HLB buys into China’s Chengdu City Commercial Bank Co Ltd
Hong Leong Bank Berhad (HLBB) is set to enter the China market through its acquisition of a 19.99% equity interestin Chengdu City Commercial Bank Co Ltd (CCCB), a leading city commercial bank in western China.
HLB had on the same day signed a conditional share subscription agreement (“SSA”) for the subscription of the Acquisition Shares. The SSA is conditionalinter alia upon the approval of shareholders of CCCB as well as the relevant regulatory authorities.
“HLBB believes in the growth potential of China and this will be Hong Leong Bank’s maiden investment in China,” commented Yvonne Chia, Group ManagingDirector of HLBB. “We are pleased to be able to partner with CCCB and we are confident that the investment will strengthen and diversify the earnings baseof Hong Leong Bank Berhad.”
With the acquisition of the equity interest in Chengdu City Commercial Bank Co Ltd, HLBB will be able to tap into the promising and growing financialservices sector of China.
“CCCB is a good business platform for our expansion into Western and Central China,” added Chia. “Both parties have complementary strengths and would beable to leverage on each other’s capabilities and resources to grow the business.”
CCCB has an extensive network and resources – it has 29 branches and 114 outlets located in Chengdu City. It has the fourth largest network in the localityand its presence extends to 9 districts of Chengdu. Between 2004 and 2006, Chengdu City Commercial Bank recorded a compound annual growth rate of 25% inits loans and deposits.
Chengdu City is the capital of the Sichuan Province of China, the fifth most populous city in China with a population of over 11 million, 5 million ofwhich reside in the city itself. Chengdu City is the centre for politics, economics, finance and culture in Sichuan. It has been declared as the hub forhigh-technology, business and trade, finance, as well as transportation and communication by the State Council for South-West China.
This investment is part of HLBB’s long term goal of establishing a bigger presence in Asia. To-date, HLBB has a branch each in Singapore and Hong Kong.
Press Release - 25/10/2007