What Secret Do Global Banks Know about Chinese Banks?

[marmar]

What Secret Do Global Banks Know about Chinese Banks?
by Wolf Richter • December 29, 2015

[font color="blue"]They’re dumping their stakes.[/font]

“Now is the right time for us to sell this investment,” announced Deutsche Bank’s newish co-CEO John Cryan on Monday after the long Christmas weekend when no one was supposed to pay attention.

It was how Cryan justified the deal to sell Deutsche’s entire 19.99% stake in Hua Xia Bank in China to Chinese insurer PICC Property and Casualty. He couched the deal in terms of executing Deutsche’s “strategic agenda”: boosting capital ratios to prop up the balance sheet.

Deutsche isn’t the first Western bank to bail out of banks in China where regulators limit foreign ownership stakes to a maximum of 20%, which brings some complications.

Goldman Sachs sold its stake in Industrial and Commercial Bank of China in 2013. Bank of America Merrill Lynch bailed out of its stake in China Construction Bank in a series of deals. BBVA, Spain’s second largest bank, has been cutting its stake in China Citic Bank from about 15% in 2013 down to 4.7% now, and that remainder appears to be earmarked for sale as well. Other banks are also likely to pick up their marbles and go, such as Standard Chartered, with its stake in Agricultural Bank of China.

Like Deutsche, they couched those deals in terms of boosting capital ratios and balance sheets. ..............(more)

http://wolfstreet.com/2015/12/29/what-do-global-banks-know-about-chinese-banks/

[leveymg]

1. High yield = High risk. China's stock market has already been bailed-out and de facto nationalized

Yes, now is the time for the rats in $3,000 suits to jump ship.

[Fuddnik]

2. The top of a building would be better.

Preferably Foxconn.