China’s Bank of Communications (BOCOM), the country’s fifth-largest commercial bank by assets, has agreed to buy a controlling stake in Brazil’s Banco BBM, the latest in a string of overseas acquisitions by Chinese banks and brokerages.
BOCOM said it would pay R$525m ($173m) in cash for an 80 per cent stake in unlisted Banco BBM, based on the bank’s book value of R$576m. BOCOM had assets totalling $1.1tn at the end of March.
Although it is the first overseas acquisition for BOCOM, Chinese financial institutions are not opposed to snapping up assets abroad, having spent a total of $4.8bn on 30 overseas deals in 2014, following $5.1bn in deals in 2013.
Most have aimed at positioning Chinese lenders to service Chinese corporate clients overseas. China is Brazil’s largest trading partner and a major importer of Brazilian soy-beans and iron ore.
The Bocom deal came as Li Keqiang, Chinese premier, met with Brazil’s President Dilma Rousseff as part of a tour of Brazil, Colombia, Peru and Chile. At a joint press conference, Mr Li and Ms Rousseff announced more than $53bn worth of trade and investment between the two countries.
Source: Wall Street Journal