CHINA Investment Corp, the country's sovereign wealth fund, is buying a 7 percent stake in the Bank of Shanghai from International Finance Corp.
"The deal is going through the proper procedures," the Bank of Shanghai said yesterday after reporters questioned the lender about a shareholder change.
Citing sources familiar with the matter, the 21st Century Business Herald yesterday reported CIC has bought the IFC's 7 percent stake in the Bank of Shanghai,
IFC, a member of the World Bank, became a Bank of Shanghai shareholder in 1999. It was the firm's first investment in China's banking sector. IFC said it has helped the Bank of Shanghai improve its corporate governance, portfolio quality and risk management since becoming a strategic partner.
"We believe that our role as a long-term investor has now been fulfilled successfully and together with Bank of Shanghai we are looking for a new partner that can add more value to Bank of Shanghai's future development," IFC said in a reply to a Shanghai Daily inquiry.
The Herald also said HSBC is considering selling its 8 percent stake in the Bank of Shanghai, which is seeking a public offering. HSBC said yesterday that it doesn't comment on market speculation. While the Bank of Shanghai also said the HSBC stake selling is speculation.
Beijing-based CIC is seeking more investment options. CIC helps manage China's US$3.2 trillion in foreign exchange reserves.