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ATAHK reads from the Bloomberg News on April 30 that Industrial & Commercial Bank of China Ltd. said it will buy Turkey’s Tekstil Bankasi AS as the biggest Chinese lender seeks to counter a credit slowdown at home that led to the weakest profit growth in almost five years.
Net income for the first quarter gained 6.6 percent to 73.3 billion yuan ($11.7 billion), the Beijing-based lender said in a statement yesterday. That compared with the 74.7 billion-yuan median of eight estimates compiled by Bloomberg. The company said it will buy 76 percent of Tekstilbank, as the Turkish lender is known, from its parent for $316 million.
The purchase extends state-owned ICBC’s reach overseas as China seeks to increase acceptance of the yuan globally. ICBC Chairman Jiang Jianqing is struggling to continue eight years of double-digit profit growth as authorities step up efforts to curb credit expansion and introduce more competition into the government-controlled banking system.
“They have to go abroad to expand their global reach,” Steven Chan, a Hong Kong-based analyst at Maybank Kim Eng Securities Pte., said by telephone. “That may not help with earnings growth immediately, but it will help with overall synergies on global business.”
Shares of ICBC fell 1.5 percent to HK$4.60 as of 2:43 p.m. in Hong Kong, extending the drop this year to 12.2 percent. The stock is valued at about 4.6 times estimated profit, compared with 10.3 times for the benchmark Hang Seng Index.
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