Hang Seng To Become Largest Shareholder At Yantai Bank

Hang Seng Bank signed an agreement to subscribe for 20% of the enlarged share capital of Yantai City Commercial Bank in China for a total consideration of RMB800 million.

Upon successful completion of the share subscription, Hang Seng will become the largest shareholder of Yantai City Bank, which serves the rapidly developing Bohai Economic Rim region. The share subscription and the terms of the agreement are subject to the approval of the China Banking Regulatory Commission, other relevant regulatory authorities and shareholders of Yantai City Bank. Hang Seng will have the right to nominate directors and to make recommendations for various senior management positions, including Vice President and department heads, at Yantai City Bank.

The strategic investment in Yantai City Bank will complement Hang Seng's existing foothold on the Mainland as the majority of Hang Seng's outlets are situated in the Pearl River Delta and Yangtze River Delta regions. Following this latest investment, Hang Seng's total investment on the Mainland will increase to about RMB7.3 billion, including the capital injected into its wholly owned subsidiary, Hang Seng Bank (China) Limited, in May last year.

Hong Kong-listed Wing Lung Bank will also take a 4.99% stake in Yantai City Bank, bringing the total foreign shareholding in the Mainland bank to 24.99%. Under current Mainland regulations, the maximum aggregate shareholding by all foreign investors in a domestic bank must not exceed 25%.