ICBC applies for Fed approval on BEA US unit acquisition
ICBC eyes for a US retail unit to move into small and mid-sized business loans and consumer banking.
Industrial and Commercial Bank of China Ltd. filed an application this week with the Federal Reserve Bank of New York to buy 80% of the Bank of East Asia's U.S. unit, the central bank branch reported.
State-controlled ICBC, China's largest bank by assets, agreed to buy the stake in January for $140 million in cash, in a bid to increase its U.S. presence. The bank also bought 70% of Bank of East Asia's Canadian operations in early 2010.
The acquisition is "an important component in the applicant's globalization strategy," ICBC's filing said. Since the bank's New York branch has already established a beachhead in large loans, ICBC wanted a retail unit to move into small and mid-sized business loans and consumer banking, the application said.
ICBC, based in Beijing, will acquire the stake and the two state-owned entities that own 71% of ICBC--China Investment Corp., the country's sovereign wealth fund, and Central Huijin Investment Ltd., a subsidiary of the fund--will be indirectly involved, according to the bank's application to the Fed. The bank has had a New York City branch since 2009 as well as a U.S. broker-dealer unit, according to a report in Automated Trader.
Bank of East Asia is Hong Kong's fifth-largest lender by assets. The unit it is selling is headquartered on Canal Street in New York City's Chinatown section and includes 13 branches in New York, Los Angeles, and San Francisco.