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Guangzhou Rural Commercial Bank to establish new lender

China's Guangzhou Rural Commercial Bank Co. Ltd. agreed to invest up to 4.56 billion yuan to establish Chaozhou Rural Commercial Bank Co. Ltd.

The new bank will be established through the merger and restructuring of the Urban District Rural Credit Union, the Chao'an Rural Credit Union and the Raoping Rural Credit Union. Its total share capital will consist of about 2.63 billion shares.

As one of the new bank's promoters, Guangzhou Rural Commercial Bank and other parties acting in concert plan to subscribe to about 1.96 billion shares of Chaozhou Rural Commercial Bank for 5.88 billion yuan. Of the total consideration, Guangzhou Rural Commercial Bank will pay up to 4.56 billion yuan.

Guangzhou Rural Commercial Bank said the strategic investment will enable it to further realize its cross-regional development strategy by leveraging the existing market share and customer base of the three rural credit unions.

The establishment of the new bank is subject to shareholder and regulatory approvals.

As of Dec. 27, US$1 was equivalent to 6.87 Chinese yuan.