The Industrial and Commercial Bank of China (ICBC) said Friday it had signed an agreement with financial services group Fortis to purchase its Hong Kong-based subsidiary Fortis Bank.

The purchase price was 1.05 times Fortis Bank's net assets, and would be paid in cash and with a 9 per cent stake in ICBC (Asia), the Hong Kong flagship of the acquirer, China's largest State-owned commercial bank.

The ICBC did not disclose the price, but said total assets of ICBC (Asia), which now owns Fortis Bank, increased to HK$97.3 billion (US$12.4 billion) from HK$66.2 billion (US$8.5 billion) after the purchase.

That makes ICBC (Aais) the special administrative region's sixth largest bank in terms of assets, instead of the tenth previously.

Zhu Qi, managing director of ICBC (Asia), said Fortis Bank's operations, mainly in retail and commercial banking, are complementary to his bank which has a strong presence in corporate banking.

"The acquisition of Fortis Bank will further boost our size and significantly enlarge our network of branches,"  he said.

The number of branches at Zhu's bank will grow to 42 from 20, five commercial banking centres designed for small and medium-sized enterprises will be added, while the number of its retail clients will jump to nearly 120,000 from 40,000.

The deal would boost non-interest incomes at ICBC (Asia), and enhance its lendings to small and medium-sized enterprises, Zhu said.

It would also significantly reduce the bank's lending/deposits ratio, he noted. The bank's total deposits rose to HK$60 billion from HK$38 billion after the deal.

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