The news, which was initially reported in the Wall Street Journal in April, regards possible early stage contacts between the firms’ senior management. The state-controlled Chinese bank would buy $2bn to $4bn worth of convertible bonds issued by Bear Stearns. The bonds could later be converted into shares, giving CCB a 10%-20% stake in Bear Stearns and making it the New York-based US firm’s largest shareholder. The transaction would also give CCB a seat on the Bear Stearns board.
With such a deal, Bear Sterns would follow rivals Morgan Stanley and Goldman Sachs, which have recently gained a presence in China’s lucrative market thanks to transactions with local financial institutions. The deal would also be a first: a Wall Street firm that is prepared to welcome a state-controlled Chinese bank as its largest shareholder. The deal would be even more exceptional considering the cultural fit: Bear Stearns is considered less international than many of its rivals.
Some commentators believe that CCB would benefit from a tie-up with Bear Stearns if the deal enhanced its reputation as an up-and-coming Chinese bank that is willing to do business with big international banking names. Some also suggest that Bear Stearns’ convertible bonds would be a sensitive way for CCB to store some excess cash deriving from its recent initial public offering. CCB listed in Hong Kong last year, raising $9.2bn. Bear Stearns refused to comment.
BNPP buys Shinhan shares
BNP Paribas has acquired a 5.6% stake in Shinhan Financial Group from the South Korean government, taking the French bank’s stake in the group to 9.4%. Shinhan Financial Group is one of the largest Korean financial groups. It was created in 2001 and has been a partner for BNP in South Korea. The two groups own two joint subsidiaries in the asset management and insurance sectors.
Turkey’s Fiba Holding plans to sell a 45% stake in Finansbank to the National Bank of Greece for $2.5bn. The transaction would be the biggest Greek investment in Turkey and the largest banking transaction in Turkish history to date. Commentators believe it might pave the way for further improvement in relations between Athens and Ankara and help to ease Turkey’s accession into the EU. Also, Business Aegean Bank will open its headquarters in Athens in June. It is a joint venture of Turkish and Greek businessmen, set up with the aim of boosting trade and investment between the two countries.
Morgan Stanley, CIT Finance and TransCredit Bank were lead managers in a securitisation of Russian lease receivables, a new Russian structured product. The Russian Rb12.57bn ($370m) 8.386% Series A Bonds due 2012 issued by Red Arrow International Leasing are internationally offered and listed on the Irish Exchange. The transaction involves two special-purpose vehicles and the Moscow branch of Red Arrow. The proceeds will be used to acquire a portfolio of rolling stock to lease to Russian Railways.
New Yorkers swap units
New York-based JPMorgan Chase has agreed to swap its corporate trust unit for the Bank of New York’s (BNY) consumer and small business banking unit. The deal is reportedly valued at about $3.1bn. The transaction is in line with JPMorgan Chase’s intention of maintaining a top ranking in New York’s retail market and will allow BNY to exit a business in which it lost market share to bigger rivals.
The world’s oldest bank, Italian Monte dei Paschi di Siena, has opened a representative office in Mumbai, India, as it intends to be business partner to the many Italian companies that already operate in the region. Trade flows generated by Italian companies operating in India were reportedly about €1.8bn in 2004.
UniCredit moves on BPH
The Polish government and UniCredit, the Italian bank that already owns Polish bank Pekao, have agreed on a compromise that allows UniCredit to take over a second Polish bank, BPH. Under the agreement, UniCredit will have to sell 200 of BPH’s 480 branches in Poland and related banking services operating under the brand BPH. UniCredit also agreed not to cut jobs for two years.
Bank Austria Creditanstalt (BA CA), now part of UniCredit, has agreed to sell its Croatian banking subsidiary HVB Splitska banka to French banking group Société Générale for about €1bn. The Croatian bank has total assets of €3.2bn, 112 branches and serves more than 460,000 customers. Following the merger of its parent, HVB, with UniCredit, BA CA will take responsibility for the Italian bank’s subsidiary in Croatia, Zagrebacka. To do this, Croatian merger law required BA CA to sell its own Croatian subsidiary.
Ceskoslovenska obchodni banka (CSOB) has agreed on a strategic partnership with Korea Exchange Bank (KEB) to jointly provide corporate banking services and offer support to Korean companies in the Czech Republic and Slovakia. KEB is reportedly planning further co-operation with fellow KBC group companies. This would support Korean businesses in Hungary, Poland and Slovenia.
Abu-Dhabi-based investment bank Injaz Mina has said it will launch five closed-end funds worth $350m, including domestic and international funds. It plans to launch other funds in the next two to four years, possibly in the Far East, Europe and the US through joint ventures.
