Italian bank Intesa Sanpaolo has signed an agreement to take a 19.99% stake in Qingdao City Commercial Bank (QCCB) for a total consideration of USD 135 million. This makes it the first Italian banking institution to make a direct investment in a Chinese bank.

Founded in 1996, QCCB is located in east coast province Shandong, which is playing an important role in the growth of the Chinese economy, second in rank in the country by GDP. The city of Qingdao is the Province’s main economic centre and QCCB is the second largest Bank in town in terms of branches with a market share of approximately 6% in deposits and loans. The Bank is 90% owned by Haier (the biggest Chinese appliance maker) and the municipality.

As at year-end 2006, QCCB had total assets of USD 3 billion, loans to customers of USD 1.8 billion, deposits of USD 2.3 billion and shareholders’ equity of USD 157 million. For the twelve months ended 31st December 2006, its net income amounted to USD 3.8 million. The Bank has a network of 39 branches.

Intesa Sanpaolo opened its first representative office in Beijing in 1981. In February 2007, the Eurizon Financial Group, a company of the Intesa Sanpaolo Group operating in the insurance and asset management businesses, entered the Chinese life insurance market through the acquisition of a 19.9% stake in the capital of Union Life, a company ranked among the top ten of the market. Just a few weeks after this transaction, the Eurizon Financial Group signed a new agreement in China providing for the acquisition of a 49% stake in Penghua Fund Management, one of the main asset management companies in the Chinese market.