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07/11/2005:
"Another China Bank Is Courted by the West"
SHANGHAI, July 10 - Goldman Sachs and Allianz of Germany are in talks to acquire a $1 billion stake in China's largest state-owned bank, the Industrial and Commercial Bank of China, according to a person briefed on the discussions.The talks come at a time when some of the world's biggest financial institutions are rushing into China to acquire stakes in some of the country's large but troubled state-owned banks ahead of planned initial public offerings in the next few years. The Bank of America said last month that it would pay $3 billion for a 9 percent stake in the nation's third-largest lender, the China Construction Bank, which is expected to offer shares to the public late this year.
And UBS said last month that it was considering investing as much as $500 million in the Bank of China, another huge state-owned bank.
"All the big financial institutions want a piece of the action," said Jack J. T. Huang, who oversees China coverage for the law firm Jones Day in Taipei, Taiwan. "This is not necessarily a rational decision when you look at the numbers. But these institutions believe the government won't allow these banks to fail. They will step in to help them succeed."
I.C.B.C. has nearly 400,000 employees, more than 100 million customers and about $500 billion in assets. It is unclear how large a stake in the bank Goldman and Allianz may get. The negotiations were reported by the South China Morning Post in Hong Kong on Saturday.
Goldman and other large investment banks may be positioning themselves to help take the banks public in the next few years in deals that could result in hundreds of millions of dollars in investment banking fees.
Citigroup was initially expected to help take China Construction Bank public, but bankers said that deal is now likely to be handled by Morgan Stanley and its Chinese joint venture partner, the China International Capital Corporation, after Citigroup passed on buying a stake.
Full: nytimes.com
