Shanghai, Feb 25: China's largest state-owned commercial bank and Hong Kong's Bank of East Asia Ltd (BEA) have jointly acquired a major share of the Asian securities business of Britain's National Westminster Bank Plc, reports said on Wednesday.The Shanghai Securities News said the Industrial and Commercial Bank of China (ICBC) and BEA had signed an agreement on Tuesday in Beijing to acquire 85 per cent of NatWest Securities Asia Co Ltd.
The China Daily said the price of the deal was 20 million Hong Kong dollars ($2.4million ) with ICBC holding a 60-per cent share of the new company, Bank of East Asia 25 per cent and NatWest's senior managers 15 per cent.
The British company, a subsidiary of National Westminster Bank, would be renamed ICEA Finance Holding Co Ltd, the report said.
The reports said the move advanced ICBC's preparations to help Chinese companies seeking overseas listings or to issue bonds.
"It is a strategic step for ICBC's business development and marks a milestone for ICBC as itsteps into the international capital market," bank president Liu Tingh Uan was quoted as saying.
NatWest Securities Asia has in recent years become lead coordinator and guarantor for many Chinese companies seeking overseas listings.
The report said ICBC took the opportunity, thrown up by National Westminster bank's decision to trim its investment banking business, to set up a finance company.China and Hong Kong will be the main business focus for the new firm which will concentrate on raising capital for enterprises, financial consultancy, sponsoring companies for listing, direct investment and securities-related businesses.
ICBC is the biggest state-owned commercial bank in China with total assets amounting to 3.6 trillion yuan (435 billion dollars) and 30,000 branches all over the country.
It has close business relationships with 80 per cent of Chinese enterprises, and eight million corporate accounts, of which 400,000 are state-owned enterprises.
Bank of East Asia is Hong Kong's biggest ethnicChinese-owned bank.An ICBC official said the acquisition had been designated a special project and submitted for official approval.
"As far as I know, Bank of China and other banks have the same plan so it shouldn't be against regulations," he said.
China prohibits banks from the securities trading business.
The official said the benefits of the acquisition were great because ICBC had many big local customers which it had been unable to service properly in the past because of limited facilities.
He added that the bank also stood to reap handsome profits from advising companies on listing.
He cited the example of an investment bank set up by Morgan Stanley and Construction Bank of China which earned $40 million from advising China Telecommunications Co Ltd on its listing in Hong Kong.
Copyright(c)1998 Indian Express Newspapers (Bombay) Ltd.
