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September 29, 2005

More China Bank M&A Action: GE Capital and Shenzhen Development Bank

GE Capital has joined Newbridge by taking a 7% stake in Shenzhen Development Bank, the first such China investment for the global finance company. We suspect that this investment will take the form of approximately $100m in primary shares, which will bolster the bank's capital. As Newbridge already controls close to 18% of SDB, it will also mean the bank is effectively at its 25% foreign ownership limit for now, although we also expect that this could be more flexible for SDB given that Newbridge already has effective management control.

Note that per GE's last presentation on Asia, they actually seem more focused on India and SE Asia in the consumer finance arena, meaning that we might see more deals in those markets soon.

Posted by The Banker at September 29, 2005 09:40 AM

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