Everbright Bank approves plan to spin-off wealth division
Long-rumoured restructuring could pave way for further asset sales among Chinese banks
China Everbright Bank's board has approved long-rumoured plans to spin off the mainland lender's wealth management division, possibly paving the way for further asset sales among Chinese banks.
The decision was announced as the bank reported a 12 per cent rise in operating profit that beat market expectations.
A need to streamline operations and raise capital may lie behind Everbright Bank's decision, confirmed in an exchange filing late on Friday night, to shift its wealth management division into a standalone unit, subject to regulatory approval.
Earlier restructuring rumours pushed Everbright Bank's Shanghai-listed shares up 9.5 per cent on March 19. China International Capital Corp estimates any spin off will be potentially worth more than US$10 billion, Bloomberg reported earlier this month.
Businesses such as wealth management, credit cards and private banking may start being spun off from Chinese banks as part of wider financial sector reforms, CICC analysts said.
Everbright Bank's pre-tax operating profits were 38.5 yuan billion yuan (HK$48 billion), a smidgeon above a 37.8 billion yuan medium analyst estimate.