Standard 'seeking Everbright stake'

ASIA-focused lender Standard Chartered is in talks to buy a stake in China Everbright Bank.

The government-sanctioned Beijing News said the State Council, the equivalent of the Chinese cabinet, had cleared the way for the talks by approving a restructure of China Everbright Group, the parent of Everbright Bank.

'Talks between Standard Chartered and Everbright Bank over a stake are continuing,' the paper quoted a source as saying.

The report follows comments earlier this week by Standard Chartered chief executive Mervyn Davies who said the bank was in talks with 'one or two' Chinese banks and hoped to buy a stake in one of them this year or in the first half of next year.

Standard Chartered has already agreed to buy 19.9% - the maximum foreign stake allowed - of national bank Bohai.

No one at the British bank would comment, but a spokeswoman made clear China was a key focus. 'We're interested in doing more in China over and above our stake in Bohai bank,'she said.

Hong Kong-listed China Everbright, which owns 21.4% of China Everbright Bank, said the lender, its main profit contributor, had recorded considerable losses in 2004.