BESI, the new investment bank Bank (former BES), will be sold for 379 million euros to the Chinese group Haitong International Holding, with headquarters in Hong Kong, wholly owned by Haitong Securities listed on the stock Shanghai and Hong Kong.
The deal was formalized Sunday night, at the headquarters of the New Bank (former BES), on Avenida da Liberdade in Lisbon. With the sale of the investment bank, the financial institution now led by Stock da Cunha fits a tot al of 445 million euros by Chinese investors.
Before the BESI sale agreement, which business has yet to receive the endorsement of several entities, such as the Bank of Portugal and the European Commission, the New Bank has alienated the capital it held in Holy Spirit Health to Chinese Fosun, in exchange for 66.5 million.
In fact, the Fosun, owner of Loyalty and ES Health and holds a position in REN, has shown interest in running the sale of the New Bank, which will formalize the end of this month.
The BESI sales operation to Haitong group (the second largest Chinese investment bank), led by its president, Jose Maria Ricciardi, implies staying in the current functions bank’s management team (headed by Ricciardi), and may also involve taking a position of Portuguese managers. As for the bank led by Eduardo da Cunha Stock, the deal raises the capital ratio of the New Bank, which is 9.2% above the recommended by the Bank of Portugal (8%), to 9.7%.
On the part of Haitong, it already went public stating that the purchase of BESI will enable “strengthen the internationalization of the business strategy of the company and extend its geographical coverage.”
Business in Brazil, India (brokerage), United Kingdom, Ireland, Poland, Spain, United States and Mexico, and with 825 employees, BESI posted a half-yearly profit of 2.5 million euros, corresponding to a 21 increase 5% year on year.
So far, the Haitong group, and a strong presence in mainland China, was only in Hong Kong and Macau (which he joined in 2000), as well as Singapore and Tokyo. In a letter to employees, Ricciardi, who was already trying to empowering BESI when Salgado was the leader of BES (now the two go to Parliament to talk about the group’s collapse), emphasizes that the deal, when implemented, will be a “milestone” as it is the first time that a financial institution such as Haitong buy a European investment bank.
Partner Stanley Ho
Haitong is dominated by family group founded by Cheng Yu Tung. Billionaire Cheng Yu Tung, now 89, built, like Stanley Ho, his fortune in the aftermath of World War II, after escaping from China to Macau (which he left after the war, to Hong Kong). In fact, the two were together in business when it launched in the game world.
In the 60s, according to the Financial Times, Cheng Yu Tung sold its position when the Stanley Ho group held the Game monopoly in Macau, getting a huge cash inflow. Forbes magazine, which places it among the 100 richest in the world, Cheng Yu Tung states that still holds a small position in Macau Games Company (SJM).
Currently the patriarch of empire is led by son, Henry Cheng, and the grandchildren, especially Adrian and Sonia. Cheng Yu Tung began his business life through gold, when it became a shop of the father. The Chow Tai Fook (something like “good luck” in Cantonese) connected to the luxury segment, is now the world’s jewelers system in terms of market capitalization. The group also owns several other businesses, especially the real estate (which includes the Carlyle Hotel in New York).
Chinese Expansion
In banking sector, there are already two Chinese banks to be present in Portugal, ICBC and Bank of China, with the first to focus solely on the investment area. In the case of Bank of China, the subsidiary of Lisbon, which started its operations in July last year, depends on the Luxembourg headquarters of European business.
According to the 2013 report Bank of China Luxembourg, the group already has offices in Brussels, Rotterdam, Stockholm and Warsaw, and Lisbon. The branch of Lisbon, managed by Yang Qing, was “the first Chinese bank established in Portugal to offer financial services [finance and retail banking] to the local market.” “Taking advantage of the internationalization of Chinese enterprises, as well as increased European investment in China, the bank will continue to strive to be the leading provider of banking services to these customers,” reads the same document.
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