The third largest UK bank, Barclays PLC, yesterday denied rumors it plans to buy a stake in China Development Bank (CDB) but said it expects a commodities deal with the bank within days.
"We met the top management of CDB on Wednesday and decided to strengthen our cooperation in developing commodities, business in Africa, asset management, training and cooperation under the framework of Basel II," Robert Diamond, president of Barclays PLC, said. "We're going to see a commodity transaction in a few days."
CDB and Barclays signed a five-year strategic alliance on commodities in October, initially focused on energy, metals and emissions. The alliance is part of the two banks' strategic partnership fixed in July when CDB paid 2.2 billion euros for a 3.1 percent stake in Barclays to become one of its largest shareholders.
"We have a very sound strategic cooperation with CDB, but we don't have any plan to buy a stake in the bank," Diamond said.
Barclays focuses on wholesale and investment banking in China through its subsidiaries Barclays Capital and Barclays Global Investors.
"Our business in China has maintained an annual compound growth rate of 40 percent in the past five years, and we expect to see a further increase of no less than 15 to 25 percent for this year," Diamond said.
The British lender said it's still interested in retail banking in China, but under current regulations it cannot take a major stake in a Chinese bank.
"We would like to be an active investor rather than a minor stakeholder," Diamond said.
This year will see more merger and acquisition opportunities at better prices, Diamond said. Barclays withdrew from a takeover bid for ABN Amro last year, but said it's still watching for opportunities in retail and commercial banking.
"Picking up market share in the US is our priority for 2008. But we're more interested in the US investment banking sector than the retail banking sector, as the latter, a consolidated market dominated by five to six big banks, is not likely to see high growth."
(China Daily February 29, 2008)