China's ICBC says will buy Indonesian bank

BEIJING (AP): The Industrial and Commercial Bank of China, which had the largest-ever IPO in October, said Monday it had agreed to acquire the small Bank Halim of Indonesia in its first such overseas purchase. ICBC said it would buy 90 percent of Bank Halim, with an option to buy the remaining 10 percent from shareholders in three years. No value of the deal was given. "It is the first time that ICBC has taken over a foreign bank ... and should give the bank experience to expand into international financial markets," ICBC said on its website. ICBC made history in October by making the first ever simultaneous Hong Kong and Shanghai listing and raising US$21.2 billion in the world's largest IPO, surpassing the record $18.4 billion raised by the NTT DoCoMo Inc. IPO in 1998. The Bank Halim deal still has to be approved by regulatory authorities in both countries. The privately held Bank Halim is based in Surabaya, on Indonesia's main island of Java, and with assets of $50 million is much smaller than ICBC, which has its headquarters in Beijing. The Chinese bank, which is the largest company by capitalization on China's stock markets, said that by the end of June it had total assets of more than 7 trillion yuan ($897 billion), with more than 2.5 million corporate and 150 million individual clients. Despite a history of bad loans and poor management, investors snapped up ICBC's IPO and have bought its shares since, seeing it as a good way to profit off of the country's roaring economic growth. ICBC's share price has risen steadily since the listing, and then jumped 30 percent in the last week of the year. It was the third of China's so-called Big Four banks to list sell overseas IPOs. China Construction Bank Corp. was the first in 2005 when it listed a $9.2 billion. Bank of China Ltd. followed in June with a US$11.2 billion offering. (***)