French firm acquires almost 20pc of commercial lender in first foray into sector plagued by rising NPLs
BNP Paribas is poised to sign a deal in Nanjing today to buy almost 20 per cent of Nanjing City Commercial Bank in the French lender's maiden commercial banking investment on the mainland.
It will join a series of other foreign investors in tapping a sector with 28.81 trillion yuan of corporate and personal deposits, brushing aside signs of a new crop of non-performing loans in the aftermath of the macroeconomic tightening since last year.
BNP Paribas would buy an 18 per cent to 19.7 per cent stake from existing shareholders of the Jiangsu-based lender, the Nanjing bank said yesterday, without disclosing a price.
The amount is expected to include a stake of about 10 per cent sold by the International Finance Corp (IFC), the World Bank's private-sector investment arm which bought a 15 per cent equity interest in the mainland bank for US$27 million almost four years ago.
Although Beijing has indicated it might lift the 25 per cent limit on combined foreign equity ownership in a mainland bank, it has given no firm timetable for the relaxation and a new ceiling.
