Singaporean Investors Built Presence in China by Investing More on Chinese Banks
To further increase their exposure to the world’s second biggest economy the OCBC or Oversea Chinese Banking Corp. has raised its stakes in Bank of Ningbo. This is the latest move of the Singapore bank after announcing that it was in exclusive negotiations to purchase Hong Kong’s Wing Hang Bank Ltd. after it agreed to buy almost 207 million new ordinary shares in the Bank of Ningbo.
The move is said is an under taking of a private placement of shares for current substantial shareholders in which the 383 million Singapore dollar investment will raise the bank’s stake in the Chinese lender from 15 percent to 20 percent. The Singapore bank has been facing limited opportunities for growth at home and the bank by assets is expanding their footprints in other markets. In 2009 the OCBC has spent around US$ 1.4 billion to purchase ING Groep NV’s private banking assets and rebranded it as the Bank of Singapore which in turn control operations in most Asian countries. But unlike its other peers in Singapore the bank looks into investing in the Chinese mainland even with the risk of creating bad debts mount in Chinese banks.
The growing connectivity of the Chinese with other regions and the rest of the world based on trade, capital flows and wealth along with the increasing internationalization of the currency has translated into great prospects for the OCBC in growing and development their businesses there. The level of nonperforming loans in China seems to be under control and on the rise by 38 percent compared to the previous two years. Banks were able to manage and keep the nonperforming rates just below 1 percent just by writing off bad loans, nonetheless Singaporean investors have established their presence in china.