Most of the key investments in China’s largest state-owned banks have been settled, but international investors are still eager to pour money into the sector.
Industrial and Commercial Bank of China (ICBC), China’s largest lender, is rumoured to be in discussions with the investment arms of Abu Dhabi and Kuwait, no doubt keen to find a way to spend all of their new oil dollars after the recent price bonanza.
Other than cash, it is hard to see what Middle Eastern investors would bring to the China banking party. ICBC appears to be seeking additional strategic investment ahead of its planned IPO in 2006. Whether or not it needs it, however, is a moot point: ICBC’s existing agreement for a $3 billion investment is from a consortium led by Goldman Sachs’ private-equity arm, Allianz and American Express. Although that consortium might lack the commercial and retail banking expertise that the deals with Bank of China and China Construction Bank secured, Goldman and Allianz know a thing or two about risk and the capital markets, both of which should come in handy.
Elsewhere in China’s rapidly changing banking scene, French bank BNP Paribas announced in October that it had agreed to purchase a 19.2%