Chinese giant to buy into Bank of East Asia

INDUSTRIAL and Commercial Bank of China, the world’s top lender by market value, will pay about $140m (£87.5m) for 80 per cent of Bank of East Asia’s US unit, the two companies said yesterday.

The deal, first mentioned in a report on Friday, will require approval from regulators in China and the United States before it is able to proceed, ICBC and BEA said in separate statements posted on the Hong Kong stock exchange.

“Acquiring a controlling interest in the target bank is an important component in the bank’s globalisation strategy, and the transaction would complement the bank's overseas institutions,” ICBC said in the statement.

Bank of East Asia added that its US unit would now focus on its wholesale banking business through its branches in New York and Los Angeles.

ICBC’s buy would make it the first Chinese lender to buy into a US retail bank and is likely to be scrutinised by US regulators.