ICBC to Invest USD1.74 Billion in New Debt-to-Equity Swap Unit

Yicai

2016-12-09

(Yicai Global) Dec. 9 -- Industrial and Commercial Bank of China Ltd., the country's biggest state-owned commercial lender, will invest CNY12 billion (USD1.74 billion) to establish a wholly owned unit that will handle its debt-to-equity swap business.

The new subsidiary will be known as ICBC Asset Management Co., Beijing-based ICBC [SHA:601398; HKG:1398] said in a statement to the Hong Kong Stock Exchange yesterday. The plan is subject to regulatory approval.

Last month, Agricultural Bank of China Ltd. [SHA:601288] announced plans to set up an asset management company specializing in debt-to-equity swaps. Due to banks’ need to dispose of non-performing assets for their market-based debt-to-equity swaps, dealing with such transactions through subsidiaries benefits lenders’ post-restructuring management needs, insiders told Yicai Global.