Fed clears China's first US bank takeover

[WestVirginiaRebel]

Yahoo News:

The United States on Wednesday opened its banking market to ICBC, China's biggest bank, for the first time clearing a takeover of a US bank by a Chinese state-controlled company.

Just days after high-level US-China economic talks in Beijing, the Federal Reserve approved an application from Industrial and Commercial Bank of China to buy a majority stake in the US subsidiary of Bank of East Asia.

The transaction will make ICBC the first Chinese state-controlled bank to acquire retail bank branches in the United States.

ICBC has been the most aggressive of China's "big four" banks in expanding overseas.

According to the Fed the bank has total assets of roughly $2.5 trillion.

It will buy up to 80 percent of the US unit of the Hong Kong-based Bank of East Asia, which operates 13 branches in New York and California.

As part of the deal ICBC and two state-backed financial firms -- China's sovereign wealth fund the China Investment Corporation (CIC), and Central Huijin Investment -- will be recognized as bank holding companies, regulated as commercial US banks.

The broad expansion of China's footprint in the US market comes amid a series of financial reforms in China that could begin to open the lucrative market to US firms.

After the May 3-4 meeting, the US Treasury noted China had made "encouraging progress" on a number of issues sought by the Obama administration, including taking steps toward a more open and market-oriented financial system.

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The Bank sets up shop...