Two weeks ago the Economist ran a story about the world’s biggest banks — and two of the top 10 happened to be Chinese: ICBC and Bank of China. Now another Chinese bank is buying into one of Europe’s biggest banks: Barclays. Will Barclays loan officers now take instructions from Beijing?
Just kidding. China Development Bank — which is controlled by Beijing — is buying just a 3.1 percent stake, according to Forbes, though it will take a bigger share – 7.7 per cent — if Barclays snaps up ABN Amro. With $1.2 trillion of foreign exchange reserves, the Chinese have to put their money somewhere. Why not in a British bank? Britons anyway are used to selling their assets. The media business is dominated by an Australian turned American. The last British carmaker was swallowed by a Chinese upstart. And now comes a Chinese bank…
And the government of Singapore. Oh yes, Singapore is taking a piece of Barclays too. Temasek Holdings, owned by Singapore’s finance ministry, is buying a 2.1 percent stake, which will go up to 3 percent if Barclays lands ABN Amro. It seems Singapore and China are more interested in the Dutch bank than in the British bank. Well, Britain is used to playing second fiddle. And, anyway, Barclays wants the Dutch bank too. Which is why… oops, they are already inside the gates.
But there’s no reason to be politically correct.
Temasek’s CEO, Singapore prime minister Lee Hsien Loong’s wife Ho Ching, is genuinely admired. “Madam Ho is galvanising Temasek,” former Barclays chief executive Andrew Buxton told the International Herald Tribune (IHT) two years ago. By then he had left Barclays and was a director of CapitaLand, a Temasek subsidiary. But she is admired by others as well and ranks among Time magazine’s 100 most influential men and women in the world.
The IHT report read like a rave review. It said:
As a young electrical engineering graduate in 1976, Ho Ching was recruited into the Singapore government’s top secret research unit that was developing weapons systems for her country’s military. These days, Ho, has a less covert mission: revamping the company that is synonymous with Singapore, Temasek Holdings.
Ho ended years of financial secrecy by publishing the government-owned company’s first ever financial review in 2005, it added.
I saw the latest review on the Temasek website. Giving figures up to March last year, it showed Temasek had a majority share in PT Bank Danamon Indonesia, 35 per cent of PT Bank Internasional Indonesia, 28 per cent of the Singapore bank DBS Group, 10 percent of South Korea’s Hana Financial Group, 8 per cent of India’s ICICI Bank, 6 percent of China Construction Bank, 6 percent of Taiwan’s E Sun Financial Company and 5 per cent of Bank of China.
Temasek last year also became the largest shareholder of the British bank, Standard Chartered, which is a major player in Asia. About 35 percent of Temasek’s $85 billion portfolio is made up of financial services firms, reported Reuters. Now it’s getting into a High Street bank in Britain. Yes, we have come a long way, baby.
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