CCB in talks with MOF to buy stake in China Cinda
China Construction Bank Corp (CCB)<601939><0939>, one of the Big Four state-owned banks in China and the world's second-largest lender by market value, is in negotiations with China's Ministry of Finance (MOF) to purchase a stake in state-owned China Cinda Asset Management Corp to tap the securities brokerage market, the Standard reported on Friday.
CCB's chairman Guo Shuqing on Thursday said in Beijing after an annual general meeting that the lender is likely to buy a 20% to 30% stake in China Cinda, the parent of Hong Kong-listed financial firm Cinda International Holdings Ltd<0111>.
Guo added that CCB has submitted its application for the deal to the State Council and the MOF.
In 1999, the MOF set up four financial asset management companies, including China Cinda, to help dispose of up to RMB 1.4 trillion worth of bad loans of the country's Big Four state-owned banks.
As of the end of 2008, Beijing-based China Cinda had taken over RMB 1.05 trillion (HK$1.19 trillion) of non-performing loans, 53.6% of which came from CCB, 15.4% from Bank of China (BOC)<601988><3988>, and 11.8% from China Development Bank (CDB).
By the end of last year, China Cinda had disposed of RMB 764 billion in bad assets and recovered RMB 204 billion in cash.
H-shares of CCB gained 2.44% to end at HK$5.46 on Thursday, hitting an eight-month high.
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