Vanke to become biggest shareholder in Huishang Bank

China Vanke Co Ltd, China's largest real estate company, will invest about $419 million in Hui-shang Bank to become its biggest shareholder after the bank gets listed in Hong Kong, financial news portal caixin.com reported Tuesday.

Huishang Bank plans to have its IPO on Hong Kong Exchange and Clearing Limited on November 12 and the IPO price will be between HK$3.47 ($0.45) to HK$3.88 per share and that 2.61 billion shares will be issued in total, the report said.

Huishang Bank is expected to have six investors, including Vanke, Chow Tai Fook Jewellery Group and Generate Capital Group, securities news portal stcn.com reported Tuesday.

It will be Vanke's first investment in the banking sector, said the report, suggesting real estate developers in China have a close link with banks because banks are the main capital resource.

Huishang Bank is glad to have a successful enterprise as Vanke as a shareholder, according to stcn.com, citing Huishang Bank Chairman Li Hongming, adding this reflects a trend in China of different industries cooperating together.

By investing in commercial banks, Vanke may expect to get financing facilities, Huang Lichong, president of Synergy Capital, was quoted by netease.com Tuesday as saying in a report.

An unnamed expert in the banking industry said many enterprises want to enter the banking industry because its profits are higher than other sectors, news portal qq.com reported Tuesday, noting that investing in banks will also help enterprises to get capital.

Based in Hefei, East China's Anhui Province, Huishang earned a profit of 4.3 billion yuan in 2012, 23.3 percent up year-on-year, caixin.com reported.

The net profit of Vanke in the third quarter of this year increased to about 1.6 billion yuan, 18.39 percent higher than the same period of last year, according to a filing released Tuesday on the Shenzhen Stock Exchange.

Neither Vanke nor Huishang could be reached for comment by press time.