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China Construction invests in NZ

NZN 22/07/2016 Jonathan Underhill

China Construction Bank, that nation's second-largest lender, has provided $140 million of equity capital to its New Zealand subsidiary to help fund lending growth.

It's the biggest such infusion since the local unit was established with $58.6 million in 2014.

China Construction Bank (New Zealand), which counts former prime minister Jenny Shipley and former PwC chair John Shewan among its five directors, issued 100 million to its parent this month, tripling shares on issue to 158.6 million, according to the Companies Office. That brings its total capital position to about $200 million.

The local bank's lending has surged since it was established, with the loan book growing to $378m as at March 31 from about $16m at December 31, 2014.

Of that, about $274m, or 72 per cent, was commercial loans and $105m was home loans, the bank's latest disclosure statement shows. Total assets stood at $415m.

"Our ambition has always been to grow a full-service bank in New Zealand and our success to date has justified the initial investment and has now necessitated a further capital injection to support the next phase of our story," CCB said in a statement.

The lender's growth "has been centred on following trade, people and capital flows in and out of China and New Zealand," it said.

"We have successfully supported New Zealand clients from large New Zealand corporates to high net worth individuals."

CCB is China's largest infrastructure lender and said in its statement that it had "brought this competency and appetite and will look to support New Zealand's growing infrastructure requirements over coming years".

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