August 30, 2017 / 1:40 PM / a year ago

China's ICBC will follow cabinet rules on overseas M&A

BEIJING (Reuters) - The world’s largest lender Industrial and Commercial Bank of China (ICBC) (601398.SS) said on Wednesday it would follow restrictions set by the country’s cabinet on overseas acquisitions.

FILE PHOTO: People walk past the headquarters of the ICBC bank in Beijing, China June 12, 2017. REUTERS/Thomas Peter/File Photo

Earlier this month, China’s State Council issued new guidelines to regulate overseas investment as the government looks to support capable firms investing overseas while restricting or banning deals in certain sectors.

“The State Council’s document has made it clear which (areas of overseas investment) are encouraged and which areas are restricted,” Yi Huiman, chairman of ICBC, told Reuters on the sidelines of an earnings press conference.

“For overseas acquisitions in the areas under restriction, we will implement the government’s requirements. But for overseas acquisitions that are being encouraged, our financing is normal,” Yi added.

ICBC said 9 pct of its operating income and 10.9 percent of its pretax profit came from overseas in a half-year earnings report published on Wednesday on the Hong Kong stock exchange.

“Credit extension in our overseas financing programme in general is very normal,” said Yi.

China’s banking regulator earlier this year targeted for checks five of the country’s most active offshore buyers, including Dalian Wanda Group, HNA, Anbang Insurance Group and Fosun International, sources said.

Reporting by Shu Zhang and Engen Tham; Additional reporting by Matthew Miller; Editing by Mark Potter

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