Archives January 2007

ICBC launches foray into Indonesian banking

THE Industrial and Commercial Bank of China has signed an agreement to acquire a 90 percent stake in Indonesian lender Bank Halim.

The remaining 10 percent will continue to be held by shareholders of Bank Halim, but ICBC has an option to buy the balance in three years, the Chinese bank said on its Website. The purchase price was not revealed.

The deal represents ICBC’s first takeover of a foreign bank, and it is also the first time for the bank to enter an overseas market via an acquisition.

The purchase is expected to produce valuable experience to help ICBC expand in the international financial markets, the Website statement said.

The two banks are now awaiting permission from their regulatory authorities before they can finalize the deal.

The agreement follows ICBC’s October 27 simultaneous listings on the Shanghai and Hong Kong stock exchanges, registering the world’s biggest initial public offering by raising US$21.9 billion. The ICBC share sale surpassed the US$18.4 billion raised by NTT DoCoMo Inc in 1998.

ICBC’s total assets exceed seven trillion yuan (US$897.4 billion), and it has 2.5 million corporate and 150 million individual clients.

The privately held Bank Halim is based in Surabaya, on Indonesia’s main island of Java. It had US$50 million in assets at the end of 2005, a capital adequacy rate of 57.88 percent and a non-performing loan rate of 1.32 percent.

Broker rises from ashes of bankruptcy

DATON Securities Co has resurrected itself from bankruptcy and is searching for talent in its quest to move into the sector’s first tier, industry sources said yesterday.
The Liaoning-based broker, China’s first securities firm to revamp via bankruptcy, is recruiting a general manager and
four deputy general managers, according to people familiar with the situation.

The broker has received several dozen applications and may start interviews with candidates early next year, the sources said.

Daton re-registered recently with 500 million yuan (US$63.9 million) in capital after going bankrupt in August as part of a regulatory edict to reform troubled securities houses, the sources said.

The broker, which was set up in July 2001 with 1.12 billion yuan in registered capital, logged a loss of 133 million yuan in 2005, extending combined losses since it began operations to 1.11 billion yuan, the sources said.

Regulators decided to let Daton go bankrupt to facilitate its overhaul, they said. Original shareholders, including Beida Jade Bird Group, quit during the reform process, while new investors including Dalian Huaxin Trust & Investment Co have joined in, the sources said.

“Huaxin is now the broker’s biggest stakeholder, but Daton’s overall shareholding structure is still very fragmented,” said a source close to the company.

After the restructuring, Daton has net assets of 505 million yuan and net capital of 445 million yuan, which still lags a threshold of 1.2 billion yuan required by regulators to become one of the country’s top-tier brokers, according to the sources.