Manila, Aug 24, 2006 AEST (ABN Newswire) - Asian Development Bank (ASX: ATB) will help reform the People's Republic of China's (PRC's) commercial banking sector on the city level by taking a minority stake in Hangzhou City Commercial Bank, one of the leading city commercial banks in PRC.
ADB will invest up to US$30 million in Hangzhou City Commercial Bank, equivalent to about 5% of the total outstanding shares. The signing took place in Hangzhou today.
Hangzhou City Commercial Bank is the fourth largest commercial bank in Hangzhou, a city that thrives on private sector economy activity, with about 26,000 corporate customers, 1.5 million individual customers, and a loan market share of around 5%.
City commercial banks in the PRC play a vital role in and around the cities they serve, especially in the development of small- and medium-sized enterprises. However, they have to address some significant issues before they can improve, including strategic risk, poor corporate governance, weak risk management, and low capital adequacy ratios.
The Government views the introduction of experienced and qualified overseas strategic investors as an effective way of promoting, as well as enhancing, this reform process.
"Through this investment, ADB will be helping Hangzhou City Commercial Bank in developing corporate governance and internal control procedures, as well as in opportunities for commercial cooperation," says William Willms, ADB Principal Investment Officer.
Following a sector-wide portfolio approach to its financial sector investments in the PRC, ADB has invested in a state-owned commercial bank (Bank of China), a joint stock commercial bank (China Everbright Bank), a joint venture bank (Xiamen International Bank), and a credit guarantee company (Credit Orienwise). ADB is also pursuing other opportunities in the credit cooperative, rural bank, and nonbank subsectors.
Contact
Tsukasa Maekawa
Email: tmaekawa@adb.org
Tel:+632 632 5875; Mobile: +63 918 939-9059
Floyd Whaley
Email: fwhaley@adb.org
Tel:+632 632 6848; Mobile: +63 920 938 6488
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