BOC Hong Kong (Holdings) Ltd. (02388.HK) is planning to divest its equity interest in Nanyang Commercial Bank Ltd. with a view to shifting its focus to Southeast Asia.
BOCHK and its parent, Bank of China Ltd. (03988.HK), have been reviewing their strategies and the feasibility of restructuring their assets.
That could result in the subsidiary focusing on business in Hong Kong and countries in the Association of Southeast Asian Nations (ASEAN), the Hong Kong Economic Journal reported Friday.
BOCHK will apply to the Ministry of Finance and related authorities regarding its divestment of Nanyang Bank at an appropriate time, a joint statement issued Thursday by the two lenders said.
The potential restructuring and sale of equity in Nanyang Bank are in line with the long-term strategies of both the parent and the bank, BOCHK vice chairman and chief executive Yue Yi said.
“It will be beneficial to the enhancement of the group’s allocation of resources,” Yue said.
He said the central government’s recent “one belt, one road” strategy envisages a closer relationship with China’s ASEAN allies.
The Hong Kong flagship requested initial bids for its stake in Nanyang Bank in April, targeting a valuation of US$5 billion.
Bank of Beijing Co. Ltd. (601169.CN) and China Life Insurance Co., Ltd. (02628.HK) have reportedly expressed interest.
Analysts expect BOCHK to use most of the proceeds from the divestment to replenish capital and acquire ASEAN assets from its parent.
Translation by Vey Wong
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