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Banks buy into mainland's potential

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When Fujian Asia Bank opened its doors in early 1993, the fanfare could best be described as moderate.

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The lender was only the third Sino-overseas joint-venture bank on the mainland and touted its Fuzhou office and registered capital of US$30 million as but a stepping stone to bigger and better things: more branches and a wider geographical scope.

The bank stuck to its original focus of financing foreign joint-venture projects in Fuzhou, where Taiwan provides 40 per cent of foreign investment.

As a result, for the next 10 years, Fujian Asia Bank turned out to be one of the less conspicuous foreign-invested players on China's financial landscape.

Last week, however, the bank found itself in the limelight as the latest acquisition target of HSBC and a subsidiary of Ping An Insurance, China's second-largest insurance firm. Both will take a 50 per cent stake in the Fuzhou lender, with HSBC paying up to US$20 million.

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Ping An's subsidiary, China Ping An Trust & Investment, has agreed to inject a further US$23 million into the lender, taking its paid-up capital to $50 million.

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