China CITIC Bank is bidding to buy a stake in US investment bank Bear Stearns, a senior Chinese regulator said this morning.
Bear Stearns is among the institutions hardest-hit by the US subprime mortgage crisis. Earlier this month, chief executive James Cayne said Bear Stearns would consider selling a stake to an investor from China or the Middle East if the deal created value.
Jiang Dingzhi, vice-chairman of the China Banking Regulatory Commission, cited CITIC Bank's interest in buying into Bear Stearns as he went through recent acquisitions and investments by Chinese banks in overseas financial institutions.
"The foreign M&A of our banks is entering a new era, and the pace of internationalisation is accelerating," Mr Jiang said at a financial forum during the five-yearly Congress of the ruling Communist Party.
Bear Stearns has been the subject of speculation that the bank, battered by two collapsed hedge funds and losses in its flagship mortgage business, needed a cash infusion.
Shares in Bear Stearns have lost more than 10 per cent since the credit crisis hit global markets this summer, sending the bank's market value to around $14.2 billion.
The smallest of Wall Street's five big independent brokerages, Bear Stearns has been looking to expand its overseas focus. A tie-up with CITIC Bank, the country's seventh-largest lender, could give it a big boost in China.