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| Bank of China buys into Rothschild venture |
The
Bank of China, the world’s fifth largest bank, is to buy a 20-percent
stake in La Compagnie Financiere Edmond de Rothschild for 236 million
euros (US$342 million).
 |
Bank of |
Compagnie Financiere Edmond de Rothschild, the French
fund-management unit of privately-held bank LCF Rothschild Group, and
Beijing-based Bank of China are to begin an asset-management and
private-banking venture to sell Rothschild's financial products through
the Chinese lender's 10,800 branches, Bloomberg News said.
"Chinese banks are performing in a marvelous way in the current
maelstrom that is shaking the global finance," Compagnie Financiere
Edmond de Rothschild Chairman Michel Cicurel said at a press conference
in Paris.
"Bank of China is perfectly positioned to accompany China's growing
middle class" as the lender has more than 20 million accounts of
individuals with at least US$100,000, he said.
Compagnie Financiere Edmond de Rothschild "had no need for cash" as it completed the deal, Cicurel said.
Bank of China is buying a 10 percent stake from Caisse de Depot et
Placement du Quebec, a Canadian pension fund, and the rest will be new
shares.
Benjamin de Rothschild, chairman of the supervisory board, will keep
a 75 percent stake in LCF Edmond de Rothschild and Bank of China will
be the second-largest shareholder in the asset-management company.
The firm managed 29.6 billion euros in assets at the end of 2007.
Bank of China "expects that the transaction will provide a
reasonable return on investment," the Chinese lender said in a
statement to Hong Kong's stock exchange.
"The bank can further explore opportunities in European and other emerging markets."
Bank of China Vice President Zhu Min also said the company wasn't ready to acquire a major United States investment bank.
While "very volatile markets present opportunities to buy others, I
don't think we have the capability to do that today," Zhu told
reporters in Paris.
The bank is still looking at its domestic market for expansion, he said.
Compagnie Financiere Edmond de Rothschild, which started operations
in Shanghai two years ago, is one of the latest international fund
managers to start operations in the country to tap growing personal
incomes and sovereign wealth funds.
(Shanghai Daily September 20, 2008)