduce its investment portfolio.
An investment banking source said yesterday that the price of bids submitted so far had been between 1.1 to 1.3 times Chekiang First Bank's book value, a far cry from the 3.2 times book that DBS Group paid for Dao Heng Bank just two years ago.
Based on Chekiang First Bank's net asset value of HK$3.9 billion, this would put submitted bids to be valued at between HK$4.3 billion and HK$5.1 billion.