* Battle for Hong Kong mid-sized banks heats up
* OCBC does not have big presence in China
* China's AgBank does not have big presence outside China
* Chong Hing shares suspended ahead of merger announcement
By Denny Thomas and Saeed Azhar
Oct 23 Singapore's Oversea-Chinese Banking Corp
Ltd has joined other suitors in weighing a bid for
Wing Hang Bank Ltd, one of four Hong Kong family-run
lenders well positioned as a gateway between mainland China and
the wider world.
OCBC is weighing an offer, said a person with direct
knowledge of the matter. Agricultural Bank of China Ltd
, China's No. 4 bank, is also considering a bid for
Wing Hang, which has a market value of about $4.5 billion,
people familiar with the matter told Reuters on Wednesday.
China's economic clout and the growth of the offshore yuan
fixed-income market has made Hong Kong's mid-sized banks
attractive to foreign lenders looking for a foothold on the
mainland and for mainland Chinese banks seeking to branch out
beyond their home turf.
Other potential suitors include Australia and New Zealand
Banking Group Ltd, Australia's No. 4 bank, and
Singapore's third-biggest lender United Overseas Bank Ltd
, sources have said.
OCBC, Singapore's No. 2 lender by assets, is rated by
analysts as one of Asia's strongest bank with Tier 1 capital
ratio of 14.9 percent.
But it has lagged domestic rival DBS Group Holdings Ltd
in North Asia. DBS's Hong Kong unit, which was formed
through an acquisition, is the fifth-biggest bank in the
OCBC earned just 5 percent of its first-half core profit
from Greater China, while Singapore accounted for 61 percent.
For China's AgBank, a successful bid would be its first
major acquisition outside its home market since a
record-breaking IPO three years ago and one that could help it
catch up with other state-run rivals.
While such a purchase would put a dent in the bank's cash
pile, it would beef up its onshore and offshore deposit base.
AgBank currently has just six overseas branches. Bank of China,
by comparison, is in 36 countries.
The news comes as Chong Hing Bank Ltd, another
Hong Kong-based family-run bank, nears a deal to be bought by
Yue Xiu Group, a trading arm of China's Guangzhou city
government, Reuters reported on Wednesday.
Chong Hing's shares were suspended on Thursday pending a
Wing Hang Bank's controlling shareholders said last month
they had received preliminary offers from independent third
parties which they did not name, putting the bank in play. Hong
Kong's Fung family and BNY International Financing Corp jointly
own about 45 percent of the bank.