Construction Bank, Bank of America start leasing JV
HONG KONG, Dec 28 (Reuters) - China Construction Bank (0939.HK) and Bank of America (BAC.N) have set up a $615 million financial leasing venture, among the first major Sino-foreign ventures to start up formally in the nascent sector.
Bank of America, which two years ago paid $3 billion for a stake in China's top property lender and is now an 8.19-percent shareholder, owns 24.9 percent of the 4.5 billion yuan ($615 million) venture and its partner the remainder, as agreed earlier, they said in a statement on Friday.
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Construction Bank, like rivals Industrial and Commercial Bank of China (1398.HK) (601398.SS) and Bank of Communications (3328.HK) (601328.SS), won regulatory approval last quarter to set up the country's first leasing ventures.
The country's lenders are now making forays into financial leasing as part of efforts to expand beyond plain-vanilla banking services, a campaign that has seen the biggest industry players diversifying into insurance, securities, trusts, and asset management.
Bank of America's venture will focus on leasing equipment and facilities to China's power generation and transmission and rail industries, and eventually also extend and obtain loans, sell leased items, and offer consulting, among other services.
Business transactions in China's burgeoning equipment leasing arena totalled $4.25 billion in 2005, less than 1 percent that of the United States's and 2 percent Japan's, versus a global $600 billion, state media have reported.
($1=7.317 Yuan)
(Reporting by Edwin Chan)
((eddie.chan@reuters.com; +852 2843 6345; Reuters Messaging: eddie.chan.reuters.com@reuters.net)) Keywords: CONSTRUCTIONBANK BANKOFAMERICA/
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