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1. Citigroup buys bank stake

2. Ryoden to focus on urban redevelopment

1. Citigroup buys bank stake
Elaine Chan, The Standard 3 January 2003

Citigroup, the world's biggest financial services group, will pay 600 million yuan (HK$565.56 million) to buy a 5 per cent stake in Shanghai Pudong Development Bank.

The purchase is the ``first stage equity investment'' by the United States bank, which has an option to raise the stake to 10 per cent.

``We will be selling more shares to Citigroup to enhance our strategic alliance,'' Pudong Bank spokesman Shen Shi said yesterday after the Chinese lender announced the 5 per cent purchase.

Citigroup joins others such as International Finance Corp (IFC) and HSBC Holdings in a growing list of foreign banks buying into domestic Chinese banks ahead of 2006 when retail banking opens to foreigners.

Citigroup will buy a 3 per cent shareholding in Pudong Bank from Shanghai State-owned Assets Operation and another 2 per cent from Jiushi Co, both of which are owned by the Shanghai government.

``This alliance with Shanghai Pudong Development Bank marks an important step in our efforts to expand our breadth of services in China,'' Citigroup's Asia corporate and investment bank division CEO Stephen Long said yesterday.

Citigroup said it would develop a credit card business with Pudong Bank to capitalise on Shanghai's rising affluence, and would take a seat on the board. Citigroup chairman Sanford Weill said: ``China is a top priority for Citigroup. We look forward to a long-term, mutually beneficial relationship.''

Shanghai Pudong Development Bank has assets valued at US$30 billion (HK$234 billion) and a national network of 270 outlets.

Set up in 1993, the bank is one of the many younger financial institutions established in the last decade that inspire more confidence, shouldering less political burden of lending to ailing state firms.

Meanwhile, the 21st Century Business Herald newspaper reported that HSBC was in talks to take a 50 per cent stake in Guangzhou City Commercial Bank and an unspecified stake in Shenzhen City Commercial Bank. HSBC took an 8 per cent stake in the Bank of Shanghai in 2001.

HSBC yesterday said it did not comment on rumours.

Guangzhou City Commercial featured in a controversial article in the December 5 issue of China's reputable Caijing magazine, which alleged that two sub-branches of the bank acted as private piggy banks for a Guangdong company that stole a total of 15 billion yuan in bank funds.

China allows foreign investors to take up to 15 per cent in city commercial banks and 25 per cent of nationwide banks.

The IFC has bought 1 per cent of Xian Commercial Bank and 7 per cent of Bank of Shanghai, as well as 15 per cent of Nanjing City Commercial Bank. Bank of Nova Scotia bought 1 per cent of Xian Commercial Bank and Asian Development Bank has 3.3 per cent of Everbright Bank of China.

2. Ryoden to focus on urban redevelopment
MAY CHAN, SCMP 3 January 2003

Ryoden Development says it sees better opportunities in urban redevelopment than greenfield projects and has no plan to buy land in the near future.

Executive director Tony Leung Ka-tung said the firm would concentrate on urban redevelopments such as its Merit Place project in Tai Po.

"There is still room for small to medium residential developments in the local market. Merit Place is selling quite well. Only 23 of the 75 units are left," Mr Leung said.

The average price of Merit Place is HK$2,153 per square foot, about 10 per cent lower than other developments in the area, and the units measure about 650 sq ft.

Mr Leung said the sale of Merit Place had yielded HK$81 million and he expected the 19 remaining units to generate more than HK$30 million.

He said the group was set to release units for sale in the third phase of its commercial-residential project in Shanghai and he expected to see a price rise of more than 10 per cent compared with phase one units.

The Shanghai Gateway Plaza project is a joint venture between Ryoden, Shun Hing China Investment and Simatelex Manufactory Co. Ryoden has invested 400 million yuan (about HK$374.84 million) in the venture.