On May 9, 2012, the Board of Governors of the Federal Reserve System (“Board”) issued an order approving the first acquisition of a US bank by a bank organized under the laws of the People’s Republic of China (“ICBC Order”). The ICBC Order approves the acquisition by Industrial and Commercial Bank of China (“ICBC”), considered the world’s largest bank in terms of profit and market capitalization, of an 80 percent interest in The Bank of East Asia (USA) National Association (“BEA-USA”), a national bank with offices in New York and California and total consolidated assets of approximately US$766 million. While the size of this acquisition is quite small, the ICBC Order is significant because it paves the way for Chinese banks to expand their presence in the US financial markets through the acquisition or establishment of US banking organizations.
The Board also approved the applications by Bank of China Limited (“BOC”) to establish an additional branch in Chicago (“BOC Order”) and for Agricultural Bank of China Limited to establish its initial branch in the United States. It also eases the regulatory process for the establishment by Chinese banks of branches and agencies in the United States.
White & Case served as counsel to ICBC in respect of its acquisition of BEA USA and the related application to the Board. White & Case also served as counsel to BOC with respect to its application for Board approval of a Chicago branch.
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