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Temasek in $4.1b China bank venture?
05:55 AM Mar 16, 2010
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BEIJING - Bank of China and Singapore investment company Temasek Holdings may invest as much as 20 billion yuan ($4.1 billion) to build a rural-banking business in China, said two people with knowledge of the matter.
The companies are in talks about setting up as many as 400 rural banks, the sources said. Bank of China would own a controlling stake in the venture, while Temasek would own more than 20 per cent, they added.
Bank of China said it was "actively" considering plans to expand into rural banking, but declined to elaborate. A Temasek spokesman declined to comment.
China plans to set up a total of 1,027 rural banks, 106 loan companies and 161 rural credit co-operatives in the three years ending 2011, the China Banking Regulatory Commission (CBRC) said in July. The majority of the 118 countryside lenders set up since 2006 had become profitable by June 30, according to the CBRC.
Rural banks in China cannot lend to non-agricultural businesses until funding needs of local farmers are adequately met. The lenders are given subsidies and are allowed to set aside smaller amounts as reserves than urban banks.
China's rural residents earned 5,153 yuan on average in 2009, less than one third of urban dwellers, according to official statistics. Bloomberg
05:55 AM Mar 16, 2010
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BEIJING - Bank of China and Singapore investment company Temasek Holdings may invest as much as 20 billion yuan ($4.1 billion) to build a rural-banking business in China, said two people with knowledge of the matter.
The companies are in talks about setting up as many as 400 rural banks, the sources said. Bank of China would own a controlling stake in the venture, while Temasek would own more than 20 per cent, they added.
Bank of China said it was "actively" considering plans to expand into rural banking, but declined to elaborate. A Temasek spokesman declined to comment.
China plans to set up a total of 1,027 rural banks, 106 loan companies and 161 rural credit co-operatives in the three years ending 2011, the China Banking Regulatory Commission (CBRC) said in July. The majority of the 118 countryside lenders set up since 2006 had become profitable by June 30, according to the CBRC.
Rural banks in China cannot lend to non-agricultural businesses until funding needs of local farmers are adequately met. The lenders are given subsidies and are allowed to set aside smaller amounts as reserves than urban banks.
China's rural residents earned 5,153 yuan on average in 2009, less than one third of urban dwellers, according to official statistics. Bloomberg
