On December 27, 2007, the Industrial and Commercial Bank of China Limited ('ICBC') announced in Beijing that ICBC has come to an agreement on the purchase of Fortis Bank's 8.23% ordinary shares of the Industrial and Commercial Bank of China (Asia) Limited ('ICBC Asia')and relevant warrants. According to the agreement, ICBC will pay Fortis Bank about 1.92 billion Hong Kong dollars of the total consideration for Fortis Bank's ordinary shares and warrants of ICBC Asia. After completing the transaction, ICBC will hold 71.21% existing issued shares of ICBC Asia.
According to reports, ICBC Asia is a holding subsidiary bank of ICBC and is the flagship in the development of offshore business. The capital adequacy ratio was 13%, the return on average assets was 1.0%, the average rate of return on equity was 13.3%, the non-performing loan ratio was 0.7% and the cost to income ratio was 35.9%. In 2007, ICBC Asia achieves the medium-term pretax profit of 854 million Hong Kong dollars and after-tax profit of 719 million Hong Kong dollars, year on year increase to 28%. And all the indications are maintaining a great developing trend.
The chairman of ICBC Jiang Jianqing expressed that ICBC Asia is an important part for ICBC's strategic objectives to build world-class commercial banks. At present, all the business of ICBC Asia has a good developing trend and its good operating performance and management skills has been widely recognized by the capital markets. Through the purchase of ICBC Asia's stake held by Fortis Bank, we can see the tremendous confidence in ICBC Asia and future developments of the banking market in Hong Kong.
According to reports, the ultimate completion of the transaction is also subject to the approvals of China Banking Regulatory Commission and relevant supervising departments.
