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SCMP Reporter

CHINA Everbright Holdings, the Hong Kong arm of mainland-owned financial and property development giant Everbright Group, has agreed to take a 20 per cent stake in the soon-to-be-listed International Bank of Asia (IBA).

    Two executives from China Everbright will join IBA's board of directors.

  The bank's parent company, Arab Banking Corp (ABC) of Bahrain, is seriously considering relinquishing 25 per cent of its shares to the public while maintaining a 55 per cent control of the bank.

  No price was disclosed in the deal.

    This share deal is the second major investment for Everbright in Hong Kong this year. In March, it acquired control of property firm Newfoundland International Co.

   ''This move is to secure a future for IBA beyond 1997. A longer-term view dictates the finding of a suitable partner for expansion in China,'' said Mike Murad, the bank's vice-chairman and chief executive.

   ''It is important for the bank to position well before 1997 and it is a prudent way to go into the China market with a good partner,'' he said.

     Under the acquisition agreement, the two parties will establish a joint-venture bank in China next year to explore opportunities.

    The share deal is subject to approval from the Hong Kong Monetary Authority.

    Through this strategic alliance, Mr Murad said, ABC would help promote Everbright in the Middle East. In return, Everbright would assist the 20-branch IBA to expand in China.

     ''We will expand our credit card, hire-purchase and other services into the China market,'' he said.

   Everbright is a diversified conglomerate whose main businesses include financial and investment service, leasing, trading, securities, precious metals trading, import of technology and facilities and property development.

    It is headed by Qiu Qing, a former vice-governor of the People's Bank, and its operations are based in Hong Kong and Beijing.

   Its presence in Hong Kong is represented by China Everbright. Its two other major operating entities are China Everbright International Trust and Investment Corp and Everbright Bank of China.

  China Everbright International is a national joint stock financial institution, operating under the regulatory supervision of People's Bank, the central bank.

      Everbright Bank started operations in August last year and has its headquarters in Beijing. Besides retail banking, it provides loans especially to infrastructure projects, export finance for machinery and electronic products industries, aircraft finance, leasing, and securities trading.



Everbright to acquire 20pc holding in IBA