BEIJING, Dec 26 (Reuters): Singapore's state-run investment agency Temasek Holdings has won approval from China's central bank to buy a 5 per cent stake in Bank of China, half what it had sought, the Caijing business magazine said in its latest edition published today.
Temasek agreed in September to buy 10 per cent of China's third-largest lender but the bank's biggest shareholder, Central Huijin Investment Co, blocked the deal amid concerns Beijing has been selling off chunks of its banks to foreigners too cheaply.
"Temasek's investment in Bank of China has won approval, but the size of the investment has been reduced to 5 per cent from the original 10 per cent," the semi-official Caijing said, citing unnamed government sources.
Under the approved plan, Temasek would buy 5 per cent in new shares from Bank of China, scrapping its earlier bid to buy another 5 per cent from Central Huijin, the central bank's investment agency that manages foreign currency funds injected into the nation's big state banks.
The bank had already won approval to sell a 10 per cent stake to a consortium led by Royal Bank of Scotland for $3.1 billion. The other strategic investors are UBS and Manila-based Asian Development Bank.
Temasek already owns 6 per cent of China Construction Bank Corp, the second-biggest bank, and 5 per cent of privately owned Minsheng Banking Corp.