Smaller Banks Expand Stakes in Financial Leasing Firms

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Smaller lenders in China are making a concerted drive to increase their investments in financial lease firms.

On 20 November the Shanghai branch of the China Banking and Insurance Regulatory Commission (CBIRC) gave its approval to Shanghai Rural Commercial Bank to increases its stake in Yangtze United Financial Leasing Co., Ltd. (长江联合金融租赁有限公司) by 450 million shares, for an investment sum of no more than 611.1 million yuan.

Following the investment Shanghai Rural Commercial will have a controlling stake of 51.02% in Yangtze United Financial Leasing Co., Ltd.

The Shanghai branch of CBIRC said the investment must be made using Shanghai Rural Commercial’s own capital, while the bank must also strengthen its investment equity management, formulate an investment development strategy and properly perform consolidation of accounts.

According to Yangtze United official website its registered capital is currently 2 billion yuan, with Shanghai Rural Commercial holding a 40% equity stake.

The approval comes just after the Ningbo office of CBIRC gave its approval on 9 October for Bank of Ningbo to increase its capital in Maxwealth Financial Leasing Co., Ltd. (永赢金融租赁有限公司) by 1 billion yuan, lifting registered capital to 3 billion yuan.

On 25 September the CBIRC office of Inner Mongolia announced that it had given initial approval to the establishment of a financial leasing company in Baotou Municipality with registered capital of 3 billion yuan, with potential investors including Norinco (中国兵器工业集团公司), Inner Mongolia Power (Group) Co., Ltd., and Inner Mongolia Jiaotong Investment Co., Ltd.

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