BEA seeks stake in China lender

Bank of East Asia is holding talks with a number of mainland banks on acquiring a 20 per cent stake as part of the bank's China expansion plan.

David Li Kwok-po, chairman of Bank of East Asia, said yesterday that two years ago the bank had held talks with Industrial Bank on taking a stake.

On Wednesday, Hang Seng Bank announced it had bought a 15.98 per cent stake in Industrial Bank.

The talks failed because at the time regulations only allowed foreign banks to each own up to 10 per cent of a mainland bank while it wanted 20 per cent to gain management control, Mr Li said.

With the recent lifting of a foreign bank's ownership limit to 20 per cent by the China Banking Regulatory Commission, he believes Bank of East Asia will be better placed to reach a deal with a mainland bank. However, he refused to comment on speculation that the bank was interested in buying into Minsheng Bank.

'I cannot comment on that as Bank of East Asia is a listed company and Minsheng Bank is going to list in Hong Kong as well. I can only tell you that we are in talks with more than one bank in China but we have not yet reached any agreement,' Mr Li said.