Beijing, April 8, 2005 — The International
Finance Corporation, the private sector arm of the World Bank Group, announced
today that its board has approved plans for IFC to purchase a 5 percent
equity stake in Bank of Beijing. IFC‘s support comes in coordination with
an agreement by ING Groep N.V.’s wholly owned subsidiary ING Bank to acquire
up to a 19.9 percent holding as part of a broader strategic alliance with
BOB. This combined acquisition forms part of an issue of new shares by
Bank of Beijing to domestic and foreign investors to raise up to RMB 2.2
billion ($266 million).
BOB is the second largest city commercial bank in China and the third largest
bank in Beijing, employing over 3,600 staff. It serves retail and corporate
clients through 118 branches. It has a network of 291 ATMs and a fast-growing
e-banking business. At the end of 2004, Bank of Beijing had total assets
of RMB209 billion ($25 bn).
Mr. Jyrki Koskelo, IFC’s director for global financial markets said “IFC’s
participation in this project is part of a strategy to assist ongoing reform
and restructuring of China’s financial sector. Our investment in selected
banks will help them achieve higher standards and begin the transformation
toward becoming model institutions.”
“IFC’s support for this transaction opens a new phase in a relationship
with Bank of Beijing that spans nearly a decade,” IFC Associate Director
Karin Finkelston said, “With a strong foundation and a new commitment
from ING Bank, Bank of Beijing is well positioned to become more competitive,
better serve clients, and set standards for the domestic banking industry.”
Mr. Yan Bingzhu, BOB’s Chairman said, “We are pleased to have IFC on
board, and look forward to working with IFC to further enhance the bank’s
corporate governance, risk management and strategic planning. This will
make the bank more competitive”.
Since BOB’s establishment, IFC has provided technical assistance to BOB
to support the development of commercially based banking operations. IFC’s
work in China’s financial sector has evolved from providing technical
assistance to becoming a major foreign investor in China’s financial sector.
IFC’s equity investment supports ING’s strategic partnership that will
contribute directly to improved management.
An investment by IFC in Bank of Beijing would mark its sixth equity investment
in China’s banking sector. IFC has equity investments in Bank of Shanghai,
Industrial Bank, Minsheng Bank, Nanjing City Commercial Bank and Xi’an
City Commercial Bank. IFC’s strategy has evolved from investing on its
own to today’s approach of investing alongside foreign strategic partners
who can contribute directly to management.
Bank of Beijing
Bank of Beijing was established in 1996 with the approval of the People’s
Bank of China. It was previously called the Beijing City Commercial Bank,
and was formed by the merger of 90 credit cooperatives in Beijing. Bank
of Beijing is presently shifting its emphasis from serving corporate customers
into retail banking to drive future growth.
International Finance Corporation
The mission of IFC (www.ifc.org)
is to promote sustainable private sector investment in developing countries,
helping to reduce poverty and improve people’s lives. IFC finances private
sector investments in the developing world, mobilizes capital in the international
financial markets, helps clients improve social and environmental sustainability,
and provides technical assistance and advice to governments and businesses.
From its founding in 1956 through FY04, IFC has committed more than $44
billion of its own funds and arranged $23 billion in syndications for 3,143
companies in 140 developing countries. IFC’s worldwide committed portfolio
as of FY04 was $17.9 billion for its own account and $5.5 billion held
for participants in loan syndications.