BEIJING, Nov. 1 (Xinhua) -- Standard and Poor's ratings services said on
Thursday that its rating of the Industrial and Commercial Bank of China Ltd.
(ICBC) was not affected by the lender's plan to acquire a 20 percent stake in a
South African bank.
ICBC planned to pay about 5.46 billion U.S. dollars in cash to acquire the
stake in Standard Bank Group Ltd. (SBG), South Africa's largest financial
services group.
China's largest commercial bank will acquire and subscribe to equal amounts
of outstanding ordinary and new shares. The acquisition, which requires
shareholder and regulatory approval, should be completed by June 30, 2008.
The impact on ICBC's credit profile is likely to be neutral over the
short-to-medium term, said Standard and Poor's.
According to the acquisition plan, ICBC will have no management control over the
acquired bank, despite becoming SBG's single largest shareholder. ICBC,
however, should benefit because the acquisition will give the bank better access
to African markets where its domestic clients are increasingly investing, said
Standard and Poor's.
According to the rating organization, ICBC's capitalization will remain
in line with the current rating. Its profitability is likely to benefit given
the target bank's satisfactory financial performance in recent years.
