Deutsche Bank Securities has positioned itself to take advantage of emerging Chinese opportunities by signing a cooperation agreement with one of China's largest state-owned banks - Industrial & Commercial Bank of China. The agreement will not take effect for some time, however, as Industrial & Commerce Bank is due to follow the lead of China Construction Bank with an initial public offering in the next year.
In a statement posted on ICBC's website, the bank said it will explore investment banking opportunities with Deutsche Bank, including securitization. Given the varying degrees of success similar alliances have enjoyed in Asia, it is difficult to speculate on how much business the Deutsche Bank/ICBC partnership will yield. However, one positive point to note is that Industrial & Commercial Bank already has prior securitization experience. The bank worked with Credit Suisse First Boston on a Rmb820 million non-performing loan ABS, completed in May 2004.
Another entity eyeing up China opportunities is the Dubai-based private-equity firm Istithmar. With a reported $3 billion to invest, the firm has been planning on establishing a Chinese MBS business. This would not be dissimilar to Emirates National Securitization Corp., which it launched earlier this year to securitize home loans by one of its subsidiaries. Emirates National completed its debut $350 million MBS in May (see ASR 5/2/2005).
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