Hang Seng Bank, the Hong Kong-based lender, is planning to increase its stake in China’s Industrial Bank (CIB) – reported Bloomberg. For the first time in more than a decade, due to a significant decline in fee income and contraction of economy, Hang Seng has reported a 29% drop in its first half profit.
On the contrary, the bank’s profit increased by 2.3% in China, during the same period. As a result, Margaret Leung, CEO, said that Hang Seng, which has pumped approximately $1.1 billion in China so far, intends to raise its 12.8% stake in CIB, reported the newspaper.
The Hong Kong bank is also looking to expand its operations in the world’s thrid most populous country through acquisitions. This February, it bought a 20% stake in China’s Yantai City Commercial Bank for CNY800 million. It is also considering entering into deals with asset managers, insurers and securities firms, hoping to attract wealthy customers, reported the newspaper.
Ms. Leung added: We will be extremely pleased to add to our stake if given the opportunity. At the same time, we want to invest in other financial institutions. We need to use our strength in wealth management to differentiate ourselves from the domestic banks. There’s no way we can compete with them in size and branch networks.”
