HONG KONG: Chinese financial firms are targeting purchases of distressed banking assets coming on the market in Europe, having been urged by Beijing to expand their reach beyond emerging markets.
The first Chinese purchase of a European investment bank was announced last week, with Haitong Securities agreeing to pay €379 million (RM1.65 billion) for an investment bank in austerity hit Portugal.
Banco Espirito Santo de Investimento SA is being sold by Novo Banco, the bank carved out of Banco Espirito Santo after its rescue in August.
For Haitong it’s a modest-sized deal, equivalent to just 1.5 per cent of the firm’s market value. But it demonstrates the changing character of purchases by Chinese financial firms.
These days they mostly seek controlling stakes and are now scouting Europe for opportunities.
Such deals can help Chinese banks gain European banking licences as well as expertise that can be transferred back home, whereas growth through opening overseas branches can be a slow process. Reuters