Who’s Bad

28 Aug 2015 By Peter Thal Larsen Follow @Peter_TL

Cinda Asset Management started as a dump for dodgy bank loans but expanded into funds, insurance and brokerage. Now it’s looking to swallow Hong Kong lender Nanyang for around $8.8 bln. At more than twice its own book value, Cinda needs many benefits to make the deal stack up.

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China Cinda Asset Management on Aug. 26 said it had submitted an application to bid for Nanyang Commercial Bank, which is owned by Bank of China’s Hong Kong unit.

Cinda, one of four state-backed bad debt managers in China, is the sole bidder for NCB.

Bank of China put the business up for sale earlier this year with a reserve price of HK$68 billion ($8.8 billion). Under the terms of the sale, which is being managed by the Beijing Financial Assets Exchange, the auction was open only to non-banking financial institutions which are controlled by the Chinese government.

At the end of 2014, Nanyang’s book value was around $4.5 billion. The bank has 42 branches in Hong Kong, 38 in mainland China, and one in San Francisco.

Cinda on Aug. 27 reported net income of 8.23 billion yuan ($1.29 billion) for the first half of the year, an increase of 53 percent on the same period of 2014.

By mid-morning on Aug. 28, Cinda shares were up almost 5 percent at HK$2.98.

Context News

China Cinda Asset Management on Aug. 26 said it had submitted an application to bid for Nanyang Commercial Bank, which is owned by Bank of China’s Hong Kong unit.

Cinda, one of four state-backed bad debt managers in China, is the sole bidder for NCB.

At the end of 2014, Nanyang’s book value was around $4.5 billion. The bank has 42 branches in Hong Kong, 38 in mainland China, and one in San Francisco.

Cinda on Aug. 27 reported net income of 8.23 billion yuan ($1.29 billion) for the first half of the year, an increase of 53 percent on the same period of 2014.

By mid-morning on Aug. 28, Cinda shares were up almost 5 percent at HK$2.98.

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