Foreign queue lengthens outside China banks
Rumour mill grinds on as Temasek invests in CCB
There is seemingly no end to the list of foreign banks and investors eager to invest huge sums in China's state-owned banks. The latest is Singapore government-funded private-equity fund Temasek Holdings, which confirmed persistent rumours that it would invest $1 billion in China Construction Bank's forthcoming IPO as well as purchase additional existing shares. CCB had already announced a $3 billion investment from Bank of America.
Now the Hong Kong's rumourmongers have started whispers about possible overseas investments in another government-controlled lender, Industrial and Commercial Bank of China. Those mentioned as suitors include American Express, Credit Suisse and even Goldman Sachs. However, the mooted Goldman deal is likely to be an investment by the firm's private-equity arm into ICBC, which is expected to list in the next two years.
If the unconfirmed reports prove well founded, the Goldman Sachs deal might be one of the smarter foreign investments in China's banks. Goldman Sachs's private-equity division has already established a solid track record of lucrative investment in China entities, including Ping An Insurance, China Netcom and SMIC. The ICBC deal would follow a similar pattern of investment several years ahead of an IPO.