Sumitomo Trust to Join Management of Chinese Peer

Tokyo, Feb. 24 (Jiji Press)--Sumitomo Trust and Banking Co. <8403>
said Wednesday that it will acquire a 19.99 pct equity stake in Nanjing
Trust Investment Co. in late March, becoming the first Japanese bank to
participate in the management of a Chinese financial institution.
The Japanese trust bank will buy the Nanjing Trust stake, worth
119.94 million yuan, from Nanjing Zijin Investment Co., which is held by the
Nanjing municipal government. Sumitomo Trust will send four officials to
Nanjing Trust.
Nanjing Trust, now fully owned by Nanjing Zijin, recently obtained
a trust business license from China's regulatory authorities.
Sumitomo Trust plans to launch Nanjing Trust's operations in
October.
At present, Sumitomo Trust's Chinese arms are engaged in only
commercial banking operations such as corporate financing.
The planned investment in Nanjing Trust will allow the Japanese
bank to offer financing for firms and local infrastructure projects using
trust schemes. Sumitomo Trust also plans to provide trust products to
wealthy individuals in China.
Some other major Japanese banks, including Bank of Tokyo-Mitsubishi
UFJ and Mizuho Corporate Bank, have invested in Chinese banks. But they do
not take part in the management of the Chinese peers as their investment
ratios are low.
Sumitomo Trust's latest move was supported by the Chinese
government's initiative to introduce business know-how of foreign trust
banks.