Chinese lenders expands presence in Europe

China is seeking to diversify its assets by branch expansion of its financial institutions.

Chinese financial institutions are pushing into Europe, opening bank branches, scouting for deal opportunities and even attending German banking classes, in the latest illustration of China's growing global economic clout.

China Development Bank, a giant government-owned lender, is one of four final parties eyeing a big stake in troubled German bank WestLB AG, according to people familiar with the matter.

Another huge bank, Industrial & Commercial Bank of China Ltd., this month is opening branches in Paris, Brussels, Amsterdam, Milan and Madrid. Last week, it agreed to buy as much as 80% of a U.S. banking company.

Bankers and government officials say this could be the tip of the iceberg. Chinese banks and investment funds are on the prowl for banking deals in several European countries, including Germany and Spain.

With foreign-exchange reserves that have grown to $2.85 trillion, a large proportion of which is invested in U.S. Treasury bonds, China is seeking to diversify its assets. Its companies have been on a global investment binge in recent years, snapping up everything from real estate to mining companies to premier global brands like Volvo— even a 7% stake in Club Med.

The "go out" push, as it is called in China, is backed by the government, which owns many of these companies and wants them to play a bigger international role, consistent with China's growing stature and the needs of its enormous economy.

View the full story in The Wall Street Journal.

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Tags: China banks Europe expansion, China banks Europe