Chinese investors, who got burned investing in big European banks during the financial crisis, is going back to region but shifting their target to small, struggling finance companies, the Wall Street Journal reported.
Chinese conglomerate Fosun International Ltd. has expressed interest in Portugal’s Novo Banco, carved out of the collapsed Banco Espírito Santo SA, while Chinese insurers are looking at Italy’s Banca Monte dei Paschi di Siena SpA, which is up for sale, the newspaper said, citing unnamed sources.
“Chinese financial institutions are thoughtfully evaluating their opportunities in Europe,” Jim O’Neil, head of Bank of America Merrill Lynch’s global financial institutions group, was quoted as saying. “They have been consciously walking in the market before they take on bigger opportunities and running.”
Last year, Chinese businesses invested a combined US$3.96 billion in European financial groups, up from US$304 million in 2013, according to data provider Dealogic.
Most of those deals, which include acquisitions and stake purchases, were valued at less than US$1 billion, the newspaper said, adding that some of them are still awaiting regulatory approval.
On Monday a unit of Anbang Insurance Group Co. agreed to buy and recapitalize Vivat, the insurance arm of SNS Reaal, a financial group owned by the Dutch government.
Anbang will pay the government 150 million euros (US$170.9 million) and put in as much as 1 billion euros to boost Vivat’s capital base.
It will also assumed 552 million euros of the group’s outstanding debt, according to the Dutch Finance Ministry. The deal still needs regulatory approval.
In December, Anbang bought a small Belgian bank from Dutch insurance company Delta Lloyd NV. It also aims to complete the acquisition of Belgian insurance company Fidea in the next few months.
Industrial & Commercial Bank of China Ltd. recently acquired a majority stake in Standard Bank Group Ltd.’s London-based global markets business in a cut-price deal.
In March last year, Fosun paid 98.5 million euros to become the second-largest shareholder in German lender BHF-Bank.
The recent flurry of deals has sparked hope among bank regulators and investors that a long-awaited influx of Chinese investments into Europe’s battered financial sector is about to begin, the report said.
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