Friday May 8, 07:08 AM
BOC to withdraw from financing venture with Peugeot
SHANGHAI (AFP) - Bank of China, one of the country's leading state-run banks, said it is selling its stake in an auto-financing venture with local maker Dongfeng Motors Group and France's PSA Peugeot Citroen.
BOC Insurance, a Bank of China subsidiary, is looking to sell its 50 percent holding for 328 million yuan (48 million dollars), according to a statement posted on the Beijing Equity Exchange website.
PSA's Dutch subsidiary, PSA Finance Nederland BV, and its joint venture with Dong Feng Motors each hold a 25 percent stake in the financing firm -- Dongfeng Peugeot Citroen Auto Finance Co Ltd.
A Bank of China spokesman contacted by AFP on Friday said the bank would not provide reasons for its withdrawal from the venture, which posted a net profit of 14.55 million yuan last year.
With a registered capital of 500 million yuan, the venture was established in 2006 to tap the fast-growing Chinese car user market by offering financing for Peugeot (Paris: FR0000121501 - news) and Citroen customers and the dealerships of both brands.
China overtook United States as the world's largest car market in the first quarter on the back of government incentives to boost domestic consumption.
Sales in China are mostly cash-based rather than credit-based as in developed markets, but industry experts say use of credit is growing.
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