The Rabobank Group and the International Finance Corporation
(IFC) signed on Thursday a landmark deal with a Chinese local bank
on equity investment, making them the first overseas investors in a
Chinese rural cooperative bank.
Under the deal signed between the Dutch bank, IFC and the United
Rural Cooperative Bank of Hangzhou (URCB), Rabobank acquired 10
percent of shares in the Chinese bank while IFC secured 5 percent
of shares in the bank, IFC said in a statement.
The deal marks the first foreign equity participation in a
Chinese rural cooperative bank, IFC said.
"This pioneering cooperation will undoubtedly have a
far-reaching effect on Rabobank, IFC and URCB, and will serve as a
valuable precedent for restructuring and reforming China's rural
credit cooperatives," according to the statement.
The deal was signed by H.(Bert) Heemskerk, chairman of the
Executive Board of the Rabobank Group (Rabobank), Karin Finkelston,
associate director of East Asia and Pacific Department of IFC, and
Zhang Chen, chairman of URCB in Hangzhou, capital city of Zhejiang Province.
IFC said it constitutes a major step in initiating the next
phase of IFC's financial sector strategy in China, which has
recently been focused on restructuring and reforming city
commercial banks.
In addition to the financial investment in URCB, Rabobank will
provide management and technical support to help further
corporatise and modernize URCB.
Rabobank and IFC will also initiate technical assistance
programs to advise the bank in a range of areas, including
strengthening the administration and management, business
development, distribution policy, marketing, credit control, risk
management and IT systems development.
Rabobank will send a senior staff member to the management of
URCB to help execute this technical assistance program. In
partnership with IFC, it will also advise the Chinese authorities
on rural cooperative reforms at the provincial level in Zhejiang
Province.
(Xinhua News Agency July 12, 2006)