BoC, Guangdong Development Bank Inked Cooperation Agreement

Bank of China (BoC, SEHK: 3988, and SHSE: 601988), one of the Big Four lenders in the nation, inked an overall cooperation agreement with Guangdong Development Bank, a joint-stock lender, on September 21, 2009.

The cooperation gains concerns as there are many uncertainties in bank credit policies.

Some analysts attributed cooperation between banks to three reasons. First, banks that are tight in lending quota want to sell credit assets to banks that full of lending quota. Second, banks that are shortage of liquidity are able to borrow and finance from cooperation banks via low cost. Third, cooperation banks can strengthen risk-resisting ability and pricing ability among large-sized financing projects via consortium loans.

For instance, Led by Bank of China, a bank team inked a consortium loan agreement, worth up to SGD 3.2 billion or about CNY 15 billion, with Huaneng Power International (SHSE: 600011, SEHK: 0902) on September 21, 2009.

Source: dycj.ynet.com (September 22, 2009)

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