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Christine Chan

HK lender  seeks further  assets  among mainland insurers and fund managers

Hang Seng Bank  chief executive Vincent Cheng Hoi-chuen  says the lender is looking for investment opportunities among the mainland's insurers and fund-management houses as part of an acquisition spree.

Speaking from Fuzhou  yesterday, after paying 1.72 billion yuan   to acquire a 15.98 per cent  stake in Industrial Bank,  Mr Cheng, who is also the bank's vice-chairman, said: 'We are interested in finding partners in  ... non-bank financial institutions: insurers or fund-management companies.

'There is a lot of potential in the mainland's financial sector. The fund-management sector is not well developed in China. The insurance market is also quite profitable.'

There are  24  insurers in the mainland and about 40  fund-management houses.

The Industrial Bank deal makes Hang Seng the largest foreign investor in a mainland bank in terms of funds invested and percentage of shareholding. It also marks the first step by Hang Seng in an accelerated expansion in the mainland,  where it has five branches.

'We are not interested in investing in other banks,' Mr Cheng said.

Industrial Bank is one of the mainland's more profitable lenders, despite being small.

Headquartered in southern Fuzhou, Industrial Bank has a nationwide network of more than 250 outlets.  That is a big platform from which Hang Seng can develop its personal financial services.

Mr Cheng said Hang Seng was planning to set up joint ventures with its mainland partner to develop credit card and unsecured personal loan business when the relevant regulations allow foreign banks to operate such businesses.

'We are also looking to do customer referrals to Industrial Bank and see whether Hang Seng products can be sold through the Industrial Bank's platform,'  Mr Cheng said.

Hang Seng will dispatch a representative to Industrial Bank and will provide technical support to the bank in risk management, financial management and internal auditing.

'Industrial Bank has a very good profit record. It had 1.6 billion yuan  in pre-tax profit last year, which could provide us with very good dividend,' Mr Cheng said.

As part of the deal, Industrial Bank offered a 4 per cent stake to International Finance Corp.

GIC Special Investments of Singapore  has bought a 5 per cent  stake in the bank.



Hang Seng buys Industrial Bank stake