Building The CITIC International Financial Services Franchise
CITIC International Financial Holdings Limited ("CIFH" or "the Company") is the financial flagship of its parent CITIC Group outside Mainland China. It was formed in November 2002 as a result of the reorganisation of CITIC Ka Wah Bank Limited ("CKWB") following its acquisition of The Hongkong Chinese Bank, Limited. As at the end of 2007, the Company's total assets amounted to approximately HK$132.4 billion, representing an increase of approximately 74% since its establishment.
With financial services at the core of CITIC Group's overall businesses, CIFH and its subsidiaries and major associate companies ("CIFH Group" or "the Group") plays an important role to realise its parent's aspiration to become Mainland China's leading globally competitive financial institution. In addition to establishing the CITIC brand in international commercial banking and financial services, CIFH Group has to showcase CITIC Group's standards in international business and management excellence.
On 5 November 2008, CIFH was successfully privatised and delisted from the Hong Kong Stock Exchange. This strategic move was part of CITIC Group's plans to restructure and better align its commercial banking businesses operated through China CITIC Bank Corporation Limited ("CNCB") and CKWB in Mainland China and Hong Kong respectively. The Company is currently approximately 70% owned by CITIC Group through Gloryshare Investments Limited, and approximately 30% owned by Banco Bilbao Vizcaya Argentaria, S.A. ("BBVA"), one of Spain's largest banks.
CITIC Group believes that the simplified equity structure of the Company after its privatisation will expedite and facilitate the tripartite collaboration strategy between the Company, CNCB and BBVA, and allow the parties to maximise synergies from this strategic alliance.
Additionally, as the next step to complete the restructuring of its cross-border commercial banking interests, CITIC Group has expressed its intention to inject its majority interest in the Company into CNCB, subject to all necessary third party and regulatory approvals.
Clearly Defined Business Scope
CIFH is an investment holding company with interests in commercial banking as well as other non-bank financial services businesses.
Its main operating business is conducted through its wholly-owned subsidiary, CITIC Ka Wah Bank Limited, a Hong Kong incorporated and licensed commercial bank which provides a range of banking services and financial solutions to both corporations and individuals, focusing on retail banking, wholesale banking and treasury services.
In the non-bank financial services area, CIFH holds a 50% interest in its associate CITIC Capital Holdings Limited, a China-focused investment management and advisory firm, and a 40% interest in CITIC International Assets Management Limited, an asset management and direct investments company.
A Unique Tripartite Commercial Banking Model
In November 2006, CIFH announced its strategic alliance with BBVA through an initial 15% share subscription in CIFH. This transaction is meaningful as this allows the Group to build regional competencies and to establish effective global linkages for its commercial banking platform.
Separately but concurrently, BBVA has also entered into an agreement to acquire an initial 5% shareholding in CNCB. Both transactions were duly completed on 1 March 2007, marking the realisation of a unique tripartite commercial banking model between CIFH Group, CNCB and BBVA that is driven by a shared commitment for mutual success in Asia, and by a shared vision to create a China-focused powerhouse that will offer an expanded customer base with effective linkages between Mainland China, Hong Kong, Asia, and the rest of the world. As a result of the Company's privatisation and agreed subsequent share transactions between CITIC Group and BBVA, the latter's holdings in CNCB will be increased to 10.07% in the near future.
With the unique tripartite partnership in place as the cornerstone for the Group's future growth, CIFH Group is well-poised to reach for its goal of becoming the best PRC Asian regional banking group.
Commercial Banking Businesses
CITIC Ka Wah Bank Limited
CITIC Ka Wah Bank Limited("CKWB" or the "Bank") is a wholly-owned subsidiary of CIFH. By providing value-creating financial solutions to define and exceed both the wealth management and international business objectives of our Greater China and overseas customers, the Bank aspires to be the "China Bank of Choice", with the best international standards and capabilities. The Bank's footprint in Greater China includes 27 branches in Hong Kong, a branch in Macau, a branch in Shanghai and its PRC-incorporated wholly-owned subsidiary, CITIC Ka Wah Bank (China) Limited, which is headquartered in Shenzhen with branches in Shanghai and Beijing. The Bank also has overseas branches in New York and Los Angeles. For the year ended 31 December 2007, the Bank reported a net profit of approximately HK$106 million; total assets as at 2007 year-end was approximately HK$110.8 billion. The Bank is rated "Baa2" by Moody's Investors and "BBB+" by FITCH. In recognition of its outstanding achievement in Quality Management, the Bank received the Silver Award in the 2007 Hong Kong Management Association Quality Award.
CKWB China has officially commenced business on 14 April 2008. It initially offers a full range of Renminbi and foreign currency wholesale banking services, foreign currency banking services for individual customers as well as Renminbi banking services for non-China residents. Licence application is underway to enable us to offer Renminbi banking services for local Chinese individuals in due course. Meanwhile, the Bank will retain its original Shanghai branch to focus on delivering foreign currency wholesale banking services to customers.
Non-Bank Financial Services Businesses
CITIC Capital Holdings Limited
Formed in 2002, CITIC Capital Holdings Limited ("CCHL") is a China-focused investment management and advisory firm. Headquartered in Hong Kong, it also has local presence in Shanghai, Beijing, New York and Tokyo. Its core businesses include private equity, real estate, mezzanine and debt finance, asset management and special situations. With the know-how and expertise of financial professionals and the support and network of CITIC Group, CCHL is uniquely positioned to capitalise on the enormous opportunities in China, particularly in the investment and finance area.
CIFH owns 50% of CCHL with the remaining 50% owned by CITIC Pacific Limited.
CITIC International Assets Management Limited
CITIC International Assets Management Limited ("CIAM") was formally established in 2002 during CIFH's reorganisation to focus on the management and recovery of non-performing loans. Over time, it has expanded into fund management and explores China related assets management business through venture capital and direct investments.
In December 2006, with its historical mandate of problem loan resolution largely completed, CIAM repositioned itself and significantly strengthened its capital base with the introduction of three foreign strategic investors. By allowing CIAM to leverage on the different but complementary strengths of these new investors and to benefit from synergies generated from their collaboration, CIAM has an enhanced base from which to accelerate the development of its direct investment business in China. The three new investors hold an aggregate 60% stake in the enlarged share capital of CIAM, while CIFH holds the remaining 40% stake. CIFH's intention is to remain the single largest shareholder of CIAM in the foreseeable future.
In April 2008, CIAM completed the acquisition of a 72% stake in E2-Capital Holdings Limited (subsequently renamed CIAM Group Limited). Following the mandatory general offer to CIAM Group Limited's minority shareholders, CIAM is in the process of share placement(s) to restore its public float requirement under the Hong Kong Stock Exchange as CIAM is now holding approximately 90.5% of CIAM Group Limited through Right Precious Limited. CIAM Group Limited's management and operations were successfully integrated with CIAM and it will become the core investment vehicle and business development platform under CIAM
updated 24th February, 2009
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