China will ask foreign investors to commit to a lockup period of five years or more when they acquire a stake in Chinese banks, Liu Mingkang, chairman of the China Banking Regulatory Commission (CBRC), said Tuesday.
China will ask foreign investors to commit to a lockup period of five years or more when they acquire a stake in Chinese banks, Liu Mingkang, chairman of the China Banking Regulatory Commission (CBRC), said Tuesday.
If Chinese commercial banks want to bring in foreign investors, the lockup period of shares held by those investors will be at least five years, Liu was quoted by the Shanghai Securities News as saying.
Under current regulations, foreign investors are only required to make a 3-year commitment on their holdings in Chinese commercial banks.
Chinese banks have been haunted by persistent speculation that their foreign investors may sell their stakes once the lockup period expires. Shares of Industrial and Commercial Bank of China (ICBC), the country's largest bank by market value, surged after Goldman Sachs agreed not to sell at least 80 percent of its stake until 2010.
In recent months, several foreign banks have sold stakes in Chinese banks to raise cash amid the global financial crisis. The banks include Bank of America, which sold part of its stake in China Construction Bank, and Royal Bank of Scotland and UBS AG, which both sold their entire stakes in Bank of China.