Bank of China looks to Europe for more profits

Europe continues to be the happy hunting ground for leading Asian banks seeking growth through mergers and acquisitions.

Bank of China, one of China’s four big state-owned banks, is said to be among a number of Asian banks interested in buying the investment arm of the state-owned Royal Bank of Scotland (RBS).

Sources said BOC is looking to expand its earnings through fee and commission income it could derive from acquiring RBS’ investment unit. RBS is seeking buyers for its cash equities, equity capital markets and mergers and acquisition business globally.

BOC is the second largest lender in China and the fifth largest bank in the world by market capitalization. It has refused to comment on the purchase, however.

RBS has hired Lazard Ltd to advise it on the process. The advice will include exploring options to both shrink the size of the division and sell off parts. Lazard provides advice on mergers and acquisitions, restructuring and capital raising and other asset management services to corporations and governments.

In 2009, RBS sold parts of its Asian retail and commercial banking business to Australia and New Zealand Banking Group Ltd.

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Tags: Bank of China, Royal Bank of Scotland