OCBC to Spend $298 Million Raising Bank of Ningbo Stake to 20%Sanat Vallikappen
Oversea-Chinese Banking Corp., Southeast Asia’s second-largest lender, will spend about 1.8 billion yuan ($298 million) buying new shares in Bank of Ningbo Co. to help its Chinese affiliate boost capital.
OCBC will increase its stake in the Shenzhen Stock Exchange-listed bank to 20 percent from 15.34 percent as part of a private placement, the Singapore-based lender said in a statement to the stock exchange today.
The share subscription, expected to be completed in the third quarter, comes as OCBC looks to increase its footprint in China to tap growing regional trade flows and the increasing use of yuan as an international currency. OCBC is in exclusive talks through Jan. 31 with the largest shareholders of Wing Hang Bank Ltd. to buy the Hong Kong-based bank in what would be its largest acquisition.
“Banking with Chinese companies, onshore and offshore, and developing the ability to tap into the fast-growing offshore yuan market will remain a key focus for us,” Darren Tan, chief financial officer of OCBC, said in an e-mailed statement today.
Bank of Ningbo plans to raise 3.2 billion yuan from the private placement to its two largest shareholders OCBC and Ningbo Development & Investment Group Co. to bolster capital, the lender, based in Zhejiang province, said in a statement dated today. OCBC will buy no more than 207.5 million shares and Ningbo Development will subscribe to 158.5 million shares at 8.85 yuan each, Bank of Ningbo said.