Xian investment focus for IFC, Scotiabank


China's banking system is open to outside investors since becoming a member of the World Trade Organization

Staff and wire reports

SHANGHAI, China -- China's Xian City Commercial Bank said Monday it will sell stakes to the World Bank's private investment arm -- the International Finance Corporation (IFC) -- and to Canada's Scotiabank.

Xian Bank said it would make a joint announcement with the IFC and Scotiabank -- Canada's fourth largest bank -- on their investments later in the day at its headquarters in Xian, capital of the central China province of Shaanxi.

"They will invest in us," a Xian Bank official told Reuters news agency, but declined to say how big the stake would be or how much it would cost.

Reports in Chinese media earlier this month quoted Xian Bank president Yin Jianhong as saying the combined IFC/Scotiabank stake would be up to 24.9 percent.

Biggest shareholder

The bank's largest shareholder now is the Xi'an municipal government with 19.4 percent.

The IFC, which invests in the private sectors of developing economies, said in a statement it would introduce its strategy on investing in Shaanxi province at a news conference in Xian on Monday.

The IFC has taken stakes in several Chinese banks, including the Bank of Shanghai and Nanjing Commercial Bank. It is also talking to China Minsheng Banking Corp. about a possible 2 percent stake.

Spokesmen for the IFC's Beijing office declined to give details of the Xian deal and officials at Scotiabank's Hong Kong and Beijing offices declined to comment.

According to Chinese media, Xian Bank will sell 500 million new shares, doubling its capital base to 1 billion renminbi ($121 million). The IFC/Scotiabank stake will come from these new shares.

Reuters contributed to this report.