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Domestic

Minsheng unfazed by UCBH losses

(China Daily/Xinhua/Agencies)
Updated: 2009-11-11 08:41

China Minsheng Banking Corp, the lender that's planning a Hong Kong stock sale, booked an 824-million-yuan ($121 million) loss on its stake in UCBH Holdings Inc, whose bank was seized by US regulators last week.

Minsheng paid 887 million yuan to accumulate a 9.9-percent stake in San Francisco-based UCBH, the Chinese lender said in a stock exchange filing yesterday. UCBH's United Commercial Bank was seized by regulators and bought by East West Bancorp, the Federal Deposit Insurance Corp said.

The seizure won't have any "major impact" on Minsheng's operations and profit because impairment charges already taken have been "relatively sufficient", the statement said.

Beijing-based Minsheng, a privately owned bank, was weighing a plan to boost its holding in UCBH to at least 50 percent, people familiar with the matter said last month. United Commercial, which serves the Chinese community in San Francisco, became the 120th US bank to fail this year as souring real estate loans sapped lenders' balance sheets.

The China Banking Regulatory Commission said on Saturday in a report that UCBH (China) was operating well with 2.67 billion yuan of total assets, 1.75 billion yuan of total liabilities and 913 million yuan of net assets.

Minsheng plans to raise as much as HK$31.54 billion ($4.07 billion) in a first-time share sale in Hong Kong, according to people with knowledge of the matter. Minsheng shares closed at 8.18 yuan yesterday at the Shanghai bourse, up 0.12%. The stock has doubled in value this year.