China Minsheng Banking Corp. said on Monday that it could become the biggest single shareholder of UCBH Holdings in 2009 by acquiring a 20-percent stake in the American bank.

 

Minsheng will purchase shares in three phases, initially acquiring 4.9 percent of UCBH by purchasing 5.4 million shares at US$17.79 each.

 

The Chinese bank will increase its stake to 9.9 percent in 2008 and possibly to 20 percent by June 2009.

 

The deal marks the first strategic investment in a banking institution in the United States by a Chinese mainland bank, said a statement from UCBH Holdings.

 

UCBH Holdings is the holding company of United Commercial Bank, a leading bank in the US serving Chinese communities and American companies doing business in China.

 

China Minsheng's chairman Dong Weibiao said his bank thought very highly of the UCBH franchise and its management team.

 

"We welcome Minsheng as a long-term shareholder," said UCBH Holdings CEO Thomas S. Wu, adding that the partnership would allow both companies to expand their business opportunities and increase their market share.

 

On the same day, China Minsheng said it would spend 2.34 billion yuan (US$312.27 million) on buying 143 million A shares of Shaanxi International Trust and Investment Corp. (SITI), the first Chinese non-bank financial institution to go listed in 1994.

 

With a 26.6 percent stake, China Minsheng would become one of the two biggest shareholders of SITI, along with a local expressway construction company.

 

The move is expected to help China Minsheng improve its asset management and develop a full range of financial services.

 

(Xinhua News Agency October 8, 2007)