Mr Yue Yi, the vice chairman and chief executive of Bank of China Hong Kong.

Mr Yue Yi, the vice chairman and chief executive of Bank of China Hong Kong.

Planning to buy parent company’s assets in Southeast Asia, BOCHK is ready to sell Nanyang Commercial Bank for funding.

BOCHK (2388.HK) announced in general meeting on 16 June the company’s plan to buy the Southeast Asia assets of its parent, the Bank of China (3988.HK), for expansion into Southeast Asia.

For enhancement of capital adequacy and improvement of non-performing ratio, BOCHK will sell the stake of Nanyang Commercial Bank (NCB) due to overlapping businesses. The Bank has already submitted the proposal to regulatory authorities in HK, Mainland China and Southeast Asia regions for approval. Details of the sale is not unveiled.

Guangzhou-based Yuexiu Group expresses interest in buying in NCB by a 1-year loan of HK$ 62 billion.

Two years back, Guangzhou-based Yuexiu Group spent HK$11.64 billion to buy Chong Hing Bank (1111.HK).

In the past three years, overseas units of BOC had 30 percent profit growth, surpassing domestic business.

The acquisitions will help BOCHK expand in southeast Asia, home to more than 29 million ethnic Chinese, Yue said. It will inject capital and launch new products there, and the bank does not exclude the possibility of more overseas acquisitions. Fund-raising may be needed to satisfy the capital demand.

Yuexiu is among four candidates vying for NCB, the report said, with the others being New China Life Insurance (1336.HK), China Cinda Asset Management (1359.HK) and China Pacific Insurance (2601.HK).

Source: The Standard Finance

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