Chinese bank negotiates foreign flotation

Bank of America, UBS, and Deutsche Bank are among up to 10 potential foreign partners being courted by the Bank of China, one of China’s largest state-owned banks, ahead of the bank’s listing on foreign exchanges.

This announcement Thursday by the Bank of China came after months of refusals to disclose exactly who it has been negotiating with for as long as a year and is seen in some quarters as an attempt to speed up the talks.

The banks initial public offering is expected to come as early as later this year.

The China Construction Bank had been expected to list before Bank of China, but CCB’s chairman recently left amid scandal, which may delay their IPO.

The listing of both banks in foreign markets is part of China’s efforts to reform its financial system.

While both banks have undergone restructuring in the past year, both have also been scandal-ridden, as well as the focus of questions about their ability to improve their operations.

While foreign banks might get seats on the Chinese banks’ boards of directors, they are not likely to achieve management control of these huge banks in spite of their pumping of billions of dollars into them.

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