Chinese lender China Construction Bank Corp (SHA:601939), or CCB, is interested in buying a European bank, or a minimum of 30% to 50% in one and has CNY100bn (USD15.8bn/EUR12.01bn) of cash available to finance a deal, according to chairman Wang Hongzhang, as cited by the Financial Times.
Hongzhang told the paper in an interview that CCB views UK, Germany or France as the most attractive markets in Europe for an investment, as it is looking to potentially buy a bank that covers all top countries and that would serve its strategy for international growth.
The executive did not wish to name any of the potential targets, but said that a suitable one should have a large enough international network instead of being focused on its home market and would not raise significant cultural issues.
Investment bankers point at European lenders partially nationalised during the financial crisis as good investment targets, the report said naming 82%-state-owned Royal Bank of Scotland Group Plc (LON:RBS) and Commerzbank AG (ETR:CBK) in which the German state holds 25%.
The British bank has a current market capitalisation of GBP17bn (USD28bn/EUR21.1bn), while the German peer is valued at EUR9bn (USD12bn).
Despite long-time predictions of analysts and bankers that Chinese companies with high market valuations could buy cheaper western lenders, there have been few such attempts, the paper said.
Guo Shuqing, former CCB chairman, said in 2011 that the price of a European bank would not be the only criteria for a potential acquisition, even if that would recommend them as good targets. With their shares declined significantly, such banks may not serve CCB’s development strategy, the Financial Times cited Shuqing as saying at the time.