The Commonwealth Bank of Australia will buy a stake in Hangzhou City Commercial Bank for 100 million Australian dollars (US$54 million) in a strategic agreement, its second equity investment in Chinese banks.
The Australian lender's purchase of 19.9 percent in Hangzhou Bank, a city-level commercial bank in the capital of Zhejiang Province, is pending approval from the China Banking Regulatory Commission.
"As part of the strategic cooperation, Hangzhou Bank will receive technical assistance in key areas through a structured capability transfer program," said Commonwealth Bank in a statement yesterday.
Under current banking regulation on China's mainland, a single overseas financial institution is allowed to purchase up to a 20 percent stake in a Chinese bank.
Hangzhou has a population of more than 6 million and was named as the top investment location on the Chinese mainland by Forbes magazine recently.
The Australian bank also announced that it has purchased Macquarie Securitisation Shanghai Co, a Shanghai-based mortgage broking business, from Macquarie Bank.
"This investment will enhance our skills and knowledge in mortgage origination and add value to our partnerships with Hangzhou City Commercial Bank and Jinan City Commercial Bank," said the statement.
The Commonwealth Bank purchased up to a fifth of the stake in Jinan City Commercial Bank last year.