Jan 24, 2011
The Industrial and Commercial Bank of China (ICBC) has agreed on a deal to take over a US retail bank, at a time when American financial institutions are falling one after another.
The ICBC will buy 80 percent of the US unit of Bank of East Asia Ltd. for USD 140 million, the two companies announced in an e-mailed statement on Sunday.
The move, which is yet to be approved by US regulators, could be a positive step for the arrival of Chinese banks to the US retail market.
The deal was signed during President Hu Jintao’s state visit to the US.
The acquisition “will enable us to establish a solid presence in the US,” ICBC Chairman Jiang Jianqing said in the statement.
“With this commercial bank license in the US, ICBC can further expand its retail banking business and operating network across the nation.”
In January, ICBC opened its first branch in Paris, and is doubling its presence in Europe through branch openings in major cities.
Over 10 percent of the 7,760 banks in the US are in financial trouble and despite receiving a total of USD 4.2 billion in bailout cash, 98 US banks are still at risk of failing.
In 2010, 157 US banks failed and so far this year seven banks have failed.