October 14, 2009 / 7:38 AM / 10 years ago

UPDATE 1-China Minsheng Bank cannot take control of UCBH -source

BEIJING, Oct 14 (Reuters) - Minsheng Bank (600016.SS), China’s first listed non-state lender, cannot take a controlling stake in U.S. bank UCBH Holdings Inc UCBH.O, because of regulatory limitations, a source told Reuters on Wednesday.

“The United States regulatory authorities have restrictions; it is impossible for us to buy a controlling stake in a U.S. bank,” said the source, who requested anonymity due to the sensitive nature of any possible investment.

The bank’s board was also split over whether it would increase its 9.9 percent stake in the troubled U.S. bank, the source said.

China has encountered difficulties making big acquisitions overseas because of regulatory hurdles. [ID:nPEK371939]

Shares of UCBH Holdings jumped 64 percent earlier this month following a media report of a possible investment by Minsheng Bank.

Analysts have said an investment by the Chinese bank would be a beneficial for UCBH, which mainly caters to the Chinese-American community.

Chairman Dong Wenbiao said in March that the Shanghai-listed bank planned to lift its stake in California-based UCBH Holdings, the parent of United Commercial Bank, to 19 percent. [ID:nHKG263137]

UCBH, which is operating under an enforcement order from the Federal Deposit Insurance Corp and the California Department of Financial Institutions, said last month that two top executives had resigned after a board audit panel raised concerns about the actions of several current and former officers. ($=6.83 yuan) (Reporting by Xie Heng; Writing by Kirby Chien; Editing by Chris Lewis)

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