ICBC enters US market with acquisition Bank of East Asia's US unit

The US opened its banking market to Chinese companies after the Federal Reserve allowed Industrial & Commercial Bank of China Ltd (ICBC) to acquire a controlling stake in Bank of East Asia's US unit.

The regulator also allowed Bank of China and Agricultural Bank of China to open US branches.

The move marks the first time that the US has allowed a Chinese bank to buy a majority stake in a US lender. the move comes less than a week after both countries started economic talks in Beijing.

ICBC, which has spent more than $6 billion on acquisitions over the past three years, will pay $140 million for an 80-per cent stake in Bank of East Asia's US arm.

Hong Kong-based Bank of East Asia is run by the family of chairman David Li. It was founded in 1918 by David Li's grandfather Li Koon-chun.

It had a market capitalisation  of $8.5 billion, as on 27 February 2011, and consolidated assets of $50.85 billion. The bank has 91 retail branches in Hong Kong, 60 in mainland China and around 30 in the US and the UK.