Bank of East Asia considering China Depositary Receipts issue

Bank of East Asia considering China Depositary Receipts issue

	Published : Thu, 11 Jan 2007 05:36 By : Agencies Print this Story

SHANGHAI (XFN-ASIA) - Bank of East Asia (HK 0023) said it is considering issuing China Depositary Receipts (CDRs), which would make it it the first overseas-based bank to list in China after local incorporation.

'We wish to become the first, or one of the first foreign banks to list on the domestic market, hopefully through China Depositary Receipts,' Chan Kay-Cheung Deputy, Chief Executive and director of Bank of East Asia said at the opening ceremony of a sub-branch in Shanghai.

'The first step is local incorporation and listing will be next,' he said. The bank expects to complete local incorporation in the second quarter of this year, according to Chan.

In December, it won regulatory approval to incorporate its China operations together with eight other foreign lenders including HSBC, Citibank and ABN AMRO.

Chan added that the bank is likely to appoint Raymond Yu, currently general manager and head of its China division, as the president of the Chinese unit and David Li, current chairman and chief executive of the bank, as chairman of the China unit.

But he added that the initiative to list the bank's China assets on the domestic A-share market was dependent on regulators issuing the necessary rules. Regulators are said to be developing rules to allow for the issuance of CDRs on mainland exchanges, although no timeframe has been indicated.

Chan also said the bank will speed up network expansion in China after incorporating its China operations, which have registered capital of at least 5 bln yuan.

'We opened 10 outlets in 2006 and the we will speed up the pace of new outlet openings every year through to 2010.' he said.

The bank now has 26 branches and sub-branches in China and hopes to open another branch in the northeastern city of Shenyang in the second quarter.

Chan said Bank of East Asia is in talks to buy into a city commercial bank as an exclusive foreign investor and it is also interested in taking a stake in a domestic securities brokerage house.

He did not disclose any details, although domestic media have reported that Bank of East Asia is in talks with Guangzhou Commercial Bank.

(1 usd = 7.8 yuan)

qionghui.feng@xinhuafinance.com