[lbo-talk] Goldman has big plans for China bank, CFO says

uvj at vsnl.com uvj at vsnl.com
Thu Jun 15 14:12:20 PDT 2006


Reuters.com

Goldman has big plans for China bank, CFO says http://today.reuters.com/investing/financeArticle.aspx?type=fundsNews2&storyID=2006-06-13T171942Z_01_N13429467_RTRIDST_0_FINANCIAL-GOLDMAN-CHINA.XML

Tue Jun 13, 2006

NEW YORK, June 13 (Reuters) - Goldman Sachs Group Inc.'s (GS.N: Quote, Profile, Research) investment in Industrial and Commercial Bank of China last month was the first step toward building a key strategic partnership in that country, Chief Financial Officer David Viniar said on Tuesday.

In April, Goldman led a group of buyers to acquire an 8.9 percent stake in ICBC, China's biggest bank, for $3.8 billion. The deal was the largest ever one-off investment by foreign investors in China's financial sector, which is in high demand from global investors eager to tap into the region's rapidly growing economy.

"It is a private equity investment, where we are very happy with ICBC," Viniar said. "We actually view this as a very important long-term strategic relationship."

Viniar said Goldman has sent a number of executives to help introduce the firm's risk management expertise to ICBC. The Chinese bank, meanwhile, is introducing Goldman executives to clients "and opening doors that we could not open up ourselves," he said.

Goldman is already one of the more active Wall Street banks in China, advising on the $11.2 billion IPO of Bank of China Ltd. (3988.HK: Quote, Profile, Research).

ICBC is planning an estimated $12 billion initial public offering later this year.

Viniar said said the carrying value of its 7 percent ICBC stake at the end of May was $2.6 billion, including $1.65 billion attributable to investment funds managed by Goldman Sachs.

China's government is trying to shore up a banking sector marred in the past by mountains of bad loans, opening the door to foreign investors. The Goldman group includes American Express Co. (AXP.N: Quote, Profile, Research) and Allianz AG Holding (ALVG.DE: Quote, Profile, Research).

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