Yue Xiu keen on further expansion
Guangzhou government-backed company sees opportunities for new business in free-trade zone following Chong Hing Bank acquisition
The new parent of Chong Hing Bank is keen on further acquisitions to make the most of opportunities in the proposed Guangdong free-trade zone.
Guangzhou government-backed Yue Xiu was open to acquiring non-Hong Kong financial firms, either on the mainland or in the wider Asia-Pacific region, to help expand Chong Hing, Yue Xiu chairman Zhang Zhaoxing said last week.
Zhang is also the chairman of Chong Hing.
The free-trade zone proposed by the Guangdong authorities would include Hong Kong, Macau, Qianhai in Shenzhen, Hengqin in Zhuhai and Nansha in Guangzhou and cover more than 1,000 square kilometres with a view to competing with the 28.8 sq km free-trade zone set up in Shanghai last year.
The Guangdong proposal has been backed by Hong Kong Chief Executive Leung Chun-ying, who said his government would help in the planning process so that it would benefit both sides.
"The formation of such a free-trade zone brings us opportunities in financial and banking business," Zhang said. "After the acquisition of Chong Hing, we will eye investments in Guangdong which contribute to the region's financial development."
Yue Xiu, an investment vehicle backed by Guangzhou's city government, operates in businesses including real estate, securities and transportation infrastructure, but did not have any banking business before its acquisition of Chong Hing, which was Hong Kong's smallest family-owned lender. It paid the Lui family HK$11.6 billion for a 75 per cent stake in the lender - at a price-book ratio of 2.08.