US Bank With China Ties Goes Bust
United Commercial Bank, a big San Francisco bank with branches in China, was closed by state regulators on Friday and its banking operations were acquired by East West Bancorp Inc, also active in both nations.
United Commercial Bank had 63 U.S. branches, a branch in Hong Kong and a subsidiary, UCB-China, in Shanghai. They will reopen as part of East West Bank. (Reuters)
I wrote about UCB in October, when Minsheng Bank announced that it would increase its stake from 9.6% to a possible 50%. I guess that’s not going to happen now.
East West Bank has similar assets, including branches in both the US and Asia (and China). I wonder what their relationship with Minsheng is (if any) and whether East West and Minsheng have future cooperation plans in China. Still seems like a good fit, although now Minsheng would be negotiating with a much larger partner, which may be a good or bad thing, depending.
For some reason, I found this little nugget kind of interesting as well:
China’s Banking Regulatory Commission said UCB-China had ample liquidity and capital. It said the bank had total assets of 2.667 billion yuan. With liabilities of 1.754 billion yuan, its net assets were 913 million yuan, the regulator said in a statement posted on its website.
The CBRC said it would work closely with the Federal Deposit Insurance Corp (FDIC) to maintain the stability of UCB-China.
It said it had conducted a preliminary examination of East West Bank’s fitness to take over UCB-China and was now deliberating on the matter in accordance with Chinese laws.
I don’t know, maybe this is simply another illustration of today’s global economy, or a measure of China’s successful opening up of its financial sector. Either way, having the CBRC and FDIC working together on the fallout of the failure of a regional US bank is not something I would have expected to read a few years ago.
