UCB TO ACQUIRE CHINESE BUSINESS BANK
 SAN FRANCISCO – 04/30/07 – United Commercial Bank has said it plans to acquire the Shanghai-based Business Development Bank (BDB) for $205 million in cash.
According to holding company UCBH Holdings Inc., the acquisition of 100% of the Chinese bank marks the latest foray by a foreign bank into that country’s expanding banking sector.
The transaction, which is still pending Chinese and US regulatory approvals, is expected to close in the fourth quarter of this year, the statement said. If approved, the deal will make UCB the first US community bank to buy a bank operating in China.
Shanghai-headquartered BDB was established in 1992 as China's first wholly foreign-owned bank, has offices in Beijing, Guangzhou, and Shantou.
The small bank, which focuses on China's booming small- and medium-sized enterprises (SMEs), reportedly has $217.2 million in assets, $188 million in loans, and $25.5 million in deposits as of Dec. 31.
BDB will operate as a wholly-owned subsidiary of United Commercial Bank under the UCB brand, UCBH said.
San Francisco-based UCB “is anticipating significant growth in its commercial banking and trade finance business after the acquisition as his bank is targeting U.S. companies doing business in China,” according to the media statement announcing the acquisition.
Europe's leading development finance institution DEG and Thailand-based global conglomerate Chroen Pokphand Group have stakes in BDB, which is licensed to conduct foreign-currency business with foreign-invested enterprises and individuals, as well as domestic enterprises and individuals in China.
The privately owned bank is also allowed to conduct local-currency business with foreign-invested enterprises and foreign individuals in China.
The Chinese bank will apply for an expanded license to conduct a full range of local-currency business, UCBH's statement said.
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