WASHINGTON, Nov 19 (Reuters) - U.S. regulators blocked the Chinese bank Minsheng from acquiring United Commercial Bank in a deal that could have saved $1.7 billion in taxpayers’ money and insurance, Financial Times reported on Thursday, citing people familiar with the matter.
Minsheng Banking Corp (600016.SS) had asked the Federal Reserve for permission to acquire UCB, but the application was not approved before the struggling California-based lender had to be seized two weeks ago by the Federal Deposit Insurance Corporation, the report said.
The Fed had warned it could not approve Minsheng’s application quickly because it was required by law to closely consider Chinese regulatory practices, the newspaper said.
The FDIC decided it could not wait before stepping in to protect depositors, FT reported.
An FDIC spokesman had no comment on the FT report.
The seizure of UCB is expected to cost the FDIC’s insurance fund about $1.4 billion and $298.7 million in government bailout funds.
The seizure was also expected to cost Minsheng $120 million for the 9.9 percent stake it had in UCBH Holdings Inc UCBH.O, the parent of UCB.
UCB’s banking operations were acquired by East West Bancorp Inc.
UCB had 63 U.S. branches, a branch in Hong Kong and a subsidiary, UCB-China, in Shanghai. (Reporting by JoAnne Allen; Editing by Bernard Orr)